Document:

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                                                                   EXHIBIT 10.1

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                              JLG Industries, Inc.
                     Supplemental Executive Retirement Plan

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                           Effective September 6, 2000

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                              JLG Industries, Inc.
                     Supplemental Executive Retirement Plan

                                TABLE OF CONTENTS

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                                                                           Page

Section 1. Establishment and Purpose of the Plan........................... 1
         1.1.     Establishment............................................ 1
         1.2.     Purpose.................................................. 1

Section 2. Participation by Eligible Executives............................ 1
         2.1.     Eligible Executives on Effective Date.................... 1
         2.2.     Eligible Executives After Effective Date................. 1
         2.3.     Written Proof of Participation Required.................. 1

Section 3. Accrued Benefit................................................. 1
         3.1.     Method of Determining Accrued Benefit.................... 1
         3.2.     Applicable Percentage.................................... 2
         3.3.     Final Average Compensation............................... 2
         3.4.     Required Reductions...................................... 2

Section 4. Retirement Benefits............................................. 3
         4.1.     Normal Retirement Benefit................................ 3
         4.2.     Late Retirement Benefit.................................. 3
         4.3.     Early Retirement Benefit................................. 4
         4.4.     Vested Retirement Benefit................................ 4
         4.5.     Disability Retirement Benefit............................ 4
         4.6.     Joint & Survivor Annuity Option.......................... 4
         4.7.     Lump Sum Option.......................................... 4

Section 5. Preretirement Death Benefits.................................... 4
         5.1.     Lump Sum Benefit......................................... 4
         5.2.     Annuity Options Available to Spouse Beneficiaries........ 5

Section 6. Nature of Participant's Interest in Plan........................ 5
         6.1.     No Right to Assets....................................... 5
         6.2.     No Right to Transfer Interest............................ 5
         6.3.     No Employment Rights..................................... 5
         6.4.     Withholding and Tax Liabilities.......................... 5

Section 7. Administration, Interpretation, and Modification of Plan........ 5
         7.1.     Plan Administrator....................................... 5

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         7.2.     Powers of Committee...................................... 6
         7.3.     Finality of Committee Determinations..................... 6
         7.4.     Incapacity............................................... 6
         7.5.     Amendment, Suspension, and Termination................... 6
         7.6.     Power to Delegate Board Authority........................ 6
         7.7.     Headings................................................. 6
         7.8.     Severability............................................. 6
         7.9.     Governing Law............................................ 6
         7.10.    Complete Statement of Plan............................... 6

Section 8. Terms Used in the Plan.......................................... 7
         8.1.     Gender and Number........................................ 7
         8.2.     Definitions.............................................. 7

Appendix A.  Accrued Benefit of Participants Before September 6, 2000......A-1
         A.1.     Introduction.............................................A-1
         A.2.     Definitions..............................................A-1
         A.3.     Applicable Percentage....................................A-1
         A.4.     Final Average Compensation...............................A-1
         A.5.     Required Reductions......................................A-1

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                              JLG INDUSTRIES, INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                           Effective September 6, 2000

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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 2.1, 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
Beneficiaries.

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 2.1, 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. METHOD OF DETERMINING ACCRUED BENEFIT.

         (a) If an individual first became a Participant on or after September
6, 2000, his Accrued Benefit shall be determined as provided in this Section 3.
The Participant's Accrued Benefit under the Plan shall be a monthly benefit
equal to the Applicable Percentage of his Final Average Compensation,

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payable in the form of a Ten-Year Certain Life Annuity beginning on his Normal
Retirement Date, and reduced in accordance with Section 3.4.

         (b) The Accrued Benefit of an individual who first became a Participant
before September 6, 2000, shall be determined as provided in Appendix A of the
Plan.

         3.2. APPLICABLE PERCENTAGE. A Participant's Applicable Percentage is
the percentage specified by the Compensation Committee with respect to the
Participant for purposes of the Plan, as reflected in the written agreement
between the Company and the Participant executed in accordance with Section 2.3,
multiplied by the service fraction described in the following sentence. Unless a
different service fraction is specified in the written agreement between the
Company and the Participant, the numerator of the service fraction is the
Participant's Years of Service (not exceeding 20) when his employment with the
Company terminates, and the denominator of the service fraction is 20.

         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 the Participant's base salary for the calendar
year and the amount of any cash bonus paid to him in the calendar year, each
including (i) amounts that are contributed, at the election of a Participant, on
behalf of the Participant to a cafeteria plan or a cash or deferred arrangement
and not included in the Participant's gross income for federal income tax
purposes by reason of section 125 or 402(e)(3) of the Code and (ii) compensation
deferred under the JLG Industries, Inc. Executive Deferred Compensation Plan (or
any successor thereto). 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, if the Participant elects to begin receiving
          benefits before his Normal Retirement Date, his Accrued Benefit will
          be reduced by one half of one percent for each month during which
          benefits are scheduled to be paid before his Normal Retirement Date.

                  (b) Second, 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) maintained by the Company or any entity that would be
          aggregated with the Company under section 414(b) or (c) of the Code.
          The amount of the Participant's employer-provided benefits under other
          defined benefit plans will be determined as of the Participant's
          Benefit Starting Date. Employer-provided benefits provided to an
          alternate payee under a domestic relations order will be treated as if
          they were provided to the Participant.

                  (c) Third, 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 maintained by
          the Company or any entity that would be aggregated with the Company
          under section 414(b) or (c) of the Code. 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

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          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.

                  (d) Fourth, each monthly installment will be further reduced
          by the monthly amount of a benefit that is the Actuarial Equivalent of
          the Participant's Company Contribution Subaccount (within the meaning
          of the JLG Industries, Inc. Executive Deferred Compensation Plan), if
          any, and any investment return (or loss) credited to such subaccount
          pursuant to section 3.3 of such plan. The balance in the Participant's
          subaccount will be determined as of 30 days before the Participant's
          Benefit Starting Date. Previous distributions attributable to the
          Participant's accounts will be taken into account, plus interest from
          the date of distribution.

                   (e) Fifth, 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.

                  (f) Sixth, 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, and zero percent in the case of a Participant with less than
          5 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.

                  (g) Seventh, 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 (except that the Applicable
Percentage shall be determined taking into account his Years of Service through
his retirement date), 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.

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         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. A Participant whose employment with the Company
terminates for any reason other than death or Disability before age 55 and
before a Change in Control is not entitled to a Retirement Benefit.

         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 4 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 4.6 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 4.7 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 4 at the time of his death. Except as provided in Section
5.2, the Preretirement Death Benefit will be paid as soon as administratively
feasible after the Participant's death in

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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 4, had he
not died.

         5.2. ANNUITY OPTIONS AVAILABLE TO SPOUSE BENEFICIARIES. In lieu of the
lump sum described in Section 5.1, 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 4, had he not died. Any election under this Section 5.2 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 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.

         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.

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         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 7.5. 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 7.10, 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 2.3, 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.

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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 3 or
          Appendix A, whichever is applicable.

