UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-11978
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The Manitowoc Company, Inc.
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(Exact name of registrant as specified in its charter)
Wisconsin 39-0448110
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
700 E. Magnolia Avenue, Suite B, Manitowoc, Wisconsin 54220
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(Address of principal executive offices) (Zip Code)
(414) 684-4410
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(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes ( X ) No ( )
The number of shares outstanding of the Registrant's common
stock, $.01 par value, as of July 31, 1995, the most recent
practicable date, was 7,674,468.
PART I. FINANCIAL INFORMATION
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<TABLE>
<CAPTION>
Item 1. Financial Statements
-----------------------------
THE MANITOWOC COMPANY, INC.
Consolidated Statement of Earnings
For the Three and Six Months Ended June 30, 1995 and July 2, 1994
(Unaudited)
(In thousands, except per-share and average shares data)
QUARTER ENDED YEAR-TO-DATE
June 30, 1995 July 2, 1994 June 30, 1995 July 2, 1994
------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Net Sales $ 82,287 $ 85,946 $ 151,388 $ 146,552
Costs And Expenses:
Cost of goods sold 61,083 64,884 114,265 111,085
Engineering, selling and
administrative expenses 12,099 12,809 24,999 24,996
------- ------- ------- -------
Total 73,182 77,693 139,264 136,081
Earnings From Operations 9,105 8,253 12,124 10,471
Other Income (Expense):
Interest & dividend income 31 287 47 763
Other income (expense) (519) (45) (725) (164)
------- ------- ------- -------
Total (488) 242 (678) 599
------- ------- ------- -------
Earnings Before Taxes
On Income 8,617 8,495 11,446 11,070
Provision For Taxes On Income 3,231 3,228 4,292 4,203
------- ------- ------- -------
Net Earnings $ 5,386 $ 5,267 $ 7,154 $ 6,867
------- ------- ------- -------
Net Earnings Per Share $ .70 $ .64 $ .93 $ .83
Dividends Per Share $ .25 $ .25 $ .50 $ .50
Average Shares Outstanding 7,674,473 8,273,561 7,674,474 8,439,774
<FN>
See accompanying notes which are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Balance Sheet
June 30, 1995 and December 31, 1994
(Unaudited)
(In thousands, except share data)
-ASSETS-
June 30, 1995 Dec. 31, 1994
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<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 6,977 $ 4,118
Marketable securities 9,880 12,045
Accounts receivable 41,849 29,500
Inventories 43,850 36,793
Prepaid expenses and other 1,323 2,882
Future income tax benefits 11,055 11,200
--------- ---------
Total current assets 114,934 96,538
Intangibles and other-net 11,396 11,636
Property, plant and equipment:
At cost 162,075 151,345
Less accumulated depreciation (100,835) (100,061)
--------- --------
Property, plant and equipment-net 61,240 51,284
--------- --------
TOTAL $ 187,570 $ 159,458
--------- --------
-LIABILITIES AND STOCKHOLDERS' EQUITY-
Current Liabilities:
Accounts payable and accrued expenses $ 51,612 $ 43,864
Short term borrowings 19,400 3,999
Income taxes payable 2,925 0
Product warranties 5,314 5,502
--------- ---------
Total current liabilities 79,251 53,365
Non-Current Liabilities:
Product warranties 2,944 2,944
Deferred income taxes 0 692
Deferred employee expenses 18,547 18,190
Deferred income 1,015 2,936
Other 7,454 6,274
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Total non-current liabilities 29,960 31,036
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Stockholders' Equity:
Common stock (10,887,847 shares
issued at both dates) 109 109
Additional paid-in capital 31,115 31,115
Cumulative foreign currency translation
adjustments (203) (188)
Retained earnings 128,840 125,523
Treasury stock at cost(3,213,379
and 3,213,372 shares) (81,502) (81,502)
--------- ---------
Total stockholders' equity 78,359 75,057
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TOTAL $ 187,570 $ 159,458
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<FN>
See accompanying notes which are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Statement of Cash Flows
For the Six Months Ended June 30, 1995 and July 2, 1994
(In thousands)
(Unaudited)
June 30, 1995 July 2, 1994
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<S> <C> <C>
Cash Flows From Operations:
Net earnings $ 7,154 $ 6,867
Non-cash adjustments to income:
Depreciation and amortization 3,090 3,491
Deferred income taxes (510) (1,191)
Changes in operating assets & liabilities:
Accounts receivable (12,349) (5,765)
Inventory (7,057) 1,681
Other current assets 1,559 (2,812)
Current liabilities 10,350 14,021
Non-current liabilities 1,537 202
Deferred income (1,921) (1,738)
Non-current assets 227 (605)
---------- ----------
Net cash provided by operations 2,080 14,151
Cash Flows From Investing:
Purchase of Femco Machine-net of
cash acquired -- (10,685)
Sale of temporary investments - net 2,165 13,002
Capital expenditures (13,005) (3,405)
---------- ----------
Net cash used for investing (10,840) (1,088)
Cash Flows From Financing:
Dividends paid (3,837) (4,178)
Proceeds from revolving line
of credit-net 15,401 0
Treasury stock purchases 0 (21,612)
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Net cash provided by (used for) financing 11,564 (25,790)
Effect of exchange rate changes on cash 55 146
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Net increase (decrease) in cash
and cash equivalents 2,859 (12,581)
Balance at beginning of year 4,118 27,675
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Balance at end of period $ 6,977 $ 15,094
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Supplemental cash flow information:
Interest paid $ 694 $ 111
Income taxes paid 2,066 1,989
<FN>
See accompanying notes which are an integral part of these statements.
</TABLE>
THE MANITOWOC COMPANY, INC.
Notes to Unaudited Consolidated Financial Statements
For the Six Months Ended June 30, 1995 and July 2, 1994
(Unaudited)
Note 1.
In the opinion of management, the accompanying unaudited
condensed financial statements contain all adjustments,
representing normal recurring accruals, necessary to present
fairly the results of operations for the six months ended
June 30, 1995 and July 2, 1994, the financial position at
June 30, 1995 and the changes in the cash flows for the six
months ended June 30, 1995 and July 2, 1994. The interim
results are not necessarily indicative of results for a full
year and do not contain information included in the
Company's annual consolidated financial statements and notes
for the year ended July 2, 1994.
In August, 1994, the Board of Directors approved a change in
the company's fiscal year-end to December 31. The second
quarter and year-to-date information for 1994 has not been
recast from the original presentations, as management does
not feel that recasting would be cost-justified since
comparability would not be enhanced.
Note 2.
<TABLE>
<CAPTION>
The components of inventory at June 30, 1995 and December
31, 1994 are summarized as follows (dollars in thousands):
June 30, 1995 Dec. 31, 1994
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<S> <C> <C>
Components:
Raw materials $ 14,406 $ 13,150
Work-in-process 20,066 14,659
Finished goods 29,615 28,758
----------- -----------
Total inventories at FIFO costs 64,087 56,567
Excess of FIFO costs
over LIFO value (20,237) (19,774)
----------- -----------
Total inventories $ 43,850 $ 36,793
</TABLE>
Inventory is carried at lower of cost or market using the
first-in, first-out (FIFO) method for 53% and 50% of total
inventory for June 30, 1995 and December 31, 1994,
respectively. The remainder of the inventory is costed
using the last-in, first-out (LIFO) method.
At June 30, 1995 and December 31, 1994, the FIFO cost of
finished goods held for lease was $499 and $940,
respectively. The cost of this inventory is amortized to
cost of sales as a percentage of lease revenues.
Note 3.
On September 8, 1992, the Board of Directors authorized the
Company to repurchase up to 1.5 million shares of its common
stock. In addition, on January 11, 1994 and February 1,
1994, the Board of Directors authorized the repurchase of an
additional 500,000 and 1,000,000 shares, respectively. Such
repurchases will be in open market or privately negotiated
purchases, as the Company may determine from time to time.
As of June 30, 1995, a total of 2,646,379 shares were
purchased pursuant to these authorizations.
Note 4.
The United States Environmental Protection Agency ("EPA")
has identified the Company as a potentially responsible
party ("PRP") under the Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA"), liable for the
costs associated with investigating and cleaning up
contamination at the Lemberger Landfill Superfund Site ("the
Site") near Manitowoc, Wisconsin.
Eleven of the potentially responsible parties have formed a
group (the Lemberger Site Remediation Group, or "LSRG") and
have successfully negotiated with the EPA and Wisconsin
Department of Natural Resources to settle the potential
liability at the Site and fund the cleanup. Approximately
150 PRP's have been identified as having shipped substances
to the Site.
Recent estimates indicate that the total cost to clean up
the Site could be as high as $25 million, however, the
ultimate remediation methods and appropriate allocation of
costs for the Site are not yet final.
Although liability is joint and several, the Company's
percentage share of liability is estimated to be 5% of the
total cleanup costs, but could increase to 15% if no
participation agreements are made between the LSRG and any
other PRP's. In connection with this matter, the Company
expensed $3.0 million in prior years for its estimated
portion of the cleanup costs.
The Company is involved in various other legal actions
arising in the normal course of business. After taking into
consideration legal counsel's evaluation of such actions, in
the opinion of management, ultimate resolution is not
expected to have a material adverse effect on the
consolidated financial statements.
As of June 30, 1995, 40 product related lawsuits were
pending. Of these, five occurred between 1985 and 1990 when
the Company was completely self-insured. The remaining
lawsuits occurred subsequent to June 1, 1990, at which time
the Company has insurance coverages ranging from a $5.5
million self-insured retention with a $10.0 million limit on
the insurer's contribution in 1990, to the current $1.0
million self-insured retention and $16.0 million limit.
Product liability reserves at June 30, 1995 are $7.4
million; $3.6 million reserved specifically for the 40 cases
referenced above, and $3.8 million for incurred but not
reported claims. These reserves were estimated using
actuarial methods. The highest current reserve for a non-
insured claim is $.3 million, and $.9 million for an insured
claim. Based on the Company's experience in defending
itself against product liability claims, management believes
the current reserves are adequate for estimated settlements
on aggregate self-insured claims.
Note 5.
During the quarter ended December 31, 1994, the Company's
decision to accelerate the consolidation of large-crane
manufacturing to a single site resulted in a $14 million
charge to earnings in the cranes and related products
segment in such quarter. The charge includes a $9.4 million
write-down of the facility being abandoned and estimated
holding costs of $4.6 million while the plant is being
marketed.
The assets currently held for sale include land and
improvements, buildings, and certain machinery and equipment
at the ``Peninsula facility'' located in Manitowoc,
Wisconsin. The current carrying value of these assets,
determined through independent appraisals, is approximately
$3 million and is included in intangibles and other. The
future holding costs, included in accounts payable and
accrued expenses and in other non-current liabilities,
consist primarily of utilities, security, maintenance,
property taxes, insurance, and demolition costs for various
buildings. Future holding costs also include estimates for
various environmental studies on the Peninsula location.
During the quarter, there were no material amounts paid and
charged against these reserves.
Additional costs are expensed as incurred and include items
such as moving and relocation, engineering, and severance.
During the quarter and six months ended June 30, 1995, $1.8
million and $.2 million, respectively, were expensed in
relation to these costs. The remaining costs, approximately
$.5 - $1.5 million, will be incurred in the third quarter of
calendar 1995. As a result, total costs are expected to
range between $2.5 - $3.5 million.
Note 6. In December, 1994, the Company adopted Statement of
Financial Accounting Standard No. 115 ``Accounting for
Certain Investments in Debt and Equity Securities''. The
effect of adopting this new standard was not material.
Marketable securities include $6.0 million of investments in
treasury bills which will be held to maturity and $3.0
million of equity securities, which are available for sale.
For both types of investments, the difference between fair
market value and cost was not material. The treasury bills
mature at various dates beginning in September, 1995,
through December, 1995.
Note 7. Certain reclassifications have been made to the financial
statements of prior years to conform to the presentation for
1995.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations for the Six Months Ended June 30, 1995 and
July 2, 1994
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<TABLE>
<CAPTION>
Net sales and earnings from operations by business segment for the
quarter and six months ended June 30, 1995 and the comparable periods
ended July 2, 1994 are shown below (in thousands):
QUARTER ENDED YEAR-TO-DATE
June 30, 1995 July 2, 1994 June 30, 1995 July 2, 1994
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
NET SALES:
Cranes & related products $ 37,395 $ 42,786 $ 74,286 $ 77,397
Foodservice products 30,625 31,368 55,514 52,325
Marine 14,267 11,792 21,588 16,830
-------- -------- -------- --------
Total $ 82,287 $ 85,946 $ 151,388 $ 146,552
EARNINGS(LOSS) FROM OPERATIONS:
Cranes & related products (297) 452 (1,874) (853)
Foodservice product 7,349 8,140 12,087 12,860
Marine 3,655 949 5,074 1,315
General corporate expense (1,602) (1,288) (3,163) (2,851)
-------- -------- -------- --------
Total $ 9,105 $ 8,253 $ 12,124 $ 10,471
</TABLE>
For the quarter ended June 30, 1995, net earnings increased to $5.4
million, or 70 cents per share, compared to $5.2 million, or 64 cents
per share for the second quarter of 1994, despite a 4% decrease in net
sales for the period. The improved operating earnings were due to an
exceptionally strong quarter for the Marine segment, where operating
earnings nearly quadrupled those of the comparable three months last
year.
