SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ]Confidential, for Use
[ X] Definitive Proxy Statement the Commission Only
[ ] Definitive Additional Materials (as permitted by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
THE MANITOWOC COMPANY, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: (1)
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
April 2, 1996
Dear Shareholder:
You are hereby notified that the 1996 Annual Meeting of
Shareholders of The Manitowoc Company, Inc. will be held on the third
floor of the Company's corporate offices located at 500 South 16th
Street, Manitowoc, Wisconsin, on Tuesday, May 7, 1996, at 9:00 A.M.,
Central Daylight Savings Time.
Whether or not you are able to attend the 1996 Annual Meeting, we
welcome your questions and comments about the Company. In order to
make the best use of time at the meeting, we would appreciate your
submitting any questions or comments in writing in advance of the
meeting so they may be answered more completely at the meeting. We
prefer that verbal questions at the meeting pertain only to those
issues covered during the management discussion at the meeting.
If you wish to make a comment or ask a question in writing, we
would appreciate receiving it by April 30th.
Sincerely,
/s/ E. Dean Flynn
E. Dean Flynn
Secretary
THE MANITOWOC COMPANY, INC.
500 South 16th Street
P.O. Box 66
Manitowoc, Wisconsin 54221-0066
(414) 684-4410
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
THE MANITOWOC COMPANY, INC.
Notice is hereby given that the Annual Meeting of Shareholders of
The Manitowoc Company, Inc. (the "Company"), a Wisconsin corporation,
will be held on the third floor of the Company's corporate offices
located at 500 South 16th Street, Manitowoc, Wisconsin, on Tuesday,
May 7, 1996, at 9:00 A.M., Central Daylight Savings Time, for the
following purposes:
1.To elect a class of three directors of the Company to serve
for terms of three years;
2.To consider and vote upon the approval of The Manitowoc
Company, Inc. 1995 Stock Plan;
3.To consider and vote upon the approval of an increase by
100,000 in the number of shares that may be issued under The
Manitowoc Company, Inc. Deferred Compensation Plan; and
4.To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof;
all as set forth and described in the accompanying Proxy Statement.
The Board of Directors has fixed the close of business on
February 28, 1996, as the record date for determination of the
shareholders entitled to notice of, and to vote at, the Annual
Meeting.
Shareholders are cordially invited to attend the Annual Meeting.
However, whether or not you expect to attend the Annual Meeting in
person, you are requested to complete, date, sign, and promptly return
the enclosed proxy card using the enclosed self-addressed envelope
which requires no postage if mailed in the United States.
By Order of the Board of Directors
E. DEAN FLYNN
Secretary
Manitowoc, Wisconsin
April 2, 1996
PROXY STATEMENT
THE MANITOWOC COMPANY, INC.
500 South 16th Street
P.O. Box 66
Manitowoc, Wisconsin 54221-0066
(414) 684-4410
SOLICITATION AND VOTING
Accompanying this Proxy Statement is a Notice of Annual Meeting
of Shareholders and a form of proxy for such Annual Meeting solicited
by the Board of Directors of The Manitowoc Company, Inc. (the
"Company"). A copy of the Annual Report to Shareholders, containing
financial statements for the year ended December 31, 1995, is also
enclosed. Such Annual Report is neither a part of this Proxy
Statement nor incorporated herein by reference. The approximate date
on which the Proxy Statement and the enclosed form of proxy are first
being sent or given to shareholders is April 2, 1996.
On February 28, 1996, the record date for shareholders entitled
to vote at the Annual Meeting, there were outstanding 7,674,468 shares
of Company Common Stock, $.0l par value per share (the "Common
Stock"). Each such share outstanding on the record date is entitled
to one vote on all matters presented at the meeting.
Any shareholder entitled to vote may vote in person or by duly
executed proxy. A proxy may be revoked at any time before it is
exercised by filing a written notice of revocation with the Secretary
of the Company, by delivering a duly executed proxy bearing a later
date or by voting in person at the Annual Meeting. Attendance at the
Annual Meeting will not in itself constitute revocation of a proxy.
The shares represented by all properly executed unrevoked proxies
received in time for the Annual Meeting will be voted as specified on
such proxies. Shares held for the accounts of participants in the
Company's Dividend Reinvestment Plan and RSVP Profit Sharing Plan (for
which the proxies will serve as voting instructions for such shares)
will be voted in accordance with the instructions of participants or
otherwise in accordance with the terms of such Plans. If no direction
is given on a properly executed unrevoked proxy, it will be voted FOR
each of the three director nominees, FOR the proposal to approve the
Company's 1995 Stock Plan (the "1995 Stock Plan") and FOR the proposal
to increase by 100,000 the number of shares that may be issued under
the Company's Deferred Compensation Plan (the "Deferred Compensation
Plan Share Increase").
The cost of soliciting proxies will be borne by the Company.
Solicitation will be made principally by mail, but also may be made by
telephone, facsimile or other means of communication by certain
directors, officers, employees and agents of the Company. Such
directors, officers and employees will receive no compensation
therefor in addition to their regular compensation, but may be
reimbursed for reasonable out-of-pocket expenses in connection with
such solicitation. The Company has retained the services of Georgeson
& Company Inc. to assist in the solicitation of proxies for an
anticipated cost to the Company of $7,500, plus reasonable out-of-
pocket expenses. The Company will request persons holding shares in
their names for the benefit of others, or in the names of their
nominees, to send proxy material to and obtain proxies from their
principals and will reimburse such persons for their expenses in so
doing.
To be effective, a matter presented for a vote of shareholders at
the Annual Meeting must be acted upon by a quorum (i.e., a majority of
the votes entitled to be cast represented at the Annual Meeting in
person or by proxy). Abstentions, shares for which authority is
withheld to vote for director nominees and broker non-votes (i.e.,
proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owners or other persons
entitled to vote shares as to a matter with respect to which the
brokers or nominees do not have discretionary power to vote) will be
considered present for the purpose of establishing a quorum. Once a
share is represented at the Annual Meeting, it is deemed present for
quorum purposes throughout the meeting or any adjourned meeting unless
a new record date is or must be set for the adjourned meeting.
Directors are elected by a plurality of the votes cast by the
holders of shares entitled to vote in the election at a meeting at
which a quorum is present. A "plurality" means that the individuals
who receive the largest number of votes are elected as directors up to
the maximum number of directors to be chosen at the election (three at
the Annual Meeting). Votes attempted to be cast against a director
nominee are not given legal effect and are not counted as votes cast
in an election of directors. Any shares not voted, whether by
withheld authority, broker non-vote or otherwise, will have no effect
on the election of directors except to the extent that the failure to
vote for an individual results in another nominee receiving a larger
number of votes.
If a quorum is present, the affirmative vote of a majority of the
votes entitled to be cast by the holders of the shares of Common Stock
represented at the Annual Meeting and entitled to vote thereon
(provided that the total vote cast represents over 50% of all the
shares of Common Stock entitled to vote) is required for approval of
the 1995 Stock Plan and the Deferred Compensation Plan Share Increase.
As to each such proposal before shareholders at the Annual Meeting,
abstentions will have the same effect as votes cast against approval
of the proposal. Broker non-votes will not be counted as votes
entitled to be cast by the holders of shares of Common Stock present
or represented by proxy at the Annual Meeting in determining whether
holders of a majority of such votes have voted to approve the 1995
Stock Plan and the Deferred Compensation Plan Share Increase.
OWNERSHIP OF SECURITIES
The following table sets forth the beneficial ownership (as that
term is defined in Rule 13d-3 promulgated under the Exchange Act of
1934 (the "Exchange Act")) of Common Stock by each continuing director
and director nominee of the Company, each executive officer of the
Company named in the Summary Compensation Table below and by the
directors and executive officers of the Company as a group, as of
February 28, 1996, unless otherwise indicated. Each of the persons
listed below is the beneficial owner of less than 1% of the
outstanding shares of Common Stock, except that all executive officers
and directors as a group own 2.5% of the outstanding shares of Common
Stock. The table also reflects for each person the number of Common
Stock units associated with compensation deferred under the Company's
Deferred Compensation Plan. No person is known by the Company to be
the beneficial owner of more than 5% of its outstanding shares of
Common Stock.