                  "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
          3.4 will be determined as of the Participant's Benefit Starting Date,
          and the resulting benefit will be expressed in the form of a Ten-Year
          Certain Life Annuity beginning on the Participant's Benefit Starting
          Date. Actuarial Equivalence under Section 4.6 will be determined as of
          the Participant's Benefit Starting Date, and the resulting benefit
          will be expressed 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 8.2 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 3.3 or Appendix A, whichever is applicable.

                  "APPLICABLE PERCENTAGE" has the meaning assigned to that term
          in Section 3.2 or Appendix A, whichever is applicable.

                  "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.

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                  "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 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 who 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.

                                       8
<PAGE>   12

                  "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 Subsidiary 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

                                       9
<PAGE>   13

                                    merger, consolidation, or reorganization,
                                    had Beneficial Ownership of securities
                                    representing 25 percent or more of the
                                    Voting Power) has Beneficial Ownership of
                                    securities representing 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 4.5.

                  "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 4.3.

                  "EFFECTIVE DATE" means June 1, 1995.

                  "ELECTION CONTEST" means an election contest described in Rule
          14a-11 promulgated 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 3.3 or Appendix A, whichever is applicable.

                  "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.

                                       10
<PAGE>   14

                  "LATE RETIREMENT BENEFIT" means the benefit described in
          Section 4.2.

                  "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 4.1.

                  "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 2.

                  "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 5.1.

                  "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.

                                       11
<PAGE>   15

                  "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 installments to the Participant, beginning with the calendar
          month in which his Benefit Starting Date occurs and ending

                                       12
<PAGE>   16

          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
          3.4(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. To the
          extent the Company awards any additional service credit under the JLG
          Industries, Inc. Employees' Retirement Savings Plan beyond the service
          required to be credited for vesting purposes under the savings plan,
          the additional service shall count as Years of Service under this Plan
          only to the extent expressly provided in a written resolution of the
          Board of Directors.

                  "VESTED RETIREMENT BENEFIT" means the benefit described in
          Section 4.4.

                  "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:
      -----------------------------               -----------------------------

                                       13
<PAGE>   17

                                   APPENDIX A
            ACCRUED BENEFIT OF PARTICIPANTS BEFORE SEPTEMBER 6, 2000

         A.1. INTRODUCTION. The Plan was amended effective September 6, 2000, to
change the formula for determining the Accrued Benefit of individuals who first
became Participants on or after September 6, 2000. The Accrued Benefit of
individuals who first became Participants before September 6, 2000 ("Prior
Participants") continues to be determined under the formula in effect before the
amendment. This Appendix A describes the method of determining the Accrued
Benefit of Prior Participants. Except as provided in Appendix A, Prior
Participants remain subject to the regular provisions of the Plan, as amended
from time to time.

         A.2. DEFINITIONS. A Prior 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 A.5.
Actuarial Equivalence under Section A.5 will be determined as of the Prior
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 Prior
Participant's Normal Retirement Date.

         A.3. APPLICABLE PERCENTAGE. A Prior Participant's Applicable Percentage
is the percentage specified by the Compensation Committee with respect to the
Prior Participant for purposes of the Plan and reflected in the written
agreement between the Company and the Prior Participant executed in accordance
with Section 2.3.

         A.4. FINAL AVERAGE COMPENSATION. A Prior 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 Prior
Participant for a calendar year is the amount of the Prior Participant's base
salary for the calendar year and the amount of any cash bonus paid to him in the
calendar year, each including (i) amounts that are contributed, at the election
of a Prior Participant, on behalf of the Prior Participant to a cafeteria plan
or a cash or deferred arrangement and not included in the Prior Participant's
gross income for federal income tax purposes by reason of section 125 or
402(e)(3) of the Code and (ii) compensation deferred under the JLG Industries,
Inc. Executive Deferred Compensation Plan (or any successor thereto). Annual
Compensation earned more than 10 years before the year in which the Prior
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.

         A.5. REQUIRED REDUCTIONS. The monthly installments otherwise included
in a Prior 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 Prior 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 Prior 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 Prior
         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

                                       A-1
<PAGE>   18

         employer. Employer-provided account balances do not include any portion
         of an account balance attributable to salary reduction contributions
         made by the Prior 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 Prior Participant's Benefit
         Starting Date. Distributions previously made from the Prior
         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 Prior Participant.

                  (c) Third, each monthly installment will be further reduced by
         the monthly amount of a benefit that is the Actuarial Equivalent of the
         Prior Participant's Company Contribution Subaccount (within the meaning
         of the JLG Industries, Inc. Executive Deferred Compensation Plan), if
         any, and any investment return (or loss) credited to such subaccount
         pursuant to section 3.3 of such plan. The balance in the Prior
         Participant's subaccount will be determined as of 30 days before the
         Prior Participant's Benefit Starting Date. Previous distributions
         attributable to the Prior Participant's accounts will be taken into
         account, plus interest from the date of distribution.

                  (d) Fourth, after the preceding reductions have been made,
         each monthly installment that is scheduled to be made after the Prior
         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.

                  (e) Fifth, if the Prior 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.

                  (f) Sixth, after the preceding reductions have been made, the
         resulting monthly installment will be further reduced by multiplying it
         by the Prior Participant's Vested Percentage. The Vested Percentage is
         100 percent in the case of a Prior Participant with 5 or more Years of
         Service, 75 percent in the case of a Prior Participant with 4 but less
         than 5 Years of Service, 50 percent in the case of a Prior Participant
         with 3 but less than 4 Years of Service, 25 percent in the case of a
         Prior Participant with 2 but less than 3 Years of Service, and zero
         percent in the case of a Prior Participant with less than 2 Years of
         Service. A Prior 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.

                  (g) Seventh, after the preceding reductions have been made,
         each monthly installment made during a month for which the Prior
         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.

                                      A-2<PAGE>   1
                                                                    Exhibit 10.2

                              JLG INDUSTRIES, INC.
                              STOCK INCENTIVE PLAN

                    (As Amended and Restated on May 23, 2001)

1. PURPOSE

The JLG Industries, Inc. Stock Incentive Plan (the "Plan"), as amended and
restated as of May 23, 2001, is designed to enable key personnel of JLG
Industries, Inc. (the "Company") and its Subsidiaries to acquire or increase a
proprietary interest in the Company, and thus to share in the future success of
the Company's business. Accordingly, the Plan is intended as a further means not
only of attracting and retaining outstanding personnel, but also of promoting a
closer identity of interests between management and shareholders. Since the
personnel eligible to receive Awards under the Plan will be those who are in
positions to make important and direct contributions to the success of the
Company, the directors believe that the grant of Awards under the Plan will be
in the Company's interest.

2. DEFINITIONS

In this Plan document, unless the context clearly indicates otherwise, words in
the masculine gender shall be deemed to refer to females as well as males, any
term used in the singular also shall refer to the plural, and the following
capitalized terms shall have the following meanings set forth in this Section 2:

         (a) "Award" means an Option, Restricted Share, Bonus Share, or a Right.
Unless the context clearly indicates otherwise, the term "Awards" shall include
Options, Restricted Shares, Bonus Shares and Rights.