For the six months ended June 30, 1995, net earnings were $7.2
million, equal to 93 cents per share, on sales totaling $151.4
million, compared with net earnings of $6.9 million, equal to 83 cents
per share, on sales of $146.6 million for the first half of 1994.
The second quarter resulted in $297,000 operating loss for the Crane
segment. This loss included $1.8 million in costs associated with the
large crane unit's plant consolidation that is now largely completed.
Greatly improved performance from the smaller crane units helped to
offset the costs associated with this move.
Sales for Cranes and Related Products decreased 13% for the second
quarter compared to the same period in 1994. This drop in sales for
the large crane unit continues to offset increases in sales for the
other businesses in this segment. Year-to-date sales have decreased
4% compared to the first six months of last year.
The crane backlog of unfinished orders stands at $96 million. With
the move to a consolidated and more-efficient facility, the focus
switches to ramping up crane production to full capacity which should
be achieved by the fourth quarter.
The longer-term outlook for the crane business is much improved. The
market reception of the new model 888 has been very positive. As a
result, 1995 production capacity is essentially sold out and a
substantial number of orders are booked for 1996 delivery.
Earlier in the quarter, the company announced the formation of the
Lattice Crane Group. This new group, which includes Manitowoc
Engineering Co., West-Manitowoc, Inc., Femco Machine Company and
Manitowoc Re-Manufacturing, will coordinate the marketing efforts of
these businesses and improve the frequency and consistency of
communication between Manitowoc and its crane-dealer network.
Although each of these businesses will operate independently, the
Lattice Crane Group will have single leadership and common objectives.
By working together, the Lattice Crane Group will rely on centralized
marketing programs that leverage the strengths of each business to
better serve the needs of our customers throughout North America and
abroad. As a result, the company expects to improve overall market
position and strengthen the crane-dealer network around the world.
The Foodservice segment's sales and operating earnings decreased 2%
and 10%, respectively, for the second quarter of 1995 as compared to
the comparable three months last year. Sales for the second quarter
for 1994 were especially strong for the ice-machine business as
dealers began to restock lower than average first quarter inventories
in response to an improved economic outlook. Margins for the segment
have been lowered due to higher raw material prices (particularly
copper) and a marketing decision to hold selling prices from 1992
through 1995. Manufacturing efficiencies gained from a newly
consolidated manufacturing facility and the implementation of specific
cost-reduction programs should bring margins back to 1994 levels by
early 1996. Year-to-date sales have increased 6% over the first six
months of last year, while operating earnings have fallen by 6%.
Sales and operating earnings for the Marine segment increased 21% and
285%, respectively, over the same quarter last year. Unexpected ship
casualty repair work at the company's Sturgeon Bay yard and increased
repair work at the Toledo facility contributed to the increases.
Year-to-date sales and operating earnings also remain well ahead of
last year.
Marine bookings remain brisk and earnings should continue to show
improvement from those of last year, but will not match the strong
gains in the first and second quarters this year.
Financial Condition at June 30, 1995
------------------------------------
The Company's financial condition remains strong. Cash and marketable
securities of $16.9 million are adequate to meet the Company's
liquidity requirements for the foreseeable future, including payments
on the line of credit, costs associated with the plant consolidation,
and the stock repurchases authorized by the Board of Directors.
During the quarter, the company reduced short-term borrowings from
$26.3 million to $19.4 million.
Capital expenditures during the first half of the current year totaled
$13 million, compared with capital investments of $3.4 million during
the first six months of last year. The increase is due to the large-
crane plant consolidation and expansion of the foodservice facility.
Capital expenditures for calendar 1995 are expected to reach $18 - $20
million.
Increases in accounts receivable and inventories from year-end levels
are due primarily to normal seasonal factors in all of the company's
three business segments.
PART II. OTHER INFORMATION
---------------------------------
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------
(a) Exhibits: See exhibit index following the signatures on
this Report, which is incorporated herein by reference.
(b) Reports on Form 8-K: None
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.
THE MANITOWOC COMPANY, INC.
(Registrant)
/s/ Fred M. Butler
------------------------
Fred M. Butler
Chief Executive Officer
/s/ Robert K. Silva
------------------------
Robert K. Silva
Chief Operating Officer
/s/ Robert R. Friedl
------------------------
Robert R. Friedl
Chief Financial Officer
/s/ E. Dean Flynn
------------------------
E. Dean Flynn
Secretary
August 8, 1995
THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO FORM 10-Q
FOR QUARTERLY PERIOD ENDED
June 30, 1995
Exhibit Filed
No Description Herewith
------- ----------- --------
3.2 Restated By-Laws (as amended through
May 22, 1995) including amendment to
Article II changing the date of
the annual meeting X
10.1 The Manitowoc Company, Inc. Management
Incentive Compensation Plan, as
amended May 22, 1995 X
10.2 The Manitowoc Company, Inc. 1995
Stock Plan (subject to shareholder
approval at the 1996 annual meeting) X
27 Financial Data Schedule X
RESTATED BY-LAWS
OF
THE MANITOWOC COMPANY, INC.
(Adopted June 16, 1971)
1/(Amended August 14, 1972)
2/(Amended November 7, 1972)
3/(Amended March 19, 1973)
4/(Amended May 5, 1975)
5/(Amended August 17, 1981)
6/(Amended August 20, 1984)
7/(Amended September 5, 1986)
8/(Amended November 3, 1986)
9/(Amended August 21, 1987)
10/(Amended February 19, 1988)
11/(Amended August 12, 1988)
12/(Amended November 7, 1988)
13/(Amended June 23, 1989)
14/(Amended June 22, 1990)
15/(Amended August 9, 1990)
16/(Amended February 15, 1991)
17/(Amended August 12, 1992)
18/(Amended November 3, 1992)
19/(Amended February 1, 1994)
20(Amended August 9, 1994)
21(Amended September 16, 1994)
22(Amended May 22, 1995)
ARTICLE I.
OFFICES
19/ Section 1. Principal Office. The principal office of the
Corporation in the State of Wisconsin shall be located at 700 East
Magnolia Avenue, Suite B, in the City of Manitowoc, County of
Manitowoc. The Corporation may have such other offices, either within
or without the State of Wisconsin, as the Board of Directors may
designate or as the business of the Corporation may require from time
to time.
Section 2. Registered Office. The registered office of the
Corporation required by the Wisconsin Business Corporation Law to be
maintained in the State of Wisconsin may be, but not need be,
identical with the principal office in the State of Wisconsin, and the
address of the registered office may be changed from time to time by
the Board of Directors.
ARTICLE II.
SHAREHOLDERS
1/11/12/14/16/22/
Section 1. Annual Meeting. The annual meeting of shareholders
shall be held on the first Tuesday in May in each year for the purpose
of electing Directors and for the transaction of only such other
business as is properly brought before the meeting in accordance with
these By-Laws.
To be properly brought before the meeting, business must be
either (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction
of the Board of Directors, or (c) otherwise properly brought before
the meeting by a shareholder. In addition to any other applicable
requirements, for business to be properly brought before an annual
meeting by a shareholder, the shareholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice must be delivered to or mailed and
received at the principal executive offices of the Corporation, not
less than fifty (50) days nor more than seventy-five (75) days prior
to the meeting date set in this Section 1; provided, however, that in
the event that the meeting is not held within ten (10) business days
of the date set in this Section 1 and less than sixty-five (65) days'
notice or prior public disclosure of the date of the meeting is given
or made to shareholders, notice by the shareholder to be timely must
be so received not later than the close of business on the fifteenth
(15th) day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure was made,
whichever first occurs. A shareholder's notice to the Secretary shall
set forth as to each matter the shareholder proposes to bring before
the annual meeting (i) a brief description of the business desired to
be brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and record address
of the shareholder proposing such business, (iii) the class and number
of shares of the Corporation which are beneficially owned by the
shareholder, and (iv) any material interest of the shareholder in such
business.
Notwithstanding anything in the By-Laws to the contrary, no
business shall be conducted at the annual meeting except in accordance
with the procedures set forth in this Section 1; provided, however,
that nothing in this Section 1 shall be deemed to preclude discussion
by any shareholder of any business properly brought before the annual
meeting.
The Chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly
brought before the meeting in accordance with the provisions of this
Section 1, and if he should so determine, he shall so declare to the
meeting and any such business not properly brought before the meeting
shall not be transacted.
If the day fixed for the annual meeting shall be a legal holiday
in the State of Wisconsin, such meeting shall be held on the next
succeeding business day. If the election of Directors shall not be
held on the day designated herein for any annual meeting of the
shareholders, or at an adjournment thereof, the Board of Directors
shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as conveniently may be.
6/ Section 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed
by statute, may be called by the President or by a majority of the
Board of Directors, and shall be called by the President at the
request of the holders of not less than one-half of all the
outstanding shares of the Corporation entitled to vote at the meeting.
16/ Section 3. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of Wisconsin,
as the place of meeting for any annual meeting or for any special
meeting. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the registered office
of the Corporation in the State of Wisconsin.
7/16/ Section 4. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special meeting,
the purpose or purposes for which the meeting is called, shall be
delivered not less than ten days (or, in the case of a special meeting
called at the request of shareholders, not less than twenty-five days)
nor more than sixty (60) days before the date of the meeting, either
personally or by mail, by or at the direction of the President, or the
Secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed,
such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the shareholder at his address as it
appears on the stock record books of the Corporation, with postage
thereon prepaid .
16/ Section 5. Voting and Record Date. At each meeting of
shareholders, whether annual or special, each shareholder shall be
entitled to vote in person or by proxy appointed by an instrument in
writing subscribed by such shareholder, and each shareholder shall
have one vote for each share registered in his or her name on the
books of the Corporation at the close of business on a record date
which shall be not more than seventy (70) days prior to the date of
the meeting as such record date is fixed by the Board of Directors.
16/ Section 6. Voting Lists. The officer or agent having charge of
the stock transfer books for shares of the Corporation shall, before
each meeting of shareholders, make a complete list of the shareholders
entitled to vote at such meeting, or any adjournment thereof, with the
address of and the number of shares held by each, which list shall be
available for inspection by any shareholder beginning two (2) business
days after notice of the meeting is given for which the list was
prepared and continuing to the date of the meeting at the
Corporation's principal office and at the time and place of the
meeting during the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to
vote at any meeting of shareholders. Failure to comply with the
requirements of this section shall not affect the validity of any
action taken at such meeting.
Section 7. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. Though less than a
quorum of the outstanding shares are represented at a meeting, a
majority of the shares so represented may adjourn the meeting from
time to time without further notice. At such adjourned meeting at
which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as
originally notified.
Section 8. Proxies. At all meetings of shareholders, a
shareholder entitled to vote may vote by proxy appointed in writing by
the shareholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the Secretary of the Corporation before or
at the time of the meeting. No proxy shall be valid after eleven
months from the date of its execution, unless otherwise provided in
the proxy. The Board of Directors shall have the power and authority
to make rules establishing presumptions as to the validity and
sufficiency of proxies.
Section 9. Voting of Shares. Each outstanding share entitled
to vote shall be entitled to one vote upon each matter submitted to a
vote at a meeting of shareholders.
16/ Section 10. Waiver of Notice by Shareholders. Whenever any
notice whatever is required to be given to any shareholder of the
Corporation under the provisions of these By-Laws or under the
provisions of the Articles of Incorporation or under the provisions of
any Statute, a waiver thereof in writing, signed at any time, whether
before or after the time of meeting, by the shareholder entitled to
such notice, shall be deemed equivalent to the giving of such notice;
provided that such waiver in respect to any matter of which notice is
required under any provision of Chapter 180, Wisconsin Statutes, shall
contain the same information as would have been required to be
included in such notice, except the time and place of meeting.
16/ Section 11. Informal Action by Shareholders. Any action
required to be taken at a meeting of the shareholders, or any other
action which may be taken at a meeting of the shareholders, may be
taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders entitled
to vote with respect to the subject matter thereof.
ARTICLE III.
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors.
6/8/9/10/11/13/14/15/17/18/
Section 2. Number, Tenure and Qualifications. The number of
Directors of the Corporation shall not be less than seven (7) nor more
than nine (9). The Directors shall be divided into three classes
which are as nearly equal in number as circumstances permit from time
to time. Each Director shall be elected to serve a term of three (3)
years (except that directors may be elected for shorter terms as
necessary in order to fill vacancies in particular classes of
Directors), and the respective terms of all directors of one class
shall expire at each annual meeting of shareholders. Each Director
shall hold office for the term for which he is elected and until his
successor is elected and qualified, or until his death, or until he
shall resign or shall have been removed in the manner provided in the
Articles of Incorporation. Directors need not be residents of the
State of Wisconsin or shareholders of the Corporation. Any Director
that is also an employee shall, upon retirement or resignation as an
employee, cease to be a member of the Board of Directors.