<TABLE>
<CAPTION>
DEFERRED
SHARES BENEFICIALLY COMMON STOCK
NAME OWNED(1) UNITS(2)
<S> <C> <C>
Dean H. Anderson ........ 400 347
Fred M. Butler .......... 16,541 (3)(4) 3,958
Robert R. Friedl ........ 2,790 (4)(5) 524
Philip D. Keener ........ 2,206 (4)(6) 313
James P. McCann ......... 1,205 2,748
George T. McCoy ......... 6,000 (7) 0
Thomas G. Musial ........ 938 (4) 464
Guido R. Rahr, Jr. ...... 3,419 0
Gilbert F. Rankin, Jr. .. 6,873 0
Robert K. Silva ......... 6,117 (4) 5,801
Robert S. Throop ........ 4,371 3,086
All Executive Officers and Directors
as a group (12 persons) 195,170 (8) 17,728
- -----------------------
<FN>
(1)Unless otherwise noted, the specified persons have sole voting
power and sole dispositive power as to the indicated shares.
(2)The Company has the sole right to vote all shares of Common Stock
underlying the deferred Common Stock units held in the Deferred
Compensation Plan Trust. The independent trustee of such Trust
has the dispositive power as to such shares.
(3)Includes 5,500 shares as to which voting and investment power is
shared with spouse.
(4)For the following executive officers, includes the indicated
number of shares which were held in their respective RSVP Profit
Sharing Plan accounts at November 30, 1995, as to which they have
sole voting power and shared investment power: Fred M. Butler -
2,384; Robert R. Friedl - 1,376; Philip D. Keener - 880; Thomas G.
Musial - 788; and Robert K. Silva - 708.
(5)Includes 219 shares as to which voting and investment power is
shared with spouse. Excludes 652 shares held by Mr. Friedl's
spouse as custodian for their daughter, as to which he disclaims
beneficial ownership.
(6)Includes 100 shares as to which voting and investment power is
shared with spouse.
(7)Represents shares held in trust under which Mr. McCoy and his
spouse are co-trustees, sharing voting and investment power.
(8)Includes 5,819 shares as to which voting and investment power is
shared and 121,483 shares, at November 30, 1995, held by the RSVP
Profit Sharing Plan Trust (for which there is sole voting power as
to 6,920 shares and shared investment power (by virtue of the
Plan's administration by an investment committee of executive
officers) as to all such shares).
</FN>
</TABLE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Pursuant to Section 16 of the Exchange Act, the Company's
executive officers and directors are required to file reports of their
trading in equity securities of the Company with the Securities and
Exchange Commission (the "Commission") and the Company. Based solely
on its review of the copies of such reports received by it and written
representations that no other reports were required, the Company
believes that during fiscal year 1995 its executive officers and
directors complied with all such applicable filing requirements,
except that Philip D. Keener, an executive officer of the Company,
inadvertently failed to include in a timely filed report two dividend
reinvestment transactions. The late reporting of these transactions
was cured promptly after Mr. Keener became aware of their omission.
1. ELECTION OF DIRECTORS
- --------------------------------------------------------
The Board of Directors consists of eight directors. Directors of
the Company are divided into three classes, two of which are composed
of three directors and one of which is made up of two directors.
Directors are elected to serve three year terms and until their
successors are elected and qualified, with the respective terms of all
directors of one class expiring at each annual meeting of
shareholders.
Three Directors are to be elected at the 1996 Annual Meeting.
The names of the nominees of management and the continuing Board
members, as well as additional information regarding such persons, are
set forth below. Each person so named is presently serving as a
director of the Company.
It is intended that the shares represented by proxies in the
accompanying form will be voted for the election of the nominees
listed below, unless a contrary direction is indicated. If any of the
nominees should be unable to serve, an eventuality which management
does not contemplate, the proxies may be voted for the election of
such other person or persons as management may recommend.
<TABLE>
<CAPTION>
The Board of Directors recommends election of the nominees
whose names follow.
Year First
Position with Elected or
Company or Other Appointed
Name Occupation Director
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
For Terms Expiring At The 1999 Annual Meeting
Dean H. Anderson Vice President - Strategic Development (since 2/95) of ABB
(Age 55) Vetco Gray Inc., Houston, TX (oilfield equipment manufacturer
with concentration on subsea oil and gas production systems);
previously President (1/90-1/95) of Foster Valve Corporation,
Houston, TX (oilfield manufacturer) (1) ............................... 1992
James P. McCann Retired (12/92); former Vice Chairman, President and Chief
(Age 66) Operating Officer (3/91-12/92) and President and Chief Operating
Officer (9/90-3/91) of Bridgestone/Firestone, Inc., Nashville, TN
(tire manufacturer) (1)(3) ........................................... 1990
Robert S. Throop Chairman and Chief Executive Officer (since 12/84) of Anthem
(Age 58) Electronics, Inc., San Jose, CA (manufacturer and distributor of
electronic products; Director of Arrow Electronics, Inc. and The
Coast Distribution System (1)(2) ...................................... 1992
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
Terms Expiring At The 1998 Annual Meeting
Gilbert F. Rankin, Jr. Retired (9/87); former Administrative Director, College of
(Age 63) Engineering, Cornell University, Ithaca, NY (1)(2) .................... 1974
Robert K. Silva Executive Vice President and Chief Operating Officer (since 7/94)
(Age 67) and Vice President (5/92-7/94) of the Company; previously President
and General Manager (8/90-7/94) of Manitowoc Equipment Works,
a division of the Company ............................................. 1990
Terms Expiring At The 1997 Annual Meeting
Fred M. Butler President and Chief Executive Officer (since 7/90) and Senior Vice
(Age 60) President and Chief Operating Officer (3/89-7/90) of the Company;
Director of Gehl Company (3) .......................................... 1990
George T. McCoy Retired (4/86); former Chairman of the Board (1985-4/86) and
(Age 76) Chairman of the Board and Chief Executive Officer (1982-1985)
of Guy F. Atkinson Company, San Bruno, CA (industrial and heavy
construction) (1)(2)(3) .............................................. 1986
Guido R. Rahr, Jr. Chairman of the Board (since 11/93) and Chairman of the Board
(Age 67) and Chief Executive Officer (9/87-11/93) of Rahr Malting Co.,
Minneapolis, MN (manufacturer of barley malt) (1) .................... 1980
____________________________
<FN>
(1) Member of Audit Committee.
(2) Member of Compensation and Benefits Committee.
(3) Member of Executive Committee.
</FN>
</TABLE>
MEETINGS OF THE BOARD AND ITS COMMITTEES
During the fiscal year ended December 31, 1995, five meetings of
the Board of Directors were held at which the aggregate attendance for
all directors as a group was 93%. During that period, all directors
attended 75% or more of the aggregate of the total number of Board
meetings held and the total number of meetings of all committees on
which they served, except Mr. Anderson.
The Company has standing Audit, Compensation and Benefits, and
Executive Committees of the Board of Directors. There is no standing
Nominating Committee. During the fiscal year ended December 31, 1995,
there were two meetings of the Audit Committee, three meetings of the
Compensation and Benefits Committee and one meeting of the Executive
Committee.
The Audit Committee reviews the scope and timing of the audit of
the Company's financial statements by the Company's independent
accountants and reviews with the independent accountants the Company's
management policies and procedures with respect to internal auditing
and accounting controls. The Compensation and Benefits Committee
determines the compensation of the Company's executive officers,
reviews management's recommendations as to the compensation of other
key personnel and administers the Company's Economic Value Added Bonus
Plan (the "EVA Plan") and the 1995 Stock Plan. The Executive
Committee discharges certain of the responsibilities of the Board of
Directors when the Board is not in session and is also charged with
reviewing and making recommendations concerning proposed major
corporate transactions.
COMPENSATION OF DIRECTORS
Each non-employee director is paid an annual retainer of $25,000
and an additional fee of $1,000 for each meeting of the Board of
Directors and any committee thereof attended. Directors who are
employees of the Company do not receive separate remuneration in
connection with their service on the Board or Board committees.
Under the Company's Deferred Compensation Plan, each non-employee
director may elect to defer all or any part of his annual retainer and
meeting fees for future payment upon death, disability, termination of
service as a director, a date specified by the participant or the
earlier of any such date to occur. A participating non-employee
director may elect to have his deferred compensation credited to two
accounts, the value of which are based upon investments in Common
Stock and a balanced fund mutual fund, respectively. Distributions
with respect to the stock account will be made in shares of Common
Stock. Other account distributions will be made in cash. Upon a
change in control (as defined in the Deferred Compensation Plan), all
restrictions on the distribution of deferred compensation will be
automatically terminated and the participant would promptly receive
the full balance of his account.
