10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDEDApril 27, 2007

OR

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD fromto.

Commission File number 1-9299

JOY GLOBAL INC. (Exact Name of Registrant as Specified in Its Charter)

Delaware	39-1566457
(State of Incorporation)	(I.R.S. Employer
	Identification No.)

100 East Wisconsin Ave, Suite 2780

Milwaukee, Wisconsin 53202

(Address of principal executive offices)

(Zip Code)

(414) 319-8500

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b -2 of the Exchange Act. LARGE ACCELERATED FILER x ACCELERATED FILER o NON-ACCELERATED FILER o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Outstanding at May 23, 2007
Common Stock, $1 par value	108,615,493 shares

JOY GLOBAL INC.

FORM 10-Q -- INDEX

April 27, 2007

PART I. – FINANCIAL INFORMATION		PAGE No.
Item 1 – Financial Statements (unaudited):
	Condensed Consolidated Statement of Income –
	Three and Six Months Ended April 27, 2007 and April 29, 2006	3
	Condensed Consolidated Balance Sheet – April 27, 2007
	and October 28, 2006	4
	Condensed Consolidated Statement of Cash Flows –
	Six Months Ended April 27, 2007 and April 29, 2006	5
	Notes to Condensed Consolidated Financial Statements	6 – 23
Item 2 – Management’s Discussion and Analysis of Financial Condition and
	Results of Operations	24 – 32
Item 3 – Quantitative and Qualitative Disclosures About Market Risk		32
Item 4 – Controls and Procedures		33
PART II. – OTHER INFORMATION
Item 1 – Legal Proceedings		34
Item 1A – Risk Factors		34
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		34
Item 3 – Defaults Upon Senior Securities		34
Item 4 – Submission of Matters to a Vote of Security Holders		34
Item 5 – Other Information		35
Item 6 –Exhibits		38
Signatures		39

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PART I. - FINANCIAL INFORMATION

Item 1. Financial Statements

JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

(In thousands except per share amounts)

				Three Months Ended				Six Months Ended
				April 27,		April 29,		April 27,		April 29,
				2007		2006		2007		2006
Net sales			$	629,162	$	560,348	$	1,189,628	$	1,113,689
Costs and expenses:
	Cost of sales			419,990		375,758		805,589		763,357
	Product development, selling and
		administrative expenses		89,013		78,075		170,863		154,395
	Other income			(1,418)		(3,977)		(2,383)		(4,961)
Operating income				121,577		110,492		215,559		200,898
Interest income				1,176		1,886		3,844		3,651
Interest expense				(9,219)		(578)		(16,329)		(1,145)
Reorganization items				(130)		5,077		(280)		4,952
Income before income taxes				113,404		116,877		202,794		208,356
Provision for income taxes				(35,825)		(34,000)		(65,550)		(67,300)
Income before cumulative effect of
	changes in accounting principle			77,579		82,877		137,244		141,056
Cumulative effect of changes in
	accounting principle			-		-		-		1,565
Net income			$	77,579	$	82,877	$	137,244	$	142,621
Basic earnings per share:
	Income before cumulative effect
		of accounting changes	$	0.71	$	0.67	$	1.22	$	1.15
	Cumulative effect of accounting changes			-		-		-		0.01
	Net income		$	0.71	$	0.67	$	1.22	$	1.16
Diluted earnings per share:
	Income before cumulative effect
		of accounting changes	$	0.70	$	0.66	$	1.21	$	1.13
	Cumulative effect of accounting changes			-		-		-		0.01
	Net income		$	0.70	$	0.66	$	1.21	$	1.14
Dividends per share			$	0.15	$	0.113	$	0.30	$	0.225
Weighted average shares outstanding:
	Basic			109,420		123,710		112,049		123,032
	Diluted			110,719		125,426		113,384		124,743

See accompanying notes to consolidated financial statements

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JOY GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

				April 27,		October 28,
				2007		2006
				(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		$	91,644	$	101,254
	Accounts receivable, net			442,372		431,430
	Inventories			740,603		639,934
	Other current assets			66,157		55,257
		Total current assets		1,340,776		1,227,875
Property, plant and equipment, net				214,422		205,011
Intangible assets, net				70,888		76,154
Deferred income taxes				296,480		335,690
Prepaid benefit cost				60,790		69,388
Other assets				50,578		39,887
		Total assets	$	2,033,934	$	1,954,005
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Short-term notes payable, including current portion
		of long-term obligations	$	2,056	$	5,166
	Trade accounts payable			183,870		200,121
	Employee compensation and benefits			49,532		77,415
	Advance payments and progress billings			197,983		186,581
	Accrued warranties			41,076		38,929
	Other accrued liabilities			85,459		91,769
		Total current liabilities		559,976		599,981
	Long-term obligations			521,061		98,145
	Accrued pension costs			265,266		264,093
	Other			73,208		72,157
		Total liabilities		1,419,511		1,034,376
Shareholders' equity				614,423		919,629
		Total liabilities and shareholders' equity	$	2,033,934	$	1,954,005

See accompanying notes to consolidated financial statements

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JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(In thousands)

			Six Months Ended
			April 27,		April 29,
			2007		2006
Cash flows from operating activities:
Net income		$	137,244	$	142,621
Non-cash items:
	Cumulative effect of accounting change		-		(1,565)
	Depreciation and amortization		24,229		19,088
	Increase in deferred income taxes, net of change in valuation allowance		99		11,839
	Excess income tax benefit from exercise of stock options		(3,466)		(19,935)
	Change in long-term accrued pension costs		11,773		11,645
	Other, net		(2,853)		(4,256)
Changes in working capital items:
	Increase in accounts receivable, net		(2,209)		(8,046)
	Increase in inventories		(87,339)		(56,673)
	(Increase) decrease in other current assets		(4,336)		2,772
	Decrease in trade accounts payable		(22,030)		(6,451)
	Decrease in employee compensation and benefits		(29,162)		(22,310)
	Increase (decrease) in advance payments and progress billings		5,676		(24,530)
	Increase in other accrued liabilities		32,539		32,419
Net cash provided by operating activities			60,165		76,618
Cash flows from investing activities:
	Acquisition of business, net of cash acquired		(10,601)		-
	Property, plant and equipment acquired		(23,805)		(24,568)
	Proceeds from the sale of property, plant and equipment		187		6,296
	Other, net		30		812
Net cash used by investing activities			(34,189)		(17,460)
Cash flows from financing activities:
	Exercise of stock options		7,394		13,366
	Excess income tax benefit from exercise of stock options		3,466		19,935
	Dividends paid		(33,680)		(27,550)
	Purchase of treasury stock		(434,413)		(37,106)
	Issuance of senior notes		394,874		-
	Financing fees		(976)		-
	Borrowings on long-term obligations, net		27,800		146
	Decrease in short-term notes payable		(3,564)		-
Net cash used by financing activities			(39,099)		(31,209)
Effect of exchange rate changes on cash and cash equivalents			3,513		3,372
(Decrease) Increase in Cash and Cash Equivalents			(9,610)		31,321
Cash and Cash Equivalents at Beginning of Period			101,254		143,917
Cash and Cash Equivalents at End of Period		$	91,644	$	175,238

See accompanying notes to consolidated financial statements

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JOY GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 27, 2007

(Unaudited)

1. Description of Business

Joy Global Inc. is the world's leading manufacturer and servicer of high productivity mining equipment for the extraction of coal and other minerals and ores. Our equipment is used in major mining regions throughout the world to mine coal, copper, iron ore, oil sands and other minerals. We operate in two business segments: underground mining machinery (Joy Mining Machinery or “Joy”) and surface mining equipment (P&H Mining Equipment or “P&H”). Joy is a major manufacturer of underground mining equipment for the extraction of coal and other bedded minerals and offers comprehensive service locations near major mining regions worldwide. P&H is a major producer of surface mining equipment for the extraction of ores and minerals and provides extensive operational support for many types of equipment used in surface mining.

2. Basis of Presentation

The Condensed Consolidated Financial Statements presented in this quarterly report on Form 10-Q are unaudited and have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission.

In our opinion, all adjustments necessary for the fair presentation on a going concern basis of the results of operations, cash flows and financial position for all periods presented have been made. All adjustments made are of a normal recurring nature.

These financial statements should be read in conjunction with the financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended October 28, 2006. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts could differ from the estimates.

3. Borrowings and Credit Facilities

On November 10, 2006, we amended our $400.0 million unsecured revolving credit facility (“Credit Agreement”) to extend the facility through November 10, 2011 and also amend certain financial covenants, including the elimination of covenants that had the effect of restricting stock repurchases and limiting capital expenditures. Outstanding borrowings bear interest equal to LIBOR plus the applicable margin (.5% to 1.25%) or the Base Rate (defined as the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%) at our option. We pay a commitment fee ranging from 0.125% to 0.25% on the unused portion of the revolving credit facility based on our credit rating. The Credit Agreement requires the maintenance of certain financial covenants including leverage and interest coverage. On April 27, 2007, we were in compliance with all financial covenants in the Credit Agreement.

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At April 27, 2007, there were $125.0 million outstanding direct borrowings under the Credit Agreement. Outstanding letters of credit issued under the Credit Agreement, which count toward the $400 million credit limit, totaled $120.7 million. At April 27, 2007, there was $154.3 million available for borrowings under the Credit Agreement.

In November 2006, we issued $250.0 million of 6% Senior Notes due 2016 and $150.0 million of 6.625% Senior Notes due 2036 with interest on the notes being paid semi-annually in arrears on May 15 and November 15 of each year, starting on May 15, 2007. The notes are guaranteed by each of our current and future significant domestic subsidiaries. Proceeds from these offerings were used for the repayment of outstanding revolver balances and additional share repurchases.

4. Shareholders’ Equity

On February 22, 2007, our Board of Directors declared a cash dividend of $0.15 per outstanding share of common stock. The dividend was paid on March 19, 2007 to all stockholders of record at the close of business on March 5, 2007.

Under our share repurchase program, management is authorized to repurchase up to $1.0 billion in shares in the open market or through privately negotiated transactions until December 31, 2008. During the three months ended April 27, 2007, we repurchased approximately $74.7 million of common stock, representing 1,608,734 shares. During the six months ended April 27, 2007, we have repurchased approximately $434.4 million of common stock, representing 9,714,160 shares. As of April 27, 2007, 15,860,912 of shares were held as treasury shares.

Comprehensive income consisted of the following:

			Three Months Ended				Six Months Ended
			April 27,		April 29,		April 27,		April 29,
In thousands			2007		2006		2007		2006
Net income		$	77,579	$	82,877	$	137,244	$	142,621
Other comprehensive income (loss):
	Minimum pension liability adjustment		-		-		-		3,376
	Translation adjustments		7,732		2,064		17,745		9,223
	Derivative fair value adjustments		(1,010)		2,881		358		4,739
Total other comprehensive income			6,722		4,945		18,103		17,338
Total comprehensive income		$	84,301	$	87,822	$	155,347	$	159,959

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5. Stock Based Compensation

We account for stock based compensation in accordance with Statement of Financial Accounting Standards (“SFAS”) 123(R), Share Based Payments (“SFAS 123(R)”). The total stock based compensation expense recognized for the six months ended April 27, 2007 and April 29, 2006 was approximately $5.3 million and $4.2 million, respectively. The total stock-based compensation expense we recognized for the three months ended April 27, 2007 and April 29, 2006 was approximately $3.0 million and $1.9 million, respectively.

During the three months ended April 27, 2007, there were 395,825 of deferred performance shares issued.

Stock Options

A summary of stock option activity under all plans is as follows:

			Weighted-Average
	Number of		Exercise Price
	Options		per Share
Outstanding at October 28, 2006	2,549,476	$	18.10
Options granted	644,500		41.80
Options exercised	(450,037)		16.56
Options forfeited or cancelled	(169,618)		25.89
Outstanding at April 27, 2007	2,574,321	$	23.79

6. Basic and Diluted Net Income Per Share

Basic net income per share is computed based on the weighted-average number of shares outstanding during each period. Diluted net income per share is computed based on the weighted average number of ordinary shares during each period, plus dilutive potential shares considered outstanding during the period in accordance with SFAS No. 128, “Earnings per Share.”

Options outstanding used to compute earnings per share excluded 86,500 and 85,250 shares of common stock for the three months and six months ended April 27, 2007, respectively, as their inclusion would have been anti-dilutive. No options outstanding were excluded from the calculation of the weighted average diluted common stock used to compute earnings per share for the three months and six months ended April 29, 2006, respectively.

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The following table sets forth the computation of basic and diluted earnings per share:

			Three Months Ended				Six Months Ended
			April 27,		April 29,		April 27,		April 29,
In thousands except per share data			2007		2006		2007		2006
Numerator:
	Income before cumulative effect
	of changes in accounting principle	$	77,579	$	82,877	$	137,244	$	141,056
	Cumulative effect of changes in accounting
	principle, net of income taxes		-		-		-		1,565
	Net income	$	77,579	$	82,877	$	137,244	$	142,621
Denominator:
	Denominator for basic net income per share -
	Weighted average shares		109,420		123,710		112,049		123,032
	Effect of dilutive securities:
	Stock options, restricted stock units and
	performance shares		1,299		1,716		1,335		1,711
	Denominator for diluted net income per share -
	Adjusted weighted average shares and
	assumed conversions		110,719		125,426		113,384		124,743
Basic earnings per share
	Income before cumulative effect of
	changes in accounting principle	$	0.71	$	0.67	$	1.22	$	1.15
	Cumulative effect		-		-		-		0.01
	Net Income	$	0.71	$	0.67	$	1.22	$	1.16
Diluted earnings per share
	Income before cumulative effect of
	changes in accounting principle	$	0.70	$	0.66	$	1.21	$	1.13
	Cumulative effect		-		-		-		0.01
	Net Income	$	0.70	$	0.66	$	1.21	$	1.14

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7. Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite useful lives are not amortized but are tested for impairment at least annually. Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

				April 27, 2007				October 28, 2006
		Weighted
		Average		Gross				Gross
		Amortization		Carrying		Accumulated		Carrying		Accumulated
In thousands		Period		Amount		Amortization		Amount		Amortization
Finite lived other intangible assets:
	Engineering Drawings	6 years	$	2,900	$	(363)	$	2,900	$	(121)
	Customer Relationships	20 years		31,000		(1,513)		31,000		(505)
	Backlog	1 year		5,990		(4,528)		5,990		(1,498)
	Non-Compete Agreements	5 years		5,300		(795)		5,300		(265)
	Patents	17 years		10,543		(4,560)		10,500		(4,079)
	Unpatented Technology	35 years		1,147		(123)		1,147		(105)
	Subtotal	16 years		56,880		(11,882)		56,837		(6,573)
Indefinite lived other intangible assets:
	Trademarks			21,500		-		21,500		-
	Pension			4,390		-		4,390		-
	Subtotal			25,890		-		25,890		-
Total other intangible assets			$	82,770	$	(11,882)	$	82,727	$	(6,573)

Amortization expense was $2.6 million and $0.4 million for the three months ended April 27, 2007 and April 29, 2006, respectively and $5.3 million and $0.2 million for the six months ended April 27, 2007 and April 29, 2006, respectively. Estimated annual amortization expense is as follows:

In thousands
For the fiscal year ending:
	2007	$	8,656
	2008		4,001
	2009		3,840
	2010		3,803
	2011		3,480

Goodwill of $3.7 million was recorded in Fiscal 2006 as part of the Stamler acquisition and recorded as part of the underground mining machinery segment. An additional $2.5 million of goodwill was recorded in Fiscal 2007 primarily related to the finalization of the opening balance sheet.