12/16/
Section 3. Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be
eligible for election as Directors. Nominations of persons for
election to the Board of Directors of the Corporation at the annual
meeting may be made at a meeting of shareholders by or at the
direction of the Board of Directors by any nominating committee or
person appointed by the Board of Directors or by any shareholder of
the Corporation entitled to vote for the election of Directors at the
meeting who complies with the notice procedures set forth in this
Section 3. Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To be timely,
a shareholder's notice shall be delivered to or mailed and received at
the principal executive offices of the Corporation not less than fifty
(50) days nor more than seventy-five (75) days prior to the meeting
date set under the provisions of these By-Laws; provided, however,
that in the event that the meeting is not held within ten (10)
business days of the date set in these By-Laws and less than sixty-
five (65) days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to
be timely must be so received not later than the close of business on
the fifteenth (15th) day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made,
whichever first occurs. Such shareholder's notice to the Secretary
shall set forth (a) as to each person whom the shareholder proposes to
nominate for election or re-election as a Director, (i) the name, age,
business address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class and
number of shares of capital stock of the Corporation which are
beneficially owned by the person, and (iv) any other information
relating to the person that is required to be disclosed in
solicitations for proxies for election of Directors pursuant to
[Regulation 14A] under the Securities Exchange Act of 1934, as
amended; and (b) as to the shareholder giving the notice (i) the name
and record address of the shareholder and (ii) the class and number of
shares of capital stock of the Corporation which are beneficially
owned by the shareholder. The Corporation may require any proposed
nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such
proposed nominee to serve as a Director of the Corporation. No person
shall be eligible for election as a Director of the Corporation unless
nominated in accordance with the procedures set forth herein.
The Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
1/12/16/
Section 4. Regular Meetings. A regular meeting of the Board of
Directors shall be held within 30 days after the annual meeting of
shareholders, and each adjourned session thereof, and at any other
time as determined by the Board of Directors. Regular meetings of the
Board of Directors may be held without notice at such time and at such
place as may from time to time be determined by the Board of
Directors.
12/ Section 5. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the President,
Secretary or any two Directors. The person or persons authorized to
call special meetings of the Board of Directors may fix any place,
within the Continental United States, as the place for holding any
special meeting of the Board of Directors called by them.
12/16/
Section 6. Notice. Notice of any special meeting of the Board
of Directors shall be given at least forty-eight (48) hours before the
date of the meeting or on such shorter notice as the person or persons
calling such meeting may deem necessary or appropriate in the
circumstances, by word of mouth, telephone or radiophone personally,
or written notice mailed to each Director at his business address, or
by telegram. Whenever any notice is required to be given to any
Director of the Corporation under the provisions of these By-Laws or
under the provisions of the Articles of Incorporation or under the
provisions of any Statute, a waiver thereof in writing, signed at
any time, whether before or after the time of meeting, by the Director
entitled to such notice, shall be deemed equivalent to the giving of
such notice. The attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting, except where a Director
attends a meeting and objects thereat to the transaction of any
business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting.
Section 7. Quorum. A majority of the number of Directors fixed
by Section 2 of this Article III shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, but
though less than such quorum is present at a meeting, a majority of
the Directors present may adjourn the meeting from time to time
without further notice.
Section 8. Manner of Acting. The act of a majority of the
Directors present at a meeting at which a quorum is present shall be
the act of the Board of Directors, unless the act of a greater number
is required by these By-Laws or By-Law.
6/ Section 9. Vacancies. Any vacancy occurring in the Board of
Directors, including a vacancy created by an increase in the number of
Directors, may be filled for the balance, if any, of the unexpired
term by the affirmative vote of a majority of the Directors then in
office, though less than a quorum of the Board of Directors. For the
purposes of this section, the term "vacancy" shall include the
disability of any Director to the point where he cannot attend
Directors' meetings or effectively discharge his duties as a Director.
Section 10. Compensation. The Board of Directors, by
affirmative vote of a majority of the Directors then in office, and
irrespective of any personal interest of any of its members, may
establish reasonable compensation of any or all Directors for services
to the Corporation as Directors, officers or otherwise, or may
delegate such authority to an appropriate committee.
Section 11. Presumption of Assent. A Director of the
Corporation who is present at a meeting of the Board of Directors or a
committee thereof at which action on any corporate matter is taken
shall be presumed to have assented to the action taken unless his
dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting
as the Secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such
right to dissent shall not apply to a Director who voted in favor of
such action.
Section 12. Committees. The Board of Directors by resolution
adopted by the affirmative vote of a majority of the number of
Directors fixed by Section 2 of the Article III may designate one or
more committees, each committee to consist of three or more Directors
elected by the Board of Directors, which to the extent provided in
said resolution as initially adopted, and as thereafter supplemented
or amended by further resolution adopted by a like vote shall have and
may exercise, when the Board of Directors is not in session, the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, except action with respect to declaration
of dividends to shareholders, election of officers or the filling of
vacancies in the Board of Directors or committees created pursuant to
this section. The Board of Directors may elect one or more of its
members as alternate members of any such committee who may take the
place of any absent member or members at any meeting of such
committee, upon request by the President or upon request by the
Chairman of such meeting. Each such committee shall fix its own rules
governing the conduct of its activities and shall make such reports to
the Board of Directors of its activities as the Board of Directors may
request.
4/ Section 13. Informal Action by Directors and Committees. Any
action required to be taken at a meeting of the Board of Directors or
a committee thereof, or any action which may be taken at a meeting of
the Board of Directors, or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the Directors, or members of a committee
thereof, entitled to vote with respect to the subject matter thereof.
14/16/
Section 14. Telephonic Meetings. Unless otherwise provided by
the Articles of Incorporation or these By-Laws, the Board of Directors
of the Corporation (and any committees thereof) may participate in
regular or special meetings by, or through the use of, any means of
communication by which (i) all Directors participating may
simultaneously hear each other, such as by conference telephone, or
(ii) all communication is immediately transmitted to each
participating Director, and each participating Director can
immediately send messages to all other participating Directors. A
Director participating in a meeting by such means shall be deemed
present in person at such meeting. If action is to be taken at any
such telephonic Board of Directors meeting on any of the following:
(i) a plan of merger or consolidation; (ii) a sale, lease, exchange or
other disposition of substantial property or assets of the
Corporation; (iii) a voluntary dissolution or the revocation of
voluntary dissolution proceedings; or (iv) a filing for bankruptcy,
then the identity of each Director participating in such meeting must
be verified by the disclosure of each such Director's social security
number to the Secretary of the Corporation before a vote may be taken
on any of the foregoing matters.
3/ ARTICLE IV.
OFFICERS
5/ Section 1. Number. The principal officers of the Corporation
shall be a Chairman of the Board (if the Board of Directors
determines to elect one), a Vice Chairman of the Board (if the Board
determines to elect one), a President, one or more Vice Presidents,
one or more of whom may be designated Executive Vice President and one
or more of whom may be designated Senior Vice President, a Secretary,
and a Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of
Directors. Any two or more offices may be held by the same person,
except the offices of President and Vice President and President and
Secretary. The duties of the officers shall be those enumerated
herein and any further duties designated by the Board of Directors.
The duties herein specified for particular officers may be transferred
to and vested in such other officers as the Board of Directors shall
elect or appoint, from time to time and for such periods or without
limitation as to time as the Board shall order.
Officers of the Corporation may apply their titles to their
duties on behalf of the various divisions of the Corporation. The
Board of Directors may, as it deems necessary, authorize the use of
additional official titles by individuals whose duties in behalf of
the various divisions of the Corporation so warrant, the authority of
such divisional offices to be confined to the appropriate divisions.
Section 2. Election and Term of Office. The officers of the
Corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board
of Directors held after each annual meeting of the shareholders. If
the election of officers shall not be held at such meeting, such
election shall be held as soon thereafter as conveniently may be.
Each officer shall hold office until his successor shall have been
duly elected or until his prior death, resignation or removal.
Section 3. Removal. Any officer or agent may be removed by the
Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Election or appointment shall not of itself create contract rights.
Section 4. Vacancies. A vacancy in any principal office
because of death, resignation, removal, disqualification or otherwise,
shall be filled by the Board of Directors for the unexpired portion of
the term.
Section 5. Chairman of the Board. The Chairman of the Board
(if the Board of Directors determines to elect one) shall preside at
all meetings of the Board of Directors and shall have such further and
other authority, responsibility and duties as may be granted to or
imposed upon him by the Board of Directors, including without
limitation his designation pursuant to Section 7 as Chief Executive
Officer of the Corporation.
5/ Section 6. Vice Chairman of The Board. The Vice Chairman of
the Board (if the Board of Directors determines to elect one) shall,
in the absence of the Chairman of the Board, preside at all meetings
of the Board of Directors and shall have such further and other
authority, responsibility and duties as may be granted to or imposed
upon him by the Board of Directors, including without limitation his
designation pursuant to Section 8 as Chief Executive Officer of the
Corporation.
5/ Section 7. President. The President, unless the Board of
Directors shall otherwise order pursuant to Section 8, shall be the
Chief Executive Officer of the Corporation and, subject to the control
of the Board of Directors, shall in general supervise and control all
of the business and affairs of the Corporation. He shall, when
present, preside at all meetings of the shareholders and shall preside
at all meetings of the Board of Directors unless the Board shall have
elected a Chairman of the Board of Directors. He shall have
authority, subject to such rules as may be prescribed by the Board of
Directors, to appoint such agents and employees of the Corporation as
he shall deem necessary, to prescribe their powers, duties and
compensation, and to delegate authority to them. Such agents and
employees shall hold office at the discretion of the President. He
shall have authority to sign, execute and acknowledge, on behalf of
the Corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases, reports and all other documents or instruments
necessary or proper to be executed in the course of the Corporation's
regular business or which shall be authorized by resolution of the
Board of Directors; and except as otherwise provided by law or the
Board of Directors, he may authorize any Vice President or other
officer or agent of the Corporation to sign, execute and acknowledge
such documents or instruments in his place and stead. In general, he
shall perform all duties incident to the office of the Chief Executive
Officer and such other duties as may be prescribed by the Board of
Directors from time to time. In the event the Board of Directors
determines not to elect a Chairman of the Board or a Vice Chairman of
the Board, or in the event of his or their absence or disability, the
President shall perform the duties of the Chairman of the Board and
when so acting shall have all the powers of and be subject to all of
the duties and restrictions imposed upon the Chairman of the Board.
5/ Section 8. Chairman of the Board as Chief Executive Officer.
The Board of Directors may designate the Chairman of the Board, the
Vice Chairman of the Board or the President, as the Chief Executive
Officer of the Corporation. In any such event, the Chairman of the
Board, the Vice Chairman of the Board or the President, shall assume
all authority, power, duties and responsibilities otherwise appointed
to the President pursuant to Section 7, and all references to the
President in these By-Laws shall be regarded as references also to the
Chairman of the Board or Vice Chairman of the Board, as such Chief
Executive Officer, except where a contrary meaning is clearly
required.
In further consequence of designating the Chairman of the Board
or the Vice Chairman of the Board as the Chief Executive Officer, the
President shall thereby become the Chief Operating Officer of the
Corporation. He shall, in the absence of the Chairman of the Board or
of the Vice Chairman of the Board, preside at all meetings of
shareholders and Directors. During the absence or disability of the
Chairman of the Board or the Vice Chairman of the Board, he shall
exercise the functions of the Chief Executive Officer of the
Corporation. He shall have authority to sign all certificates,
contracts, and other instruments of the Corporation necessary or
proper to be executed in the course of the Corporation's regular
business or which shall be authorized by the Board of Directors and
shall perform all such other duties as are incident to his office or
are properly required of him by the Board of Directors, the Chairman
of the Board or the Vice Chairman of the Board. He shall have the
authority, subject to such rules, directions, or orders, as may be
prescribed by the Chairman of the Board or the Vice Chairman of the
Board, or the Board of Directors, to appoint and terminate the
appointment of such agents and employees of the Corporation as he
shall deem necessary, to prescribe their power, duties and
compensation and to delegate authority to them.
5/ Section 9. The Vice Presidents. At the time of election, one
or more of the Vice Presidents may be designated Executive Vice
President and one or more of the Vice Presidents may be designated
Senior Vice President. In the absence of the President or in the
event of his death, inability or refusal to act, or in the event for
any reason it shall be impracticable for the President to act
personally, the Executive Vice President, or if more than one, the
Executive Vice Presidents in the order designated at the time of their
election, or in the absence of any such designation, then in the order
of their election, or in the event of his or their inability to act
then the Senior Vice President or if more than one, the Senior Vice
Presidents in the order designated at the time of their election, or
in the absence of any such designation then in the order of their
election, or in the event of his or their inability to act, then the
other Vice Presidents in the order designated at the time of their
election, or in the absence of any such designation, then in the order
of their election, shall perform the duties of the President and when
so acting shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice President may sign with the
Secretary or Assistant Secretary certificates for shares of the
Corporation and shall perform such other duties as from time to time
may be assigned to him by the President or the Board of Directors.