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal year ended
December 31, 1995, the six month transition period from July 3, 1994
through December 31, 1994 resulting from the Company's change in
fiscal year (designated as "1994T" in the Summary Compensation Table),
and the fiscal years ended July 2, 1994 and July 3, 1993, each
component of compensation paid or earned for services rendered in all
capacities for the Chief Executive Officer and for each of the four
other most highly compensated executive officers of the Company whose
cash compensation exceeded $100,000 during fiscal 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-----------------------
Awards Payouts
---------- -------
ANNUAL COMPENSATION Securities LTIP All Other
Name and Salary Bonus Underlying Payouts Compensation
Principal Position Year ($) ($) Options/SARs ($) ($)
(1) (1)(2) (#)(3) (4) (5)
- ------------------------------ ------ --------- ------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Fred M. Butler ............... 1995 300,000 214,298 18,000 9,590 8,566
President and Chief Executive 1994T 150,000 69,300 0 14,429 5,332
Officer 1994 300,000 201,600 0 0 6,222
1993 269,246 20,000 0 0 23,895
Robert K. Silva .............. 1995 225,000 160,726 0 12,136 3,796
Executive Vice President and 1994T 110,578 51,975 0 18,259 11,605
Chief Operating Officer 1994 175,000 113,362 0 0 34,967
1993 175,064 84,755 0 0 21,900
Robert R. Friedl ............. 1995 146,154 89,286 4,700 3,463 17,860
Vice President and Chief 1994T 65,000 25,025 0 5,210 9,075
Financial Officer 1994 130,000 72,800 0 0 22,662
1993 130,000 75,176 0 0 17,222
Thomas G. Musial (6) ......... 1995 107,759 65,475 2,300 1,631 13,069
Vice President -
Human Resources
Philip D. Keener ............. 1995 106,846 65,475 2,300 1,745 13,408
Treasurer 1994T 46,800 12,613 0 2,626 5,587
1994 91,800 36,691 0 0 14,045
1993 86,060 32,720 0 0 10,023
______________________________
<FN>
(1) Compensation deferred at the election of an executive officer
pursuant to the Company's Deferred Compensation Plan is included in
the year earned. Under such Plan, an executive officer may elect
to defer up to 40% of base compensation and up to 100% of any
incentive compensation.
(2) Reflects bonus earned and accrued during the years indicated and
paid at the beginning of the next fiscal year.
(3) Consists entirely of stock options under the 1995 Stock Plan,
which is subject to shareholder approval at the Annual Meeting.
(4) Reflects portion of bonus bank balance under the EVA Plan paid
with respect to the fiscal year indicated.
(5) The 1995 amounts represent: (a) the Company's contributions to
the RSVP Profit Sharing Plan as follows: Fred M. Butler - $6,513,
Robert K. Silva - $2,285, Robert R. Friedl - $16,775, Thomas G.
Musial - $10,973 and Philip D. Keener - $11,885; (b) premiums paid
by the Company relating to key man group life insurance as follows:
Fred M. Butler - $1,085, Robert K. Silva - $762, Robert R. Friedl -
$1,085, Thomas G. Musial - $1,085 and Philip D. Keener - $1,085;
and (c) Company contributions to the Deferred Compensation Plan as
follows: Fred M. Butler - $968, Robert K. Silva - $749, Robert R.
Friedl - $0, Thomas G. Musial - $1,011 and Philip D. Keener - $438.
(6) Mr. Musial became an executive officer of the Company in January,
1995.
</FN>
</TABLE>
In connection with the proposed 1995 Stock Plan, which is subject
to shareholder approval at the Annual Meeting, the table below sets
forth information regarding stock option grants during the last fiscal
year to the executive officers named in the Summary Compensation
Table. The grants listed below shall be null and void should
shareholder approval of the 1995 Stock Plan not be obtained.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed
Individual Grants (1) Annual Rates of Stock
Price Appreciation
for Option Term (2)
- ---------------------------------------------------------------------------------------- ------------------------
Percent of
Number of Total
Securities Options/SAR's Exercise
Underlying Granted to or Base
Options/SAR's Employees in Price Expiration
Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
------------- ------------ ----- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Fred M. Butler 18,000 37.7% 26.25 5/21/2005 297,180 752,940
Robert K. Silva 0 N/A N/A N/A N/A N/A
Robert R. Friedl 4,700 9.9% 26.25 5/21/2005 77,597 196,601
Thomas G. Musial 2,300 4.8% 26.25 5/21/2005 37,973 96,209
Philip D. Keener 2,300 4.8% 26.25 5/21/2005 37,973 96,209
------------------------
<FN>
N/A = Not Applicable
(1)Consists of incentive and non-qualified stock options to purchase
shares of Company Common Stock granted on May 22, 1995 pursuant to
the 1995 Stock Plan. These options have an exercise price equal
to the fair market value of Company Common Stock on the date of
grant. The options vest in 25% increments annually beginning two
years after the date of grant and are fully exercisable five years
after such date. Upon certain extraordinary events (e.g., the
acquisition by a person of 30% or more of the Company's voting
stock, a change in the majority of individuals constituting the
Board of Directors or shareholder approval of a plan of merger or
liquidation) as described in the 1995 Stock Plan, these options
will become immediately exercisable. The Compensation and
Benefits Committee, which administers the 1995 Stock Plan, has the
right to accelerate vesting of the options. The options were
granted for a term of ten years, subject to earlier termination in
certain events related to termination of employment.
(2)The dollar amounts in these columns are the result of calculations
at the 5% and 10% stock appreciation rates set by the Commission
and therefore do not forecast possible future appreciation, if
any, of the Company's Common Stock price.
</FN>
</TABLE>
No stock options other than those granted pursuant to the
proposed 1995 Stock Plan were outstanding in the last fiscal year.
Accordingly, no options were exercisable in 1995. The following table
sets forth the number of options that were not exercisable and the
value of such options at the end of the last fiscal year for the
executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Number of
Securities Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Fiscal Year-End (#)(1) Fiscal Year-End ($)(2)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
----- ------------- -------------
<S> <C> <C>
Fred M. Butler 0/18,000 0/78,750
Robert K. Silva N/A N/A
Robert R. Friedl 0/4,700 0/20,563
Thomas G. Musial 0/2,300 0/10,063
Philip D. Keener 0/2,300 0/10,063
- -------------------------
<FN>
N/A = Not Applicable
(1)No SARs were outstanding at the end of the last fiscal year.
(2)Based upon the difference between the option exercise price and
the $30.625 closing sale price of Company Common Stock on the New
York Stock Exchange at the end of the last fiscal year.
</FN>
</TABLE>
As described in more detail in the "Report of the Compensation
and Benefits Committee on Executive Compensation" below, the EVA Plan
requires that bonuses payable to executive officers in excess of their
target bonuses be banked and remain at risk. Thirty-three percent of
a positive "bonus bank" balance is paid out at the end of each year.
A negative bonus in any year is subtracted from the outstanding bonus
bank balance. The amounts of the banked contingent incentive
compensation awarded for fiscal 1995 to the executive officers named
in the Summary Compensation Table are as follows:
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
Performance or Estimated Future Payouts Under
Amounts Other Period Non-Stock Price-Based Plans
Banked Until Maturation -----------------------------
Name ($) or Payout Minimum ($) Maximum ($)
- ---------------- ------ --------------- ---------- -----------
<S> <C> <C> <C> <C>
Fred M. Butler 68,315 1996-1998 0 68,315
Robert K. Silva 51,224 1996-1998 0 51,224
Robert R. Friedl 28,464 1996-1998 0 28,464
Thomas G. Musial 20,875 1996-1998 0 20,875
Philip D. Keener 20,875 1996-1998 0 20,875
</TABLE>
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE
ON EXECUTIVE COMPENSATION
OVERVIEW
The Company's Compensation and Benefits Committee (the
"Committee"), which is comprised of three outside directors of the
Company, is responsible for considering and approving compensation
arrangements for senior management of the Company, including the
Company's executive officers. The goals of the Committee in
establishing annual compensation for senior management are as follows:
(i) to attract and retain key executives who will assure real growth
of the Company and its operating subsidiaries and divisions; and (ii)
to provide strong financial incentives, at a reasonable cost to the
Company's shareholders, for senior management to enhance the long-term
value of the shareholders' investment in the Company.