In December 2006, we acquired the assets of Donnelly Pty. Ltd., a small motor rebuild operation in Australia for a total cost of approximately $8.5 million. We are still in the process of finalizing third-party valuations

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of certain intangible assets; accordingly, allocation of the purchase price is subject to modification in the future.

8. Contingent Liabilities

We and our subsidiaries are involved in various unresolved legal matters that arise in the normal course of operations, the most prevalent of which relate to product liability (including asbestos-related and silicosis liability), employment and commercial matters. Also, as a normal part of their operations, our subsidiaries undertake contractual obligations, warranties and guarantees in connection with the sale of products or services. Although the outcome of these matters cannot be predicted with certainty and favorable or unfavorable resolutions may affect the results of operations on a quarter-to-quarter basis, we believe that the outcome of such legal and other matters will not have a materially adverse effect on our consolidated financial position, results of operations or liquidity.

From time to time we and our subsidiaries become involved in proceedings relating to environmental matters. We believe that the resolution of such environmental matters will not have a materially adverse effect on our consolidated financial position, results of operations or liquidity.

On April 19, 2004, Joy South Africa declared a dividend to our wholly owned subsidiary in the United Kingdom in the amount of approximately $46.0 million. As part of the transaction and in accordance with the South African Tax Act (“Act”), Joy South Africa was not required to pay tax on the transaction. In August 2004 the South African Revenue Service (“SARS”) stated that it disagreed with the Joy South Africa interpretation of the Act and would attempt to collect this tax. In September 2005, we received a notice of assessment from SARS, which as of April 2007 was approximately $7.4 million, including interest and penalties. We have not made payment or recorded a liability as it relates to the assessment, as management believes the exemption utilized during the dividend transaction was valid in accordance with the Act. We also believe further information will become available as a result of a similar case which is pending trial. We will continue to defend our position on the matter.

During the fourth quarter of Fiscal 2006, Joy Mining completed the manufacturing of a powered roof support system for a customer in China. In accordance with company policy, revenue was recognized under the percentage of completion method. During the last half of Fiscal 2006, the customer experienced a series of explosions at their mine, which in turn shut down the mine and delayed the delivery of the system and corresponding payments. We are currently working with our customer on a timeline in which they will be able to remit payment. We believe we will receive payment in full on the system mainly due to the close proximity of the mine to a coal fueled power plant, but if collectability is determined to not be assured and alternative sales are not viable, the maximum amount of the loss could be approximately $19.0 million.

At April 27, 2007, we were contingently liable to banks, financial institutions and others for approximately $149.0 million for outstanding letters of credit, bank guarantees and surety bonds securing performance of sales contracts and other guarantees in the ordinary course of business. Included in the amount were $10.8 million of outstanding letters of credit or other guarantees issued by non-U.S. banks for non-U.S. subsidiaries.

We have entered into various forward foreign exchange contracts with major international financial institutions for the purpose of hedging our risk of loss associated with changes in foreign exchange rates. These contracts involve off-balance-sheet market and credit risk. As of April 27, 2007, the nominal or face value of forward foreign exchange contracts to which we are a party, in absolute U.S. dollar equivalent terms, was $198.5 million.

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Forward exchange contracts are entered into to protect the value of committed future foreign currency receipts and disbursements and net investment hedges and consequently any market related loss on the forward contract would be offset by changes in the value of the hedged item. As a result, we are not exposed to net market risk associated with these instruments.

We are exposed to credit-related losses in the event of non-performance by counterparties to our forward exchange contracts, but we do not expect any counterparties to fail to meet their obligations. A contract is generally subject to credit risk only when it has a positive fair value and the maximum exposure is the amount of the positive fair value.

We are currently negotiating retirement income matters in accordance with the memorandum of understanding within the 2004 contract agreement with the United Steelworkers of America (“Steelworkers”) at P&H Mining Equipment’s manufacturing facility in Milwaukee, Wisconsin. While we have passed the contractual deadline of May 1, 2007, both management and the Steelworkers are currently engaged in mediation to find a mutually agreeable solution. Although management is optimistic that this matter can be resolved without adverse impact on the business, we have contingency plans covering a variety of outcomes.

9. Inventories

Consolidated inventories consisted of the following:

		April 27,		October 28,
In thousands		2007		2006
Finished goods	$	453,530	$	358,785
Work in process and purchased parts		221,063		207,660
Raw materials		66,010		73,489
	$	740,603	$	639,934

10. Warranties

We provide a warranty reserve for the estimated costs that may be incurred under product warranties to remedy deficiencies of quality or performance in our products. These product warranties extend over either a specified period of time, units of production or machine hours depending upon the product subject to the warranty. We accrue a provision for estimated future warranty costs based upon the historical relationship of warranty costs to sales. We periodically review the adequacy of the accrual for product warranties and adjust the warranty percentage and accrued warranty reserve for actual experience as appropriate.

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The following table reconciles the changes in the Company's product warranty reserve:

			Three Months Ended				Six Months Ended
			April 27,		April 29,		April 27,		April 29,
In thousands			2007		2006		2007		2006
Balance, beginning of period		$	40,988	$	37,697	$	38,929	$	34,183
	Accrual for warranty expensed during
	the period		8,656		5,786		14,597		11,384
	Settlements made during the period		(8,839)		(4,909)		(13,438)		(7,084)
	Change in liability for pre-existing warranties
	during the period, including expirations		112		(171)		207		(285)
	Effect of foreign currency translation		159		319		781		524
Balance, end of period		$	41,076	$	38,722	$	41,076	$	38,722

11. Pension and Postretirement

The components of net periodic benefit costs recognized are as follows:

			Pension Benefits				Postretirement Benefits
			Three Months Ended				Three Months Ended
			April 27,		April 29,		April 27,		April 29,
In thousands			2007		2006		2007		2006
Service cost		$	5,773	$	5,249	$	220	$	48
Interest cost			20,014		18,593		798		753
Expected return on assets			(21,781)		(20,511)		(63)		-
Amortization of:
	Prior service cost		126		111		(25)		-
	Actuarial loss		5,689		5,272		111		196
Net periodic benefit cost		$	9,821	$	8,714	$	1,041	$	997

			Pension Benefits				Postretirement Benefits
			Six Months Ended				Six Months Ended
			April 27,		April 29,		April 27,		April 29,
In thousands			2007		2006		2007		2006
Service cost		$	11,546	$	10,498	$	439	$	97
Interest cost			40,029		37,186		1,596		1,505
Expected return on assets			(43,563)		(41,023)		(126)		-
Amortization of:
	Prior service cost		251		222		(50)		-
	Actuarial loss		11,379		10,544		223		391
Net periodic benefit cost		$	19,642	$	17,427	$	2,082	$	1,993

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12. Segment Information

At April 27, 2007, we had two reportable segments: Underground Mining Machinery and Surface Mining Equipment. Operating income (loss) of the segments does not include interest income (expense) or provision for income taxes. There are no significant intersegment sales. There has not been a material change in segment total assets from October 28, 2006.

		Second Quarter				Six Months
In thousands		Fiscal 2007		Fiscal 2006		Fiscal 2007		Fiscal 2006
Net Sales
Underground Mining Machinery	$	363,179	$	335,188	$	690,300	$	676,583
Surface Mining Equipment		265,983		225,160		499,328		437,106
Consolidated Total	$	629,162	$	560,348	$	1,189,628	$	1,113,689
Operating Income
Underground Mining Machinery	$	81,685	$	77,693	$	139,811	$	141,734
Surface Mining Equipment		47,491		39,503		90,513		73,858
Total operations		129,176		117,196		230,324		215,592
Corporate		(7,599)		(6,704)		(14,765)		(14,694)
Consolidated Total		121,577		110,492		215,559		200,898
Interest income		1,176		1,886		3,844		3,651
Interest expense		(9,219)		(578)		(16,329)		(1,145)
Reorganization items		(130)		5,077		(280)		4,952
Income before income taxes	$	113,404	$	116,877	$	202,794	$	208,356

13. Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — An Amendment of FASB Statements No. 87, 88, 106, and 132R (“SFAS 158”). SFAS 158 requires companies to recognize the funded status of pension and other postretirement benefit plans on sponsoring employers’ balance sheets and to recognize changes in the funded status in the year the changes occur. SFAS 158 is effective for us at the end of Fiscal 2007. The effect on our financial statements is dependent upon the discount rate at our Fiscal 2007 measurement date (October 26, 2007) and actual returns on our pension plan assets during the year. We expect the statement to result in a reduction of our shareholders’ equity. It is unlikely that SFAS 158 will affect our loan covenant compliance.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and retirement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 will be effective for us

-14-

beginning in Fiscal 2008. We are evaluating the interpretation to determine the effect on our financial statements and related disclosures.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS 159 becomes effective for us beginning in Fiscal 2009. We do not believe the adoption of SFAS 159 will have a significant effect on our financial statements or related disclosures.

14. Subsidiary Guarantors

The following tables present condensed consolidated financial information as of and for the three months and six months ended April 27, 2007 and April 29, 2006 for; (a) the Company; (b) on a combined basis, the guarantors of the Credit Agreement and Senior Notes issued in November 2006, which include Joy Technologies Inc. and P&H Mining Equipment Inc. (“Subsidiary Guarantors”); and (c) on a combined basis, the non-guarantors, which include all of our foreign subsidiaries and a number of small domestic subsidiaries (“Non-Guarantor Subsidiaries”). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantors are unconditionally, jointly, and severally liable under the guarantees, and we believe such separate statements or disclosures would not be useful to investors.

-15-

Condensed Consolidated

Statement of Income

Three Months Ended April 27, 2007

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net sales		$	-	$	433,872	$	344,814	$	(149,524)	$	629,162
Cost of sales			-		301,711		239,102		(120,823)		419,990
Product development, selling
	and administrative expenses		7,503		45,962		35,548		-		89,013
Other (income) expense			-		5,932		(7,350)		-		(1,418)
Operating income (loss)			(7,503)		80,267		77,514		(28,701)		121,577
Intercompany items			(3,095)		(7,539)		(8,149)		18,783		-
Interest income (expense) - net			(8,915)		90		782		-		(8,043)
Reorganization items			(130)		-		-		-		(130)
Income (loss) before income taxes
	and equity		(19,643)		72,818		70,147		(9,918)		113,404
(Provision) benefit for income taxes			9,869		(30,257)		(15,437)		-		(35,825)
Equity in income (loss) of subsidiaries			87,353		40,453		9,909		(137,715)		-
Net Income		$	77,579	$	83,014	$	64,619	$	(147,633)	$	77,579

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Condensed Consolidated

Statement of Income

Three Months Ended April 29, 2006

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net sales		$	-	$	364,674	$	306,374	$	(110,700)	$	560,348
Cost of sales			-		250,181		218,686		(93,109)		375,758
Product development, selling
	and administrative expenses		6,680		42,232		29,163		-		78,075
Other income					6,506		(10,483)		-		(3,977)
Operating income (loss)			(6,680)		65,755		69,008		(17,591)		110,492
Intercompany items			4,656		(10,475)		(8,289)		14,108		-
Interest income (expense) - net			149		175		984		-		1,308
Reorganization items			5,077		-		-		-		5,077
Income (loss) before income taxes
	and equity		3,202		55,455		61,703		(3,483)		116,877
(Provision) benefit for income taxes			4,354		(27,825)		(10,529)		-		(34,000)
Equity in income (loss) of subsidiaries			75,321		43,843		9,446		(128,610)		-
Income before cumulative effect of changes
	in accounting principle		82,877		71,473		60,620		(132,093)		82,877
Cumulative effect of changes in accounting
	principle		-		-		-		-		-
Net Income		$	82,877	$	71,473	$	60,620	$	(132,093)	$	82,877

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Condensed Consolidated

Statement of Income

Six Months Ended April 27, 2007

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net sales		$	-	$	797,568	$	680,154	$	(288,094)	$	1,189,628
Cost of sales			-		555,051		485,513		(234,975)		805,589
Product development, selling
	and administrative expenses		14,613		87,624		68,626		-		170,863
Other income			-		14,404		(16,787)		-		(2,383)
Operating income (loss)			(14,613)		140,489		142,802		(53,119)		215,559
Intercompany items			(3,345)		(15,640)		(20,902)		39,887		-
Interest income (expense) - net			(13,996)		299		1,212		-		(12,485)
Reorganization items			(280)		-		-		-		(280)
Income (loss) before income taxes
	and equity		(32,234)		125,148		123,112		(13,232)		202,794
(Provision) benefit for income taxes			14,512		(54,442)		(25,620)		-		(65,550)
Equity in income (loss) of subsidiaries			154,966		75,534		13,996		(244,496)		-
Net Income		$	137,244	$	146,240	$	111,488	$	(257,728)	$	137,244

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Condensed Consolidated

Statement of Income

Six Months Ended April 29, 2006

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net sales		$	-	$	692,092	$	669,925	$	(248,328)	$	1,113,689
Cost of sales			-		481,569		490,769		(208,981)		763,357
Product development, selling
	and administrative expenses		14,400		82,769		57,226		-		154,395
Other income			-		13,879		(18,840)		-		(4,961)
Operating income (loss)			(14,400)		113,875		140,770		(39,347)		200,898
Intercompany items			3,704		(19,437)		(19,678)		35,411		-
Interest income (expense) - net			170		321		2,015		-		2,506
Reorganization items			4,952		-		-		-		4,952
Income (loss) before income taxes
	and equity		(5,574)		94,759		123,107		(3,936)		208,356
(Provision) benefit for income taxes			5,286		(51,031)		(21,555)		-		(67,300)
Equity in income (loss) of subsidiaries			141,344		90,288		21,489		(253,121)		-
Income before cumulative effect of changes
	in accounting principle		141,056		134,016		123,041		(257,057)		141,056
Cumulative effect of changes in accounting
	principle		1,565		-		-		-		1,565
Net Income		$	142,621	$	134,016	$	123,041	$	(257,057)	$	142,621

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Condensed Consolidated

Balance Sheet

April 27, 2007

(In thousands)

				Parent		Subsidiary		Non-Guarantor
				Company		Guarantors		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
	Cash and cash equivalents		$	16,871	$	8,082	$	66,691	$	-	$	91,644
	Accounts receivable-net			-		216,407		258,394		(32,429)		442,372
	Inventories			-		400,684		381,105		(41,186)		740,603
	Other current assets			31,920		18,368		21,494		(5,625)		66,157
		Total current assets		48,791		643,541		727,684		(79,240)		1,340,776
Property, plant and equipment-net				199		134,639		79,584		-		214,422
Intangible assets-net				4,390		65,241		1,257		-		70,888
Investment in affiliates				1,692,168		758,812		182,179		(2,633,159)		-
Intercompany accounts-net				(612,430)		97,468		544,208		(29,246)		-
Deferred income taxes				296,480		-		-		-		296,480
Prepaid benefit costs				1,174		-		59,616		-		60,790
Other assets				2,057		27,829		20,692		-		50,578
		Total assets	$	1,432,829	$	1,727,530	$	1,615,220	$	(2,741,645)	$	2,033,934
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Short-term notes payable, including current portion
	of long-term obligations		$	48	$	11	$	1,997	$	-	$	2,056
	Trade accounts payable			794		97,212		86,733		(869)		183,870
	Employee compensation and benefits			3,662		26,462		19,408		-		49,532
	Advance payments and progress billings			-		93,992		117,168		(13,177)		197,983
	Accrued warranties			-		22,069		19,007		-		41,076
	Other accrued liabilities			(6,273)		40,857		62,052		(11,177)		85,459
		Total current liabilities		(1,769)		280,603		306,365		(25,223)		559,976
Long-term obligations				520,010		155		896		-		521,061
Other non-current liabilities				300,165		12,138		26,171		-		338,474
Shareholders' equity				614,423		1,434,634		1,281,788		(2,716,422)		614,423
		Total liabilities and shareholders' equity	$	1,432,829	$	1,727,530	$	1,615,220	$	(2,741,645)	$	2,033,934