5/ Section 10. The Secretary. The Secretary shall: (a) keep the
minutes of the meetings of the shareholders and of the Board of
Directors in one or more books provided for that purpose; (b) see that
all notices are duly given in accordance with the provisions of these
By-Laws or as required by law; (c) be custodian of the Corporate
Records and of the Seal of the Corporation and see that the Seal of
the Corporation is affixed to all documents the execution of which on
the behalf of the Corporation under its seal is duly authorized; (d)
keep or arrange for the keeping of a register of the post office
address of each shareholder which shall be furnished to the Secretary
by such shareholder; (e) sign with the President, or a Vice President,
certificates for shares of the Corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors;
(f) have general charge of the stock transfer books of the
Corporation; and (g) in general perform all duties incident to the
office of Secretary and have such other duties and exercise such
authority as from time to time may be delegated or assigned to him by
the President or by the Board of Directors.
5/ Section 11. The Treasurer. The Treasurer shall: (a) have
charge and custody and be responsible for all funds and securities of
the Corporation; (b) receive and give receipts for moneys due and
payable to the Corporation from any source whatsoever, and deposit all
such moneys in the name of the Corporation in such banks, trust
companies or other depositories as shall be selected in accordance
with the provisions of Section 4, Article V; and (c) in general
perform all of the duties incident to the office of Treasurer and have
such other duties and exercise such other authority as from time to
time may be delegated or assigned to him by the President or by the
Board of Directors. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his duties
in such sum and with such surety or sureties as the Board of Directors
shall determine.
5/ Section 12. Assistant Secretaries and Assistant Treasurers.
There shall be such number of Assistant Secretaries and Assistant
Treasurers as the Board of Directors may from time to time authorize.
The Assistant Secretaries may sign with the President or a Vice
President certificates for shares of the Corporation, the issuance of
which shall have been authorized by a resolution of the Board of
Directors. The Assistant Treasurers shall respectively, if required
by the Board of Directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as the Board of
Directors shall determine. The Assistant Secretaries and Assistant
Treasurers, in general, shall perform such duties and have such
authority as shall from time to time be delegated or assigned to them
by the Secretary or the Treasurer, respectively, or by the President
or the Board of Directors.
5/ Section 13. Other Assistants and Acting Officers. The Board of
Directors shall have the power to appoint any person to act as
assistant to any officer, or as agent for the Corporation in his
stead, or to perform the duties of such officer whenever for any
reason it is impracticable for such officer to act personally, and
such assistant or acting officer or other agent so appointed by the
Board of Directors shall have the power to perform all the duties of
the office to which he is so appointed to be assistant, or as to which
he is so appointed to act, except as such power may be otherwise
defined or restricted by the Board of Directors.
5/ Section 14. Salaries. The salaries of the principal officers
shall be fixed from time to time by the Board of Directors or by a
duly authorized committee thereof, and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a
Director of the Corporation.
4/5/16/
Section 15. Liability of Directors and Officers and Employee
Fiduciaries. No Director shall be liable to the Corporation, its
shareholders, or any person asserting rights on behalf of the
Corporation or its shareholders, for damages, settlements, fees,
fines, penalties or other monetary liabilities arising from a breach
of, or failure to perform, any duty resulting solely from his or her
status as a Director, unless the person asserting liability proves
that the breach or failure to perform constitutes any of the
following: (a) willful failure to deal fairly with the Corporation or
its shareholders in connection with a matter in which the Director has
a material conflict of interest; (b) violation of criminal law, unless
the Director had reasonable cause to believe that his or her conduct
was lawful or no reasonable cause to believe that his or her conduct
was unlawful; (c) transaction from which the Director derived an
improper personal profit; (d) willful misconduct. No person shall be
liable to the Corporation for any loss or damage suffered by it on
account of any action taken or omitted to be taken by him as an
officer, or employee fiduciary as that term is defined in the
Employment Retirement Security Act of 1974 (hereinafter, and in
Section 15 of this Article IV, called "employee fiduciary") of the
Corporation or of any other corporation which he serves as an officer,
or employee fiduciary at the request of the Corporation, in good
faith, if such person (a) exercised and used the same degree of care
and skill as a prudent man would have exercised or used under the
circumstances in the conduct of his own affairs, or (b) took or
omitted to take such action in reliance upon advice of counsel for the
Corporation or upon statements made or information furnished by
officers or employees of the Corporation which he had reasonable
grounds to believe to be true. The foregoing shall not be exclusive
of other rights and defenses to which he may be entitled as a matter
of law.
4/5/16/
Section 16. Indemnity of Officers and Directors and Employee
Fiduciaries. Every person who is or was a Director or officer or
employee fiduciary of the Corporation, and any person who may have
served at its request as a Director or officer or employee fiduciary
of another Corporation in which it owns shares of capital stock or of
which it is a creditor, shall (together with the heirs, executors and
administrators of such person) be indemnified by the Corporation
against all costs, damages and expenses asserted against, incurred by
or imposed upon him in connection with or resulting from any claim,
action, suit or proceeding, including criminal proceedings, to which
he is made or threatened to be made a party by reason of his being or
having been such Director or officer or employee fiduciary, upon a
determination by or on behalf of the Corporation that the Director,
officer or employee fiduciary did not breach or fail to perform a duty
constituting any of the following: (a) willful failure to deal fairly
with the Corporation or its shareholders in connection with a matter
in which the Director or officer has a material conflict of interest;
(b) violation of the criminal law, unless the Director or officer had
reasonable cause to believe that his or her conduct was lawful or no
reasonable cause to believe that his or her conduct was unlawful; (c)
transaction from which the Director or officer derived an improper
personal profit; (d) willful misconduct. This indemnity shall include
reimbursement of amounts and expenses incurred and paid in settling
any such claim, action, suit or proceeding. The termination of a
proceeding by judgment, order, settlement or conviction or upon a plea
of guilty or nolo contendere or its equivalent shall not create a
presumption that such Director or officer or employee fiduciary is not
entitled to indemnification under this Section 16.
The Corporation, by its Board of Directors, may indemnify in like
manner, or with any limitations, any employee or former employee of
the Corporation with respect to any action taken or not taken in his
capacity as such employee.
The foregoing rights of indemnification shall be in addition to
all rights to which officers, Directors or employees may be entitled
as a matter of law.
ARTICLE V.
CONTRACTS, LOANS, CHECKS AND DEPOSITS
3/ Section 1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute or deliver any instrument in the name of and on behalf of the
Corporation, and such authorization may be general or confined to
specific instances. In the absence of other designation, all deeds,
mortgages and instruments of assignment or pledge made by the
Corporation shall be executed in the name of the Corporation by the
President or one of the Vice Presidents and by the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer, the
Secretary or an Assistant Secretary, when necessary or required, shall
affix the Corporate Seal thereto; and when so executed no other party
to such instrument or any third party shall be required to make any
inquiry into the authority of the signing officer or officers.
Section 2. Loans. No loans shall be contracted on behalf of
the Corporation and no evidence of indebtedness shall be issued in its
name unless authorized by or under the authority of a resolution of
the Board of Directors. Such authorization may be general or confined
to specific instances.
Section 3. Checks, Drafts, Etc. All checks, drafts or other
orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the Corporation, shall be signed by
such officer or officers, agent or agents of the Corporation and in
such manner as shall from time to time be determined by or under the
authority of resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit
of the Corporation in such banks, trust companies or other
depositaries as may be selected by or under the authority of the Board
of Directors.
ARTICLE VI.
CERTIFICATES FOR SHARES AND THEIR TRANSFERS
Section 1. Certificates for Shares. Certificates representing
shares of the Corporation shall be in such form as shall be determined
by the Board of Directors. Such certificates shall be signed by the
President or a Vice President and by the Secretary or an Assistant
Secretary. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the person
to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books
of the Corporation. All certificates surrendered to the Corporation
for transfer shall be canceled and no new certificates shall be issued
until the former certificate for a like number of shares shall have
been surrendered and canceled, except that in case of a lost,
destroyed or mutilated certificate a new one may be issued therefor
upon such terms and indemnity to the Corporation as the Board of
Directors may prescribe.
Section 2. Facsimile Signatures and Seal. The Seal of the
Corporation on any certificates for shares may be a facsimile. The
signatures of the President or Vice President and the Secretary or
Assistant Secretary upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent, or registered by a
registrar, other than the Corporation itself or an employee of the
Corporation.
Section 3. Signature by Former Officers. In case any officer
who has signed or whose facsimile signature has been placed upon any
certificate for shares, shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with
the same effect as if he were such officer at the date of its issue.
Section 4. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the
Corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the Corporation or the
Corporation's transfer agent, and on surrender for cancellation of the
certificate for such shares. The person in whose name shares stand on
the books of the Corporation shall be deemed by the Corporation to be
the owner thereof for all purposes.
Section 5. Lost, Destroyed or Stolen Certificates. Where the
owner claims that his certificate for shares has been lost, destroyed
or wrongfully taken, a new certificate shall be issued in place
thereof if the owner (a) so requests before the Corporation has notice
that such shares have been acquired by a bona fide purchaser, and (b)
files with the Corporation a sufficient indemnity bond, and (c)
satisfies such other reasonable requirements as the Board of Directors
may prescribe.
Section 6. Stock Regulations. The Board of Directors shall
have the power and authority to make all such further rules and
regulations not inconsistent with the Statutes of the State of
Wisconsin as they may deem expedient concerning the issue, transfer
and registration of certificates representing shares of the
Corporation.
ARTICLE VII.
FISCAL YEAR
20/ Section 1. Fiscal Year. The fiscal year of the Corporation
shall end on the thirty-first day of December of each calendar year.
ARTICLE VIII.
DIVIDENDS
Section 1. Dividends. The Board of Directors may from time to
time declare, and the Corporation may pay, dividends on its
outstanding shares in the manner and upon the terms and conditions
provided by law and its Articles of Incorporation.
Section 2. Record Date. The Board of Directors may, but shall
not be obligated to, order the stock books of the Corporation closed
so as to prevent any stock from being transferred of record for a
period not exceeding two (2) weeks prior to the date fixed for the
payment of any dividend, or in the alternative, may fix a record date
for the determination of those shareholders entitled to receive such
dividend, which record date, if so fixed, shall be not more than four
(4) weeks prior to the date fixed for the payment of such dividend.
ARTICLE IX.
SEAL
Section 1. Seal. The Board of Directors shall provide a
Corporate Seal which shall be circular in form and shall have
inscribed thereon the name of the Corporation and the State of
Incorporation and the words "Corporate Seal."
6/ ARTICLE X.
AMENDMENTS
Section 1. By Shareholders. These By-Laws may be altered,
amended or repealed and new By-Laws adopted by a vote of the holders
of a majority of outstanding shares entitled to vote which are present
at any annual or special meeting of the shareholders at which a quorum
is in attendance; provided, however, that no amendment of Section 2
of Article II, or of Section 2 or Section 9 of Article III, or of
this Article X, by the shareholders shall be effective unless it shall
have been adopted by a vote of the holders of not less than two-thirds
(2/3) of all outstanding shares entitled to vote.
Section 2. By Directors. These By-Laws may also be altered,
amended or repealed and new By-Laws adopted by the Board of Directors
by affirmative vote of a majority of the entire Board of Directors,
but no By-Law adopted by the shareholders shall be amended or repealed
by the Board of Directors if the By-Law so adopted so provides.
21/ Section 3. Implied Amendments. Any action taken or authorized
by the shareholders or by the Board of Directors, which would be
inconsistent with the By-Laws then in effect but is taken or
authorized by a vote that would be sufficient to amend the By-Laws so
that the By-Laws would be consistent with such action, shall be given
the same effect as though the By-Laws had been temporarily amended or
suspended so far, but only so far, as is necessary to permit the
specific action so taken or authorized.
THIS INSTRUMENT DRAFTED
BY
ATTORNEY A. F. RANKIN,
MANITOWOC, WISCONSIN
MANAGEMENT INCENTIVE COMPENSATION PLAN
Economic Value Added (EVA) Bonus Plan
As Amended May 22, 1995
ARTICLE I
Statement of Purpose
----------------------
1.1 The purpose of the Plan is to provide a system of incentive
compensation which will promote the maximization of
shareholder value over the long term. In order to align
management incentives with shareholder interests, incentive
compensation will reward the creation of value. This Plan
will tie incentive compensation to Economic Value Added
("EVA") and, thereby, reward management for creating value and
penalize management for destroying value.
1.2 EVA is the performance measure of value creation. EVA
reflects the benefits and costs of capital employment.
Managers create value when they employ capital in an endeavor
that generates a return that exceeds the cost of the capital
employed. Managers destroy value when they employ capital in
an endeavor that generates a return that is less than the cost
of capital employed. By imputing the cost of capital upon the
operating profits generated by a business group, EVA measures
the total value created (or destroyed) by management.