Executive compensation consists of the following components:
* Base salary compensation;
* Short-term incentive compensation (the Economic Value Added
Bonus Plan); and
* Long-term incentive compensation (the 1995 Stock Plan).
BASE SALARY
Base salary compensation is set to be competitive with comparable
positions at other durable goods manufacturing companies of similar
size. The Committee references survey data of comparable companies
obtained from a major compensation and benefit consulting firm and
sets base proposed salaries at a level about equal to the midpoint of
the survey data. Base salaries of individual executive officers can
vary from this salary benchmark based on a subjective analysis of such
factors as the scope of the executive officer's experience, current
performance and future potential, along with the Company's financial
performance.
THE ECONOMIC VALUE ADDED COMPENSATION PROGRAM
The EVA Plan is an incentive compensation program, first
effective during the 1994 fiscal year, which provides for annual
bonuses for all executive officers of the Company, and certain other
officers and key employees of the Company and its subsidiaries, if
their performance adds value for Company shareholders. The
Committee's objective under the EVA Plan is to provide an incentive
share portion of compensation which will result in higher total
compensation opportunities than the median total compensation of peer
companies in years in which the Company performs well. Similarly, the
incentive share portion of compensation payable to EVA Plan
participants is expected to result in lower total compensation
opportunities than the median total compensation of comparable
companies in years when the Company performs poorly.
Bonuses payable under the new program are determined based on
improvements in Economic Value Added ("EVA"), which is a technique
developed by Stern Stewart & Co., a financial consulting firm based in
New York, that measures the economic profit generated by a business.
EVA is equal to the difference between (i) net operating profit after
tax, defined as operating earnings adjusted to eliminate the impact
of, among other things, certain accounting charges such as
amortization of good-will and bad debt reserve expenses, and (ii) a
capital charge, defined as capital employed times the weighted average
cost of capital.
Participants are divided into nine classifications which have
target bonus levels ranging from 2% to 60% of base salary. It is
intended that the assignment of a particular classification correspond
with a position's relative effect on the Company's performance.
Under the EVA Plan, bonuses are awarded to each Plan participant
based on the improvement in EVA for the participant's business unit.
To measure the improvement (or deterioration) in EVA, an EVA target is
set yearly for each business unit based on the average of the prior
fiscal year's target and actual EVA plus the expected improvement in
EVA for the current fiscal year. If the annual improvement in EVA is
in excess of the targeted improvement, the bonus calculation will
produce an amount in excess of the participant's target bonus. If the
annual improvement in EVA is less than the targeted improvement, the
bonus calculation will produce an amount less than the individual's
target bonus. Bonuses payable under the EVA Plan are not subject to
any minimum or maximum. In fiscal 1995, the Company exceeded its EVA
target resulting in Plan compensation of 157% of target.
In order to encourage a long-term commitment by executive
officers and other key employees to the Company and its shareholders,
the EVA Plan requires that two thirds of any bonus earned in a given
year in excess of the target bonus be deferred in a "bonus bank" for
possible future payout by the Company. Thirty-three percent of a
positive bonus bank balance is paid out each year. Consequently, the
total bonus payable in any given period consists of the individual's
target bonus, plus (or minus) the participant's fixed share of EVA
improvement and plus (or minus) a portion of the bonus bank balance.
A bonus bank account is considered "at risk" in the sense that in any
year EVA performance results in a bonus amount which is negative, the
negative bonus amount is subtracted from the outstanding bonus bank
balance. In the event that the outstanding bonus bank balance at the
beginning of the year is negative, the bonus paid for that year is
limited to the aggregate of thirty-three percent of the positive bonus
earned up to the target bonus and thirty-three percent of any positive
bonus bank balance after applying the remaining portion of the bonus
earned for the year against the negative balance in the bonus bank.
The executive is not expected to repay negative balances in the bonus
bank. In the event that an executive voluntarily terminates
employment with the Company, the bonus bank balance is subject to
forfeiture.
THE 1995 STOCK PLAN
As described in greater detail under "Proposed 1995 Stock Plan"
below, the Board of Directors adopted The Manitowoc Company, Inc. 1995
Stock Plan pursuant to which incentive stock options, non-qualified
stock options, restricted stock and limited stock appreciation rights
may be granted to key employees of the Company. The Committee views
stock-based compensation as an important incentive component of the
Company's overall compensation package. The Committee believes that
the 1995 Stock Plan serves the important purposes of (i) aligning the
interests of key employees of the Company and its subsidiaries with
those of shareholders through equity ownership that is based on the
appreciation in value of Common Stock; (ii) focusing executives on
long-term performance; and (iii) providing a balance between short-
and long-term incentives. The Committee also believes that such
stock-based compensation will assist the Company in attracting
qualified employees and building long-term relationships with existing
employees.
In May 1995, stock options to purchase a total of 47,700 shares
of Company Common Stock were granted to certain key employees selected
by the Committee, contingent upon shareholder approval at the Annual
Meeting. The exercise price of each option was equal to the fair
market value of Company Common Stock on the date of grant. The
options vest in 25% increments annually beginning two years after the
date of grant and are fully exercisable five years after such date.
In making the May 1995 grants, the Committee was guided by the
following factors, no one of which was weighted more heavily than any
other: the level of responsibility of the individual's position; the
level of the Company's and individual's performance and future
potential; the Company's desired mix of the various compensation
components; the number of shares available for issuance under the 1995
Stock Plan; and competitive marketplace practices. While the
frequency of awards under the 1995 Stock Plan is at the sole
discretion of the Committee, initially awards will be made on an
annual basis. The frequency of awards will also be a consideration in
determining the size of future grants under the 1995 Stock Plan.
Several officers who are nearing retirement, including Robert K. Silva
who is named in the Summary Compensation Table, will not participate
in the 1995 Stock Plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
The factors that are used to determine the annual base salary and
incentive compensation of Mr. Fred M. Butler, the Company's Chief
Executive Officer ("CEO"), are the same as those described above for
all executive officers. In fiscal 1995, Mr. Butler's base salary
remained at $300,000, which the Committee determined to be appropriate
based upon the midpoint salary compensation of other CEOs of similarly
sized durable goods manufacturing companies as determined by the
above-mentioned salary survey data as well as a subjective evaluation
of Mr. Butler's individual and the Company's overall performance. Mr.
Butler's EVA target bonus level for fiscal 1995 was 60% of base
salary. As a result of the Company achieving EVA Plan results in
excess of targeted goals, Mr. Butler was paid incentive compensation
of $223,888 and $68,315 was added to his bonus bank. Mr. Butler was
also granted an incentive stock option for 16,000 shares of Common
Stock and a non-qualified stock option for 2,000 shares of Common
Stock during the year based on a subjective consideration of the
factors cited above for all grants under the 1995 Stock Plan.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), limits the Company's federal income tax deduction to
$1,000,000 per year for compensation to its CEO and any of its four
other highest paid executive officers. Performance-based compensation
is not, however, subject to the deduction limit provided certain
requirements of Section 162(m) are satisfied. Certain awards under
the proposed 1995 Stock Plan are intended to qualify for the
performance-based compensation exception under Section 162(m). It is
the Committee's intent to preserve the deductibility of executive
compensation to the extent reasonably practicable and consistent with
the best interests of the Company and its shareholders.
Compensation and Benefits Committee
George T. McCoy
Gilbert F. Rankin, Jr.
Robert S. Throop
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total
shareholder return, including reinvestment of dividends on a quarterly
basis, of Company Common Stock against the cumulative total returns of
the Standard and Poor's ("S&P") 500 Composite Stock Index and the S&P
Diversified Machinery Stock Index. The graph assumes $100 was
invested on December 31, 1990 in Company Common Stock, the S&P 500
Composite Stock Index and the S&P Diversified Machinery Stock Index.