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Condensed Consolidated

Balance Sheet

October 28, 2006

(In thousands)

				Parent		Subsidiary		Non-Guarantor
				Company		Guarantors		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
	Cash and cash equivalents		$	(1,270)	$	24,970	$	77,554	$	-	$	101,254
	Accounts receivable-net			-		196,129		257,275		(21,974)		431,430
	Inventories			-		375,128		309,159		(44,353)		639,934
	Other current assets			32,273		7,046		15,938		-		55,257
		Total current assets		31,003		603,273		659,926		(66,327)		1,227,875
Property, plant and equipment-net				235		134,004		70,772		-		205,011
Intangible assets-net				4,390		74,059		(2,295)		-		76,154
Investment in affiliates				1,523,484		672,059		160,845		(2,356,388)		-
Intercompany accounts-net				(592,439)		98,255		509,836		(15,652)		-
Deferred income taxes				335,690		-		-		-		335,690
Prepaid benefit costs				12,724		-		56,664		-		69,388
Other assets				1,252		20,650		17,985		-		39,887
		Total assets	$	1,316,339	$	1,602,300	$	1,473,733	$	(2,438,367)	$	1,954,005
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Short-term notes payable, including current portion
	of long-term obligations		$	-	$	11	$	5,155	$	-	$	5,166
	Trade accounts payable			3,399		103,929		92,793		-		200,121
	Employee compensation and benefits			6,813		45,919		24,683		-		77,415
	Advance payments and progress billings			-		96,219		97,238		(6,876)		186,581
	Accrued warranties			-		20,057		18,872		-		38,929
	Other accrued liabilities			(10,022)		60,075		66,774		(25,058)		91,769
		Total current liabilities		190		326,210		305,515		(31,934)		599,981
Long-term obligations				97,048		161		936		-		98,145
Other non-current liabilities				299,472		12,113		24,665		-		336,250
Shareholders' equity				919,629		1,263,816		1,142,617		(2,406,433)		919,629
		Total liabilities and shareholders' equity	$	1,316,339	$	1,602,300	$	1,473,733	$	(2,438,367)	$	1,954,005

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Condensed Consolidated

Statement of Cash Flows

Six Months Ended April 27, 2007

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net cash provided (used) by operating activities		$	53,587	$	(359)	$	7,123	$	(186)	$	60,165
Investing Activities:
	Acquisition of business, net of cash received		-		(2,147)		(8,454)		-		(10,601)
	Property, plant and equipment acquired		-		(15,040)		(8,951)		186		(23,805)
	Proceeds from the sale of property, plant and equipment		-		12		175		-		187
	Other - net		(111)		652		(511)		-		30
	Net cash (used) provided by investing activities		(111)		(16,523)		(17,741)		186		(34,189)
Financing Activities:
	Exercise of stock options		7,394		-		-		-		7,394
	Excess income tax benefit from exercise of stock options		3,466		-		-		-		3,466
	Dividends paid		(33,680)		-		-		-		(33,680)
	Purchase of treasury stock		(434,413)		-		-		-		(434,413)
	Issuance of senior notes		394,874		-		-		-		394,874
	Financing fees		(976)		-		-		-		(976)
	Borrowings (payments) on long-term obligations, net		28,000		(6)		(194)		-		27,800
	Increase (decrease) in short-term notes payable, net		-		-		(3,564)		-		(3,564)
	Net cash used by financing activities		(35,335)		(6)		(3,758)		-		(39,099)
Effect of Exchange Rate Changes on Cash and
	Cash Equivalents		-		-		3,513		-		3,513
Increase (Decrease) in Cash and Cash Equivalents			18,141		(16,888)		(10,863)		-		(9,610)
Cash and Cash Equivalents at Beginning of Period			(1,270)		24,970		77,554		-		101,254
Cash and Cash Equivalents at End of Period		$	16,871	$	8,082	$	66,691	$	-	$	91,644

-22-

Condensed Consolidated

Statement of Cash Flows

Six Months Ended April 29, 2006

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net cash provided by operating activities		$	62,427	$	7,882	$	6,309	$	-	$	76,618
Investing Activities:
	Acquisition of business, net of cash received		-		-		-		-		-
	Property, plant and equipment acquired		(94)		(15,557)		(8,917)		-		(24,568)
	Proceeds from the sale of property, plant and equipment		-		847		5,449		-		6,296
	Other - net		(181)		860		133		-		812
	Net cash used by investing activities		(275)		(13,850)		(3,335)		-		(17,460)
Financing Activities:
	Exercise of stock options		13,366		-		-		-		13,366
	Excess income tax benefit from exercise of stock options		19,935		-		-		-		19,935
	Dividends paid		(27,550)		-		-		-		(27,550)
	Borrowings (payments) on long-term obligations, net		-		(5)		151		-		146
	Purchase of treasury stock		(37,106)		-		-		-		(37,106)
	Net cash (used) provided by financing activities		(31,355)		(5)		151		-		(31,209)
Effect of Exchange Rate Changes on Cash and
	Cash Equivalents		-		-		3,372		-		3,372
Increase (Decrease) in Cash and Cash Equivalents			30,797		(5,973)		6,497		-		31,321
Cash and Cash Equivalents at Beginning of Period			52,427		5,694		85,796		-		143,917
Cash and Cash Equivalents at End of Period		$	83,224	$	(279)	$	92,293	$	-	$	175,238

-23-

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. Forward-looking statements are subject to risks, uncertainties and assumptions which could cause actual results to differ materially from those projected, including those described in Item 5 - Other Information – Forward-Looking Statements and Cautionary Factors in Part II of this report.

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes to the Condensed Consolidated Financial Statements in Part I of this report. Dollar amounts are in thousands, except share and per share data and as indicated.

Overview

Joy Global Inc., a worldwide leader in high-productivity mining solutions, manufactures and markets original equipment and aftermarket parts and services for both the underground and aboveground mining industries through two business segments, Underground Mining Machinery and Surface Mining Equipment. Our principal manufacturing facilities are located in the United States, including facilities in Pennsylvania and Wisconsin, and in the United Kingdom, South Africa, Chile, Australia and China.

Operating results during the second quarter of Fiscal 2007 and six month period then ended represent the continued strength of international commodity markets offset with softness in underground U.S. coal markets. Net sales for the second quarter of Fiscal 2007 totaled $629 million compared with $560 million in the second quarter of Fiscal 2006 while net sales for the Fiscal 2007 six months totaled $1.2 billion compared with $1.1 billion in the Fiscal 2006 six months. The acquisition of Stamler during the fourth quarter of Fiscal 2006 added $30.1 and $59.0 million of sales in the quarter and six months, respectively, while consistent growth in aftermarket parts and service globally contributed to the remainder of the increase. Operating income totaled $122 million in the second quarter Fiscal 2007 compared to $110 million in the prior year second quarter and $216 million in the Fiscal 2007 six months compared to $201 million in the prior year six month period. The increase in operating income was due to increased gross profit margins primarily related to a higher mix of aftermarket revenues offset by incremental expenses associated with the Stamler acquisition. Net income was down from $82.9 million in the second quarter Fiscal 2006 to $77.6 million in Fiscal 2007 and down from $142.6 million in the Fiscal 2006 six months compared to $137.2 million in the Fiscal 2007 six months. Both the quarter and six month period decreases in net income were primarily impacted by increased interest expense related to our Senior Note offering during the first quarter Fiscal 2007.

The demand for commodities mined by our customers continues to remain strong. Commodity prices for copper and iron ore are well above production costs with demand expected to outpace supply on the sustained economic growth in China and other developing countries. As the strong commodity cycle develops, our customers that mine these resources continue strategic expansion projects, which results in many short and long-term opportunities for both original equipment and aftermarket needs. The oil sands of Canada continue to be a significant long-term growth opportunity for surface mining with the expected market demand to be 6 to 8 shovels a year through 2015. Coal markets outside of the U.S. have shown strength in the quarter. The recent tightening of the seaborne thermal coal market has begun to show strength primarily due to China’s change in status from a net exporter to net importer of thermal coal. As China needs additional energy requirements to keep pace with current and future strong economic growth, high productivity mining equipment will become more prevalent in existing and new mines.

The softening of the U.S. underground coal market has continued in the second quarter of Fiscal 2007. Certain positive signs, such as higher electrical power demand in 2007 as compared to 2006 and slowly increasing spot coal pricing in eastern production areas, have signaled that conditions are improving. Despite these indicators, more positive U.S. coal conditions will not become apparent until spot prices increase to a level which supports the development of new mines and the reopening of currently idled mines. The timing of these

-24-

events is impossible to determine and new orders of original equipment specifically related to underground mining will continue to be adversely effected by such uncertainty. The long-term outlook for U.S. coal remains positive with electricity demand continuing to strengthen over the foreseeable future. Coal continues to be one of the most cost effective energy sources and as new coal technologies are developed, additional demand will be created as environmental concerns subside.

Results of Operations

Three Months Ended April 27, 2007 to Three Months Ended April 29, 2006.

Net Sales

The following table sets forth the combined net sales included in our Condensed Consolidated Statement of Income:

			Three Months Ended
			April 27,		April 29,		$	%
In thousands			2007		2006		Change	Change
Net Sales
	Underground Mining Machinery	$	363,179	$	335,188	$	27,991	8.4%
	Surface Mining Equipment		265,983		225,160		40,823	18.1%
	Total	$	629,162	$	560,348	$	68,814	12.3%

The increase in net sales for Underground Mining Machinery in the second quarter was the result of a $2.0 million increase in original equipment shipments and a $26.0 million increase in the sale of aftermarket products and service. Decreased original equipment sales were reported in the emerging markets served out of the United Kingdom offset by incremental sales related to the Stamler line of business, which was purchased during the fourth quarter of Fiscal 2006. In the emerging markets served out of the United Kingdom, the decrease in original equipment sales was due to a roof support system and flexible conveyor train sale in the second quarter of Fiscal 2006 not duplicated in the second quarter of Fiscal 2007. Aftermarket sales increases were primarily due to emerging markets served out of the United Kingdom on continued demand for coal mining activity internationally.

The increase in net sales for Surface Mining Equipment in the second quarter was the result of a $5.7 million increase in original equipment and a $35.1 million increase in aftermarket products and service. Growth remained consistent in the market for original equipment and aftermarket sales globally. During the quarter, original equipment and aftermarket sales were particularly strong in the United States due to the continued strength in the demand for coal and copper. Aftermarket sales also increased in Chile by over 15% and almost doubled in emerging markets served out of the United Kingdom. Aftermarket growth was partially offset by decreases in South Africa, Canada and Australia primarily due to timing.

-25-

Operating Income

The following table sets forth the operating income (loss) included in our Condensed Consolidated Statement of Income:

			Three Months Ended
			April 27, 2007			April 29, 2006
			Operating	%		Operating	%
In thousands			Income (loss)	of Net Sales		Income (loss)	of Net Sales
	Underground Mining Machinery	$	81,685	22.5%	$	77,693	23.2%
	Surface Mining Equipment		47,491	17.9%		39,503	17.5%
	Corporate Expense		(7,599)			(6,704)
	Total	$	121,577	19.3%	$	110,492	19.7%

Operating income as a percentage of net sales for Underground Mining Machinery decreased from 23.2% in the second quarter of 2006 to 22.5% in the second quarter of 2007. The decrease in operating profit as a percentage of sales was primarily driven by increased product development selling and administrative expenses as a percentage of sales of 1.2% and a less favorable sales mix of original equipment and aftermarket sales of 0.5% offset by decreased period costs as a percentage of sales of 1.0% due to more stable material costs, decreased overtime premiums and decreased performance-based incentive compensation.

Operating income as a percentage of net sales for Surface Mining Equipment increased from 17.5% in the second quarter of 2006 to 17.9% in the second quarter of 2007. The increase in operating profit as a percentage of sales was driven by a more favorable sales mix of original equipment and aftermarket products of 0.2% and decreased product development selling and administrative expenses as a percentage of sales of 1.1% offset by 0.9% decrease in other income primarily related to decreased asset sales.

Product Development, Selling and Administrative Expense

Product development, selling and administrative expense totaled $89.0 million, or 14% of sales, in the second quarter of Fiscal 2007, as compared to $78.1 million, or 14% of sales, in the second quarter of Fiscal 2006. Increased product development, selling and administrative expense was attributable to general inflation, $2.3 million related to the Stamler acquisition and $4.2 million of higher selling expenses related to increased business activity and the development of emerging markets.

Interest Expense

Interest expense increased to $9.2 million in the second quarter of Fiscal 2007 as compared to $0.6 million for Fiscal 2006. The $8.6 million increase was principally due to the November 2006 issuance of $250.0 million of 6% Senior Notes due 2016 and $150.0 million of 6.625% Senior Notes due 2036 and increased borrowings on our Credit Agreement, all of which were primarily used to finance our common stock repurchase program.

Reorganization Items

Reorganization items include income and expense that were realized or incurred as a result of our reorganization under Chapter 11 of the Bankruptcy Code. Reorganization related items moved to $0.1 million of expense during the second quarter of Fiscal 2007 from $5.1 million of income during the second quarter of

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Fiscal 2006 with the Fiscal 2006 results being positively effected by reorganization income related to cash receipts from a fully reserved note receivable of $5.2 million.

Provision for Income Taxes

Income tax expense for the second quarter of Fiscal 2007 increased to $35.8 million as compared to $34.0 million in the second quarter of Fiscal 2006. These income tax provisions represented effective income tax rates for the second quarters of Fiscal 2007 and 2006 of 31.6% and 29.1%, respectively.

A review of income tax valuation reserves was performed as part of the analysis of the second quarter Fiscal 2007 and 2006 income tax provisions, respectively. No discreet adjustments were recorded relating to Fiscal 2007 while a discreet tax benefit of $6.3 million was recorded in Fiscal 2006 relating to certain valuation reserves applicable to our Australian Group. On a recurring basis, the main drivers of the variance in tax rates when compared to the statutory rate of 35% were the geographic mix of earnings and the corresponding differences in local statutory tax rates offset by U.S. State income taxes.

Cash taxes paid for the second quarter of Fiscal 2007 were $13.3 million compared to $10.3 million in the second quarter of Fiscal 2006. This increase in cash taxes paid was primarily due to increased Non-U.S. profitability year over year and the global timing requirements with respect to the payment of current and prior year tax liabilities.

Six Months Ended April 27, 2007 to Six Months Ended April 29, 2006.