EVA = (Net Operating Profit After Tax - Capital Charge)
1.3 Each Plan Participant is placed in a classification. Each
classification has a prescribed target bonus. The bonus
earned in any one year is the result of multiplying the Actual
Bonus Percentage times the Participant's base pay. Bonuses
that fall within a pre-specified range will be fully paid out.
Positive and negative bonuses falling outside this range are
banked forward in the Participant's Bonus Bank, with one-third
of the net positive balance paid out each year in cash.
ARTICLE II
Definition of EVA and the Components of EVA
--------------------------------------------
Unless the context provides a different meaning, the following
terms shall have the following meanings.
2.1 "Participating Group" means a business division or group of
business divisions which are uniquely identified for the
purpose of calculating EVA and EVA based bonus awards. Some
Participants' awards may be a mixture of two different
Participating Groups.
For the purpose of this plan, the Participating Groups are listed
on Exhibit C.
2.2 "Capital" means the net investment employed in the operations
of each Participating Group. The components of Capital are as
follows:
Gross Accounts Receivable (including trade A/R from
another Manitowoc unit)
Plus: FIFO Inventory
Plus: Other Current Assets
Less: Non-Interest Bearing Current Liabilities (NIBCL's -
See Note 1)
Plus: Net PP&E
Plus: Present Value of Non - Capitalized Lease Commitments
(See Note 2)
Plus: Other Operating Assets
Plus: Capitalized Research & Development
Plus: Goodwill acquired after July 3, 1993
Plus: Accumulated Amortization on Goodwill acquired after
July 3, 1993
Plus (Less): Special Items (one-time)
--------------------------------------
Equals: Capital
Notes: (1) NIBCL's include trade A/P to another Manitowoc unit,
but do not include the contingent liability associated
with Bonus Banks.
(2) A firm's decision to finance an asset with an Operating
Lease should not exclude the asset from the firm's capital.
The Present Value of Non -Capitalized Leases can be estimated
by discounting the future minimum lease payments (usually only
5 years is available) by a 10% discount rate. Includes only
new leases (not renewals of existing leases or those incurred
as part of the G.E. Capital lease fleet) with a NPV greater
than $50,000 entered into subsequent to July 3, 1993.
2.3 Each component of Capital will be measured by computing an
average balance based on the ending monthly balance for the
twelve months of the Fiscal Year.
2.4 "Cost of Capital" or "C*" means the weighted average of the
after tax cost of debt and equity for the year in question.
The Cost of Capital will be reviewed annually and revised if it has
changed significantly. Calculations will be carried to one
decimal point.
The cost of capital for the initial year is 12.6%. See Exhibit A.
In subsequent plan years the methodology for the calculation
of the Cost of Capital will be:
a) Cost of Equity = Risk Free Rate + (Beta x Market Risk Premium)
b) Debt Cost of Capital = Debt Yield x (1 - Tax Rate)
c) The weighted average of the Cost of Equity and the Debt Cost of
Capital is determined by reference to the actual debt to
capital ratio where the Risk Free Rate is the average daily
closing yield rate on 30 year U.S. Government Bonds for the
month of October immediately preceding the Plan Year, the BETA
is determined by reference to the most recently available
Value Line report on the Company closest to, but before
October 31, the Market Risk Premium is 6%, the Debt Yield is
the weighted average yield on the Company's long term
obligations for the trailing 12 month period ending October 31
of the year immediately preceding the Plan Year, and the tax
rate is 39%.
d) Short-term debt is to be treated as long-term for purposes
of computing the cost of capital.
2.5 "Capital Charge" means the deemed opportunity cost of
employing Capital in the business of each Participating Group.
The Capital Charge is computed as follows:
Capital Charge = Capital x Cost of Capital (C*)
2.6 "Net Operating Profit After Tax" or "NOPAT"
-------------------------------------------
"NOPAT" means the after tax cash earnings attributable to the
capital employed in the Participating Group for the year in
question. The components of NOPAT are as follows:
Operating Earnings
Plus: Interest Expense on Non-Capitalized Lease
Commitments (See Note 1)
Plus: Increase (Decrease) in Capitalized R & D (See
Note 2)
Plus: Increase (Decrease) in Bad Debt Reserve
Plus: Increase (Decrease) in Inventory Reserves
Plus: Amortization of Goodwill acquired after July 3, 1993
Less: Other Expense (Excluding interest on debt)
Plus: Other Income (Excluding investment income)
Equals: Net Operating Profit Before Tax
Less: Taxes (See Note 3)
------------------------------
Equals: Net Operating Profit After Tax
Note: (1) For consistency with the treatment of capitalized
leases in capital, the interest portion of the lease
payments should be reclassified from operating expense
to interest expense.
(2) Since R & D is Capitalized, the difference in the balance
is the expensed amount for that year.
(3) Taxes is assumed to be 39% of Net Operating Profit Before
Tax.
2.7 "Economic Value Added" or "EVA" means the NOPAT that remains
after subtracting the Capital Charge, expressed as follows:
NOPAT
Less: Capital Charge
-------------------------
Equals: EVA
EVA may be positive or negative.
ARTICLE III
Definition and Computation of Target Bonus Value
-------------------------------------------------
3.1 "Actual EVA" means the EVA as calculated for each
Participating Group for the year in question.
3.2 "Target EVA" means the level of EVA that is expected in order
for the Participating Group to receive the Target Bonus Value.
The Target EVA for the first year is set at the expected EVA for
the year prior to the first year of the plan after adjusting
for inventory write-offs, Manitex relocation, FAS 106 and 109
and the $5 million product liability settlement (except for
$1.2 million). After the first year, the Base-Line EVA is
revised according to the following formula:
Last Year's Actual EVA + Last Year's Target EVA
-----------------------------------------------
Target EVA = 2 + Expected Improvement in EVA
"Expected Improvement in EVA" means the constant EVA improvement
that is added to shift the target up each year. This is
determined by the expected growth in EVA per year.
See Exhibit B for the Expected Improvement for each Participating
Group.
3.3 "Target Bonus Value" means the "Target Bonus Percentage"
times a Participant's base pay.
3.4 "Target Bonus Percentage" is determined by a Participant's
classification as shown on Exhibit B.
3.5 "Actual Bonus Value" means the bonus earned * by a Participant
and is computed as the Actual Bonus Percentage times a
Participant's base pay.
3.6 "Actual Bonus Percentage" is determined by multiplying the
Target Bonus Percentage by the Bonus Performance Value.
3.7 "Bonus Performance Value" means the difference between the
Actual EVA and the Target EVA divided by the Leverage Factor
plus 1.0.
(Actual EVA - Target EVA)
-------------------------
Bonus Performance Value = ( Leverage Factor ) + 1
3.8 "Leverage Factor" is the negative (positive) deviation from
Target EVA necessary before a zero (two times Target) bonus is
earned. See Exhibit C for the Leverage Factor of each
Participating Group.
3.9 A Participant's classification is determined by each business
unit manager. They shall generally be direct reports and are
subject to approval by the CEO and the Compensation Committee
of the Board of Directors.
* Note: A portion of the Actual Bonus Value may be placed in the
Participants' Bonus Bank. See Article IV for details on the
Bonus Bank.
ARTICLE IV
Description of Bonus Banks
--------------------------
4.1 Establishment of a Bonus Bank. To encourage a long-term
commitment by Participants to the Company, a portion of
exceptional bonuses (amounts above Target and negative
bonuses) shall be credited to "at risk" deferred accounts
("Bonus Banks"), with the level of payout contingent on
sustained high performance and improvements and continued
employment as provided herein.
4.2 Although a Bonus Bank may, as a result of negative EVA, have a
deficit, no Plan Participant shall be required, at any time,
to reimburse his/her Bonus Bank.
4.3 "Bonus Bank" means, with respect to each Participant, a
bookkeeping record of an account to which amounts are
credited, or debited as the case may be, from time to time
under the Plan and from which bonus payments to such
Participant are debited.
4.4 "Bank Balance" means, with respect to each Participant, a
bookkeeping record of the net balance of the amounts credited
to and debited against such Participant's Bonus Bank. A
Participant's Bank Balance shall initially be equal to zero.
4.5 Payout Rule: If the Bank Balance entering the Plan Year is
zero or positive, then
1) Pay any positive bonus earned up to the "Target Bonus
Value",
2) Add any unpaid portion of the bonus earned (including
negative bonuses) to the Bonus Bank,
3) Pay out 1/3 of any Positive Bank Balance
4) Carry the remaining Bank Balance forward to the next year.
If the Bank Balance entering the Plan Year is negative, then
1) Pay 1/3 of the positive bonus earned up to the "Target
Bonus Value",
2) Add any unpaid portion of the bonus earned (including
negative bonuses) to the Bonus Bank,
3) Pay out 1/3 of any Positive Bank Balance,
4) Carry the remaining Bank Balance forward to the next year.
4.6 A Participant may elect to withdraw, in cash, all or a portion
of the Bank Balance. The amount available for such withdrawal
is the lesser of the ending Bank Balance of the applica ble
year or the Bank Balance at the end of the third prior year.
ARTICLE V
Plan Participation, Transfers and Terminations
-----------------------------------------------
5.1 Participant Group. The Committee will have sole discretion in
determining who shall participate in the EVA Bonus Plan.
Employees designated for Plan participation by the Committee
shall be management or highly compensated employees.
5.2 Transfers. A Participant who transfers his employment from
one Participating Unit of the Company to another shall retain
his Bonus Bank and will be eligible to receive future EVA Plan
Awards in accordance with the provisions of the EVA Plan. Any
positive Bonus Bank balance would payout in full as soon as is
practical.
5.3 Retirement or Disability. A Participant who terminates
employment with the Company, at or after age fifty-five, for
any reason ("retirement"), or suffers a "disability," as such
term is defined in the Company's long-term disability benefits
program, while in the Company's employ shall be eligible to
receive the balance of their Bonus Bank. In the case of
retirement, the Participant will receive their balance over
three years subject to reduction if the Actual Bonus Value is
negative in any of the three years subsequent to the year of
retirement. In the case of disability while in the Company's
employ, the Participant will receive their balance as soon as
practical after qualifying for benefit payments under the
Company's long-term disability benefits program.
5.4 Involuntary Termination Without Cause or Death. A Participant
who is Terminated without cause or who dies shall receive any
positive Bonus Bank balance. Such payments will be made as
soon as is practical.
5.5 Voluntary Termination. In the event that a Participant
voluntarily terminates employment with the Company, the right
of the Participant to their Bonus Bank shall be forfeited
unless a different determination is made by the Committee.
5.6 Involuntary Termination for Cause. In the event of
termination of employment for cause, the right of the
Participant to the Bonus Bank shall be determined by the
Committee.
"Cause" shall mean:
(i) any act or acts of the Participant constituting a felony
under the laws of the United States, any state thereof or any
foreign jurisdiction;
(ii) any material breach by the Participant of any employment
agreement with the Company or the policies of the Company or
the willful and persistent (after written notice to the
Participant) failure or refusal of the Participant to comply
with any lawful directives of the Board;
(iii) a course of conduct amounting to gross neglect,
willful misconduct or dishonesty; or
(iv) any misappropriation of material property of the Company
by the Participant or any misappropriation of a corporate or
business opportunity of the Company by the Participant.
5.7 Breach of Agreement. Notwithstanding any other provision of
the Plan or any other agreement, in the event that a
Participant shall breach any non-competition agreement with
the Company or breach any agreement with respect to the post-
employment conduct of such Participant, the Bonus Bank held by
such Participant shall be forfeited.
5.8 No Guarantee. Participation in the Plan provides no guarantee
that a payment under the Plan will be paid. Selection as a
Participant is no guarantee that payments under the plan will
be paid or that selection as a Participant will be made in the
subsequent Calendar Year.
ARTICLE VI
General Provisions
------------------
6.1 Withholding of Taxes. The Company shall have the right to
withhold the amount of taxes, which in the determination of
the Company, are required to be withheld under law with
respect to any amount due or paid under the Plan.
6.2 Expenses. All expenses and costs in connection with the
adoption and administration of the plan shall be borne by the
Company.
6.3 No prior Right or Offer. Except and until expressly granted
pursuant to the Plan, nothing in the Plan shall be deemed to
give any employee any contractual or other right to
participate in the benefits of the Plan.
6.4 Claims for Benefits. In the event a Participant (a
"claimant") desires to make a claim with respect to any of the
benefits provided hereunder, the claimant shall submit
evidence satisfactory to the Committee of facts establishing
his entitlement to a payment under the Plan. Any claim with
respect to any of the benefits provided under the Plan shall
be made in writing within ninety (90) days of the event which
the claimant asserts entitles him to benefits. Failure by the
claimant to submit his claim within such ninety (90) day
period shall bar the claimant from any claim for benefits
under the Plan.