<TABLE>
<CAPTION>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
THE MANITOWOC COMPANY, INC.; S&P 500;
AND THE S&P DIVERSIFIED MACHINERY INDEX
(PERFORMANCE GRAPH APPEARS HERE)
Manitowoc S&P Diversified
Date Company S&P 500 Machinery Index
- ---------------------------------------------------------------
<S> <C> <C> <C>
December 1990 $100.00 $100.00 $100.00
December 1991 $111.77 $130.34 $118.89
December 1992 $145.77 $140.25 $121.32
December 1993 $189.45 $154.32 $179.61
December 1994 $132.18 $156.42 $174.87
December 1995 $193.88 $214.99 $215.75
- ----------------------------------------------------------------
</TABLE>
CONTINGENT EMPLOYMENT AGREEMENTS
The Company has entered into Contingent Employment Agreements
(the "Employment Agreements") with Messrs. Butler, Friedl, Keener,
Musial and Silva and certain other key executives of the Company and
certain subsidiaries. The Employment Agreements provide that in the
event of a change in control of the Company, as defined therein, each
executive shall continue to be employed by the Company for a period of
three years thereafter. Under the Employment Agreements, each
executive shall remain employed at the same position held as of the
change in control date, and shall receive a salary at least equal to
the salary in effect as of such date, plus all bonuses, incentive
compensation and other benefits extended by the Company to its
executive officers and key employees. After a change in control, the
executive officer's compensation would be subject to upward adjustment
at least annually based upon his contributions to the Company's
operating efficiency, growth, production and profits. The Employment
Agreements terminate prior to the end of the three year period noted
above if the executive first attains the age of 65, voluntarily
retires from the Company or is terminated by the Company "for cause,"
as defined therein. The Employment Agreements are terminable by
either party at any time prior to a change in control.
SUPPLEMENTAL RETIREMENT AGREEMENTS
The Company has entered into Supplemental Retirement Agreements
(the "Retirement Agreements") with Messrs. Butler and Silva providing
for certain monthly payments upon their retirement from the Company,
with such benefits to vary depending upon the timing and nature of
their retirement.
If Mr. Butler's retirement occurs on or after his attaining the
age of 65, Mr. Butler will receive an annual benefit (payable in
twelve monthly installments) equal to 50% of his average yearly salary
over a specified period prior to retirement reduced by the amount of
pension benefits received by Mr. Butler from his former employer (the
"Butler Monthly Benefit"). If Mr. Butler retires after attaining age
60 but prior to attaining age 65, he will receive the Butler Monthly
Benefit reduced by one-half of 1% for each full month by which his
employment with the Company terminated prior to his attainment of age
65 (the "Butler Reduced Monthly Benefit"). If Mr. Butler dies before
attaining the age of 60, or if he is terminated for other than cause
(as defined in the Retirement Agreement) prior to attaining the age of
60, he or his spouse, as the case may be, will receive the Butler
Reduced Monthly Benefit. Upon termination by the Company of Mr.
Butler's employment for other than cause prior to his attainment of
age 60 but on or after a change in control (as defined in the
Retirement Agreement), he will be paid 70% of the Butler Monthly
Benefit.
If Mr. Silva's retirement occurs on or after his attaining the
age of 68, Mr. Silva will receive an annual benefit (payable in twelve
monthly installments) equal to $125,000 (the "Silva Monthly Benefit").
If Mr. Silva retires prior to attaining age 68, he will receive the
Silva Monthly Benefit reduced by 2% for each full month by which his
employment with the Company terminated prior to his attainment of age
68 (the "Silva Reduced Monthly Benefit"). If Mr. Silva dies before
attaining the age of 68, or if he is terminated for other than cause
(as defined in the Retirement Agreement) prior to attaining the age of
68, he or his spouse, as the case may be, will receive the Silva
Reduced Monthly Benefit. Upon termination by the Company of Mr.
Silva's employment for other than cause prior to his attainment of age
68, but on or after a change in control (as defined in the Retirement
Agreement), he will be paid 70% of the Silva Monthly Benefit.
All payments to Messrs. Butler and Silva shall be made in the
form of a joint and 100% survivor annuity such that the annuity will
be payable to such executives during their lifetime, and upon their
death to their spouses for their lifetime. The Retirement Agreements
and the benefits payable thereunder will at all times be unfunded and
the rights of Messrs. Butler and Silva that of unsecured creditors.
2. PROPOSED 1995 STOCK PLAN
- ---------------------------------
GENERAL
On May 22, 1995, the Board of Directors of the Company adopted
The Manitowoc Company, Inc. 1995 Stock Plan, subject to shareholder
approval at the Annual Meeting. If the 1995 Stock Plan is not
approved by shareholders, it will be null and void. The purposes of
the 1995 Stock Plan are to (i) align the interests of key employees of
the Company and its subsidiaries who are primarily responsible for the
management, growth and financial success of the Company with those of
shareholders through equity ownership that is based on the
appreciation in value of Company Common Stock; (ii) facilitate the
attraction and retention of such employees; and (iii) provide long-
term incentive opportunities that are competitive with those of other
major corporations. A copy of the 1995 Stock Plan is attached hereto
as Appendix A. The following description of the 1995 Stock Plan is
qualified in its entirety by reference to the complete text set forth
in Appendix A.
The 1995 Stock Plan has been designed to comply with recent tax
law changes which impose limits on the ability of a public company to
claim tax deductions for compensation paid to certain highly
compensated executives. Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code"), generally denies a corporate tax
deduction for annual compensation exceeding $1,000,000 paid to the CEO
and the four other most highly compensated executive officers of a
public company. Certain types of compensation, including performance-
based compensation, are generally excluded from this deduction limit.
In an effort to help ensure that, where possible, awards under the
1995 Stock Plan will qualify as performance-based compensation, which
is generally deductible, the 1995 Stock Plan is being submitted to
shareholders for approval at the Annual Meeting. While the Company
believes compensation payable pursuant to the 1995 Stock Plan will be
deductible for federal income tax purposes under a number of
circumstances, there can be no assurance in this regard. By approving
the 1995 Stock Plan, shareholders will be approving, among other
things, the eligibility requirements and limits on various awards
contained therein. The affirmative vote of a majority of the votes
entitled to be cast by the holders of the shares of Common Stock
represented at the Annual Meeting and entitled to vote thereon
(provided that the total vote cast represents over 50% of all the
shares of Common Stock entitled to vote) is required for approval of
the 1995 Stock Plan. Such vote will also satisfy the shareholder
approval requirements of Section 422 of the Code with respect to the
grant of incentive stock options, Rule 16b-3 under the Exchange Act
and the applicable New York Stock Exchange rules. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE 1995 STOCK
PLAN.
The 1995 Stock Plan provides for the grant of: (i) incentive
stock options ("ISOs"), intended to qualify as such within the meaning
of Section 422 of the Code; (ii) non-qualified stock options ("NSOs");
(iii) restricted stock; and (iv) limited stock appreciation rights
("LSARs") (collectively, the "Awards"). The maximum number of shares
of Company Common Stock that may be issued (i.e., either authorized
but unissued shares or treasury shares) under the 1995 Stock Plan is
750,000, subject to adjustment as described below. If any shares of
restricted stock are forfeited or if there is a termination,
expiration or cancellation of any stock option prior to the issuance
of shares thereunder, those shares may be used for new Awards without
again being charged against the 750,000 share maximum. During the
term of the 1995 Stock Plan, no more than a total of 200,000 shares of
Common Stock may be awarded to any participant, including both awards
of options and restricted stock.
The 1995 Stock Plan is administered by the Compensation and
Benefits Committee of the Board of Directors (the "Committee"). Each
member of the Committee must qualify as a "disinterested person"
within the meaning of Rule 16b-3 under the Exchange Act and as an
"outside director" within the meaning of Section 162(m) of the Code.
The Committee is responsible for interpreting the 1995 Stock Plan and
may adopt rules and regulations for carrying out its provisions. The
Committee, in its sole discretion, will designate the persons to whom
Awards will be granted (i.e., key employees of the Company or its
present or future subsidiaries, but not any non-employee director or a
member of the Committee), grant the Awards in such form and amount as
it shall determine, and impose such other terms and conditions upon
any such Award as it shall deem appropriate.
STOCK OPTIONS
The exercise price for any option granted under the 1995 Stock
Plan shall not be less than 100% of the fair market value (as defined
in the 1995 Stock Plan) of the shares on the date of grant. The
Committee shall set forth at the time of grant the period during which
an option may be exercised, subject to the Committee's ability to
accelerate such vesting. The maximum exercise term that may be fixed
by the Committee for ISOs granted under the 1995 Stock Plan is ten
years from the date of grant. The maximum exercise term for NSOs that
may be fixed is ten years and two days after the date of grant. If a
participant's employment terminates, all unvested options are
forfeited, subject to the Committee's right to permit exercise of such
options during a period which may not exceed the shorter of one year
from the date of employment termination or the options' scheduled
expiration date. Options which are vested as of the effective date of
employment termination may be exercised, in the case of termination by
reason of death, disability or retirement, within one year following
such date of termination and, in all other cases, within 90 days
following such termination date.