Net Sales

			Six Months Ended
			April 27,		April 29,		$	%
In thousands			2007		2006		Change	Change
Net Sales
	Underground Mining Machinery	$	690,300	$	676,583	$	13,717	2.0%
	Surface Mining Equipment		499,328		437,106		62,222	14.2%
	Total	$	1,189,628	$	1,113,689	$	75,939	6.8%

The increase in net sales for Underground Mining Machinery in the Fiscal 2007 six months compared with the Fiscal 2006 six months was the result of a $53.5 million increase in aftermarket products and service partially offset by decreased shipments of original equipment of $39.8 million. Decreased original equipment sales were reported in the United States and emerging markets served out of the United Kingdom offset by incremental sales of $28.7 million related to the Stamler line of business, which was purchased during the fourth quarter of Fiscal 2006. In the United States, the decrease in original equipment sales was the result of a roof support system sale in the Fiscal 2006 six months not duplicated in the Fiscal 2007 six months and a decrease in shuttle car sales over the same period. In the emerging markets served out of the United Kingdom, the decrease in original equipment sales was due to the sale of a roof support system and armored face conveyor in the Fiscal 2006 six months not duplicated in the Fiscal 2007 six months. Aftermarket sales increases were reported across all underground markets but primarily in the emerging markets served out of the United Kingdom due to the continued strength of coal mining activity internationally. Incremental aftermarket sales were also contributed by the Stamler line of business.

The increase in net sales of Surface Mining Equipment for the Fiscal 2007 six months compared to the Fiscal 2006 six months was due to a $17.4 million increase in original equipment and a $44.8 million increase in aftermarket products and service. Increases in original equipment sales in the United States, China, and Canada were primarily from sales of electric mining shovels and continues to reflect the ongoing growth of activity

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levels for both the replacement of existing equipment and the addition of new mining capacity for copper, coal, iron ore, oil sands and gold. Aftermarket sales growth was particularly strong in the United States from the continued strength in copper and surface mined coal. Aftermarket sales increased by 60% in the emerging markets served out of the United Kingdom and by 10% in Chile due to continued strength in copper. Aftermarket growth was partially offset by decreases in Canada, Australia and South Africa primarily due to timing.

Operating Income

			Six Months Ended
			April 27, 2007			April 29, 2006
			Operating	%		Operating	%
In thousands			Income (loss)	of Net Sales		Income (loss)	of Net Sales
	Underground Mining Machinery	$	139,811	20.3%	$	141,734	20.9%
	Surface Mining Equipment		90,513	18.1%		73,858	16.9%
	Corporate Expense		(14,765)			(14,694)
	Total	$	215,559	18.1%	$	200,898	18.0%

Operating income as a percentage of net sales for Underground Mining Machinery decreased from 20.9% in the Fiscal 2006 six months to 20.3% in the Fiscal 2007 six months. The decrease in operating profit as a percentage of sales was primarily driven by increased product development selling and administrative expenses as a percentage of sales of 2.1% offset by a more favorable sales mix of original equipment and aftermarket sales of 0.8% and decreased period costs as a percentage of sales of 0.9% due to more stable material costs, decreased overtime premiums and decreased performance-based incentive compensation.

Operating income as a percentage of net sales for Surface Mining Equipment increased from 16.9% in the Fiscal 2006 six months to 18.1% in the Fiscal 2007 six months. The increase in operating profit as a percentage of sales is primarily driven by a more favorable sales mix of original equipment and aftermarket products of 1.1% and decreased product development selling and administrative expenses as a percentage of sales of 1.5% offset by increased period costs as a percentage of sales primarily related to the timing of increased warranty expense and decreased other income related to the sale of assets in the Fiscal 2006 six months.

Product Development, Selling and Administrative Expense

Product development, selling and administrative expense totaled $170.9 million, or 14% of sales, in the Fiscal 2007 six months, as compared to $154.4 million, or 14% of sales, in the Fiscal 2006 six months. While a consistent percentage of total sales, the 11% increase in product development, selling and administrative expense was primarily attributable to general inflation, $4.4 million related to the Stamler acquisition and $7.9 million of higher selling expenses related to increased business activity and the development of emerging markets.

Interest Expense

Interest expense increased to $16.3 million in the Fiscal 2007 six months as compared to $1.1 million for the Fiscal 2006 six months. The $15.2 million increase was principally due to the November 2006 issuance of $250.0 million of 6% Senior Notes due 2016 and $150.0 million of 6.625% Senior Notes due 2036 and increased borrowings on our Credit Agreement, all of which were primarily used to finance our common stock repurchase program.

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Reorganization Items

Reorganization related items moved to $0.3 million of expense during the Fiscal 2007 six months from $5.0 million of income during the Fiscal 2006 six months with the Fiscal 2006 results being positively affected by reorganization income related to cash receipts from a fully reserved note receivable of $5.2 million.

Provision for Income Taxes

Income tax expense for the Fiscal 2007 six months decreased to $65.5 million as compared to $67.3 million for the Fiscal 2006 six months. On a consolidated basis, these income tax provisions represented effective income tax rates for the Fiscal 2007 six months and Fiscal 2006 six months of 32.3% for both periods.

A review of income tax valuation reserves was performed as part of the analysis of the Fiscal 2007 and 2006 six months income tax provisions, respectively. No discreet adjustments were recorded relating to Fiscal 2007 while a discreet tax benefit of $6.3 million was recorded in Fiscal 2006 relating to certain valuation reserves applicable to our Australian Group. On a recurring basis, the main drivers of the variance in tax rates when compared to the Statutory rate of 35% were the geographic mix of earnings and the corresponding differences in local statutory tax rates offset by U.S. State income taxes.

Cash taxes paid for the Fiscal 2007 six months were $28.6million compared to $19.3 million paid for the Fiscal 2006 six months. This increase in cash taxes paid was primarily due to increased Non-U.S. profitability year over year and the global timing requirements with respect to the payment of current and prior year tax liabilities.

Bookings and Backlog

The bookings trend remained strong for original equipment and aftermarket products and services. During the Fiscal 2007 second quarter and six months, we received $728 million and $1.3 billion, respectively, of new orders compared to new order bookings of $548 million and $1.1 billion for the Fiscal 2006 second quarter and six months, respectively. Aftermarket products and services orders continued to trend upward for the quarter and six month periods ended April 27, 2007 by 8% and 5%, respectively as compared to the prior year. The measured growth of aftermarket parts and services is largely representative of the demands on the ever increasing installed base of original equipment offset by the continued weakness in the United States coal market. Original equipment orders were up 87% and 26% for the quarter and six month period over the prior year mainly due to the continued strength of all markets served by the surface mining business and international markets served by our underground mining business offset by the effects of the downturn in the United States coal market on our underground mining business.

Due to the continued strength of the surface mining business and despite the softness in the U.S underground coal market, backlog increased from $1.3 billion at the end of Fiscal 2006 to $1.4 billion at the end of the Fiscal 2007 second quarter.

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Liquidity and Capital Resources

We currently use working capital and cash flow production as two financial measurements to judge the performance of our operations and our ability to meet our financial obligations.

The following table summarizes the major components of our working capital as of April 27, 2007 and October 28, 2006, respectively:

		April 27,		October 28,
In millions		2007		2006
Cash and cash equivalents	$	91.6	$	101.3
Accounts receivable		442.4		431.4
Inventories		740.6		639.9
Other current assets		66.2		55.3
Short-term debt		(2.0)		(5.2)
Accounts payable		(183.9)		(200.1)
Employee compensation and benefits		(49.5)		(77.4)
Advance payments and progress billings		(198.0)		(186.6)
Accrued warranties		(41.1)		(38.9)
Other current liabilities		(85.5)		(91.8)
Working Capital	$	780.8	$	627.9

We continue to require working capital investment to maintain our position as the world’s leading manufacturer and servicer of high productivity mining equipment. The primary drivers relate to funding for purchases of production and replacement parts inventories. As part of our continuous improvement of purchasing and manufacturing processes, we continue to strive for alignment of inventory levels with customer demand and current production schedules.

We anticipate that capital spending could reach 3.5% to 4.0% of sales in Fiscal 2007 and 2008 primarily due to a number of programs to increase our manufacturing capacity and in order to continue the expansion of our aftermarket service capabilities.

Expansion efforts of both the surface and underground mining operations continued during the second quarter of Fiscal 2007. Efforts commenced on the expansion in component machining capabilities for P&H Mining at our Tianjin, China campus, with start-up being projected as mid-2008. The underground mining operation continued the previously announced expansion efforts in lower cost environments, including Poland and China. The 70,000 square feet combined service center and manufacturing facility in Poland is on target for completion in late Fiscal 2007. The Baotou expansion was completed during the second quarter and is currently providing expanded repair and rebuild capability in the region. The Joy Tianjin facility was completed in the first quarter of Fiscal 2007 and is currently providing pan lines for armored face conveyors.

During the Fiscal 2007 six months, cash provided by operating activities was $60.2 million compared to cash provided by operating activities of $76.6 million during the Fiscal 2006 six months. The decrease in cash generated by operating activities primarily related to increased working capital requirements associated with higher business activity levels.

During the Fiscal 2007 six months cash used by investing activities was $34.2 million compared to cash used by investing activities of $17.5 million during the Fiscal 2006 six months. The increase was primarily due to the $8.5 million acquisition of a repair and rebuild facility in Australia during the first quarter of Fiscal 2007.

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The acquisition has provided complementary service to existing electric motor repair and rebuild facilities and created an original equipment repair shop network in Eastern Australia. The increase was also impacted by proceeds of $4.9 million from the sale of facilities in the United States and Australia during the Fiscal 2006 six months.

During the Fiscal 2007 six months cash used by financing activities was $39.1 million compared to cash used by financing activities of $31.2 million in the Fiscal 2006 six months. The primary drivers of the change were the decreased excess income tax benefits from the exercise of stock options and increased borrowings on long term obligations and the issuance of senior notes in the first quarter of Fiscal 2007 offset by the increased purchase of common stock.

In November 2006, we issued $250.0 million of 6% Senior Notes due 2016 and $150.0 million of 6.625% Senior Notes due 2036 with interest on the notes being paid semi-annually in arrears on May 15 and November 15 of each year, starting on May 15, 2007. The notes are guaranteed by each of our current and future significant domestic subsidiaries. Proceeds from these offerings were used for the repayment of outstanding revolver balances and additional share repurchases.

Under our share repurchase program, management is authorized to repurchase up to $1.0 billion in shares in the open market or through privately negotiated transactions until December 31, 2008. During the three months ended April 27, 2007, we repurchased approximately $74.7 million of common stock, representing 1,608,734 shares. During the six months ended April 27, 2007, we have repurchased approximately $434.4 million of common stock, representing 9,714,160 shares. As of April 27, 2007, 15,860,912 shares were held as treasury shares. We will continue to evaluate the repurchase of shares of common stock as market conditions dictate.

On February 22, 2007, our Board of Directors declared a cash dividend of $0.15 per outstanding share of common stock. The dividend was paid on March 19, 2007 to all stockholders of record at the close of business on March 5, 2007.

Financial Condition

As of the end of the second quarter Fiscal 2007, we had $91.6 million in cash and cash equivalents and $154.3 million available for borrowings under the Credit Agreement. Our primary cash requirements include working capital, capital expenditures, dividends and share repurchases. We will also continue to evaluate potential acquisitions. Target acquisitions would include “bolt-on” businesses which would be mining related product line additions or service extensions or “third leg” businesses that would provide a strong branded, highly engineered product with the platform for our life-cycle management strategy and provide a solid base for growth potential. Based upon our current level of operations, we believe that cash flows from operations, together with available borrowings under the Credit Agreement, will be adequate to meet our anticipated future cash requirements.

Off-Balance Sheet Arrangements

We lease various assets under operating leases. No significant changes to lease commitments have occurred since our fiscal year ended October 28, 2006. We have no other off-balance sheet arrangements, other than noted in Note 8 to the Condensed Consolidated Financial Statements.

Critical Accounting Estimates, Assumptions and Policies

Our discussion and analysis of financial condition and results of operations is based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these Condensed Consolidated Financial Statements

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requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent assets and liabilities. We evaluate, on an ongoing basis, our estimates and judgments, including those related to bad debts, excess inventory, warranty, intangible assets, income taxes, and contingencies. We base our estimates on historical experience and assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

We believe our accounting policies for revenue recognition, inventories, intangible assets, accrued warranties, pension and postretirement benefits and costs, and income taxes are the ones that most frequently require us to make estimates and judgments, and therefore are critical to the understanding of our results of operations. See Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended October 28, 2006 for a discussion of these policies. There were no material changes to these policies during the second quarter of Fiscal 2007.

Effective October 30, 2005, we adopted SFAS 123(R) using the modified prospective transition method. Prior to the adoption of SFAS 123(R), we accounted for share based compensation in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. The fair value of certain share based payments is estimated at grant date using the Black Scholes valuation model.

As a result of adopting SFAS 123(R), we recorded a cumulative effect of a change in accounting principle related to the performance share award program. The cumulative effect of a change in accounting principle added $1.6 million (net of taxes of $0.8 million), or $.01 a share, to net income for the six months ended April 29, 2006. Under APB 25, we recorded share based payment expense related to performance share awards and restricted stock units. For performance share awards, we recorded compensation expense for changes in the market value of the underlying common stock. For restricted stock unit awards, we recorded compensation expense based on the grant date market value of the underlying common stock.

The total stock based compensation expense recognized for the six months ended April 27, 2007 and April 29, 2006 was approximately $5.3 million and $4.2 million, respectively. The total stock-based compensation expense we recognized for the three months ended April 27, 2007 and April 29, 2006 was approximately $3.0 million and $1.9 million, respectively. We estimate that our share based compensation expense for Fiscal 2007 will be $11.1 million and is dependent on the share based payment programs awarded thus far in Fiscal 2007, the assumptions used in calculating the fair value of the awards using the Black Scholes model and the actual amount of forfeitures as compared to expected forfeitures upon issuance.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

As more fully described in our Annual Report on Form 10-K for the year ended October 28, 2006, we are exposed to various types of market risks, primarily foreign currency risks. We monitor our risks in this area on a continuous basis and generally enter into forward foreign currency contracts to minimize these exposures for periods of less than one year. We do not engage in speculation in our derivative strategies. Gains and losses from foreign currency contract activities are offset by changes in the underlying costs of the transactions being hedged.

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Item 4.Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to us, including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective (1) in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and (2) to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There have not been any changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings

No change.

Item 1A.Risk Factors

There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended October 28, 2006.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.

(b) Not applicable.

(c) We made the following purchases of our common stock, par value $1.00 per share, during the period covered by this report:

						Maximum Approximate
						Dollar Value of Shares
				Total Number of Shares		that May Yet Be
				Purchased as Part of		Purchased Under the
	Total Number of		Average Price	Publicly Announced		Plans or Programs
Period	Shares Purchased		Paid per Share	Plans or Programs		(in millions)*
January 27, 2007 to	602,900	$	47.45	602,900	$	316,151,730
February 26, 2007
February 27, 2007 to	1,005,834	$	45.84	1,005,834	$	270,048,544
March 26, 2007
March 27, 2007 to	-			-	$	270,048,544
April 27, 2006

*All purchases were made under our stock repurchase plan announced on May 31, 2005, which originally authorized the repurchase of $300 million in common stock. On September 12, 2006, the stock repurchase plan was increased to a level of $1 billion and extended until the end of calendar 2008.

Item 3.Defaults upon Senior Securities

Not applicable.

Item 4.Submission of Matters to a Vote of Security Holders

At the annual meeting held on February 22, 2007 there were three proposals voted on by shareholders.