6.5 In the event that a claim which is made by a claimant is
wholly or partially denied, the claimant will receive from the
Committee a written explanation of the reason for denial and
the claimant or his duly authorized representative may appeal
the denial of the claim to the Committee at any time within
ninety (90) days after the receipt by the claimant of written
notice from the Committee of the denial of the claim. In
connection therewith, the claimant or his duly authorized
representative may request a review of the denied claim; may
review pertinent documents; and may submit issues and comments
in writing. Upon receipt of an appeal, the Committee shall
make a decision with respect to the appeal and, not later than
sixty (60) days after receipt of a request for review, shall
furnish the claimant with a decision on review in writing,
including the specific reasons for the decision written in a
manner calculated to be understood by the claimant, as well as
specific reference to the pertinent provisions of the Plan
upon which the decision is based. In reaching its decision,
the Committee shall have complete discretionary authority to
determine all questions arising in the interpretation and
administration of the Plan, and to construe the terms of the
Plan, including any doubtful or disputed terms and the
eligibility of a Participant for benefits.
6.6 Action Taken in Good Faith; Indemnification. The Committee
may employ attorneys, consultants, accountants or other
persons and the Company's directors and officers shall be
entitled to rely upon the advice, opinions or valuations of
any such persons. All actions taken and all interpretations
and determinations made by the Committee in good faith shall
be final and binding upon all employees who have received
awards, the Company and all other interested parties. No
member of the Committee, nor any officer, director, employee
or representative of the Company, or any of its affiliates
acting on behalf of or in conjunction with the Committee,
shall be personally liable for any action, determination, or
interpretation, whether of commission or omission, taken or
made with respect to the Plan, except in circumstances
involving actual bad faith or willful misconduct. In addition
to such other rights of indemnification as they may have as
members of the Board, as members of the Committee or as
officers or employees of the Company, all members of the
Committee and any officer, employee or representative of the
Company or any of its subsidiaries acting on their behalf
shall be fully indemnified and protected by the Company with
respect to any such action, determination or interpretation
against the reasonable expenses, including attorneys' fees
actually and necessarily incurred, in connection with the
defense of any civil or criminal action, suit or proceeding,
or in connection with any appeal therein, to which they or any
of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or an
award granted thereunder, and against all amounts paid by them
in settlement thereof (provided such settlement is approved by
independent legal counsel selected by Company ) or paid by
them in satisfaction of a judgment in any action, suit or
proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit or proceeding that such
person claiming indemnification shall in writing offer the
Company the opportunity, at its own expense, to handle and
defend the same. Expenses (including attorneys' fees)
incurred in defending a civil or criminal action, suit or
proceeding shall be paid by the Company in advance of the
final disposition of such action, suit or proceeding if such
person claiming indemnification is entitled to be indemnified
as provided in this Section.
6.7 Rights Personal to Employee. Any rights provided to an
employee under the Plan shall be personal to such employee,
shall not be transferable (except by will or pursuant to the
laws of descent or distribution), and shall be exercisable,
during his lifetime, only by such employee.
6.8 Upon termination of the Plan or suspension for a period of
more than 90 days, the Bank Balance of each Participant shall
be distributed as soon as practicable but in no event later
than 90 days from such event. The Committee, in its sole
discretion, may accelerate distribution of the Bank Balance,
in whole or in part, at any time without penalty.
6.9 Non-Allocation of Award. In the event of a suspension of the
Plan in any Plan Year, as provided herein at Article VIII,
Section 8, the Current Bonus for the subject Plan year shall
be deemed forfeited and no portion thereof shall be allocated
to Participants. Any such forfeiture shall not affect the
calculation of EVA in any subsequent year.
ARTICLE VII
Limitations
-----------
7.1 No Continued Employment. Nothing contained herein shall
provide any employee with any right to continued employment or
in any way abridge the rights of the Company and its
Participating Units to determine the terms and conditions of
employment and whether to terminate employment of any
employee.
7.2 No Vested Rights. Except as otherwise provided herein, no
employee or other person shall have any claim of right (legal,
equitable, or otherwise)to any award, allocation, or
distribution or any right, title, or vested interest in any
amounts in his Bonus Bank and no officer or employee of the
Company or any Participating Group or any other person shall
have any authority to make representations or agreements to
the contrary. No interest conferred herein to a Participant
shall be assignable or subject to claim by a Participant's
creditors. The right of the Participant to receive a
distribution hereunder shall be an unsecured claim against the
general assets of the Company and the Participant shall have
no rights in or against any specific assets of the Company as
the result of participation hereunder.
7.3 Not Part of Other Benefits. The benefits provided in this
plan shall not be deemed a part of any other benefit provided
by the Company to its employees. The Company assumes no
obligation to plan Participants except as specified herein.
This is a complete statement, along with the Schedules and
Appendices attached hereto, of the terms and conditions of the
plan.
7.4 Other Plans. Nothing contained herein shall limit the Company
or the Compensation Committee's power to grant bonuses to
employees of the Company, whether or not Participants in this
plan.
7.5 Limitations. Neither the establishment of the plan or the
grant of an award hereunder shall be deemed to constitute an
express or implied contract of employment for any period of
time or in any way abridge the rights of the Company to
determine the terms and conditions of employment or to
terminate the employment of any employee with or without cause
at any time.
7.6 Unfunded Plan. This Plan is unfunded and is maintained by the
Company in part to provide deferred compensation to a select
group of management and highly compensated employees. Nothing
herein shall create or be construed to create a trust of any
kind, or a fiduciary relationship between the Company and any
Participant.
ARTICLE VIII
Authority
----------
8.1 Compensation Committee Authority. Except as otherwise
expressly provided herein, full power and authority to
interpret and administer this plan shall be vested in the
Compensation Committee. The Compensation Committee may from
time to time make such decisions and adopt such rules and
regulations for implementing the Plan as it deems appropriate
for any Participant under the Plan. Any decision taken by the
Compensation Committee arising out of or in connection with
the construction, administration, interpretation and effect of
the Plan shall be final, conclusive and binding upon all
Participants and any person claiming under or through them.
8.2 Board of Directors Authority. The Board shall be ultimately
responsible for administration of the plan. References made
herein to the "Compensation Committee" assume that the Board
of Directors has created a Compensation Committee to
administer the Plan. In the event a Compensation Committee is
not so designated, the Board shall administer the Plan. The
Board or its Compensation Committee, as appropriate, shall
work with the CEO of the Company in all aspects of the
administration of the Plan.
ARTICLE IX
Notice
-------
9.1 Any notice to be given pursuant to the provisions of the Plan
shall be in writing and directed to the appropriate recipient
thereof at his business address or office location.
ARTICLE X
Effective Date
--------------
10.1 This Plan shall be effective as of July 4, 1993.
ARTICLE XI
Amendments
-----------
11.1 This Plan may be amended, suspended or terminated at any time
at the sole discretion of the Board upon the recommendation of
the Compensation Committee. Provided, however, that no such
change in the Plan shall be effective to eliminate or diminish
the distribution of any Award that has been allocated to the
Bank of a Participant prior to the date of such amendment,
suspension or termination. Notice of any such amendment,
suspension or termination shall be given promptly to each
Participant.
ARTICLE XII
Applicable Law
---------------
12.1 This Plan shall be construed in accordance with the provisions
of the laws of the State of Wisconsin.
Exhibit A
Calculation of the Cost of Capital
Inputs Variables:
-----------------
Risk Free Rate = Average Daily closing yield on U.S. Government 30
Yr. Bonds (for the month of October preceding the Plan
Year)
Market Risk Premium = 6.0% (Fixed)
Beta = 0.80 (Value Line)
Debt/Capital Ratio = Debt as a % of Capital (computed using the monthly
average debt/capital ratio for the trailing 12
month period ending October 31 of the year
preceding the Plan Year)
b = Cost of Debt Capital (Weighted Average Yield on the
Company's Long Term Debt Obligations)
Marginal Tax Rate = 39.0% (Historical Average)
Calculations:
-------------
y = Cost of Equity Capital
= Risk Free Rate + (Beta x Market Risk Premium)
Weighted Average Cost of Capital =
(Cost of Equity Capital x (1 - Debt/Capital Ratio)) +
(Cost of Debt x (Debt/Capital Ratio) x (1 - Marginal Tax Rate))
c* = (y x (1 - Debt/Capital)) + (b x (Debt/Capital) x (1 - Marginal Tax Rate))
Exhibit B
Participant Target Bonus
Classification Percentage
-------------- -------------
I 60 %
II 50 %
III 35 %
IV 25 %
V 15 %
VI 10 %
VII 7 %
VIII 5 %
IX 2 %
Exhibit C
Participating Expecting Improvement
Groups in EVA Leverage Factor
------------- --------------------- ---------------
MEC 1,000,000 3,000,000
Manitex 500,000 1,000,000
Orley Meyer 50,000 250,000
Foodservice * 500,000 2,000,000
Marine 150,000 750,000
Corporate 1,000,000 7,000,000
Manitowoc Western 110,000 330,000
Manitowoc Forsythe 50,000 140,000
North Central Crane 40,000 120,000
Femco 400,000 600,000
West-Manitowoc 200,000 350,000
Manitowoc Europe LTD 75,000 225,000
* After Market Group
(Remanuf. & Femco) * 400,000 *750,000
* MEC Group
(MEC and Stores) * 1,275,000 * 3,800,000
*Effective 1/1/96
THE MANITOWOC COMPANY, INC.
1995 Stock Plan
-----------------------------------------------------------------------
1. PURPOSE
The purpose of this 1995 Stock Plan (the "Plan") is to promote the
interests of The Manitowoc Company, Inc. (the "Company") and its
stockholders by providing a method whereby key employees of the
Company and its subsidiaries who are primarily responsible for the
management, growth and financial success of the Company may be
offered incentives and rewards which will encourage them to acquire
a proprietary interest, or otherwise increase their proprietary
interest, in the Company and continue to remain in the employ of
the Company or its subsidiaries. The Plan permits grants of options
to purchase shares of Common Stock, $.01 par value, of the Company
("Common Stock"), grants of limited stock appreciation rights in
connection with options and awards of shares of Common Stock that
are restricted as provided in Section 6 ("Restricted Shares").
Awards of Restricted Shares may be in lieu of or in addition to
grants of options under the Plan. It is intended that options
issued under this Plan shall constitute (a) incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), and the
treasury regulations promulgated thereunder, to the extent provided
in Section 5(a) hereof, or (b) options which do not qualify as
incentive stock options ("Non-qualified Stock Options") .
2. SHARES SUBJECT TO PLAN
The total number of shares of Common Stock with respect to which
options may be granted and Restricted Shares may be awarded under
the Plan shall not exceed 750,000 shares, subject to adjustment as
provided in Section 7. Shares awarded as Restricted Shares or
issued upon exercise of options granted under the Plan may be
either authorized and unissued shares or treasury shares. In the
event that any Restricted Shares shall be forfeited or any option
granted under the Plan shall terminate, expire or be canceled as to
any shares of Common Stock, without having been exercised in full,
new awards of Restricted Shares may be made or new options may be
granted with respect to such shares without again being charged
against the maximum share limitations set forth above in this
Section 2.
Notwithstanding any other provision of the Plan to the contrary,
the maximum number of shares of Common Stock (subject to adjustment
under Section 7) subject to award of an option or Restricted Shares
that any Participant (as defined in Section 4 hereof) can be
granted under the Plan during its term is 200,000 shares.
3. ADMINISTRATION
The Plan shall be administered by the Compensation and Benefits
Committee, or any successor Committee (hereinafter called the
"Committee"), which shall be appointed by the Board of Directors of
the Company (the "Board") and shall consist of such number of
directors, not less than three, as shall be determined by the
Board, who shall serve at the pleasure of the Board. Each member
of the Committee shall at the time of designation and service be a
"disinterested person" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or any successor rule or regulation in effect at the time ("Rule
16b-3"), and be an "outside director" within the meaning of Section
162(m) of the Code and the Treasury Regulations promulgated
thereunder.
The Committee, from time to time, may adopt rules and regulations
for carrying out the provisions and purposes of the Plan. The
interpretation and construction by the Committee of any provisions
of, and the determination of any question arising under, the Plan,
any such rule or regulation, or any agreement granting options or
Restricted Shares under the Plan, shall be final and conclusive and
binding on all persons interested in the Plan.
Subject to the terms and conditions of the Plan, the Committee, in
its sole discretion, shall determine the Participants to whom
options and Restricted Shares shall be granted, the time or times
when they shall be granted, when options may be exercised, the
number of shares to be awarded as Restricted Shares or to be
covered by each option so granted, all other terms and conditions
of the grant of options or awards of Restricted Shares, the terms
and provisions of the award agreements (which need not be
identical) and, with respect to grants of options, which options
are to be Incentive Stock Options and which Options are to be Non-
qualified Stock Options.
4. ELIGIBILITY
Any key employees of the Company or its present or future
subsidiaries ("Participants") as determined by the Committee shall
be eligible to receive awards under the Plan. No director who is
not an officer or employee of the Company or a subsidiary thereof
and no member of the Committee, during the time of his or her
service as such, shall be eligible to receive an option or
Restricted Shares under the Plan.