No person may receive an ISO if, at the time of grant, such
person owns more than 10% of the total combined voting power of all
classes of Company stock, unless the exercise price is not less than
110% of the fair market value of the shares and the exercise period of
such ISO is limited to not more than five years from the date of
grant. Generally, the aggregate fair market value (determined at the
time of grant) of shares covered by ISOs that first become exercisable
by a participant during any calendar year under the 1995 Stock Plan is
limited to $100,000.
Payment for shares acquired through exercise of options issued
under the 1995 Stock Plan may be made: (i) in cash or cash
equivalents; (ii) with the consent of the Committee, in shares of
Common Stock held by the participant for at least six months prior to
the time of exercise and having a fair market value on the exercise
date equal to the option price; (iii) with the consent of the
Committee, in any combination of shares of Common Stock and cash or
cash equivalents; (iv) through a broker-dealer sale and remittance
procedure; or (v) by delivery of any other property acceptable to the
Committee which has a fair market value on the exercise date equal to
the option price and serves as valid consideration for issuance of the
Common Stock.
In the event of a proposed dissolution or liquidation of the
Company, or any corporate separation or division (e.g., a spin-off),
the Committee may provide that each holder of an exercisable option
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 that such
optionee would have received had such option been exercised
immediately prior to such event. Alternatively, the Committee may
provide that each option granted under the 1995 Stock Plan will
terminate as of a date fixed by the Board of Directors, provided that
participants have 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.
As described in more detail in Section 7(c) of the 1995 Stock
Plan, if while unexercised options remain outstanding: (i) any person
becomes the beneficial owner of 30% or more of the Company's voting
stock; (ii) there is a change in the majority of the individuals
constituting the Board of Directors during any period of two
consecutive years; or (iii) shareholders of the Company approve
certain mergers of the Company with any other corporation, 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 all options granted under the 1995 Stock Plan
will be exercisable in full, whether or not previously exercisable.
Following the acceleration of the option exercise dates, (a) in the
case of such a merger, liquidation or sale or disposition of assets,
the Committee will make appropriate adjustments to the number and
class of shares of Common Stock available for options and restricted
stock, 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 to the price thereof; and (b)
the Committee may, in its discretion, permit the cancellation of
outstanding options in exchange for a cash payment in an amount per
share equal to the amount that would be payable upon exercise of an
LSAR under those circumstances.
On May 22, 1995, the Committee granted ISOs for a total of 45,700
shares of Common Stock and NSOs for a total of 2,000 shares of Common
Stock to 10 key employees, all at an exercise price of $26.25 per
share (the fair market value of the Common Stock on the date of
grant). For further information concerning the options granted to the
executive officers named in the Summary Compensation Table, see
"Executive Compensation--Option/SAR Grants in Last Fiscal Year" above.
Of the 47,700 total shares, options for 29,200 shares of Common Stock
were granted to the executive officers of the Company as a group (six
persons), no options were granted to non-employee directors (as they
are not eligible to receive grants under the 1995 Stock Plan) and
options for a total of 18,500 shares were granted to all other
employees as a group (five persons, not including the executive
officers). The options vest in 25% increments annually beginning two
years after the date of grant and are fully exercisable five years
after such date. The options were granted for a term of ten years,
subject to earlier termination upon termination of employment. All
such grants are subject to shareholder approval of the 1995 Stock Plan
at the Annual Meeting and will be null and void should shareholder
approval not be obtained. The Company estimates that the number of
key employees presently eligible to participate in the 1995 Stock Plan
is approximately fifteen. The Company cannot determine at this time
the number of options to be granted in the future to persons named in
the Summary Compensation Table, to all current executive officers as a
group or to all employees as a group.
The closing price of Company Common Stock reported on the New
York Stock Exchange Composite Tape for March 20, 1996 was $32.25.
RESTRICTED STOCK
Shares of restricted stock may be issued either alone or in
addition to other Awards granted under the 1995 Stock Plan. The
Committee determines the eligible employees to whom and the times at
which grants of restricted stock will be made, the number of shares to
be awarded, the restricted period of such shares (which shall not be
less than one year nor more than ten years) within which they may be
subject to forfeiture, the amount of payment, if any, for such shares
and all other terms and conditions of the Award. The provisions of
the restricted stock Awards need not be the same with respect to each
recipient.
At the time of grant, the Committee may, in its discretion, set
forth 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
expiration of the restricted period. Such conditions may include the
participant's death, disability, retirement, termination for other
than cause, or the occurrence of certain events set forth in Section
7(c) of the 1995 Stock Plan as discussed above. The Committee could
also condition vesting of the restricted stock on the attainment by
the Company or any of its divisions or subsidiaries, as applicable, of
a specified level of earnings per share, stock price, net operating
earnings, EVA, cash flow, retained earnings, return on equity, or
return on capital. The Committee may also shorten or terminate any
restricted period or waive any conditions for the lapse or termination
of restrictions at any time after the date of the Award.
A stock certificate representing the number of shares of
restricted stock awarded to an individual will be registered in such
participant's name and, at the discretion of the Committee, will
either be delivered to the participant bearing an appropriate legend
referring to the restrictions applicable to the shares represented
thereby or held in custody by the Company or a bank for the
participant's account. Until the applicable restrictions lapse, a
grantee will not be permitted to transfer or encumber shares of
restricted stock, but will generally have all of the rights and
privileges of a shareholder, including the right to vote such shares
and receive cash dividends with respect thereto. At the discretion of
the Committee, cash and stock dividends with respect to restricted
stock may either be currently paid or withheld by the Company for the
participant's account. Interest may be paid on cash dividends
withheld at a rate and terms determined by the Committee. Unless
otherwise determined by the Committee, upon termination of a
participant's employment for any reason during the applicable
restricted period, all shares of restricted stock as to which
restrictions have not lapsed will be forfeited and all rights of the
participant to such shares will terminate without further obligation
on the part of the Company.
Upon the expiration or termination of the restricted period and
satisfaction of any other conditions prescribed by the Committee, the
restrictions applicable to the restricted stock will lapse and a stock
certificate for the appropriate number of whole shares of restricted
stock will be delivered to the participant or to his or her
beneficiary or estate free of all such restrictions except those that
may be imposed by law. In lieu of delivering any fractional share of
Common Stock, the Company will pay the fair market value (determined
as of the date the restrictions lapse) of such fractional share to
such person.
LIMITED STOCK APPRECIATION RIGHTS
The Committee has authority under the 1995 Stock Plan to grant
LSARs to the holder of any option with respect to some or all of the
shares of Common Stock covered by such option. The LSAR may be
granted either at the time of grant of the related option or
thereafter during the option's term. Each LSAR is exercisable only
if, and to the extent that, the related option is exercisable pursuant
to Section 7(c) of the 1995 Stock Plan, as discussed above. In
addition, in the case of an LSAR granted with respect to an ISO, the
LSAR may be exercised only when the fair market value per share of
Common Stock exceeds the option exercise price per share.
Notwithstanding the foregoing, no LSAR may be exercised for a period
of six months from the date of grant. Since the exercise of an LSAR
is an alternative to the exercise of an option, the option shall cease
to be exercisable to the extent the LSAR is exercised and the LSAR
shall terminate to the extent the option is exercised.
As described in more detail in Section 8(b) of the 1995 Stock
Plan, an LSAR entitles the holder to receive upon exercise the excess
of a certain specified price per share (depending upon the transaction
which serves as the basis for the LSAR's exercisability) over the
option price per share for the related stock option, multiplied by the
number of shares of Common Stock with respect to which the LSAR is
being exercised. In the case of the exercise of an LSAR by reason of
an acquisition by any person of 30% or more of the Company's voting
stock, the specified price per share is the greater of (i) the highest
price per share shown on the statement on Schedule 13D or amendment
thereto filed by such holder which gives rise to the exercise of the
LSAR, and (ii) the highest fair market value per share of Common Stock
during the 60 day period ending on the date such LSAR is exercised.
In the case of the exercise of an LSAR by reason of a change in the
majority of individuals constituting the Board of Directors, the
specified price is the highest fair market value per share of Common
Stock during the 60 day period ending on the date the LSAR is
exercised. In the case of the exercise of an LSAR by reason of
shareholder approval of certain mergers, sale of assets, or
liquidation, the specified price is the greater of (a) the fixed or
formula price for the acquisition of shares of Common Stock specified
in any such plan or agreement if such price is determinable on the
date such LSAR is exercised, and (b) the highest fair market value per
share of Common Stock during the 60 day period ending on the date such
LSAR is exercised.