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Proposal # 1

Each of our directors standing for election was re-elected to a term ending at the annual meeting in 2008. The votes cast are listed below:

					Broker
	For	Against	Withheld	Abstained	Non-Votes
Steven L. Gerard	99,517,464	-	1,812,822	-	-
John Nils Hanson	98,029,645	-	3,300,641	-	-
Ken C. Johnsen	100,010,108	-	1,320,178	-	-
Gale E. Klappa	100,313,634	-	1,016,652	-	-
Richard B. Loynd	90,821,710	-	10,508,576	-	-
P. Eric Siegert	97,393,228	-	3,937,058	-	-
Michael W. Sutherlin	100,900,727	-	429,559	-	-
James H. Tate	87,656,587	-	13,673,699	-	-

Proposal #2

Shareholders were asked to approve the Joy Global Inc. 2007 Stock Incentive Plan. The proposal was passed and the votes cast are listed below:

			Broker
For	Against	Abstained	Non-Votes
54,247,561	34,691,254	167,095	12,224,376

Proposal #3

Shareholders were asked to approve an amendment to the corporation’s Restated Certificate of Incorporation increasing its authorized common stock from 150,000,000 to 500,000,000 shares. The proposal was not passed and the votes cast are listed below:

For	Against	Abstained
38,741,537	61,023,138	1,592,608

Item 5.Other Information

Not applicable

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Forward-Looking Statements and Cautionary Factors

This document contains forward-looking statements. When used in this document, terms such as “anticipate,” “believe,” “estimate,” “expect,” “indicate,” “may be,” “objective,” “plan,” “predict,” “will be,” and the like are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Actual results may differ for a variety of reasons, many of which are beyond our control. Forward-looking statements are based upon our expectations at the time they are made. Although we believe that our expectations are reasonable, we can give no assurance that our expectations will prove to be correct. Important factors that could cause actual results to differ materially from such expectations (“Cautionary Statements”) are described generally below and disclosed elsewhere in this document. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Our principal businesses involve designing, manufacturing, marketing and servicing large, complex machines. Significant periods of time are necessary to design and build these machines. Large amounts of capital must be devoted by our customers to purchase these machines and to finance the mines that use them. Our success in obtaining and managing a relatively small number of sales opportunities, including our success in securing payment for such sales and meeting the requirements of warranties and guarantees associated with such sales, can affect our financial performance. In addition, many mines are located in undeveloped or developing economies where business conditions are less predictable. Factors that could cause actual results to differ materially include:

Factors affecting our customers’ purchases of new equipment, rebuilds, parts and services such as: production capacity, stockpile levels and production and consumption rates of coal, copper, iron ore, gold, oil sands and other ores and minerals; the cash flows and capital expenditures of our customers; the cost and availability of financing to our customers and their ability to obtain regulatory approval for investments in mining projects; consolidations among customers; changes in environmental regulations; work stoppages at customers or providers of transportation; and the timing, severity and duration of customer buying cycles, particularly for original equipment.

Factors affecting our ability to capture available sales opportunities, including: our customers’ perceptions of the quality and value of our products and services as compared to our competitors’ products and services; our ability to commit to delivery schedules requested or required by our customers; whether we have successful reference installations to display to customers; customers’ perceptions of our financial health and stability as compared to our competitors; our ability to assist customers with competitive financing programs; the availability of steel, castings, forgings, bearings and other materials; and the availability of manufacturing capacity at our factories.

Factors affecting general business levels, such as: political and economic turmoil in major markets such as the United States, Australia, Brazil, Canada, Chile, China, Russia and South Africa; environmental and trade regulations; commodity prices; and the stability and ease of exchange of currencies.

Factors affecting our ability to successfully manage and complete sales we obtain, such as: the successful transition to a new enterprise software system at our surface mining equipment business; the timely negotiation of collective bargaining agreements and pension issues with our unionized workers; the accuracy of our cost and time estimates for major projects and long-term maintenance and repair contracts; the adequacy of our systems to manage major projects and our success in completing projects on time and within budget; our success in recruiting, hiring and retaining managers and skilled employees in the areas where we operate; wage stability and cooperative labor relations; plant capacity and utilization; and whether acquisitions are assimilated and divestitures completed without notable surprises or unexpected difficulties.

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Factors affecting our general business or financial position, such as: unforeseen patent, tax, product (including asbestos-related and silicosis liability), environmental, employee health and benefits, or contractual liabilities; changes in pension and post-retirement benefit costs; nonrecurring restructuring and other special charges; changes in accounting or tax rules or regulations; reassessments of asset valuations for such assets as receivables, inventories, fixed assets, intangible assets and deferred tax assets; adverse tax rulings; collectibility of accounts receivable; and leverage and debt service.

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Item 6.Exhibits

10.1	Joy Global Inc. 2007 Stock Incentive Plan
10.2	Form of Restricted Stock Unit Award Agreement entered into between the registrant and each of its non-employee directors in connection with restricted stock unit awards granted under the Joy Global Inc. 2007 Stock Incentive Plan
31.1	Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certifications
31.2	Chief Financial Officer Rule 13a-14(a)/15d-14(a) Certifications
32	Section 1350 Certifications

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	JOY GLOBAL INC
	(Registrant)
	/s/ James H. Woodward, Jr.
Date May 31, 2007	James H. Woodward, Jr.
	Executive Vice President,
	Chief Financial Officer
	and Treasurer
	/s/ Michael S. Olsen
Date May 31, 2007	Michael S. Olsen
	Vice President and
	Chief Accounting Officer

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EX-10

JOY GLOBAL INC. 2007 STOCK INCENTIVE PLAN

SECTION 1. Purpose;Definitions

The purpose of the Plan is to give the Company a competitive advantage in attracting, retaining and motivating officers, employees, and/or directors and to provide the Company and its Subsidiaries and Affiliates with a stock plan providing incentives directly linked to the profitability of the Company’s businesses and increases in Company shareholder value.

For purposes of the Plan, the following terms are defined as set forth below:

(a)“Affiliate” means a corporation or other entity controlled by, controlling or under common control with the Company.

(b)“Award” means a Stock Option, Stock Appreciation Right, Performance Awardor other stock-based award.

(c)“Award Cycle” means a period of consecutive fiscal years or portions thereof designated by the Committee over which Performance Awards are to be earned. No Award Cycle shall exceed five years in duration.

(d)“Board” means the Board of Directors of the Company.

(e)“Cause” means, unless otherwise provided by the Committee, (i) “Cause” as defined in any Individual Agreement to which the participant is a party, or (ii) if there is no such Individual Agreement or if it does not define Cause: (A) conviction of the participant for committing a felony under federal law or the law of the state in which such action occurred, (B) dishonesty in the course of fulfilling the participant’s employment duties, (C) willful and deliberate failure on the part of the participant to perform his or her employment duties in any material respect, or (D) prior to a Change in Control, such other events as shall be determined by the Committee. The Committee shall, unless otherwise provided in an Individual Agreement with the participant, have the sole discretion to determine whether “Cause” exists, and its determination shall be final.

(f)“Change in Control” and “Change in Control Price” have the meanings set forth in Sections 9(b) and 9(c), respectively.

(g)“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

(h)“Commission” means the Securities and Exchange Commission or any successor agency.

(i)“Committee” means the Committee referred to in Section 2.

(j)“Common Stock”means common stock, par value $1.00 per share, of the Company.

(k)“Company” means Joy Global Inc., a Delaware corporation.

(l)“Covered Employee” means a participant designated prior to the grant of Performance Awards by the Committee who is or may be a “covered employee” within the meaning of Section 162(m)(3) of the Code in the year in which Performance Awards are expected to be taxable to such participant.

(m)“Disability” means, unless otherwise provided by the Committee, (i) “Disability” as defined in any Individual Agreement to which the participant is a party, or (ii) if there is no such Individual Agreement or it does not define “Disability”, permanent and total disability as determined under the Company’s Long-Term Disability Plan applicable to the participant.

(n)“Early Retirement” means retirement from active employment with the Company, a Subsidiary or Affiliate pursuant to the early retirement provisions of the applicable pension plan of such employer.

(o)“Eligible Individuals” means directors, officers, and employees of the Company or any of its Subsidiaries or Affiliates, and prospective employees who have accepted offers of employment from the Company or its Subsidiaries or Affiliates.

(p)“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto.

(q)“Fair Market Value” means, except as otherwise provided by the Committee, as of any given date, the average of the highest and lowest per-share sales prices for a share of Common Stock during normal business hours on the Nasdaq Stock Market or such other national securities market or exchange as may at the time be the principal market for the Common Stock, or if the shares were not traded on such national securities market or exchange on such date, then on the next preceding date on which such shares of Common Stock were traded, all as reported by such source as the Committee may select.

(r)“Incentive Stock Option” means any Stock Option designated as, and qualified as, an “incentive stock option” within the meaning of Section 422 of the Code.

(s)“Individual Agreement” means an employment or similar agreement between a participant and the Company or one of its Subsidiaries or Affiliates.

(t)“Nonqualified Stock Option”means any Stock Option that is not an Incentive Stock Option.

(u)“Normal Retirement” means retirement from active employment with the Company, a Subsidiary or Affiliate at or after age 65.

(v)“Outside Director” means a director who qualifies as an “independent director” within the meaning of Rule 4200 of the National Association of Securities Dealers, as an “outside director” within the meaning of Section 162(m) of the Code, and as a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act.

(w)“Performance Awards” means Awards granted under Section 7.

(x)“Performance Goals” means the performance goals established by the Committee in connection with the grant of Performance Awards. In the case of Qualified Performance-Based Awards, (i) such goals shall be based on the attainment of specified levels of one or more of the following measures: revenue growth; earnings before interest, taxes, depreciation, and amortization; earnings before interest and taxes; operating income; pre- or after-tax income; earnings per share; cash flow; cash flow per share; return on equity; return on invested capital; return on assets; economic value added (or an equivalent metric); share price performance; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels, and (ii) such Performance Goals shall be set by the Committee within the time period prescribed by Section 162(m) of the Code and related regulations. Performance Goals may be established on a corporate-wide basis orwith respect to one or more business units, divisions, or subsidiaries. Measurement of performance against goals may exclude

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impact of charges for restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring items, and the cumulative effects of accounting changes, each as defined by generally accepted accounting principles and as identified in the financial statements, notes to the financial statements, or management’s discussion and analysis within the Company’s annual report on Form 10-K.

(y)“Plan” means the Joy Global Inc. 2007 Stock Incentive Plan, as set forth herein and as hereinafter amended from time to time.

(z)“Qualified Performance-Based Award” means a Performance Award designated as such by the Committee at the time of grant, based upon a determination that (i) the recipient is or may be a “covered employee” within the meaning of Section 162(m)(3) of the Code in the year in which the Company would expect to be able to claim a tax deduction with respect to such Performance Award and (ii) the Committee wishes such Performance Award to qualify for the Section 162(m) Exemption.

(aa)“Retirement” means Normal or Early Retirement.

(bb)“Rule 16b-3” means Rule 16b-3, as promulgated by the Commission under Section 16(b) of the Exchange Act, as amended from time to time.

(cc)“Section 162(m) Exemption” means the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code.

(dd)“Stock Appreciation Right” means an Award granted under Section 6.

(ee)“Stock Option” means an Award granted under Section 5.

(ff)“Stock Option Proceeds” means, with respect to a Stock Option, the sum of (i) the exercise price paid in cash, if any, to purchase shares of Common Stock under such Stock Option, plus (ii) in the case of Nonqualified Stock Options and in the case of Incentive Stock Options pursuant to which the exercise of the Incentive Stock Option or the sale of the underlying shares received upon exercise of the Incentive Stock Option results in a “disqualifying disposition” triggering a deduction for the Company pursuant to Section 421(b) of the Code, the value of all federal, state, and localtax deductions to which the Company is entitled with respect to the exercise of such Stock Option.

(gg)“Subsidiary” means any corporation, partnership, joint venture or other entity during any period in which at least a 50% voting or profits interest is owned, directly or indirectly, by the Company or any successor to the Company.

(hh)“Termination of Employment” means the termination of the participant’s employment with, or performance of services for, the Company and any of its Subsidiaries or Affiliates. A participant employed by, or performing services for, a Subsidiary or an Affiliate shall also be deemed to incur a Termination of Employment if the Subsidiary or Affiliate ceases to be such a Subsidiary or an Affiliate, as the case may be, and the participant does not immediately thereafter become an employee of, or service-provider for, the Company or another Subsidiary or Affiliate. Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and its Subsidiaries and Affiliates shall not be considered Terminations of Employment.

In addition, certain other terms used herein have definitions given to them in the first place in which they are used.

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SECTION 2. Administration

The Plan shall be administered by the Human Resources and Nominating Committee or such other committee of the Board as the Board may from time to time designate (the “Committee”), which shall be composed solely of Outside Directors numbering no fewer than two (2), shall be appointed by and serve at the pleasure of the Board.

The Committee shall have plenary authority to grant Awards pursuant to the terms of the Plan to Eligible Individuals.

Among other things, the Committee shall have the authority, subject to the terms of the Plan to:

(a)select the Eligible Individuals to whom Awards may from time to time be granted;

(b)determine whether and to what extent Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Performance Awards, and other stock-based Awards pursuant to Section 8, or any combination thereof, are to be granted hereunder;

(c)determine the number of shares of Common Stock to be covered by each Award granted hereunder;

(d)determine the terms and conditions of any Award granted hereunder (including, but not limited to, the option price (subject to Section 5(b)), any vesting condition, restriction or limitation (which may be related to the performance of the participant, the Company or any Subsidiary or Affiliate) and any vesting acceleration regarding any Award and the shares of Common Stock relating thereto, based on such factors as the Committee shall determine;

(e)modify, amend or adjust the terms and conditions of any Award, at any time or from time to time, including but not limited to Performance Goals; provided, however, that the Committee may not adjust upwards the amount payable with respect to a Qualified Performance-Based Award or waive or alter the Performance Goals associated therewith;

(f)determine to what extent and under what circumstances Common Stock and other amounts payable with respect to an Award shall be deferred; and

(g)determine under what circumstances an Award may be settled in cash or Common Stock under Sections 6(b)(ii), 6(c)(iv), and 7(b)(iv).

The Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable, to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any agreement relating thereto) and to otherwise supervise the administration of the Plan.

The Committee may act only by a majority of its members then in office. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may (i) delegate administrative responsibilities with respect to the Plan, and (ii) delegate all or any portion of its responsibilities to grant Awards to the Chief Executive Officer of the Company (the “CEO”); provided, however, that no delegation may be made by the Committee that would cause Awards or other transactions under the Plan to cease to be exempt from Section 16(b) of the Exchange Act or cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption; and provided, further, that the Committee may not delegate to the CEO

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the authority to grant Awards to executive officers of the Company. Any allocation or delegation may be revoked by the Committee at any time.

Any determination made by the Committee with respect to any Award shall be made in the sole discretion of the Committee at the time of the grant of the Award or, unless in contravention of any express term of the Plan, at any time thereafter. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on all persons, including the Company and Plan participants.

Any authority granted to the Committee may also be exercised by the full Board, except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of Section 16 of the Exchange Act or cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall control.

SECTION 3. Common Stock Subject to Plan

(a)Aggregate Limit. The maximum number of shares of Common Stock that may be delivered to participants and their beneficiaries under the Plan shall be the sum (such sum, the “Aggregate Limit”) of (x) 10,000,000, (y) the number of shares of Common Stock that “become available for distribution” pursuant to Sections 3(a)(i), 3(a)(ii), and 3(a)(iii), and (z) the amount of any shares of Common Stock that are repurchased by the Company with Stock Option Proceeds (determined under generally accepted accounting principles) in respect of the exercise of a Stock Option; provided, however, that the number of shares of Common Stock contributed to the Aggregate Limit pursuant to Section 3(a)(z) in respect of a use of Stock Option Proceeds for repurchase shall not be greater than (A) the amount of such Stock Option Proceeds divided by (B) the Fair Market Value on the date of exercise of the applicable Stock Option. Shares subject to an Award under the Plan may be authorized and unissued shares or may be treasury shares. No future awards shall be granted under the Joy Global Inc. 2001 Stock Incentive Plan (the “2001 Plan”) or the Joy Global Inc. 2003 Stock Incentive Plan (the “2003 Plan”) following the Effective Time of this Plan.