5. OPTIONS
All options approved by the Committee under the Plan shall be
evidenced by stock option agreements in writing (hereinafter called
"option agreements"), in such form as the Committee may from time
to time approve, executed on behalf of the Company by one or more
members of the Committee. Each such agreement shall be subject to
the Plan and, in addition to such other terms and conditions as the
Committee may deem desirable, shall provide in substance as
follows:
(a) Limitations. The aggregate Fair Market Value (as defined in
Section 5(b) hereof) of the shares of Common Stock (determined
as of the date of grant) with respect to which Incentive Stock
Options may be first exercisable by a Participant during any
calendar year under this Plan and all other option plans of the
Company and its subsidiaries shall not exceed $100,000;
provided, however, that, to the extent permitted by the Code and
the Treasury Regulations promulgated thereunder, nothing
contained in this Section 5(a) shall be interpreted to prevent a
Participant (i) from exercising in any year subsequent to the
year in which an Incentive Stock Option first became exercisable
the whole or any portion of such Incentive Stock Option not
exercised in the year such Incentive Stock Option first became
exercisable, or (ii) from exercising Incentive Stock Options in
full pursuant to the terms of Section 7(c) hereof. Non-qualified
Stock Options may be exercised by a Participant without regard
to the limitations stated in the previous sentence.
(b) Number and Price of Shares. Each option agreement shall
specify the number of shares of Common Stock covered by such
option and the purchase price per share thereof. Such price
shall be equal to at least 100% of the fair market value of the
shares as of the date such option is granted ("Fair Market
Value"). The Fair Market Value of a share of Common Stock shall
be the price per share at the close of the prior days trading as
reported on the New York Stock Exchange Composite Tape. The
option price shall be subject to adjustment as provided in
Section 7 hereof.
In the case of a Participant who owns shares of Common Stock
representing more than ten percent (10%) of the total combined
voting power of all classes of stock the Company (as determined
under Section 425(e) and (f) of the Code) at the time an
Incentive Stock Option is granted, the Incentive Stock Option
price shall not be less than 110% of the Fair Market Value of
the shares at the time the Incentive Stock Option is granted.
(c) Time of Exercise. Each option agreement shall set forth the
period during which it may be exercised, which shall be
determined by the Committee at the time of grant, subject to the
Committee's ability to accelerate vesting, provided that each
Non-qualified Stock Option shall expire not more than ten years
and two days after the date such option is granted and each
Incentive Stock Option shall expire not more than ten years
after the date such option is granted (the period set forth in
each option agreement being hereinafter referred to as "option
period").
Notwithstanding the foregoing, if a Participant owns, at the
time of grant, stock representing more than 10% of the total
combined voting power of all classes of the Company's stock,
then no Incentive Stock Option granted to such Participant may
have a life of more than five years from the date of grant.
(d) Manner of Exercise. An option may be exercised, subject to
its terms and conditions and the terms and conditions of the
Plan, subject to the company Insider Trading Policy as outlined
in the Corporate Policy Manual, No. 112., in full at any time or
in part from time to time by delivery to the Secretary of the
Company (or such other designee) of a written notice of exercise
specifying the number of shares with respect to which the option
is being exercised. Any notice of exercise shall be accompanied
by full payment of the option price of the shares being
purchased, unless the broker-dealer sale and remittance payment
procedure detailed below is utilized in connection therewith.
Payment of the option price may be effected in one of the
alternative forms specified below:
(i) in cash or cash equivalents;
(ii) with the consent of the Committee (as set forth in the
option agreement or otherwise), by delivery of shares of
Common Stock held by the Participant for at least six (6)
months and having a Fair Market Value on the Exercise Date
(as such term is defined below) equal to the option price;
(iii) with the consent of the Committee (as set forth in the
option agreement or otherwise), by any combination of shares
of Common Stock held for at least six (6) months, valued at
Fair Market Value on the Exercise Date, and cash or cash
equivalents; or
(iv) by payment effected through a broker-dealer sale and
remittance procedure pursuant to which the Participant (a)
shall provide irrevocable written instructions to the
designated broker/dealer to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale
proceeds available on the settlement date, an amount equal to
the aggregate option price payable for the purchased shares
plus all applicable Federal and State income and employment
taxes required to be withheld by the Company by reason of
such purchase and (b) shall provide written directives to
the Company to deliver the certificates for the purchased
shares directly to such broker-dealer; or
(v) by delivery of other any property acceptable to the Committee
which has a fair market value, as determined by the
Committee, on the Exercise Date equal to the option price and
serves as valid consideration for issuance of the Company's
Common Stock.
For purposes of this subsection (d), the "Exercise Date"
shall be the first date on which there shall have been
delivered to the Company: (i) written notice of the exercise
of the option and (ii) any representations by the Participant
that the Committee should determine are required by Federal
or State securities laws.
(e) Termination of Employment. In the event a Participant leaves
the employ of the Company and/or its subsidiaries, whether
voluntarily or by reason of dismissal, disability, death or
retirement, all rights to exercise an option shall terminate
immediately unless otherwise provided in the option agreement
granted to such Participant.
(f) Non-Transferability of Options or Limited Rights. To the
extent required to comply with Rule 16b-3, the options granted
under the Plan and any Limited Right (as hereinafter defined)
are not transferable by the Participant other than by will or by
the laws of descent and distribution and during the lifetime of
the Participant, such option may be exercised only by the
Participant or such Participant's legal representative.
(g) Prior Outstanding Options. Each option agreement evidencing
an Incentive Stock Option shall provide that, if such Incentive
Stock Option is exercisable by its terms, it may be exercised
while there is outstanding (within the meaning of Section 422(c)
(7) of the Code) any other Incentive Stock Option to purchase
shares of Common Stock of the Company or of a corporation which
is a subsidiary of the Company or of a predecessor corporation
of the Company or such subsidiary.
6. RESTRICTED SHARES.
(a) Awards. The Committee may from time to time in its discretion
award Restricted Shares to Participants and shall determine the
number of Restricted Shares awarded and the terms and conditions
of, and the amount of payment, if any, to be made by the
Participant for, such Restricted Shares. Each award of
Restricted Shares will be evidenced by a written agreement
executed on behalf of the Company by one or more members of the
Committee and containing terms and conditions not inconsistent
with the Plan as the Committee, in its sole discretion, shall
determine to be appropriate.
(b) Restricted Period; Lapse of Restrictions. At the time an
award of Restricted Shares is made, the Committee shall
establish a period of time (the "Restricted Period") applicable
to such award which shall not be less than one year nor more
than ten years. Each award of Restricted Shares may have a
different Restricted Period. At the time an award is made, the
Committee may, in its discretion, prescribe conditions for the
incremental lapse of restrictions during the Restricted Period
and for the lapse or termination of restrictions upon the
occurrence of other conditions in addition to or other than the
expiration of the Restricted Period with respect to all or any
portion of the Restricted Shares. Such conditions may include,
without limitation, the death or disability of the Participant
to whom Restricted Shares are awarded, retirement of the
Participant pursuant to normal or early retirement under any
retirement plan of the Company or any of its subsidiaries,
termination by the Company or any of its subsidiaries of the
Participant's employment other than for cause or the occurrence
of an Acceleration Date (as defined in Section 7(c) hereof). The
Committee may also, in its discretion, shorten or terminate the
Restricted Period or waive any conditions for the lapse or
termination of restrictions with respect to all or any portion
of the Restricted Shares at any time after the date the award is
made.
(c) Rights of Holder; Limitations Thereon. Upon an award of
Restricted Shares, a stock certificate representing the number
of Restricted Shares awarded to the Participant shall be
registered in the Participant's name and, at the discretion of
the Committee, will be either delivered to the Participant with
an appropriate legend or held in custody by the Company or a
bank for the Participant's account. The Participant shall
generally have the rights and privileges of a stockholder as to
such Restricted Shares, including the right to vote such
Restricted Shares, the right to receive cash dividends, except
that the following restrictions shall apply: (i) with respect to
each Restricted Share, the Participant shall not be entitled to
delivery of an unlegended certificate until the expiration or
termination of the Restricted Period, and the satisfaction of
any other conditions prescribed by the Committee, relating to
such Restricted Share; (ii) with respect to each Restricted
Share, such share may not be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of until the
expiration of the Restricted Period, and the satisfaction of any
other conditions prescribed by the Committee, relating to such
Restricted Share; and (iii) except as otherwise determined by
the Committee, upon termination of employment of a Participant
for any reason during the applicable Restricted Period, all of
the Restricted Shares as to which restrictions have not at the
time lapsed shall be forfeited and all rights of the Participant
to such Restricted Shares shall terminate without further
obligation on the part of the Company. Upon the forfeiture of
any Restricted Shares, such forfeited shares shall be
transferred to the Company without further action by the
Participant. At the discretion of the Committee, cash and stock
dividends with respect to the Restricted Shares may be either
currently paid or withheld by the Company for the Participant's
account, and interest may be paid on the amount of cash
dividends withheld at a rate and subject to such terms as
determined by the Committee. The Participant shall have the
same rights and privileges, and be subject to the same
restrictions, with respect to any shares received pursuant to
Section 7(h) hereof.
(d) Delivery of Unrestricted Shares. Upon the expiration or
termination of the Restricted Period and the satisfaction of any
other conditions prescribed by the Committee, the restrictions
applicable to the Restricted Shares shall lapse and one or more
stock certificates for the appropriate number of Restricted
Shares with respect to which the restrictions have lapsed shall
be delivered, free of all such restrictions, except any that may
be imposed by law, to the Participant or the Participant's
beneficiary or estate, as the case may be. The Company shall not
be required to deliver any fractional share of Common Stock but
will pay, in lieu thereof, the fair market value (determined as
of the date the restrictions lapse) of such fractional share to
the Participant or the Participant's beneficiary or estate, as
the case may be. Prior to or concurrently with the issuance or
delivery of an unlegended certificate for Restricted Shares, the
Participant shall be required to pay any portion of the purchase
price of such Restricted Shares then unpaid, if any, and that
amount necessary to satisfy applicable Federal, state or local
tax requirements.
7. EFFECT OF CERTAIN CHANGES.
(a) If there is any change in the number of shares of Common
Stock by reason of a declaration of a stock dividend (other than
a stock dividend declared in lieu of an ordinary cash dividend),
stock split, recapitalization, or combination or exchange of
shares, the number of shares of Common Stock available for
options and Restricted Shares and the number of such shares
covered by outstanding options, and the price per share of such
options, shall be proportionately adjusted by the Committee to
reflect any increase or decrease in the number of issued shares
of Common Stock; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.
(b) In the event of the proposed dissolution or liquidation of
the Company, or in the event of any corporate separation or
division, including, but not limited to, a split-up, split-off,
or spin-off, the Committee may provide that the holder of each
option then exercisable shall have the right to exercise such
option (at its then option price) solely for the kind and amount
of shares of stock and other securities, property, cash or any
combination thereof receivable upon such dissolution,
liquidation or corporate separation or division by a holder of
the number of shares of Common Stock for which such option might
have been exercised immediately prior to such dissolution,
liquidation, or corporate separation or division; or the
Committee may provide, in the alternative, that each option
granted under the Plan shall terminate as of a date to be fixed
by the Board, provided that not less than thirty (30) days
written notice of the date so fixed shall be given to each
Participant, who shall have the right, during the period of
thirty (30) days preceding such termination, to exercise the
option as to all or any part of the shares of Common Stock
covered thereby, including shares as to which such option would
not otherwise be exercisable.
(c) If while unexercised options remain outstanding under the
Plan (i) any "person", as such term is used in Sections 13(d)
and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned, directly
or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company's then
outstanding securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such
period constitute the Board, and any new director (other than a
director designated by a person who has entered into an
agreement with the Company to effect a transaction described in
clause (i), (iii) or (iv) of this subsection) whose election by
the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute at least a majority thereof, (iii) the stockholders
of the Company approve a merger or consolidation of the Company
with any other corporation, other than (a) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 80% of
the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation or (b) a merger or consolidation
effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove
defined) acquires more than 30% of the combined voting power of
the Company's then outstanding securities, or (iv) the
stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets, then from and after the date on which public
announcement of the acquisition of such percentage shall have
been made, or the date on which the change in the composition of
the Board set forth above shall have occurred, or the date of
any such stockholder approval (any such date being referred to
herein as the "Acceleration Date"), all options shall be
exercisable in full, whether or not otherwise exercisable, but
subject, however, in the case of an Incentive Stock Option, to
Section 5 (g) hereof. Following the Acceleration Date, (1) the
Committee shall, in the case of a merger, consolidation,
liquidation or sale or disposition of assets, promptly make an
appropriate adjustment to the number and class of shares of
Common Stock available for options and Restricted Shares, and to
the amount and kind of shares or other securities or property
receivable upon exercise of any outstanding options after the
effective date of such transaction, and the price thereof, and
(2) the Committee may, in its discretion, permit the
cancellation of outstanding options in exchange for a cash
payment in an amount per share subject to any such option equal
to the amount that would be payable pursuant to Section 8(b)
hereof upon exercise of a Limited Right (as defined in Section
8(a) hereof) under those circumstances; provided, however, that,
for purposes of such cancellation and cash-out, the Acceleration
Date shall be restricted in such manner as the Committee may
determine is necessary to comply with the conditions and
requirements of Rule 16b-3 to prevent short-swing profit
liability to the holder thereof under Section 16(b) of the
Exchange Act.