         (b) "Beneficiary" means the person or persons designated in writing by
the Grantee as his beneficiary in respect of an Award; or, in the absence of an
effective designation or if the designated person or persons predecease the
Grantee, the Grantee's Beneficiary shall be the person or persons who acquire by
bequest or inheritance the Grantee's rights in respect of an Award. In order to
be effective, a Grantee's designation of a Beneficiary must be on file with the
Company before the Grantee's death. Any such designation may be revoked and a
new designation substituted therefor at any time before the Grantee's death.

         (c) "Board of Directors" or "Board" means the Board of Directors of the
Company.

         (d) "Bonus Share" means a Share granted pursuant to Section 11(g)
hereof without restriction.

         (e) "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

<PAGE>   2

                  (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:

                           (i) a merger, consolidation, or reorganization
                  involving the Company, unless

                                    (A) 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;

                                    (B) 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

                                    (C) no person (other than (I) the Company or
                           any Subsidiary thereof, (II) any employee benefit
                           plan (or any trust forming a part thereof) maintained
                           by the Company, any Subsidiary thereof, or the
                           surviving corporation, or(III) 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
                           representing 25 percent or more of the combined
                           voting power of the Surviving Corporation's then
                           outstanding voting securities;

                           (ii) a complete liquidation or dissolution of the
                  Company; or

                           (iii) 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).

         (f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.

         (g) "Committee" means a committee consisting of such number of members
of the Compensation Committee of the Board of Directors with such qualifications
as are required to satisfy the requirements of

                           (i) Rule 16b-3 under the Securities Exchange Act of
                  1934, as in effect from time to time (or any successor rule of
                  similar import) and

                           (ii) Section 162(m) of the Code, and the regulations
                  thereunder, as in effect from time to time (or any successor
                  provision of similar import), to the extent that Awards made
                  under the Incentive Plan are intended to qualify as
                  performance-based compensation thereunder.

         (h) "Company" means JLG Industries, Inc.

         (i) "Disability" or "Disabled" means having a total and permanent
disability as defined in Section 22(e)(3) of the Code.

         (j) "Fair Market Value" means, when used in connection with the Shares
on a certain date, the fair market value of a Share as determined by the
Committee, and shall be deemed equal to the mean of the high and low prices at
which Shares are traded on such date (or on the next preceding day for which
such information is ascertainable at the time of the Committee's determination)
as reported for such date by The Wall Street Journal (or if Shares are not
traded on such date, on the next preceding day on which Shares are traded) (or
if Shares are traded on such date but no edition of The Wall Street Journal
reporting such prices for such date is published, the fair market value shall be
deemed equal to the mean of the high and low prices at which Shares are traded
on such date as reported through the National Association of Securities Dealers
Automated Quotations System in any other newspaper).

         (k) "Grantee" means a person to whom an Award has been granted under
the Plan.

         (l) "Incentive Stock Option" means an Option that complies with the
terms and conditions set forth in Section 422(b) of the Code and is designated
by the Committee as an Incentive Stock Option.

         (m) "Limited Stock Appreciation Right" or "Right" means a right that
provides for payment in accordance with Section 10 hereof.

<PAGE>   3

         (n) "Non-qualified Stock Option" means an Option granted under the Plan
other than an Incentive Stock Option.

         (o) "Option" means any option to purchase a Share or Shares pursuant to
the provisions of the Plan. Unless the context clearly indicates otherwise, the
term "Option" shall include both Incentive Stock Options and Non-qualified Stock
Options.

         (p) "Option Agreement" means the written agreement to be entered into
by the Company and the Grantee, as provided in Section 7 hereof.

         (q) "Parent" means any parent corporation of the Company within the
meaning of Section 424(e) of the Code (or a successor provision of similar
import).

         (r) "Performance-Based Restricted Shares" means Restricted Shares that
are intended to qualify as performance-based compensation under Section 162(m)
of the Code, and the regulations thereunder.

         (s) "Plan" means the JLG Industries, Inc. Stock Incentive Plan, as
amended and restated on May 23, 2001, as set forth herein and as amended from
time to time (except where the context makes clear that the reference is to the
Plan as in effect prior to May 23, 1991, which was called the JLG Industries,
Inc. 1983 Stock Option Plan (as amended and restated)).

         (t) "Quota" means the portion of the total number of Shares subject to
an Option that the Grantee of the Option may purchase during each of the several
periods of the Term of the Option (if the Option is subject to Quotas), as
provided in Section 12(a) hereof.

         (u) "Restricted Shares" means Shares granted pursuant to Section 11(a)
through 11(f) hereof or purchased under a Non-qualified Stock Option pursuant to
Section 9(d) hereof and subject to such restrictions and other terms and
conditions as the Committee shall determine in accordance with the Plan.

         (v) "Retirement" means retirement pursuant to the JLG Industries, Inc.
Employees' Retirement Savings Plan, as amended from time to time.

         (w) "Shares" means shares of the Company's $.20 par value common stock.

         (x) "Subsidiary" means a subsidiary corporation of the Company within
the meaning of Section 424(f) of the Code (or a successor provision of similar
import.)

         (y) "Term" means the period during which a particular Option or Right
may be exercised.

3. EFFECTIVE DATE AND DURATION OF THE AMENDED AND RESTATED PLAN

         (a) Upon approval by the Board of Directors, the Plan as amended shall
be effective as of May 23, 2001 and shall continue in effect until December 31,
2004. The amendment of the Plan as of May 23, 2001 shall not affect the terms of
any Option or Award that was outstanding on May 22, 2001; all such Options and
Awards shall continue to be governed by the terms of the Plan in effect on May
22, 2001.

         (b) Awards may be granted at any time prior to the earlier of the
expiration of the ten-year term of the Plan, as described in subsection (a)
above, or the termination of the Plan pursuant to Section 19 hereof. For the
purpose of commencing the ten-year period specified in Section 422(b)(2) of the
Code during which Incentive Stock Options may be granted, this amendment and
restatement of the Plan as of August 31, 1999 shall constitute the adoption of a
new plan. An Award outstanding at the time the Plan is terminated (either by
expiration of the ten-year term of the Plan or by termination of the Plan
pursuant to Section 19 hereof) shall not cease to be or cease to become
exercisable pursuant to its terms solely because of the termination of the Plan.

4. NUMBER AND SOURCE OF SHARES SUBJECT TO THE PLAN

         (a) Subject to the provision of subsection (d) below, the Company may
grant Awards (including Replacement Options granted under Section 13(b) hereof)
under the Plan, as amended and restated as of May 23, 1991, and as further
amended as of November 21, 1994, and as further amended and restated as of
September 1, 1999 and amended as of May 23, 2001 with respect to not more than
(i) the remaining number of Shares with respect to which additional Options were
authorized to be granted under the Plan immediately prior to its amendment and
restatement as of May 23, 1991 (namely 28,596 Shares) plus (ii) 6,000,000
additional Shares

<PAGE>   4

(subject, however, to increase as provided in subsection (c) below and to
adjustment as provided in Section 17 hereof) which shall be provided from Shares
in the treasury or by the issuance of Shares authorized but unissued.