(i) If, after the Effective Time, any Award (or any award granted under the 2001 Plan or the 2003 Plan that is outstanding as of the Effective Time) is forfeited, or if any Stock Option or Stock Appreciation Right (including any Stock Option or Stock Appreciation Right granted under the 2001 Plan or the 2003 Plan) terminates, expires or lapses without being exercised, or if any Award is settled in cash or otherwise paid out in cash, shares of Common Stock subject to such Awards shall thereafter become available for distribution in connection with Awards under the Plan.

(ii) If the option price of any Stock Option (or any stock option granted under the 2001 Plan or the 2003 Plan that is outstanding as of the Effective Time) is satisfied by delivering shares of Common Stock to the Company (by either actual delivery or by attestation), only the number of shares of Common Stock delivered to the optionee net of the shares of Common Stock delivered to the Company or attested to shall be deemed delivered for purposes of determining the maximum numbers of shares of Common Stock available for delivery under the Plan.

(iii) To the extent any shares of Common Stock subject to an Award are not delivered to a participant upon exercise or settlement of such Award because such shares are used to satisfy an applicable tax withholding obligation, such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of Common Stock available for delivery

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under the Plan. To the extent any shares of Common Stock subject to an award granted under the 2001 Plan or the 2003 Plan that are outstanding as of the Effective Time are not delivered to a participant upon exercise or settlement of such award because such shares are used to satisfy an applicable tax withholding obligation, the number of shares not delivered shall thereafter become available for distribution in connection with Awards under the Plan.

(iv) For the avoidance of doubt, delivery of shares of Common Stock subject to awards granted in substitution of awards granted by a business or entity that is acquired by, or whose assets are acquired by, the Company shall not be deemed a delivery for purposes of determining the maximum number of shares of Common Stock available for delivery under the Plan.

(v) Neither (A) shares of Common Stock that are available for delivery pursuant to Section 3(a)(y) nor (B) shares of Common Stock that are available for delivery pursuant to Section 3(a)(i) because of the forfeiture, termination, expiration or lapse of an Award granted under the 2001 Plan or the 2003 Plan, may be used for any Awards other than Stock Options, Stock Appreciation Rights or Performance Awards.

(b)Other Limits. The maximum number of shares of Common Stock that may be delivered pursuant to Stock Options intended to be Incentive Stock Options shall be 8,000,000 shares. The maximum number of shares of Common Stock that may be delivered pursuant to Awards other than Stock Options and Stock Appreciation Rights shall be 6,000,000 shares. No participant may be granted during any consecutive 24-month period Stock Options and Stock Appreciation Rights covering in excess of an aggregate of 8,000,000 shares of Common Stock. No more than 2,000,000 shares of Common Stock may be subject to Awards other than Stock Options or Stock Appreciation Rights granted during any consecutive 24-month period to any participant. No participant shall receive a Performance Award settlement pursuant to Section 7(b)(iv), the value of which exceeds the product of (x) the number of fiscal years composing the duration of the applicable Award Cycle (with partial fiscal years expressed as a fraction, the numerator of which is the number of days in such fiscal year that elapsed during the Award Cycle, and the denominator of which is 365, multiplied by (y) $2,000,000.

(c)Adjustment Provision. In the event of any change in corporate capitalization (including, but not limited to, a change in the number of shares of Common Stock outstanding), such as a stock split or a corporate transaction, any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the Committee or Board may make such substitution or adjustments in the aggregate number and kind of shares reserved for issuance under the Plan, in the maximum limitations upon Stock Options, Incentive Stock Options, Stock Appreciation Rights and other Awards to be granted to any participant, in the number, kind and option price or Strike Price of shares subject to outstanding Stock Options and Stock Appreciation Rights, in the number and kind of shares subject to other outstanding Awards granted under the Plan and/or such other equitable substitution or adjustments as it may determine to be appropriate in its sole discretion; provided, however, that the number of shares subject to any Award shall always be a whole number. Such adjusted option price shall also be used to determine the amount payable by the Company upon the exercise of any Tandem Stock Appreciation Right.

SECTION 4. Eligibility

Awards may be granted under the Plan to Eligible Individuals.

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SECTION 5. Stock Options

Stock Options may be granted alone or in addition to other Awards granted under the Plan and may be of two types: Incentive Stock Options and Nonqualified Stock Options. Any Stock Option granted under the Plan shall be in such form as the Committee may from time to time approve.

The Committee shall have the authority to grant any Eligible Individual Incentive Stock Options, Nonqualified Stock Options or both types of Stock Options (in each case with or without Tandem Stock Appreciation Rights); provided, however, that grants hereunder are subject to the limits set forth in Section 3(b); and, provided, further, that Incentive Stock Options may be granted only to employees of the Company and its subsidiaries or parent corporation (within the meaning of Section 424(f) of the Code). To the extent that any Stock Option is not designated as an Incentive Stock Option or even if so designated does not qualify as an Incentive Stock Option on or subsequent to its grant date, it shall constitute a Nonqualified Stock Option.

Stock Options shall be evidenced by option agreements, the terms and provisions of which may differ. An option agreement shall indicate on its face whether it is intended to be an agreement for an Incentive Stock Option or a Nonqualified Stock Option. The grant of a Stock Option shall occur on the date the Committee by resolution selects an Eligible Individual to receive a grant of a Stock Option, determines the number of shares of Common Stock to be subject to such Stock Option and specifies the terms and provisions of such Stock Option. The Company shall notify an Eligible Individual of any grant of a Stock Option, and a written option agreement or agreements shall be duly executed and delivered by the Company to the participant. Such agreement or agreements shall become effective upon execution by the Company and the participant.

Stock Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions as the Committee shall deem desirable:

(a)Option Term. The Committee shall determine the stated term of each Stock Option granted under this Plan. Except as specifically stated in the Plan, no Stock Option shall be exercisable more than 10 years after the date the Stock Option is granted.

(b)Option Price. The Committee shall determine the option price per share of Common Stock subject to Stock Options granted under this Plan. The option price per share of Common Stock subject to a Stock Option shall not be less than the Fair Market Value of the Common Stock subject to such Stock Option on the date of grant, except with respect to Stock Options granted in lieu of foregone compensation. Except for adjustments pursuant to Section 3(c), in no event may any Stock Option granted under this Plan be amended to decrease the option price thereof, cancelled in conjunction with the grant of any new Stock Option with a lower option price, or otherwise be subject to any action that would be treated, for accounting purposes, as a “repricing” of such Stock Option, unless such amendment, cancellation, or action is approved by a vote of the Company’s stockholders.

(c)Exercisability. Except as otherwise provided herein, Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee, and the Committee may at any time accelerate the exercisability of any Stock Option; provided, however, that except as may be provided in Sections 5(f), 5(g), 5(h) and 9(a)(i), and except as determined otherwise by the Committee in limited instances, no Stock Option shall be exercisable prior to the first anniversary of the date of grant. If the Committee provides that any Stock Option is exercisable only in installments, the Committee may at any time waive such installment exercise provisions, in whole or in part, based on such factors as the Committee may determine.

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(d)Method of Exercise. Subject to the provisions of this Section 5, Stock Options may be exercised, in whole or in part, at any time during their stated term by giving written notice of exercise to the Company specifying the number of shares of Common Stock subject to the Stock Option to be purchased.

Such notice shall be accompanied by payment in full of the purchase price by certified or bank check or such other instrument as the Company may accept. If approved by the Committee, payment, in full or in part, may also be made in the form of unrestricted Common Stock (by delivery of such shares or by attestation) already owned by the optionee of the same class as the Common Stock subject to the Stock Option (based on the Fair Market Value of the Common Stock on the date the Stock Option is exercised); provided, however, that in the case of an Incentive Stock Option, the right to make a payment in the form of already owned shares of Common Stock of the same class as the Common Stock subject to the Stock Option may be authorized only at the time the Stock Option is granted. In addition, if approved by the Committee, payment in full or in part may also be made by instructing the Committee to withhold a number of such shares having a Fair Market Value on the date of exercise equal to the aggregate exercise price of such Stock Option.

To the extent permitted by applicable law, if approved by the Committee, payment in full or in part may also be made by delivering a properly executed exercise notice to the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds necessary to pay the purchase price, and, if requested by the Company, the amount of any federal, state, local or foreign withholding taxes. To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms.

No shares of Common Stock shall be delivered until full payment therefor has been made. Except as otherwise provided in Section 5(l) below, an optionee shall have all of the rights of a stockholder of the Company holding the class or series of Common Stock that is subject to such Stock Option (including, if applicable, the right to vote the shares and the right to receive dividends), when the optionee has given written notice of exercise, has paid in full for such shares and, if requested by the Company, has given the representation described in Section 12(a).

(e)Nontransferability of Stock Options. No Stock Option shall be transferable by the optionee other than (i) by will or by the laws of descent and distribution; or (ii) in the case of a Nonqualified Stock Option, as otherwise expressly permitted by the Committee including, if so permitted, pursuant to a transfer to such optionee’s children or family member, whether directly or indirectly or by means of a trust or partnership or otherwise. For purposes of this Plan, unless otherwise determined by the Committee, “family member” shall have the meaning given to such term in General Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933 as amended, and any successor thereto. All Stock Options shall be exercisable, subject to the terms of this Plan, only by the optionee, the guardian or legal representative of the optionee, or any person to whom such option is transferred pursuant to this paragraph, it being understood that the term “holder” and “optionee” include such guardian, legal representative and other transferee; provided, however, that the term “Termination of Employment” shall continue to refer to the Termination of Employment of the original optionee.

(f)Termination by Reason of Death. Unless otherwise determined by the Committee, if an optionee incurs a Termination of Employment by reason of death, any Stock Option held by such optionee shall vest in full and shall remain exercisable (i) in the case of a Nonqualified Stock Option, until the first anniversary of such Termination of Employment (notwithstanding any earlier expiration of the stated term of such Nonqualified Stock Option) and (ii) in the case of an Incentive Stock Option, until the earlier of (A) the first anniversary of such Termination of Employment, or (B) the expiration of the stated term of such Incentive Stock Option.

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(g)Termination by Reason of Disability. Unless otherwise determined by the Committee, if an optionee incurs a Termination of Employment by reason of Disability, any Stock Option held by such optionee shall vest in full and remain exercisable until (i) in the case of a Nonqualified Stock Option, the first anniversary of such Termination of Employment (notwithstanding any earlier expiration of the stated term of such Nonqualified Stock Option) and (ii) in the case of an Incentive Stock Option, the earlier of (A) the first anniversary of such Termination of Employment or (B) the expiration of the stated term of such Stock Option; provided, however, that if the optionee dies within such period, notwithstanding the expiration of such period, any unexercised Stock Option, may thereafter be exercised (x) in the case of a Nonqualified Stock Option, for a period of one year from the date of death (notwithstanding any earlier expiration of the stated term of such Nonqualified Stock Option) and (y) in the case of an Incentive Stock Option, until the earlier of (A) the first anniversary of the date of death or (B) the expiration of the stated term of such Incentive Stock Option. In the event of Termination of Employment by reason of Disability, if an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Nonqualified Stock Option.

(h)Termination by Reason of Retirement. Unless otherwise determined by the Committee, if an optionee incurs a Termination of Employment by reason of Retirement, any Stock Option held by such optionee may thereafter be exercised by the optionee, to the extent it was exercisable at the time of such Termination of Employment, or on such accelerated basis as the Committee may determine, until the earlier of (i) the third anniversary of such Termination of Employment or (ii) the expiration of the stated term of such Stock Option; provided, however, that if the optionee dies within such period, any unexercised Stock Option may to the extent exercisable on the date of death thereafter be exercised (x) in the case of a Nonqualified Stock Option, until the later of (A) the first anniversary of the date of death (notwithstanding any earlier expiration of the stated term of such Nonqualified Stock Option) or (B) the third anniversary of the Termination of Employment by reason of Retirement and (y) in the case of an Incentive Stock Option, until the earlier of (A) the later of (1) the first anniversary of the date of death or (2) the third anniversary of the Termination of Employment by reason of Retirement or (B) the expiration of the stated term of such Incentive Stock Option. In the event of Termination of Employment by reason of Retirement, if an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Nonqualified Stock Option.

(i)Other Termination. Unless otherwise determined by the Committee: (i) if an optionee incurs a Termination of Employment for Cause, all Stock Options held by such optionee shall thereupon immediately terminate; (ii) if an optionee incurs a Termination of Employment due to a termination by the Company for any reason other than death, Disability, Retirement or for Cause, any Stock Option held by such optionee, may, to the extent it was exercisable at the time of Termination of Employment, be exercised until the earlier of (A) 90 days from the date of such Termination of Employment, or (B) the expiration of the stated term of the Stock Option; or (iii) if an optionee incurs a Termination of Employment due to a voluntary termination by the optionee, any Stock Option held by such optionee, may, to the extent it was exercisable at the time of Termination of Employment, be exercised until the earlier of (A) 30 days from the date of such Termination of Employment, or (B) the expiration of the stated term of the Stock Option; provided, however, that if the optionee dies within either of the exercise periods established by Sections 5(i)(ii) or 5(i)(iii), any unexercised Stock Option held by such optionee shall, continue to be exercisable to the extent to which it was exercisable at the time of death until (x) in the case of Nonqualified Stock Options, the first anniversary of the date of death (notwithstanding any earlier expiration of the stated term of such Nonqualified Stock Option) or (y) in the case of Incentive Stock Options, the earlier of (A) the first anniversary of the date of death, or (B) the expiration of the stated term of such Stock Option.

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(j)Change in Control Termination. Unless otherwise determined by the Committee, notwithstanding any other provision of this Plan to the contrary, in the event an optionee incurs a Termination of Employment other than for Cause during the 24-month period following a Change in Control, any Stock Option held by such optionee may thereafter be exercised by the optionee, to the extent it was exercisable at the time of such Termination of Employment until the earlier of (i) the later of (A) the first anniversary of such date of Termination of Employment, or (B) such other date as may be provided in the Plan for such Termination of Employment, or as the Committee may provide in the option agreement, or (ii) the expiration of the stated term of such Stock Option; provided, however, that if the optionee dies within such period, notwithstanding the expiration of such period, any unexercised Stock Option may to the extent exercisable on the date of death thereafter be exercised (x) in the case of a Nonqualified Stock Option, until the later of (i) the end of such exercise period or (ii) the first anniversary of the date of death (notwithstanding any earlier expiration of the stated term of such Nonqualified Stock Option), or (y) in the case of an Incentive Stock Option, until the earlier of (i) the later of (A) the end of such exercise period or (B) the first anniversary of the date of death or, (ii) the expiration of the stated term of such Incentive Stock Option. If an Incentive Stock Option is exercised after the expiration of the post-termination exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Nonqualified Stock Option.

(k)Change in Control Cash-Out. Notwithstanding any other provision of the Plan, during the 60-day period from and after a Change in Control (the “Exercise Period”), if the Committee shall determine at the time of grant or thereafter, an optionee shall have the right, whether or not the Stock Option is fully exercisable and in lieu of the payment of the option price for the shares of Common Stock being purchased under the Stock Option and by giving notice to the Company, to elect (within the Exercise Period) to surrender all or part of the Stock Option to the Company and to receive cash, within 30 days of such election, in an amount equal to (i) the amount by which the Change in Control Price on the date of such election shall exceed the exercise price per share of Common Stock under the Stock Option, multiplied by (ii) the number of shares of Common Stock granted under the Stock Option as to which the right granted under this Section 5(k) shall have been exercised.