(d) Subsections (b) and (c) of this Section 7 shall not apply to
a merger or consolidation in which the Company is the surviving
corporation and shares of Common Stock are not converted into or
exchanged for stock or securities of any other corporation, cash
or any other thing of value. Notwithstanding the preceding
sentence, in case of any consolidation or merger of another
corporation into the Company in which the Company is the
surviving corporation and in which there is a reclassification
or change (including a change to the right to receive cash or
other property) of the shares of Common Stock (other than a
change in par value, or from par value to no par value, or as a
result of a subdivision or combination, but including any change
in such shares into two or more classes or series of shares),
the Committee may provide that the holder of each option then
exercisable shall have the right to exercise such option solely
for the kind and amount of shares of stock and other securities
(including those of any new direct or indirect parent of the
Company), property, cash or any combination thereof receivable
upon such reclassification, change, consolidation or merger by
the holder of the number of shares of Common Stock for which
such option might have been exercised.
(e) In the event of a change in the Common Stock of the Company
as presently constituted, which is limited to a change of all of
its authorized shares with par value into the same number of
shares with a different par value or without par value, the
shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.
(f) To the extent that the foregoing adjustments relate to stock
or securities of the Company, such adjustments shall be made by
the Committee, whose determination in that respect shall be
final, binding and conclusive, provided that each Incentive
Stock Option granted pursuant to this Plan shall not be adjusted
in a manner that causes such option to fail to continue to
qualify as an incentive stock option within the meaning of
Section 422 of the Code.
(g) Except as hereinbefore expressly provided in this Section 7,
the Participant shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class or
the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by
reason of any dissolution, liquidation, merger, or consolidation
or spin-off of assets or stock of another corporation, and any
issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock
subject to the option or the number or price of Restricted
Shares. The grant of an option or of Restricted Shares pursuant
to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structures
or to merge or to consolidate or to dissolve, liquidate or sell
or transfer all or part of its business or assets.
(h) The Committee may make or provide for such adjustments to the
number and class of shares available for awards of Restricted
Shares under the Plan or to any outstanding Restricted Shares as
it shall deem appropriate to prevent dilution or enlargement of
rights, including adjustments in the event of changes in the
outstanding Common Stock by reason of stock dividends, stock
splits, split-ups, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, separations, reorganizations,
liquidations and the like. Any such determination by the Committee
shall be conclusive.
8. LIMITED RIGHTS
(a) The Committee shall have authority to grant a limited stock
appreciation right (a "Limited Right") to the holder of any
option with respect to all or some of the shares of Common Stock
covered by such option. A Limited Right may be granted either at
the time of grant of the related option or any time thereafter
during its term. Each Limited Right shall be exercisable only
if, and to the extent that, the related option is exercisable
pursuant to Section 7(c) hereof or otherwise, and, in the case
of a Limited Right granted in respect of an Incentive Stock
Option, only when the Fair Market Value per share of Common
Stock exceeds the option price per share. Notwithstanding the
provisions of the two immediately preceding sentences, no
Limited Right may be exercised until the expiration of six (6)
months from the date of grant of the Limited Right. Upon the
exercise of a Limited Right, the related option shall cease to
be exercisable to the extent of the shares of Common Stock with
respect to which such Limited Right is exercised, but shall be
considered to have been exercised to that extent for purposes of
determining the number of shares of Common Stock available for
the grant of further stock options and Rights or the award of
further Restricted Shares pursuant to this Plan. Upon the
exercise or termination of an option, the Limited Right with
respect to such option shall terminate to the extent of the
shares of Common Stock with respect to which such option was
exercised or terminated.
(b) Upon the exercise of a Limited Right, the holder thereof
shall receive in cash whichever of the following amounts is
applicable.
(i) in the case of an exercise of Limited Rights by reason of an
acquisition of Common Stock described in Section 7(c)(i)
hereof, an amount equal to the Acquisition Spread (as defined
in Section 8(d) hereof);
(ii) in the case of an exercise of Limited Rights by reason of
the change in composition of the Board of Directors described
in Section 7(c)(ii), an amount equal to the Spread (as
defined in Section 8(e) hereof);
(iii) in the case of an exercise of Limited Rights by reason of
stockholder approval of a merger described in Section
7(c)(iii), an amount equal to the Merger Spread (as defined
in Section 8(g) hereof); or
(iv) in the case of an exercise of Limited Rights by reason of
stockholder approval of a plan or agreement described in
Section 7(c)(iv), an amount equal to the Liquidation Spread
(as defined in Section 8(i) hereof).
Notwithstanding the foregoing, in the case of a Limited Right
granted in respect of an Incentive Stock Option, the holder
may not receive an amount in excess of such amount as will
enable such option to qualify as an Incentive Stock Option.
(c) The term "Acquisition Price per Share" as used in this
Section 8 shall mean, with respect to the exercise of any
Limited Right by reason of an acquisition of Common Stock
described in Section 7(c) (i), the greater of (i) the highest
price per share shown on the Statement on Schedule 13D or
amendment thereto filed by the holder of 30% (or such greater
percentage as shall be required in order for the exemptions
available under Rule l6b-3 to continue to be applicable to the
Plan) or more of the Company's Common Stock which gives rise to
the exercise of such Limited Right, and (ii) the highest Fair
Market Value per share of Common Stock during the sixty-day
period ending on the date such Limited Right is exercised. Any
securities or property which are part or all of the
consideration paid for shares of Common Stock in such
acquisition shall be valued in determining the Acquisition Price
per share at the higher of (A) the valuation placed on such
securities or property by the corporation, person or other
entity having such consideration or (B) the valuation placed on
such securities or property by the Committee.
(d) The term "Acquisition Spread" as used in this Section 8 shall
mean an amount equal to the product computed by multiplying (i)
the excess of (A) the Acquisition Price per Share over (B) the
option price per share of Common Stock at which the related
option is exercisable, by (ii) the number of shares of Common
Stock with respect to which the Limited Right is being
exercised.
(e) The term "Spread" as used in this Section 8 shall mean, with
respect to the exercise of any Limited Right by reason of a
change in the composition of the Board described in Section 7(c)
(ii), an amount equal to the product computed by multiplying (i)
the excess of (A) the highest Fair Market Value per share of
Common Stock during the sixty-day period ending on the date the
Limited Right is exercised over (B) the option price per share
of Common Stock at which the related option is exercisable, by
(ii) the number of shares of Common Stock with respect to which
such Limited Right is being exercised.
(f) The term "Merger Price per Share" as used in this Section 8
shall mean, with respect to the exercise of any Limited Right by
reason of stockholder approval of an agreement described in
Section 7(c) (iii), the greater of (i) the fixed or formula
price for the acquisition of shares of Common Stock specified in
such agreement if such fixed or formula price is determinable on
the date on which such Limited Right is exercised, and (ii) the
highest Fair Market Value per share of Common Stock during the
sixty-day period ending on the date such Limited Right is
exercised. Any securities or property which are part or all of
the consideration for the acquisition of shares of Common Stock
specified in such agreement shall be valued in determining the
Merger Price per Share at the higher of (A) the valuation placed
on such securities or property by the corporation, person or
other entity paying such consideration or (B) the valuation
placed on such securities or property by the Committee.
(g) The term "Merger Spread" as used in this Section 8 shall mean
an amount equal to the product computed by multiplying (i) the
excess of (A) the Merger Price per Share over (B) the option
price per share of Common Stock at which the related option is
exercisable, by (ii) the number of shares of Common Stock with
respect to which the Limited Right is being exercised.
(h) The term "Liquidation Price per Share" as used in this
Section 8 shall mean, with respect to the exercise of any
Limited Right by reason of stockholder approval of a plan or
agreement described in Section 7(c)(iv), the greater of (i) the
fixed or formula price for the acquisition of shares of Common
Stock specified in such plan or agreement if such fixed or
formula price is determinable on the date on which such Limited
Right is exercised, and (ii) the highest Fair Market Value per
share of Common Stock during the sixty-day period ending on the
date such Limited Right is exercised. Any securities or property
which are part or all of the consideration for the acquisition
of shares of Common Stock specified in such plan or agreement
shall be valued in determining the Liquidation Price per Share
at the higher of (A) the valuation placed on such securities or
property by the corporation, person or other entity paying such
consideration or (B) the valuation placed on such securities or
property by the Committee.
(i) The term "Liquidation Spread" as used in this Section 8 shall
mean an amount equal to the product computed by multiplying (i)
the excess of (A) the Liquidation Price per Share over (B) the
option price per share of Common Stock at which the related
option is exercisable, by (ii) the number of shares of Common
Stock with respect to which the Limited Right is being
exercised.
9. FINANCING OF EXERCISE OF OPTIONS AND PURCHASE OF RESTRICTED SHARES
To the extent permitted by the regulations of the Federal Reserve
Board governing margin requirements in effect at the time of
exercise of any option or purchase of any Restricted Shares
(including any exemption from margin requirements for employee
stock option plans if such exemption is available), the Company may
extend credit, or arrange for the extension of credit, to each
Participant who exercises an option or purchases Restricted
Shares,at the time of such exercise or purchase, to assist the
Participant in the purchase of stock. Such credit will be
collateralized by the stock purchased and will be in an amount not
greater than the lesser of (i) the option or purchase price of the
stock or (ii) the amount of credit permitted by regulations of the
Federal Reserve Board. The rate of interest, terms of repayment
and provisions for release of collateral with respects to each such
credit will be as determined by the Committee at the time the
credit is extended, but in any event shall be in accordance with
any applicable regulations of the Federal Reserve Board.
10. SUBSIDIARY
For purposes of the Plan, a subsidiary of the Company shall be any
corporation which at the time qualifies as a subsidiary thereof
under the definition of "subsidiary corporation" contained in
Section 425 of the Code, as the same may be amended from time to
time. A transfer of employment from the Company to such a
subsidiary or vice versa or between two such subsidiaries shall not
be deemed a termination of employment.
11. GOVERNMENT REGULATIONS
The Plan, the award or purchase of Restricted Shares and the grant
and exercise of options and Limited Rights hereunder, and the
Company's obligation to sell and deliver shares of stock pursuant
to any such award, purchase or exercise, shall be subject to all
applicable Federal and state laws, rules and regulations and to
such approvals by any regulatory or government agency as may be
required. The Company shall not be required to issue or deliver any
certificate or certificates for shares of its Common Stock prior to
(i) the admission of such shares to listing on any stock exchange
on which the Common Stock may then be listed and (ii) the
completion of any registration or other qualification of such
shares under any state or Federal law or rulings or regulations of
any government body, which the Company shall, in its sole
discretion, determine to be necessary or advisable.
12. TERM OF THE PLAN
The effective date of the Plan shall be May 22, 1995, subject,
however, to the approval by the stockholders of the Company at the
next annual meeting of stockholders, or any adjustment or
postponement thereof, within twelve months following the date of
adoption of the Plan by the Board, and any and all awards made
under the Plan prior to such approval shall be subject to such
approval. The Plan shall terminate ten years from the effective
date or on such earlier date as may be determined by the Board of
Directors. In any case, termination shall be deemed to be
effective as of the close of business on the day of termination. No
option or Limited Right may be granted, and no Restricted Shares
may be awarded, after such termination. Termination of the Plan,
however, shall not affect outstanding options, Limited Rights or
Restricted Shares which have been granted prior to such
termination, and all unexpired options, Limited Rights and
Restricted Shares shall continue in force and operation after
termination of the Plan except as they may lapse or terminate by
their own terms and conditions and the terms of the Plan shall
continue to apply to such options, Limited Rights and Restricted
Shares.
13. AMENDMENT OF THE PLAN
The Board of Directors of the Company at any time and from time to
time may suspend or amend the Plan in any respect; provided,
however, that no amendment which requires stockholder approval in
order for the exemptions available under Rule 16b-3 to continue to
be applicable to the Plan shall be effective unless the same shall
be approved by the stockholders of the Company entitled to vote
thereon. Without the written consent of the applicable Participant,
no amendment, modification, suspension or termination of the Plan
may adversely affect any option, Limited Right or Restricted Shares
previously granted under the Plan; but it shall be conclusively
presumed that any adjustment for change as provided in Section 7
does not adversely affect any such right.
14. GENERAL
(a) Governing Law. The Plan and all determinations made and
actions taken pursuant thereto shall be governed by and
construed in accordance with the internal laws of the State of
Wisconsin.
(b) Rule 16b-3 Six Month Limitations. To the extent required in
order to comply with Rule 16b-3 only, any equity security
offered pursuant to the Plan may not be sold for at least six
months after acquisition, except in the case of death or
disability, and any derivative security issued pursuant to the
Plan shall not be exercisable for at least six months, except in
the case of death or disability of the holder thereof. Terms
used in the preceding sentence shall, for the purposes of such
sentence only, have the meanings, if any, assigned or attributed
to them under Rule 16b-3.
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<PERIOD-END> JUN-30-1995
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<ALLOWANCES> 1421
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0
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