         (b) If an Option granted on or after September 1, 1999 is surrendered
before exercise, or lapses or is terminated without being exercised, in whole or
in part, for any reason other than the exercise of a Right, the Shares subject
to the Option shall be restored to the aggregate maximum number of Shares
(specified in subsection (a) above) with respect to which Awards may be granted
under the Plan, but only to the extent that the Option or any related Right has
not been exercised. Similarly, if any Restricted Share is forfeited and returned
to the Company, such forfeited Share shall be restored to such aggregate maximum
number of Shares with respect to which Awards may be granted under the Plan.

         (c) If, on or after September 1, 1999, any of the 1,605,090 Options or
Restricted Shares granted before September 1, 1999 under the Plan as in effect
before September1, 1999 which remain unexercised or unvested on September 1,
1999 is surrendered before exercise, lapses or is terminated without being
exercised, or is forfeited, in whole or in part, for any reason, the Company may
grant Awards under the Plan with respect to the Shares subject to such Options
or such forfeited Restricted Shares in addition to the aggregate maximum number
of Shares specified in subsection (a) above.

         (d) The Company may grant Incentive Stock Options under the Plan only
with respect to not more than 6,000,000 of the Shares specified in subsection
(a) above.

         (e) The maximum number of Shares that can be the subject of Awards to
any individual in any fiscal year of the Company is 300,000 Shares. For purposes
of this subsection (e), (i) if an Award is canceled, the canceled Award shall be
counted against the maximum number of Shares for which Awards may be granted to
the individual, and (ii) if, after grant, the exercise price of an Option or
Right is reduced (other than pursuant to the adjustment provisions of Section 17
hereof), the transaction shall be treated as the cancellation of the Option or
Right and the grant of a new Option or Right, and both the Option or Right that
is deemed to be canceled and the Option or Right that is deemed to be granted
shall reduce the maximum number of Shares for which Options and Rights may be
granted to the individual.

5. ADMINISTRATION OF THE PLAN

         (a) The Plan shall be administered by the Committee.

         (b) The Committee may adopt, amend and rescind rules and regulations
relating to the Plan as it may deem proper, shall make all other determinations
necessary or advisable for the administration of the Plan, and may provide for
conditions and assurances deemed necessary or advisable to protect the interests
of the Company, to the extent not contrary to the express provisions of the
Plan; provided, however, that the Committee may take action only upon the
agreement of a majority of its members then in office. Notwithstanding the
provisions of the preceding sentence, no action or determination by the
Committee may adversely affect any right acquired by any Grantee or Beneficiary
under the terms of any Award granted before the date such action or
determination is taken or made, unless the affected Grantee or Beneficiary shall
expressly consent; but it shall be conclusively presumed that any adjustment
pursuant to Section 17does not adversely affect any such right. Any action that
the Committee may take through a written instrument signed by all of its members
then in office shall be as effective as though taken at a meeting duly called
and held.

         (c) The powers of the Committee shall include plenary authority to
interpret the Plan, and, subject to the provisions hereof, the Committee may
determine (i) the persons to whom Awards shall be granted; (ii) the number of
Shares subject to each Award; (iii) the Term of each Award; (iv) the frequency
of Awards and the date on which each Award shall be granted; (v) the type of
each Award; (vi) the Quotas (if any), exercise periods, and other terms and
conditions applicable to each Option and Right, and the provisions of each
Option Agreement; (vii) any performance criteria pursuant to which Awards may be
granted; and (viii) the restrictions and other terms and conditions of each
grant of Restricted Shares and the provisions of any instruments evidencing such
grants. The Committee also may accelerate at any time the exercisability of
outstanding Options, provided that no

<PAGE>   5

Option shall be exercisable prior to the expiration of the mandatory six-month
holding period specified in Section 12(a) hereof.

         (d) The determinations, interpretations, and other actions made or
taken by the Committee pursuant to the provisions of the Plan shall be final,
binding, and conclusive for all purposes and upon all persons.

         (e) Subject to the limits established by the Committee pursuant to this
Section 5(e), the Company's Chief Executive Officer is authorized to grant
Awards to key employees (excluding those employees required to file ownership
reports with the Securities and Exchange Commission under Section 16(a) of the
Securities and Exchange Act of 1934) having such terms, consistent with the
terms of the Plan, as the Chief Executive Officer shall determine. No later than
90 days after the commencement of each fiscal year of the Company, the Committee
may establish (i) a maximum aggregate amount of Awards which the Chief Executive
Officer may grant during such fiscal year and (ii) the maximum amount of Awards
which the Chief Executive Officer may grant to any one Grantee during such
fiscal year. Upon granting any Awards pursuant to the Plan, the Chief Executive
Officer, promptly, but in any event not later than the next Committee meeting,
shall inform the Committee of the terms and number of Awards granted to any
Grantee. The types of Awards that the Chief Executive Officer may grant shall be
limited to Restricted Shares, Bonus Shares and Non-qualified Stock Options. The
exercise price of any Options granted by the Chief Executive Officer pursuant to
the Plan shall not be less than the Fair Market Value of the Shares on the date
the Option is granted.

6. EMPLOYEES ELIGIBLE TO RECEIVE OPTIONS

         (a) Awards may be granted under the Plan to key employees of the
Company or any Subsidiary (including employees who are directors and/or
officers). All determinations by the Committee as to the identity of the persons
to whom Awards shall be granted hereunder shall be conclusive.

         (b) Directors who are not regular salaried employees of the Company or
a Subsidiary shall not be eligible to receive Awards.

         (c) An individual Grantee may receive more than one Award.

7. OPTION AGREEMENT

         (a) No Option or Right shall be exercised by a Grantee unless he shall
have executed and delivered an Option Agreement evidencing the grant of such
Option or Right. The Agreement shall set forth the number of Shares subject to
the Option or Right and the terms, conditions and restrictions applicable
thereto.

         (b) Appropriate officers of the Company are hereby authorized to
execute and deliver Option Agreements in the name of the Company as directed
from time to time by the Committee.

8. INCENTIVE STOCK OPTIONS

         (a) The Committee may authorize the grant of Incentive Stock Options to
officers and key employees, subject to the terms and conditions set forth in the
Plan. The Option Agreement relating to an Incentive Stock Option shall state
that the Option evidenced by the Option Agreement is intended to be an
"incentive stock option" within the meaning of Section 422(b) of the Code.

         (b) The Term of each Incentive Stock Option shall end (unless the
Option shall have terminated earlier under another provision of the Plan) on a
date fixed by the Committee and set forth in the applicable Option Agreement. In
no event shall the Term of an Incentive Stock Option extend beyond ten years
from the date of grant. In the case of any Grantee who, on the date the Option
is granted, owns (within the meaning of Section 424(d) of the Code) more than
ten percent of the total combined voting power of all classes of stock of the
Company, a Parent, or a Subsidiary, the Term of the Option shall not extend
beyond five years from the date of grant.

         (c) To the extent that the aggregate Fair Market Value of the stock
with respect to which Incentive Stock Options(determined without regard to this
paragraph (c)) are exercisable by any Grantee for the first time during

<PAGE>   6

any calendar year (under all stock option plans of the Company, its Parent and
its Subsidiaries) exceeds $100,000, such Options shall not be Incentive Stock
Options. For the purpose of this paragraph c), the Fair Market Value of stock
shall be determined as of the time the Option with respect to such stock is
granted. This paragraph (c) shall be applied by taking Options into account in
the order in which they were granted.