(l)Deferral of Option Shares. The Committee may from time to time establish procedures pursuant to which an optionee may elect to defer, until a time or times later than the exercise of a Stock Option, receipt of all or a portion of the shares of Common Stock subject to such Stock Option and/or to receive cash at such later time or times in lieu of such deferred shares, all on such terms and conditions as the Committee shall determine. If any such deferrals are permitted, then notwithstanding Section 5(d) above, an optionee who elects such deferral shall not have any rights as a stockholder with respect to such deferred shares unless and until shares are actually delivered to the optionee with respect thereto, except to the extent otherwise determined by the Committee.

SECTION 6. Stock Appreciation Rights

(a)Grant and Exercise. Stock Appreciation Rights may be granted alone (“Freestanding Stock Appreciation Rights”) or in conjunction with all or part of any Stock Option granted under the Plan (“Tandem Stock Appreciation Rights”).

(b)Terms and Conditionsof Tandem Stock Appreciation Rights. Tandem Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined by the Committee, including the following:

(i) Relationship to Related Stock Option. A Stock Appreciation Right issued in conjunction with a Nonqualified Stock Option may be granted either at or after the time of grant of such Stock Option. A Stock Appreciation Right issued in conjunction with an Incentive Stock Option may be granted

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only at the time of grant of such Stock Option. Tandem Stock Appreciation Rights shall be exercisable only at such time or times and to the extent that the Stock Options to which they relate are exercisable in accordance with the provisions of Section 5.

(ii) Settlement. Upon the exercise of a Tandem Stock Appreciation Right, a participant shall be entitled to receive an amount in cash, shares of Common Stock or a combination of cash and shares, in value equal to (A) the excess of the Fair Market Value of one share of Common Stock over the option price per share specified in the related Stock Option, multiplied by (B) the number of shares in respect of which the Stock Appreciation Right shall have been exercised, with the Committee having the right to determine the form of payment. The Committee may from time to time establish procedures pursuant to which a participant may elect to further defer receipt of cash or shares in settlement of Tandem Stock Appreciation Rights for a specified period or until a specified event, all on such terms and conditions as the Committee shall determine.

(iii) Nontransferability. Tandem Stock Appreciation Rights shall be transferable only to permitted transferees of the underlying Stock Option in accordance with Section 5(e).

(iv) Plan Limits. Upon the exercise of a Tandem Stock Appreciation Right for shares of Common Stock, the Stock Option or part thereof to which such Tandem Stock Appreciation Right is related shall be deemed to have been exercised for the purpose of the limitation set forth in Section 3(a) on the number of shares of Common Stock to be issued under the Plan, but only to the extent of the number of shares covered by the Tandem Stock Appreciation Right at the time of exercise based on the value of the Tandem Stock Appreciation Right at such time.

(v) Method of Exercise. A Tandem Stock Appreciation Right may be exercised by an optionee by surrendering the applicable portion of the related Stock Option in accordance with procedures established by the Committee. Upon such exercise and surrender, the optionee shall be entitled to receive an amount determined in the manner prescribed by Section 6(b)(ii). Stock Options which have been so surrendered shall no longer be exercisable to the extent the related Stock Appreciation Rights have been exercised. Any Tandem Stock Appreciation Right shall terminate and no longer be exercisable upon the termination or exercise of the related Stock Option.

(c)Terms and Conditionsof Freestanding Stock Appreciation Rights. Freestanding Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined by the Committee, including the following:

(i) Term. The Committee shall determine the stated term of each Freestanding Stock Appreciation Right granted under this Plan. Except as specifically provided in this Plan, no Freestanding Stock Appreciation Right shall be exercisable more than 10 years after the date of grant.

(ii) Strike Price. Unless provided otherwise by the Committee, the strike price (the “Strike Price”) per share of Common Stock subject to a Freestanding Stock Appreciation Right shall be the Fair Market Value of the Common Stock on the date of grant, except with respect to Freestanding Stock Appreciation Rights granted in lieu of foregone compensation. Except for adjustments pursuant to Section 3(c), in no event may any Stock Appreciation Right granted under this Plan be amended to decrease the Strike Price thereof, cancelled in conjunction with the grant of any new Stock Appreciation Right with a lower Strike Price, or otherwise be subject to any action that would be treated, for accounting purposes, as a “repricing” of such Stock Appreciation Right, unless such amendment, cancellation or action is approved by a vote of the Company’s stockholders.

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(iii) Exercisability. Except as otherwise provided herein, Freestanding Share Appreciation Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee, and the Committee may at any time accelerate the exercisability of any Share Appreciation Right; provided, however, that subject to Sections 6(c)(vi), 6(c)(vii), 6(c)(viii), and 9(a)(i), under no circumstances shall any Freestanding Share Appreciation Right be exercisable prior to the first anniversary of the date of grant. If the Committee provides that any Share Appreciation Right is exercisable only in installments, the Committee may at any time waive such installment exercise provisions, in whole or in part, based on such factors as the Committee may determine.

(iv) Settlement. Upon the exercise of a Freestanding Stock Appreciation Right, a participant shall be entitled to receive an amount in cash, shares of Common Stock or a combination of cash and shares, in value equal to (A) the excess of the Fair Market Value of one share of Common Stock over the applicable Strike Price, multiplied by (B) the number of shares in respect of which the Freestanding Stock Appreciation Right shall have been exercised, with the Committee having the right to determine the form of payment.

(v) Nontransferability. No Freestanding Stock Appreciation Right shall be transferable by a participant other than by will or by the laws of descent and distribution or as otherwise expressly permitted by the Committee, including, if so permitted, pursuant to a transfer to such participant’s children or family members, whether directly or indirectly or by means of a trust or partnership or otherwise. For purposes of this Plan, unless otherwise determined by the Committee, “family member” shall have the meaning given to such term in General Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933 as amended, and any successor thereto. All Freestanding Stock Appreciation Rights shall be exercisable, subject to the terms of this Plan, only by the participant, the guardian or legal representative of the participant, or any person to whom such Freestanding Stock Appreciation Right is transferred pursuant to this paragraph, it being understood that the terms “holder” and “participant” include such guardian, legal representative and other transferee; provided, however, that the term “Termination of Employment” shall continue to refer to the Termination of Employment of the original participant.

(vi) Termination by Reason of Death. Unless otherwise determined by the Committee, if a participant incurs a Termination of Employment by reason of death, any Freestanding Share Appreciation Rights held by such participant shall vest in full and may thereafter be exercised for a period of one year from the date of such Termination of Employment (notwithstanding any earlier expiration of the stated term of such Freestanding Stock Appreciation Right).

(vii) Termination by Reason of Disability. Unless otherwise determined by the Committee, if a participant incurs a Termination of Employment by reason of Disability, any Freestanding Stock Appreciation Right held by such participant shall vest in full and may thereafter be exercised by the participant until the first anniversary of such Termination of Employment (notwithstanding any earlier expiration of the stated term of such Freestanding Stock Appreciation Right); provided, however, that if the participant dies within such period, any unexercised Freestanding Stock Appreciation Right, notwithstanding the expiration of such period, may thereafter be exercised for a period of one year from the date of death (notwithstanding any earlier expiration of the stated term of such Freestanding Stock Appreciation Right).

(viii) Termination by Reason of Retirement. Unless otherwise determined by the Committee, if a participant incurs a Termination of Employment by reason of Retirement, any Freestanding Stock Appreciation Right held by such participant may thereafter be exercised by the participant, to the extent it was exercisable at the time of such Termination of Employment, or on such accelerated

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basis as the Committee may determine, until the earlier of (A) the third anniversary of such Termination of Employment or (B) the expiration of the stated term of such Freestanding Stock Appreciation Right; provided, however, that if the participant dies within such period, any unexercised Freestanding Stock Appreciation Right, may to the extent exercisable on the date of death thereafter be exercised until the later of (x) the first anniversary of the date of death (notwithstanding any earlier expiration of the stated term of such Freestanding Stock Appreciation Right) or (y) the earlier of (1) the third anniversary of such Termination of Employment or (2) the expiration of the stated term of such Freestanding Stock Appreciation Right.

(ix) Other Termination. Unless otherwise determined by the Committee: (A) if a participant incurs a Termination of Employment for Cause, all Freestanding Stock Appreciation Rights held by such participant shall thereupon immediately terminate; (B) if a participant incurs a Termination of Employment due to a termination by the Company for any reason other than death, Disability, Retirement or for Cause, any Freestanding Stock Appreciation Right held by such participant, may, to the extent it was exercisable at the time of Termination of Employment, be exercised until the earlier of (1) 90 days from the date of such Termination of Employment or (2) the expiration of such Freestanding Stock Appreciation Right’s stated term; or (C) if a participant incurs a Termination of Employment due to a voluntary termination by the participant, any Freestanding Stock Appreciation Right held by such participant, may, to the extent it was exercisable at the time of Termination of Employment, be exercised until the earlier of (1) 30 days from the date of such Termination of Employment, or (2) the expiration of such Freestanding Stock Appreciation Right’s stated term; provided, however, that if the participant dies within the 90-day period or 30-day period established by Sections 6(c)(ix)(B) and 6(c)(ix)(C), respectively, any unexercised Freestanding Stock Appreciation Right held by such participant shall, notwithstanding the expiration of such period, continue to be exercisable to the extent to which it was exercisable at the time of death for a period of one year from the date of death (notwithstanding any earlier expiration of the stated term of such Freestanding Stock Appreciation Right).

(x) Change in Control Termination. Unless otherwise determined by the Committee, notwithstanding any other provision of this Plan to the contrary, in the event a participant incurs a Termination of Employment other than for Cause during the 24-month period following a Change in Control, any Freestanding Stock Appreciation Right held by such participant may thereafter be exercised by the participant, to the extent it was exercisable at the time of such Termination of Employment, until the earlier of (A) the later of (1) the first anniversary of such date of Termination of Employment, or (2) such other date as may be provided in the Plan for such Termination of Employment or as the Committee may provide in the applicable Freestanding Stock Appreciation Right agreement, or (B) the expiration of the stated term of such Freestanding Stock Appreciation Right; provided, however, that if the participant dies within such period, any unexercised Freestanding Stock Appreciation Right, notwithstanding the expiration of such period, may to the extent exercisable on the date of death thereafter be exercised until the later of (x) the end of such exercise period or (y) the first anniversary of the date of death (notwithstanding any earlier expiration of the stated term of such Freestanding Stock Appreciation Right).

(xi) Change in Control Cash-Out. Notwithstanding any other provision of the Plan, during the 60-day period from and after a Change in Control (the “Exercise Period”), if the Committee shall determine at the time of grant or thereafter, a holder of a Freestanding Stock Appreciation Right shall have the right, whether or not such Stock Appreciation Right is fully exercisable, to surrender all or part of such Stock Appreciation Right to the Company and to receive cash, within 30 days of such election, in an amount equal to (A) the amount by which the Change in Control Price per share of Common Stock on the date of such election shall exceed the Strike Price under such Stock Appreciation Right, multiplied by (B) the number of shares of Common Stock subject to the Stock

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Appreciation Right as to which the right granted under this Section 6(c)(xi) shall have been exercised.

(xii) Deferral. The Committee may from time to time establish procedures pursuant to which a participant may elect to further defer receipt of cash or shares in settlement of Freestanding Stock Appreciation Rights for a specified period or until a specified event, subject in each case to the Committee’s approval and to such terms as are determined by the Committee.

SECTION 7. Performance Awards

(a)Administration. Performance Awards may be awarded either alone or in addition to other Awards granted under the Plan. The Committee shall determine the Eligible Individuals to whom and the time or times at which Performance Awards shall be awarded, the number of Performance Shares and/or Performance Units to be awarded to any Eligible Individual, the duration of the Award Cycle, and any other terms and conditions of the Award, in addition to those contained in Section 7(b). The Committee shall also determine whether each Performance Award shall be denominated as (i) a performance-based stock Award (a “Performance Share”), or (ii) a performance-based cash Award (a “Performance Unit”).

(b)Terms and Conditions. Performance Awards shall be subject to the following terms and conditions:

(i) Performance-Based Awards. The Committee may, prior to or at the time of the grant, designate Performance Awards as Qualified Performance-Based Awards, in which event it shall condition the settlement thereof upon the attainment of Performance Goals. If the Committee does not designate Performance Awards as Qualified Performance-Based Awards, it may also condition the settlement thereof upon the attainment of Performance Goals. Regardless of whether Performance Awards are Qualified Performance-Based Awards, the Committee may also condition the settlement thereof upon the continued service of the participant. The provisions of such Awards (including without limitation any applicable Performance Goals) need not be the same with respect to each participant. Subject to the provisions of the Plan and the Performance Award Agreement referred to in Section 7(b)(v), Performance Awards may not be sold, assigned, transferred, pledged or otherwise encumbered during the Award Cycle.

(ii) Forfeiture Upon Termination. Except to the extent otherwise provided in the applicable Performance Award Agreement or Section 7(b)(iii) or 9(a)(ii), upon a participant’s Termination of Employment for any reason during the Award Cycle or before any applicable Performance Goals are satisfied, all rights to receive cash or stock in settlement of the Performance Awards shall be forfeited by the participant; provided, however, that the Committee shall have the discretion to waive, in whole or in part, any or all remaining payment limitations (other than, in the case of Performance Awards that are Qualified Performance-Based Awards, satisfaction of the applicable Performance Goals unless the participant’s employment is terminated by reason of death or Disability) with respect to any or all of such participant’s Performance Shares and/or Performance Units.

(iii) Deferral. The Committee may from time to time establish procedures pursuant to which a participant may elect to further defer receipt of cash or shares in settlement of Performance Awards for a specified period or until a specified event, subject in each case to the Committee’s approval and to such terms as are determined by the Committee. Subject to any exceptions adopted by the Committee, such election must generally be made prior to commencement of the Award Cycle for the Performance Awards in question.

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(iv) Settlement. At the expiration of the Award Cycle, the Committee shall evaluate the Company’s performance in light of any Performance Goals for such Performance Award, and shall determine the number of Performance Shares or Performance Units, as applicable, granted to the participant which have been earned, and the Committee shall then cause to be delivered (A) if the Performance Awards are Performance Shares, (1) a number of shares of Common Stock equal to the number of Performance Shares determined by the Committee to have been earned, or (2) cash equal to the product of (x) the Fair Market Value as of the date of settlement multiplied by (y) such number of Performance Shares determined to have been earned, as the Committee shall elect (subject to any deferral pursuant to Section 7(b)(iii)), or (B) if the Performance Awards are Performance Units, (1) cash equal to the amount earned under the Performance Units (the “Cash Payment”), or (2) a number of shares of Common Stock equal to (x) the Cash Payment divided by (y) the Fair Market Value as of the date of settlement (with any resulting fractional shares distributed in the form of cash), as the Committee shall elect (subject to any deferral pursuant to Section 7(b)(iii)).

(v) Each Award shall be confirmed by, and be subject to, the terms of a Performance Award Agreement.