OTHER TERMS OF THE 1995 STOCK PLAN
In the event of a stock dividend, stock split, recapitalization,
or combination or exchange of shares involving the Common Stock,
appropriate adjustments to the aggregate number of shares available
for grant under the 1995 Stock Plan and in the number, price and kind
of shares covered by outstanding grants will be made.
To the extent required to comply with Rule 16b-3 under the
Exchange Act, any option and related LSAR granted under the 1995 Stock
Plan are not transferrable by the participant other than by will or by
the laws of descent and distribution. During the lifetime of the
participant, such Awards may be exercised only by the participant or
such participant's legal representative.
Each Award under the 1995 Stock Plan will be evidenced by a
written agreement containing such terms and conditions as the
Committee shall establish from time to time consistent with the 1995
Stock Plan.
To the extent permitted by regulations of the Federal Reserve
Board ("FRB"), the Company may extend credit, or arrange for the
extension of credit, to each participant who exercises an option or
purchases restricted stock at the time of such exercise or purchase.
Any 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 FRB. At the time of the extension of credit, the
Committee shall determine the rate of interest, terms of repayment and
provisions for release of collateral, all of which will be in
accordance with any applicable regulations of the FRB.
The 1995 Stock Plan will terminate on May 21, 2005, unless
earlier terminated by the Board of Directors. No Awards under the
1995 Stock Plan may be made after such termination. Termination of
the 1995 Stock Plan will not affect outstanding awards made prior to
such termination.
The Board of Directors may at any time suspend or amend the 1995
Stock Plan in any respect, provided that no amendment which requires
shareholder approval under Rule 16b-3 of the Exchange Act shall be
effective unless the amendment is approved by the Company's
shareholders. Without the written consent of a participant, no
amendment, modification, suspension or termination of the 1995 Stock
Plan may adversely affect any outstanding Award, except that any
adjustment provided under Section 7 of the 1995 Stock Plan is
conclusively presumed not to adversely affect any such Award.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income
tax consequences of Awards made under the 1995 Stock Plan based upon
the applicable provisions of the Code in effect on the date hereof.
The laws governing the tax aspects of Awards are highly technical and
are subject to change.
NON-QUALIFIED STOCK OPTIONS. An optionee will not recognize
taxable income at the time an NSO is granted. Upon exercise of an
NSO, an optionee will recognize compensation income in an amount equal
to the difference between the exercise price and the fair market value
of the shares on the date of exercise. The amount of such difference
will be a deductible expense to the Company for tax purposes. The
income realized will be taxed at ordinary income tax rates for federal
income tax purposes. On a subsequent sale or exchange of shares
acquired pursuant to the exercise of an NSO, the optionee will
recognize a taxable capital gain or loss, measured by the difference
between the amount realized on the disposition and the tax basis of
such shares. The tax basis will, in general be the amount paid for
the shares plus the amount treated as compensation income at the time
the shares were acquired pursuant to the exercise of the option.
Where the NSO exercise price is paid in delivered stock, the
exercise is treated as: (i) a tax-free exchange of the shares of
delivered stock (without recognizing any taxable gain with respect
thereto) for a like number of new shares (with such new shares having
the same basis and holding period as the old); and (ii) the issuance
of a number of additional shares having a fair market value equal to
the "spread" between the exercise price and the fair market value of
the shares for which the NSO is exercised. The optionee's basis in
the additional shares will equal the amount of compensation income
recognized upon exercise of the NSO and the holding period for such
shares will begin on the date of exercise. This mode of payment does
not affect the ordinary income tax liability incurred upon exercise of
the NSO described above.
INCENTIVE STOCK OPTIONS. An optionee will not recognize taxable
income at the time an ISO is granted. Further, an optionee will not
recognize taxable income upon exercise of an ISO if the optionee
complies with two separate holding periods: shares acquired upon
exercise of an ISO must be held for at least two years after the date
of grant and for at least one year after the date of exercise. The
difference between the exercise price and the fair market value of the
stock at the date of exercise is, however, a tax preference item.
When the shares of stock received pursuant to the exercise of an ISO
are sold or otherwise disposed of in a taxable transaction, the
optionee will recognize a capital gain or loss, measured by the
difference between the exercise price and the amount realized.
Ordinarily, an employer granting ISOs will not be allowed any
business expense deduction with respect to stock issued upon exercise
of an ISO. However, if all of the requirements for an ISO are met
except for the holding period rules set forth above, the optionee will
be required, at the time of the disposition of the stock, to treat the
lesser of the gain realized or the difference between the exercise
price and the fair market value of the stock at the date of exercise
as ordinary income and the excess, if any, as capital gain. The
employer will be allowed a corresponding business expense deduction to
the extent of the amount of the optionee's ordinary income.
Where the ISO exercise price is paid in delivered stock, the
exercise is treated as a tax-free exchange of the shares of delivered
stock (without recognizing any taxable gain with respect thereto,
assuming applicable holding periods have been satisfied) for (i) a
like amount of new shares (with such new shares having the same
holding period as the old and a basis generally equal to that of the
old shares) plus (ii) additional shares with a basis equal to zero and
a holding period starting on the date of exercise. If ISO stock is
used as delivered stock, and if the applicable holding periods for
such ISO stock have not been met before such transfer, the transfer
will result in ordinary income with respect to the stock disposed of,
but will not affect the tax treatment, as described above, for the
stock received.
RESTRICTED STOCK. A grantee receiving a restricted stock award
will generally recognize ordinary income in an amount equal to the
fair market value of the stock at the time the stock is no longer
subject to forfeiture. While the restrictions are in effect, the
grantee will recognize compensation income equal to the amount of any
dividends received and the Company will be allowed a deduction for
that amount. A grantee may elect, under Section 83(b) of the Code,
within 30 days of the stock grant, to recognize taxable ordinary
income on the date of grant equal to the fair market value of the
shares (determined without regard to the restrictions) on such date.
The Company will generally be entitled to a deduction equal to the
amount that is taxable as ordinary income to the grantee in the year
that such income is taxable.
The holding period to determine whether the grantee has long-term
or short-term capital gain or loss on the subsequent sale of
restricted stock generally begins when the restriction period expires
and the tax basis for such shares would generally be based on the fair
market value of the shares on such date. However, if the grantee has
made an election under Section 83(b) of the Code, the holding period
will commence on the date of grant and the tax basis will be equal to
the fair market value of the shares on such date (determined without
regard to the restrictions).
LIMITED STOCK APPRECIATION RIGHTS. No income will be realized by
a participant in connection with the grant of an LSAR. Upon exercise
of an LSAR, a participant will recognize ordinary income in an amount
equal to the cash received. The Company will be entitled to a
deduction for tax purposes in the same amount and at the same time as
the participant recognizes ordinary income.
3. PROPOSED DEFERRED COMPENSATION PLAN SHARE INCREASE
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GENERAL
The Manitowoc Company, Inc. Deferred Compensation Plan (the
"Deferred Compensation Plan") was adopted by the Board of Directors on
April 27, 1993, and approved by shareholders on November 2, 1993. A
total of 25,000 shares of Common Stock was originally authorized for
issuance under the Deferred Compensation Plan. On February 27, 1996,
the Board of Directors increased by 100,000 the number of shares of
Common Stock reserved for issuance under the Deferred Compensation
Plan, subject to shareholder approval at the Annual Meeting. Such
increase in the number of shares reserved for issuance under the
Deferred Compensation Plan is subject to appropriate adjustment in the
event of any merger, share exchange, reorganization, consolidation,
recapitalization, stock dividend, stock split or other change in
corporate structure affecting the Common Stock. In order to continue
to implement the purposes of the Deferred Compensation Plan as
described below, it is necessary to have a sufficient number of shares
authorized under the Plan to satisfy deferrals made by non-employee
directors and key employees. It is anticipated that such additional
100,000 shares tha t may be acquired under the Deferred Compensation
Plan will be sufficient to meet the needs of the Deferred Compensation
Plan for approximately four years. The affirmative vote of a majority
of the votes entitled to be cast by the holders of the shares of
Common Stock represented at the Annual Meeting and entitled to
vote thereon (provided that the total vote cast represents over 50%
of all the shares of Common Stock entitled to vote) is required for
approval of the Deferred Compensation Plan Share Increase. THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
DEFERRED COMPENSATION PLAN SHARE INCREASE.