         (d) The Option price to be paid by the Grantee to the Company for each
Share purchased upon the exercise of an Incentive Stock Option shall be equal to
the Fair Market Value of a Share on the date the Option is granted, except that
with respect to any Incentive Stock Option granted to a Grantee who, on the date
the Option is granted, owns (within the meaning of Section 424(d) of the Code)
more than ten percent of the total combined voting power of all classes of stock
of the Company, a Parent, or a Subsidiary, the Option price for each Share
purchased shall not be less than 110 percent of the Fair Market Value of a Share
on the date the Option is granted. In no event may an Incentive Stock Option be
granted if the Option price per Share is less than the par value of a Share.

         (e) Any Grantee who disposes of Shares purchased upon the exercise of
an Incentive Stock Option either (i) within two years after the date on which
the Option was granted, or (ii) within one year after the transfer of such
Shares to the Grantee, shall promptly notify the Company of the date of such
disposition and of the amount realized upon such disposition.

9. NON-QUALIFIED STOCK OPTIONS

         (a) The Committee may authorize the grant of Non-qualified Stock
Options subject to the terms and conditions set forth in the Plan. Unless an
Option is designated by the Committee as an Incentive Stock Option, it is
intended that the Option will not be an "incentive stock option" within the
meaning of Section 422(b) of the Code and, instead, will be a Non-qualified
Stock Option. The Option Agreement relating to a Non-qualified Stock Option
shall state that the Option evidenced by the Option Agreement will not be
treated as an Incentive Stock Option.

         (b) The Term of each Non-qualified Stock Option shall end (unless the
Option shall have terminated earlier under another provision of the Plan) on a
date fixed by the Committee and set forth in the applicable Option Agreement. In
no event shall the Term of a Non-qualified Stock Option extend beyond ten years
from the date of grant of the Option.

         (c) In no event may a Non-qualified Stock Option be granted if the
Option price per Share is less than the par value of a Share.

         (d) At the time of the grant of a Non-qualified Stock Option, the
Committee shall specify whether the Shares purchased under the Option shall or
shall not be Restricted Shares (or whether they shall be a specified combination
of Shares that are, and Shares that re not, Restricted Shares). Restricted
Shares purchased under an Option shall be subject to the terms, conditions and
restrictions set out in subsections (b) through (e) of Section 11, and such
additional terms, conditions and restrictions as the Committee may determine.
Subject to the provisions of subsections (b) through (e) of Section 11, the
Committee, at the time of grant, shall determine (and the Option Agreement shall
specify) the terms and conditions of any Restricted Shares that may be purchased
under the Non-qualified Stock Option, including the duration of the restrictions
that shall be imposed on the Restricted Shares, and the dates on which, or
circumstances in which, the restrictions shall expire, lapse or be removed or
the Restricted Shares shall be forfeited. Shares purchased under an Option after
the Company obtains actual knowledge that a Change in Control has occurred shall
not be subject to any restrictions.

10. LIMITED STOCK APPRECIATION RIGHTS

         (a) The Committee may authorize the grant of Limited Stock Appreciation
Rights in connection with all or part of any Option.

         (b) A Right may be exercised only at such times, by such persons, and
to such extent, as the related Option is exercisable. Furthermore, a Right may
be exercised only within the 60-day period beginning on the date on which

<PAGE>   7

the Company obtains actual knowledge that a Change in Control has occurred. As
soon as the Company obtains actual knowledge that a Change in Control has
occurred, the Company shall promptly notify each Grantee in writing of the
Change in Control, whether or not the Grantee holds a Right.

         (c) The Shares that are subject to a Right shall not be used more than
once to calculate the amount to be received pursuant to the exercise of the
Right. The right of a Grantee to exercise an Option shall be canceled if and to
the extent that the Shares subject to the Option are used to calculate the
amount to be received upon the exercise of the related Right, and the right of a
Grantee to exercise a Right shall be canceled if and to the extent that the
Shares with respect to which the Right may be exercised are purchased upon the
exercise of the related Option.

         (d) A Right may be granted coincident with or after the grant of any
related Option, provided that the Committee shall consult with counsel before
granting a Right after the grant of a related Incentive Stock Option.

         (e) The amount to be paid to the Grantee upon exercise of a Right that
is related to a Non-qualified Stock Option shall be paid in cash, and shall be
equal to the number of Shares with respect to which the Right is exercised
multiplied by the excess of

                  (1) the higher of (i) the highest Fair Market Value of a Share
         during the period commencing on the ninetieth (90th) day preceding the
         exercise of the Right and ending on the date of exercise; or (ii) if an
         event described in paragraph (i) of the definition of "Change in
         Control", above, has occurred, the highest price per Share (A) paid for
         any Share in any transaction occurring during the period described in
         clause (i) by any person or group (as defined in the definition of
         "Change in Control", above) whose acquisition of Shares caused the
         Change in Control to occur, or (B) paid for any Share as shown on
         Schedule 13D (or an amendment thereto) filed pursuant to Section 13(d)
         of the Securities Exchange Act of 1934 by any such person or group,
         over

                  (2) the Option price of the related Non-qualified Stock
         Option.

         (f) The amount to be paid to the Grantee upon exercise of a Right that
is related to an Incentive Stock Option shall be paid in cash, and shall be
equal to the number of Shares with respect to which the Right is exercised
multiplied by the excess of (i) the Fair Market Value (as of the exercise date
of the Right) of a Share over (ii) the Option price of the related Incentive
Stock Option.

11. RESTRICTED SHARES AND BONUS SHARES

         (a) The Committee may authorize the grant of Restricted Shares subject
to the terms and conditions set forth in the Plan. The following terms,
conditions and restrictions and such additional terms, conditions and
restrictions as may be determined by the Committee shall apply to Restricted
Shares. Subject to the provisions of this Section 11 (including, in the case of
Performance-Based Restricted hares, paragraph (f)), the Committee shall
determine at the time of grant the size and the terms and conditions of each
grant of Restricted Shares, including the duration of the restrictions that
shall be imposed on the Restricted Shares, the dates on which, or circumstances
in which, the restrictions shall expire, lapse or be removed or the Restricted
Shares shall be forfeited, and the price to be paid to the Company by the
Grantee (and the terms of payment thereof) for the Restricted Shares. In no
event, however, shall the price of a Restricted Share be less than the par value
of a Share on the date of grant. The Committee may cause to be issued an
instrument evidencing the grant of the Restricted Shares to the Grantee, which
instrument may set forth the restrictions and other terms and conditions of the
grant.

         (b) A Grantee who has acquired Restricted Shares (pursuant to either a
grant of Restricted Shares or the exercise of an Option to purchase Restricted
Shares) shall have beneficial ownership of the Restricted Shares, including the
right to receive dividends on (subject, in the case of Performance-Based
Restricted Shares, to the provisions of paragraph (f)) and the right to vote,
the Restricted Shares. A certificate or certificates representing the number of
Restricted Shares acquired shall be registered in the name of the Grantee. The
Committee, in its sole discretion, shall determine when the certificate or
certificates shall be delivered to the Grantee (or, in the event of the
Grantee's death, to his Beneficiary), may provide for the holding of such
certificate or certificates in

<PAGE>   8

custody by a bank or other institution or by the Company itself pending their
delivery to the Grantee or Beneficiary, and may provide for any appropriate
legend to be borne by the certificate or certificates referring to the terms,
conditions and restrictions applicable to the Shares. Any attempt to dispose of
the Shares in contravention of such terms, conditions and restrictions shall be
ineffective.