SECTION 8. Other Stock-Based Awards

Other Awards of Common Stock and other Awards that are valued in whole or in part by reference to, or are otherwise based upon, Common Stock, including, without limitation, restricted stock, restricted stock units, deferred stock units, and dividend equivalents, may be granted either alone or in conjunction with other Awards granted under the Plan. Unless provided otherwise by the Committee, awards of restricted stock, restricted stock units, or deferred stock units shall vest over no less than a three-year period; provided, however, that such three-year vesting limitation shall not apply to grants in lieu of foregone compensation or to grants to prospective employees.

SECTION 9. Change in Control Provisions

(a)Impact of Event. Notwithstanding any other provision of the Plan to the contrary, unless provided otherwise by the Committee, in the event of a Change in Control:

(i) Any Stock Options and Stock Appreciation Rights outstanding as of the date such Change in Control is determined to have occurred, and which are not then exercisable and vested, shall immediately become fully exercisable and vested to the full extent of the original grant.

(ii) All Performance Awards shall be considered to be earned and payable in full at the target Performance Goal level, and any deferral or other restriction shall lapse and such Performance Awards shall be settled in cash as promptly as is practicable.

(iii) The Committee may also make additional adjustments and/or settlements of outstanding Awards as it deems appropriate and consistent with the Plan’s purposes.

(b)Definition of Change in Control. For purposes of the Plan, a “Change in Control” shall mean the happening of any of the following events:

(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (A) the then-outstanding shares of Common Stock (the “Outstanding Company Common Stock”) or (B) the combined voting

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power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this Section 9(b)(i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate or (4) any acquisition by any corporation pursuant to a transaction that complies with Sections 9(b)(iii)(A), 9(b)(iii)(B) and 9(b)(iii)(C); or

(ii) Any time at which individuals who, as of the Effective Time, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Time whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 40% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

(iv) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

(c)Change in Control Price. For purposes of the Plan, “Change in Control Price” means the higher of (i) the highest reported sales price, regular way, of a share of Common Stock in any transaction reported on the Nasdaq Stock Market (or such other national securities market or exchange as may at the time be the principal market for the Common Stock) during the 60-day period prior to and including the date of a Change in Control or (ii) if the Change in Control is the result of a tender or exchange offer or a

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Corporate Transaction, the highest price per share of Common Stock paid in such tender or exchange offer or Corporate Transaction; provided, however, that in the case of Incentive Stock Options and Tandem Stock Appreciation Rights relating to Incentive Stock Options, the Change in Control Price shall be in all cases the Fair Market Value of the Common Stock on the date such Incentive Stock Option or Tandem Stock Appreciation Right is exercised. To the extent that the consideration paid in any such transaction described above consists all or in part of securities or other noncash consideration, the value of such securities or other noncash consideration shall be determined in the sole discretion of the Board.

SECTION 10. Amendment and Termination

The Board may amend, alter, or discontinue the Plan, but no amendment, alteration or discontinuation shall be made which would impair the rights of an optionee under a Stock Option or a recipient of a Stock Appreciation Right, Performance Award or other stock-based Award theretofore granted without the optionee’s or recipient’s consent, except such an amendment made to comply with applicable law, stock exchange rules or accounting rules. In addition, no such amendment shall be made without the approval of the Company’s stockholders to the extent such approval is required by applicable law or stock exchange rules.

The Committee may amend the terms of any Stock Option or other Award theretofore granted, prospectively or retroactively, but no such amendment shall cause a Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption or impair the rights of any holder without the holder’s consent except such an amendment made to cause the Plan or Award to comply with applicable law, stock exchange rules or accounting rules.

Subject to the above provisions, the Board shall have authority to amend the Plan to take into account changes in law and tax and accounting rules as well as other developments, and to grant Awards that qualify for beneficial treatment under such rules without stockholder approval.

SECTION 11. Unfunded Status of Plan

It is presently intended that the Plan constitute an “unfunded” plan for incentive and deferred compensation. The Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Common Stock or make payments; provided, however, that unless the Committee otherwise determines, the existence of such trusts or other arrangements is consistent with the “unfunded” status of the Plan.

SECTION 12. General Provisions

(a)Representation. The Committee may require each person purchasing or receiving shares pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to the distribution thereof. The certificates for such shares may include any legend that the Committee deems appropriate to reflect any restrictions on transfer. Notwithstanding any other provision of the Plan or agreements made pursuant thereto, the Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock under the Plan prior to fulfillment of all of the following conditions: (i) listing or approval for listing upon notice of issuance, of such shares on Nasdaq or such other securities exchange as may at the time be the principal market for the Common Stock; (ii) any registration or other qualification of such shares of the Company under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification which the Committee shall, in its absolute discretion upon the advice of counsel, deem necessary or advisable; and (iii) obtaining any other consent, approval, or permit from any state or federal governmental agency

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which the Committee shall, in its absolute discretion after receiving the advice of counsel, determine to be necessary or advisable.

(b)No Limit on Other Arrangements. Nothing contained in the Plan shall prevent the Company or any Subsidiary or Affiliate from adopting other or additional compensation arrangements for its employees.

(c)No Contract of Employment. The Plan shall not constitute a contract of employment, and adoption of the Plan shall not confer upon any employee any right to continued employment, nor shall it interfere in any way with the right of the Company or any Subsidiary or Affiliate to terminate the employment of any employee at any time.

(d)Tax Withholding. No later than the date as of which an amount first becomes includible in the gross income of the participant for federal income tax purposes with respect to any Award under the Plan, the participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Company, withholding obligations may be settled with Common Stock, including Common Stock that is part of the Award that gives rise to the withholding requirement; provided, however, that if the Company is at the time of withholding subject to APB 25, not more than the legally required minimum withholding may be settled with Common Stock that is otherwise payable with respect to such Award. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the participant. The Committee may establish such procedures as it deems appropriate, including making irrevocable elections, for the settlement of withholding obligations with Common Stock.

(e)Death Beneficiary. The Committee shall establish such procedures as it deems appropriate for a participant to designate a beneficiary to whom any amounts payable in the event of the participant’s death are to be paid or by whom any rights of the participant, after the participant’s death, may be exercised.

(f)Subsidiary Employees. In the case of a grant of an Award to any employee of a Subsidiary of the Company, the Company may, if the Committee so directs, issue or transfer the shares of Common Stock, if any, covered by the Award to the Subsidiary, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Subsidiary will transfer the shares of Common Stock to the employee in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan. All shares of Common Stock underlying Awards that are forfeited or canceled revert to the Company.

(g)Governing Law. The Plan and all Awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws.

(h)Nontransferability. Except as otherwise provided in Section 5(e), 6(b)(iii), or 6(c)(v), or by the Committee, Awards under the Plan are not transferable except by will or by laws of descent and distribution.

(i)Foreign Law and Foreign Employees. The Committee may grant Awards to Eligible Employees who are foreign nationals, who are located outside the United States, or who are otherwise subject to (or could cause the Company to be subject to) legal or regulatory provisions of countries or jurisdictions outside the United States, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the

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purposes of the Plan, and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures, or subplans as may be necessary or advisable to comply with such legal or regulatory provisions.

SECTION 13. Effective Time of Plan

The Plan shall be effective as of the time (the “Effective Time”) it is approved by a majority of the votes cast by the Company's stockholders with respect to the Plan's approval.

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EX-10

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS AGREEMENT is entered into as of _______________, between Joy Global Inc. (the “Company”) and ____________________ (the “Grantee”). In consideration of the mutual promises and covenants made in this Agreement and the mutual benefits to be derived from this Agreement, the Company and the Grantee agree as follows:

Subject to the provisions of this Agreement and the provisions of the Joy Global Inc. 2007 Stock Incentive Plan (as amended from time to time, the “Plan”), the Company hereby grants to the Grantee __________ restricted stock units (the “Restricted Stock Units”) as of ___________________ (the “Grant Date”). This grant constitutes an “other stock-based award” under Section 8 of the Plan. Capitalized terms not defined in this Agreement have the meanings given to them in the Plan.

1.Vesting. Subject to the provisions of Paragraph 5(a) of this Agreement, the Restricted Stock Units will vest and become non-forfeitable on the one-year anniversary of the Grant Date.

2.Restriction Period. The Restriction Period is the time between the Grant Date and the one-year anniversary of the date on which the Grantee’s service on the Board terminates.

3.No Shareholder Rights Before Settlement. The Grantee shall not be entitled to any rights or privileges of ownership of shares of Common Stock with respect to any Restricted Stock Unit unless and until a share of Common Stock is actually delivered to the Grantee in settlement of such Restricted Stock Unit pursuant to this Agreement.

4.Dividends. On each payment date with respect to any dividend or distribution to holders of Common Stock with a record date occurring during a Restriction Period, the Grantee will be credited with additional Restricted Stock Units (rounded to the nearest whole unit) having a value equal to the amount of the dividend or distribution that would have been payable with respect to the unvested Restricted Stock Units if they had been actual shares of Common Stock on such record date, based on the Fair Market Value of a share of Common Stock on the applicable payment date. Such additional Restricted Stock Units shall also be credited with additional Restricted Stock Units as further dividends or distributions are declared, and all such additional Restricted Stock Units shall be subject to the same restrictions and conditions as the Restricted Stock Units with respect to which they were credited.

5.Forfeiture and Settlements of Units.

(a)The Restricted Stock Units shall be forfeited if the service of the Grantee on the Board is terminated for any reason prior to the one-year anniversary of the Grant Date; provided, however, that if the Grantee’s service on the Board terminates by reason of the Grantee’s death or Disability the Restricted Stock Units shall become non-forfeitable and will be settled; provided, further, that if the service of the Grantee on the Board terminates on the date of the Company’s ________ annual meeting of

shareholders, such service shall be deemed to have continued until the first anniversary of the Grant Date, notwithstanding that such period may actually have been less than 365 calendar days. In the event of Grantee’s death or Disability the Restricted Stock Units shall be settled as soon as practicable after the date of death or Disability. In the event that the Grantee dies before settlement of all of the Grantee’s vested Restricted Stock Units (whether while the Grantee is a member of the Board or after such membership has terminated), all such remaining vested Restricted Stock Units shall be settled by delivery to the Grantee’s beneficiary or beneficiaries (as determined under the Plan), as soon as practicable after the date of such death, of a number of shares of Common Stock equal to the number of such Restricted Stock Units. If, in the event of the Grantee’s death, the Grantee fails to designate a beneficiary, or if the designated beneficiary of the Grantee dies before the Grantee or before the complete payment of the amounts distributable under this Agreement, the amounts to be paid under this Agreement shall be paid to the legal representative or representatives of the estate of the last to die of the Grantee and the beneficiary.

(b)Unless earlier forfeited or settled pursuant to Paragraph 5(a) of this Agreement, Restricted Stock Units shall be settled at the end of the Restriction Period. Each Restricted Stock Unit settled pursuant to this Paragraph 5 shall be settled by delivery of one share of Common Stock. Any fractional Restricted Stock Units shall be rounded to the nearest whole number.

6. Change in Control and Corporate Events.

(a)Notwithstanding any other provision of this Agreement, in the event of a Change in Control, all outstanding Restricted Stock Units held by the Grantee on the effective date of the Change in Control, whether or not then vested, shall be settled as soon as practicable after the Change in Control by payment to the Grantee of an amount in cash equal to the Fair Market Value of a share of Common Stock on the date of the Change in Control times the number of such Restricted Stock Units.

(b)In the event of a stock split, spin-off, or other distribution of stock or property of the Company, or any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code), the number of Restricted Stock Units subject to the award shall be equitably adjusted by the Committee as it determines to be appropriate in its sole discretion; provided, however, that the number of Restricted Stock Units subject to the award shall always be a whole number. In the event of any other change in corporate capitalization (including, but not limited to, a change in the number of shares of Common Stock outstanding), or a corporate transaction, such as any merger, consolidation, or separation, or any partial or complete liquidation of the Company, the number and kind of Restricted Stock Units subject to the award may be adjusted by the Board or Committee as the Board or Committee may determine to be appropriate in its sole discretion; provided, however, that the number of Restricted Stock Units subject to the award shall always be a whole number. The determination of the Board or Committee regarding any adjustment will be final and conclusive.

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7.Nontransferability. Restricted Stock Units granted under this Agreement are not transferable by the Grantee, whether voluntarily or involuntarily, by operation of law or otherwise, during the Restriction Period, except as provided in the Plan. Any assignment, pledge, transfer or other disposition, voluntary or involuntary, of the Restricted Stock Units made, or any attachment, execution, garnishment, or lien issued against or placed upon the Restricted Stock Units, shall be void.

8.Administration. This Agreement and the rights of the Grantee hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Grantee.

9.Notices. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by facsimile, overnight courier, or registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Grantee:

If to the Company:

Joy Global Inc.

100 East Wisconsin Avenue, Suite 2780

Milwaukee, WI 53202

Attention: Corporate Secretary

Facsimile: 414-319-8520

or to such other address or facsimile number as any party shall have furnished to the other in writing in accordance with this Paragraph 9. Notice and communications shall be effective when actually received by the addressee.

10.Successors. Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company, and to any transferee or successor of the Grantee pursuant to Paragraph 7.

11.Laws Applicable to Construction. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware as applied to contracts executed in and performed wholly within the State of Delaware, without reference to principles of conflict of laws.

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12.Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

13.Conflicts and Interpretation.  In the event of any conflict between this Agreement and the Plan, the Plan shall control. In the event of any ambiguity in this Agreement, any term which is not defined in this Agreement, or any matters as to which this Agreement is silent, the Plan shall govern including, without limitation, the provisions thereof pursuant to which the Committee has the power, among others, to (a) interpret the Plan, (b) prescribe, amend and rescind rules and regulations relating to the Plan, and (c) make all other determinations deemed necessary or advisable for the administration of the Plan.

14.Headings. The headings of paragraphs herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any of the provisions of this Agreement.

15.Amendment. This Agreement may not be modified, amended or waived except by an instrument in writing signed by both parties hereto. The waiver by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

16.Counterparts. This Agreement may be executed in counterparts, which together shall constitute one and the same original.

17.Miscellaneous.

(a)This Agreement shall not confer upon Grantee any right to continue as a member of the Board, nor shall this Agreement interfere in any way with the right of the Company’s shareholders to terminate the Grantee’s Board service at any time.

(b)This Agreement shall be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

4

IN WITNESS WHEREOF, the Grantee has executed this Agreement, and the Company has caused this Agreement to be executed in its name and on its behalf, all as of the date first written above.

JOY GLOBAL INC.

/s/ Oren B. Azar

Oren B. Azar

Secretary and Associate General Counsel

GRANTEE

By: ____________________

5

EX-31

EXHIBIT 31.1

CERTIFICATIONS

        I, Michael W. Sutherlin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Joy Global Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 31, 2007

/s/ Michael W. Sutherlin
Michael W. Sutherlin
President and Chief Executive Officer

EX-31

EXHIBIT 31.2

CERTIFICATIONS

        I, James H. Woodward, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Joy Global Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 31, 2007

/s/ James H. Woodward, Jr.
James H. Woodward, Jr.
Executive Vice President, Chief Financial Officer and Treasurer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Joy Global Inc. (the “registrant”) on Form 10-Q for the quarter ended April 27, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “report”), we, Michael W. Sutherlin and James H. Woodward, Jr., Chief Executive Officer and Chief Financial Officer, respectively, of the registrant, certify, pursuant to 18 U.S.C. § 1350, that to our knowledge:

(1) The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

Date: May 31, 2007	/s/Michael W. Sutherlin Michael W. Sutherlin President and Chief Executive Officer
	/s/James H. Woodward, Jr. James H. Woodward, Jr. Executive Vice President, Chief Financial Officer and Treasurer