         (c) While subject to the restrictions imposed by the Committee in
accordance with this Section 11, Restricted Shares

                  (1) shall not be sold, assigned, conveyed, transferred,
         pledged, hypothecated, or otherwise disposed of, and

                  (2) shall be returned to the Company forthwith, and all the
         rights of the Grantee to such Shares shall immediately terminate, if
         the Grantee's continuous employment with the Company or any Subsidiary
         shall terminate for any reason, except as provided in Section 11(d).
         The return of the Shares shall be accomplished, if necessary, by the
         Grantee's delivering or causing to be delivered to the Company the
         certificate(s) for the Shares, accompanied by such endorsement(s)
         and/or instrument(s) of transfer as may be required by the Company.
         Upon the return of Shares in accordance with this paragraph (2), the
         Company shall pay to the Grantee an amount in cash equal to the lesser
         of the aggregate price paid for the Shares returned or the current fair
         market value of the Shares returned.

         (d) Subject to the following provisions of this Section 11(d), the
restrictions imposed on Restricted Shares shall lapse on such date or dates as
the Committee shall determine when the Restricted Shares (or any Option to
purchase them) are granted. In addition, if a Grantee who has been in the
continuous employment of the Company or a Subsidiary since the date on which he
acquired the Restricted Shares becomes Disabled or dies while in such
employment, then the restrictions imposed on the Restricted Shares shall lapse;
provided that, if such Restricted Shares are intended to qualify as
Performance-Based Restricted Shares, they shall cease to qualify as
performance-based compensation for purposes of Section 162(m) of the Code if the
restrictions lapse on the account of the Disability or death of the Grantee.
Further, all restrictions imposed on Restricted Shares shall lapse immediately
following the date on which the Company obtains actual knowledge that a Change
in Control has occurred; provided that, if such Restricted Shares are intended
to qualify as Performance-Based Restricted Shares, they shall cease to qualify
as performance-based compensation for purposes of Section 162(m) of the Code if
the restrictions lapse on account of a Change in Control.

         (e) If, after Restricted Shares are transferred to a Grantee (pursuant
to either a grant of Restricted Shares or the exercise of an Option to purchase
Restricted Shares), the Grantee properly elects, pursuant to section 83(b) of
the Code, to include in gross income for Federal income tax purposes the amount
determined under section 83(b) of the Code, the Grantee shall furnish to the
Company a copy of his completed and signed election form, and shall pay (or make
arrangements satisfactory to the Company to pay) to the Company any Federal,
state or local taxes required to be withheld with respect to the Shares. If the
Grantee fails to make such payments, the Company and its Subsidiaries shall, to
the extent permitted by law, have the right to deduct from any payment of any
kind otherwise due to the Grantee any Federal, state or local taxes of any kind
required by law to be withheld with respect to the Shares.

         (f) The Committee may authorize the grant of Performance-Based
Restricted Shares subject to the following terms and conditions, in addition to
all other applicable terms and conditions set forth in the Plan:

                  (1) The restrictions imposed on Performance-Based Restricted
         Shares shall expire, lapse or be removed based solely on the account of
         the attainment of performance targets established by the Committee
         using one or more of the following criteria as the applicable
         performance objectives: (i) increase in net sales; (ii) pretax income
         before allocation of corporate overhead and/or bonus; (iii) budget;
         (iv) earnings per share; (v) net income; (vi) attainment of division,
         group or corporate financial goals; (vii) return on stockholders'
         equity; (viii) return on assets; (ix) attainment of strategic and
         operational initiatives; (x) appreciation in or maintenance of the
         price of the common stock or any other publicly-traded securities of
         the Company; (xi) increase in market share; (xii) gross profits; (xiii)
         earnings before interest and taxes; (xiv) earnings before interest,
         taxes, depreciation and amortization; (xv) economic value-added models;
         (xvi) comparisons with various stock market indices; or

<PAGE>   9

         (xvii) reductions in costs. The performance objective shall be
         sufficiently specific that a third party having knowledge of the
         relevant facts could determine whether the objective is met. The
         establishment of the actual performance targets and, if an award is
         based on more than one of the foregoing financial criteria, the
         weighing of such financial criteria, shall be at the sole discretion of
         the Committee; provided, however, that in all cases the performance
         targets must be established by the Committee in writing no later than
         90 days after the commencement of the fiscal year to which the
         performance target(s) relates and when achievement of the performance
         target(s) is substantially uncertain. Once established by the
         Committee, the performance target(s) may not be changed to increase the
         amount of compensation that otherwise would be due upon the attainment
         of the performance target(s).

                  (2) Dividends shall be payable on Performance-Based Restricted
         Shares only to the extent of the Shares received based upon the
         attainment of the pre-established performance target(s).

                  (3) Prior to the release of restrictions on any
         Performance-Based Restricted Shares, the Committee shall certify in
         writing (which may be set forth in the minutes of the Committee) that
         the pre-established performance target(s) have been satisfied.

         (g) The Committee may authorize the grant of Bonus Shares in
consideration for services rendered by a Grantee to the Company or a Subsidiary
subject to the terms and conditions set forth in the Plan. Bonus Shares may be
awarded pursuant to an Award Agreement containing such terms and conditions as
may be established by the Committee. Notwithstanding the foregoing, Bonus Shares
may not be awarded to any Grantee required to file ownership reports with the
Securities and Exchange Commission under Section 16(a) of the Securities and
Exchange Act of 1934, and no Grantee may receive more than 1,000 Bonus Shares
during any fiscal year of the Company.

12. TERMS AND QUOTAS OF OPTION

         (a) Each Option and Right granted under the Plan shall be exercisable
only during a Term commencing at least six months after the date on which the
Option or Right was granted. The Committee shall have authority to grant both
Options exercisable in full at any time during their Term and Options
exercisable in Quotas. In exercising an Option that is subject to Quotas, the
Grantee may purchase less than the full Quota available under the Option during
any period. Quotas or portions thereof not purchased in earlier periods shall
accumulate and shall be available for purchase in later periods within the Term
of the Option.

         (b) Upon the expiration of the mandatory six-month holding period
specified in subsection (a) above, any Option shall be exercisable in full,
notwithstanding the applicability of any Quota or other limitation on the
exercise of such Option, immediately following the date on which the Company
obtains actual knowledge that a Change in Control has occurred.

13. EXERCISE OF OPTION OR RIGHT

         (a) Options or Rights shall be exercised by delivering or mailing to
the Committee:

                  (1) a notice, in the form and in the manner prescribed by the
         Committee, specifying the number of Shares to be purchased, or the
         number of Shares with respect to which a Right shall be exercised, and

                  (2) if an Option is exercised, payment in full of the Option
         price for the Shares so purchased

                           (i) by money order, cashier's check, certified check;
                  or other cash equivalent approved by the Committee

                           (ii) by the tender of Shares to the Company, or by
                  the attestation to the ownership of the Shares that otherwise
                  would be tendered to the Company in exchange for the Company's
                  reducing the number of Shares that it issues to the Grantee by
                  the number of Shares necessary for payment in full of the
                  Option price for the Shares so purchased;

                           (iii) by money order, cashier's check, or certified
                  check and the tender of Shares to the Company, or by money
                  order, cashier's check, or certified check and the attestation
                  to the ownership of the Shares that otherwise would be
                  tendered to the Company in exchange for the Company's reducing
                  the number of Shares that it issues to

<PAGE>   10

                  the Grantee by the number of Shares necessary for payment in
                  full of the Option price for the Shares so purchased; or

                           (iv) unless the Committee expressly notifies the
                  Grantee otherwise (at the time of grant in the case of an
                  Incentive Stock Option or at any time prior to full exercise
                  in the case of a Non-qualified Stock Option), and except to
                  the extent that the Option is an Option to purchase Restricted
                  Shares, by the Grantee's (a) irrevocable instructions to the
                  Company to deliver the Shares issuable upon exercise of the
                  Option promptly to the broker for the Grantee's account and
                  (b) irrevocable instruction letter to the broker to sell
                  Shares sufficient to pay the exercise price and upon such sale
                  to deliver the exercise price to the Company, provided that at
                  the time of such exercise, such exercise would not subject the
                  Grantee to liability under section 16(b) of the Securities
                  Exchange Act of 1934, or would be exempt pursuant to Rule
                  16b-3 promulgated under such Act or any other exemption from
                  such liability. The Company shall deliver an acknowledgment to
                  the broker upon receipt of instructions to deliver the Shares.
                  The Company shall deliver the Shares to the broker upon the
                  settlement date. The broker shall deliver to the Company cash
                  sale proceeds sufficient to cover the exercise price upon
                  receipt of the Shares from the Company. Shares tendered or
                  attested to in exchange for Shares issued under the Plan must
                  be held by the Grantee for at least six months prior to their
                  tender or their attestation to the Company, and may not be
                  Restricted Shares at the time they are tendered or attested
                  to. The Committee shall determine acceptable methods for
                  tendering or attesting to Shares to exercise an Option under
                  the Plan, and may impose such limitations and prohibitions on
                  the use of Shares to exercise Options as it deems appropriate.
                  For purposes of determining the amount of the Option price
                  satisfied by tendering or attesting to Shares, such Shares
                  shall be valued at their Fair Market Value on the date of
                  tender or attestation, as applicable. Except as provided in
                  this paragraph, the date of exercise shall be deemed to be the
                  date that the notice of exercise and payment of the Option
                  price are received by the Committee. For exercise pursuant to
                  Section 13(a)(2)(iv) of the Plan, the date of exercise shall
                  be deemed to be the date that the notice of exercise is
                  received by the Committee.

         (b) At the time it grants a Non-qualified Stock Option, the Committee
may provide in the Option Agreement that if the Grantee exercises the
Non-qualified Stock Option (the "Exercised Option") by tendering Shares to the
Company to pay the Option price in accordance with subsection (a) above, he
shall be granted, as of the date of exercise, a Non-qualified Stock Option (the
"Replacement Option") to purchase a number of Shares not exceeding the number of
Shares he tendered to pay the Option price in exercising the Exercised Option;
provided, however, that no Replacement Option shall be granted to the extent
that it, would cause the limitations set forth in Sections 4(a) and 4(e) hereof
to be exceeded. The terms of the Replacement Option shall be identical to the
terms of the Exercised Option, except that (i) the Option price per Share shall
be equal to the Fair Market Value of a Share on the date on which the
Replacement Option is granted, but in no event shall the Option price per Share
be less than the par value of a Share on that date; (ii) the Term shall commence
at least six months after the date the Replacement Option is granted, and (iii)
the Committee may establish new Quotas (or no Quotas at all) with respect to the
Replacement Option.

         (c) Subject to subsection (d) below, upon receipt of the notice of
exercise and, if an Option is exercised, upon payment of the Option price, the
Company shall promptly deliver to the Grantee (or Beneficiary) a certificate or
certificates for the Shares purchased, without charge to him for issue or
transfer tax, and if a Right is exercised, shall promptly distribute cash to be
paid upon the exercise of the Right.

         (d) The exercise of each Option and Right and the grant or distribution
of Restricted Shares under the Plan shall be subject to the condition that if at
any time the Company shall determine (in accordance with the provisions of the
following sentence) that it is necessary as a condition of, or in connection
with, such exercise (or the delivery or purchase of Shares thereunder), grant or
distribution (i) to satisfy withholding tax or other withholding liabilities,
(ii) to effect the listing, registration, or qualification on any securities
exchange or under any state or Federal law of any Shares otherwise deliverable
in connection with such exercise, grant or distribution, or (iii) to obtain the
consent or approval of any regulatory body, then in any such event such
exercise, grant or distribution shall not be effective unless such withholding,
listing, registration, qualification, consent or

<PAGE>   11

approval shall have been effected or obtained free of any conditions not
acceptable to the Company in its reasonable and good faith judgment. Any such
determination (described in the preceding sentence) by the Company must be
reasonable, must be made in good faith, and must be made without any intent to
postpone or limit such exercise, grant or distribution beyond the minimum extent
necessary and without any intent otherwise to deny or frustrate any Grantee's
rights in respect of any Award. In seeking to effect or obtain any such
withholding, listing, registration, qualification, consent or approval, the
Company shall act with all reasonable diligence. Any such postponement or
limitation affecting the right to exercise an Option or Right or the grant or
distribution of Restricted Shares shall not extend the time within which the
Option or Right may be exercised or the Restricted Shares may be granted or
distributed, unless the Company and the Grantee choose to amend the terms of the
Award to provide for such an extension; and neither the Company nor its
directors or officers shall have any obligation or liability to the Grantee or
to a Beneficiary with respect to any Shares with respect to which the Award
shall lapse, or with respect to which the grant or distribution shall not be
effected, because of a postponement or limitation that conforms to the
provisions of this subsection (d).

         (e) Except as provided in Section 13(f) below, Options and Rights
granted under the Plan shall be nontransferable other than by will or by the
laws of descent and distribution in accordance with Section 14(a) hereof, and an
Option or Right may be exercised during the lifetime of the Grantee only by him.

         (f) Subject to the approval of the Committee in its sole discretion,
Non-qualified Stock Options, Limited Stock Appreciation Rights that are granted
in connection with Non-qualified Stock Options, and Restricted Stock may be
transferable to members of the immediate family of the Grantee and to one or
more trusts for the benefit of such family members, partnerships in which such
family members are the only partners, or corporations in which such family
members are the only stockholders. "Members of the immediate family" means the
Grantee's spouse, children, stepchildren, grandchildren, parents, grandparents,
siblings (including half brothers and sisters), and individuals who are family
members by adoption.

         (g) Upon the purchase of Shares under an Option, the stock certificate
or certificates may, at the request of the purchaser, be issued in his name and
the name of another person as joint tenants with right of survivorship.

14. EXERCISE OF OPTION OR RIGHT AFTER DEATH, DISABILITY, RETIREMENT, OTHER
    TERMINATION OF EMPLOYMENT, OR CHANGE IN CONTROL

         (a) Death

         If a Grantee's employment with the Company and its Subsidiaries shall
cease due to the Grantee's death, or if the Grantee shall die within three
months after cessation of employment while an Option is exercisable pursuant to
subsection (d) or (e) below, any Option held by the Grantee on the date of his
death may be exercised only within twelve months after the Grantee's death, and
only by the Grantee's Beneficiary, to the extent that the Option could have been
exercised immediately before the Grantee's death.

         (b) Disability

         If a Grantee's employment with the Company and its Subsidiaries shall
cease due to his Disability, after at least six months of continuous employment
with the Company and/or a Subsidiary immediately following the date on which an
Option was granted, the Grantee may exercise the Option, to the extent that the
Option could be exercised at the cessation of employment, at any time within two
years after the Grantee shall so cease to be an employee.

         (c) Retirement

         If a Grantee's employment with the Company and its Subsidiaries ceases
due to his Retirement, after at least six months of continuous employment with
the Company and/or a Subsidiary immediately following the date on which an
Option was granted, the Grantee may exercise the Option, to the extent the
Option could be exercised at the cessation of employment, at any time within
five years after the Grantee's Retirement.

<PAGE>   12

         (d) Termination of Employment for Any Other Reason

         The Option Agreement shall specify the period, if any, during which an
Option may be exercised subsequent to the termination of a Grantee's employment
with the Company and its Subsidiaries at any time other than within three months
after the date on which the Company obtains actual knowledge that a Change in
Control has occurred and for any reason other than those specified in
subsections (a) through (c) above; provided, however, that the Option Agreement
shall not permit the exercise of any Option later than three months after such
termination; and provided further that the Option may not be exercised to an
extent greater than the extent to which it could be exercised at the cessation
of employment.

         (e) Termination of Employment After a Change in Control

         If, within three months after the Company obtains actual knowledge that
a Change in Control has occurred, a Grantee's employment with the Company and
its Subsidiaries ceases for any reason other than those specified in subsections
(a) through (c) above, the Grantee may exercise the Option at any time within
three months after such cessation of employment.

         (f) Notwithstanding any other provision of this Section 14, in no event
shall an Option be exercisable after the expiration date specified in the Option
Agreement.

15. TAX WITHHOLDING

         (a) The Company shall have the right to collect an amount sufficient to
satisfy any Federal, State and/or local withholding tax requirements that might
apply with respect to any Award to a Grantee (including, without limitation, the
exercise of an Option or Right, the disposition of Shares, or the grant or
distribution of Restricted Shares or Bonus Shares) in the manner specified in
subsection (b) or (c) below. Alternatively, a Grantee may elect to satisfy any
such withholding tax requirements in the manner specified in subsection (d) or
(e) below to the extent permitted therein.

         (b) The Company shall have the right to require Grantees to remit to
the Company an amount sufficient to satisfy any such withholding tax
requirements.

         (c) The Company and its Subsidiaries also shall, to the extent
permitted by law, have the right to deduct from any payment of any kind (whether
or not related to the Plan) otherwise due to a Grantee any such taxes required
to be withheld.

         (d) If the Committee in its sole discretion approves, a Grantee may
irrevocably elect to have any withholding tax obligation satisfied by (i) having
the Company withhold Shares otherwise deliverable to the Grantee, or (ii)
delivering Shares (other than Restricted Shares) to the Company, provided that
the Shares withheld or delivered have a Fair Market Value (on the date that the
amount of tax to be withheld is determined) equal to the amount required to be
withheld.

         (e) A Grantee may elect to have any withholding tax obligation
satisfied in the manner described in Section 13(a)(2)(iv) hereof, to the extent
permitted therein.

16. SHAREHOLDER RIGHTS

         No person shall have any rights of a shareholder by virtue of an Option
or Right except with respect to Shares actually issued to him, and the issuance
of Shares shall confer no retroactive right to dividends.

17. ADJUSTMENT FOR CHANGES IN CAPITALIZATION

         (a) Subject to the provisions of Section 18 hereof, in the event that
there is any change in the Shares through merger, consolidation, reorganization,
recapitalization or otherwise; or if there shall be any dividend on the Shares,
payable in Shares; or if there shall be a stock split or a combination of
Shares, the aggregate number of shares available for Awards, the number of
Shares subject to outstanding Awards, and the Option price per Share of each out
standing Option may be proportionately adjusted by the Board of Directors as it
deems equitable in its

<PAGE>   13

absolute discretion to prevent dilution or enlargement of the rights of the
Grantees; provided that any fractional Shares resulting from such adjustments
shall be eliminated.

         (b) Subject to the provisions of Section 18 hereof, any Shares to which
a Grantee shall become entitled as a result of a stock dividend on Restricted
Shares, or as a result of a stock split, combination of Shares, merger,
consolidation, reorganization, recapitalization or other event affecting
Restricted Shares, shall have the same status, be subject to the same
restrictions, and bear the same legend (if any) as the Shares with respect to
which they were issued, except as may be otherwise provided by the Board of
Directors.

         (c) The Board's determination with respect to any such adjustments
shall be conclusive.

18. EFFECTS OF MERGER OR OTHER REORGANIZATION

         If the Company shall be the surviving corporation in a merger or other
reorganization, Awards shall extend to stock and securities of the Company after
the merger or other reorganization to the same extent that a person who held,
immediately before the merger or reorganization, the number of Shares
corresponding to the number of Shares covered by the Award would be entitled to
have or obtain stock and securities of the Company under the terms of the merger
or reorganization.

19. TERMINATION, SUSPENSION, OR MODIFICATION OF PLAN

         The Board of Directors may at any time terminate, suspend, or modify
the Plan, except that the Board shall not, without approval by the affirmative
votes of the holders of a majority of the securities of the Company present, or
represented, and entitled to vote, at a meeting duly held in accordance with
applicable law, change (other than through adjustment for changes in
capitalization as provided in Section 17 hereof) (a) the aggregate number of
Shares for which Awards may be granted; (b) the class of persons eligible for
Awards; (c) the minimum Option price, applicable to Options or Rights, that is
provided for under the terms of the Plan; or (d) the maximum duration of the
Plan. No termination, suspension or modification of the Plan shall adversely
affect any right acquired by any Grantee, or by any Beneficiary, under the terms
of any Award granted before the date of such termination, suspension or
modification, unless such Grantee or Beneficiary shall expressly consent; but it
shall be conclusively presumed that any adjustment pursuant to Section 17 hereof
does not adversely affect any such right.

20. APPLICATION OF PROCEEDS

         The proceeds received by the Company from the sale of Shares (including
Restricted Shares) under the Plan shall be used for general corporate purposes.

21. GENERAL PROVISIONS

         The grant of an Award in any year shall not give the Grantee any right
to similar grants in future years or any right to be retained in the employ of
the Company or its Subsidiaries.

22. GOVERNING LAW

         The Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the Commonwealth of Pennsylvania
except to the extent that such laws may be superseded by any Federal law.

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