SUMMARY DESCRIPTION OF THE DEFERRED COMPENSATION PLAN
The purpose of the Deferred Compensation Plan is to attract and
retain well-qualified persons for service as non-employee directors of
the Company or as key employees and to promote identity of interest
between the Company's non-employee directors and key employees and its
shareholders. Shares of Common Stock to be acquired under the
Deferred Compensation Plan may be authorized but unissued shares,
treasury shares, reacquired shares, or shares purchased on the open
market. Since its inception, shares necessary to meet the needs of
the Deferred Compensation Plan have been acquired on the open market.
It is anticipated that if the Deferred Compensation Plan Share
Increase is approved by shareholders, shares to be acquired under the
Plan thereafter (until changed by the Company) will come from the
Company's treasury.
Eligibility is limited to non-employee directors and to key
employees of the Company. Key employee, for this purpose, is defined
as any employee of the Company whose rate of pay on the last day of
the immediately preceding plan year (i.e., the fiscal year of the
Company) is equal to or greater than the indexed amount described in
Code Section 414(q)(1)(c) ($66,000 for 1995). At present, there are
six non-employee directors eligible to participate in the Deferred
Compensation Plan. The number of key employees presently eligible to
participate in the Deferred Compensation Plan is forty-six. The
Company cannot determine the amounts that may be deferred in the
future by participants.
The Deferred Compensation Plan is administered by the Treasurer
of the Company. The Treasurer is appointed by and serves at the
pleasure of the Board of Directors. Among other functions, the
Treasurer has authority to interpret the Deferred Compensation Plan
document, supervise preparation of compensation deferral agreements
and forms, and establish rules and regulations for the administration
of the Deferred Compensation Plan. If the Treasurer is also a
participant in the Deferred Compensation Plan, the Board of Directors
shall act as administrator with respect to any determinations
affecting the Treasurer's participation.
A non-employee director may make a deferral election with respect
to all or part of his compensation, in increments of 5%.
Compensation, for purposes of a non-employee director, means retainer
fees paid for service as a member of the Board of Directors and for
service on any Board committee, including attendance fees. A key
employee participant may elect to defer, in whole percentages, up to
40% of regular pay and up to 100% of incentive bonuses. Deferred
amounts will not be counted as compensation under any qualified
retirement plans of the Company, including the RSVP Profit Sharing
Plan.
Credits to deferred compensation accounts for key employees will
also include a contribution equal to the amount of deferred
compensation of the key employee for the plan year (subject to a
maximum of 25% of eligible compensation) multiplied by the rate,
determined as a percentage of eligible compensation, of fixed and
variable profit sharing contributions plus 1% that the participant has
received from his employer for the year under the RSVP Profit Sharing
Plan. The dollar value of Company contributions under the Deferred
Compensation Plan in the last fiscal year to the executive officers
named in the Summary Compensation Table is set forth in footnote 5
thereto. During that same period, the dollar value of such Company
contributions to all executive officers as a group (6 persons) and all
other employees as a group (19 persons, not including the executive
officers) were $3,571 and $29,638, respectively. Non-employee
directors are not eligible to receive Company contributions under the
Deferred Compensation Plan.
The current investment options available to participants under
the Deferred Compensation Plan are a bookkeeping account, the value of
which is based on investments in Company Common Stock, and a
bookkeeping account, the value of which is based on investments in a
balanced fund mutual fund. Participants have no rights as
shareholders pertaining to Company Common Stock units credited to
their accounts under the Deferred Compensation Plan. The Deferred
Compensation Plan administrator has the right to increase the number
of investment options in the future.
Distributions are permitted as of a date specified by the
participant, promptly following the participant's date of death,
disability, or termination of employment or service on the Board of
Directors, or the earlier of any such date to occur, as determined in
advance by the participant. Hardship distributions may be made in
certain circumstances upon approval of the Board of Directors.
Distributions are made, at the advance election of the participant, in
a lump sum or installments not exceeding 15 years. All distributions
of amounts allocated to investment in Company Common Stock will be
distributed in kind, except that cash is distributed in lieu of
fractional shares. Other investment options are distributed in cash.
Participants who are insiders subject to Section 16 of the Exchange
Act may also elect in advance whether applicable withholding
requirements on Company Common Stock distributions shall be satisfied
through withholding of Company Common Stock, subject to certain
restrictions. All restrictions on the distribution of deferred
compensation under the Deferred Compensation Plan would automatically
be terminated and the participant would receive distribution of his or
her account in full in the event that circumstances existed which
would likely result in a change in control of the Company (as defined
in the Deferred Compensation Plan), irrespective of the possible
termination of a participant's employment.
The Deferred Compensation Plan is intended to operate in full
compliance with the insider trading liability rules under Section 16
of the Exchange Act. The Treasurer of the Company is empowered to
implement any necessary rules or procedures to assure such compliance.
The Deferred Compensation Plan is unfunded for purposes of the
Code and ERISA. The Company has created a trust to facilitate payment
of the Company's obligations, consistent with the "unfunded" status of
the Deferred Compensation Plan. The right of a participant to receive
a distribution under the Plan is an unsecured claim against the
general assets of the Company.
No rights of a participant to the payment of benefits under the
Deferred Compensation Plan may be assigned, encumbered or transferred,
other than by will or the laws of descent and distribution.
The Board of Directors may at any time terminate or amend the
Deferred Compensation Plan, except that no termination or amendment
may reduce any account balance accrued on behalf of a participant
based on deferrals already made or divest any participant of rights to
which such person would have been entitled if the Deferred
Compensation Plan had been terminated immediately prior to the
effective date of such amendment. No amendment may become effective
until shareholder approval is obtained if the amendment materially
increases the benefits accruing to participants under the Deferred
Compensation Plan; materially increases the aggregate number of shares
of Company Common Stock that may be issued under the Deferred
Compensation Plan; or materially modifies the eligibility requirements
for Deferred Compensation Plan participation. There is no time limit
on the duration of the Deferred Compensation Plan.
4. MISCELLANEOUS
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OTHER MATTERS
Management knows of no business which will be presented for
action at the Annual Meeting other than as set forth in the Notice of
Annual Meeting as attached to this Proxy Statement. If other matters
do properly come before the Annual Meeting, it is intended that the
proxies shall be voted in accordance with the best judgment of the
person or persons exercising authority conferred by such proxies.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has retained Coopers & Lybrand LLP as its independent
public accountants for the fiscal year ending December 31, 1996. A
representative of Coopers & Lybrand LLP is expected to be present at
the Annual Meeting to respond to appropriate questions and to make a
statement if he or she desires to do so.
On January 31, 1995, the Company engaged Coopers & Lybrand LLP as
its independent public accountants to audit the Company's financial
statements for the fiscal year ended December 31, 1995 and the
transition period resulting from the Company's change in fiscal years
from July 3, 1994 through December 31, 1994. On January 31, 1995, the
Company also informed Arthur Andersen LLP, the Company's previous
independent public accountants, of their replacement. The change in
independent public accountants was recommended by the Audit Committee
and approved by the Board of Directors.
In connection with the audits of the Company's two fiscal years
ended July 2, 1994 and July 3, 1993, and the subsequent interim period
preceding the engagement of Coopers & Lybrand LLP, there were no
disagreements with Arthur Andersen LLP on any matters of accounting
principles or practices, financial statements, disclosure or auditing
scope or procedures, which disagreements, if not resolved to the
satisfaction of Arthur Andersen LLP, would have caused that firm to
make reference to the subject matter of the disagreement in connection
with its report. Arthur Andersen LLP's report on the Company's
financial statements for such fiscal years contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as
to uncertainty, audit scope or accounting principles.
1997 ANNUAL MEETING
Shareholders intending to submit proposals to be considered for
inclusion in the Proxy Statement and form of proxy for the 1997 Annual
Meeting of Shareholders must submit such proposals in writing, mailed
or delivered, to the Secretary of the Company, so as to be received
prior to December 4, 1996.
Shareholders wishing to propose any floor nominations for
directors or floor proposals at the 1997 Annual Meeting of
Shareholders must provide notice thereof, containing certain specified
information as required by the Company's By-Laws, to the Company's
Secretary at the principal executive offices of the Company, so as to
be received not less than 50 nor more than 75 days prior to such
annual meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN, AND RETURN THE PROXY CARD AS SOON
AS POSSIBLE.
By Order of the Board of Directors
Manitowoc, Wisconsin E. DEAN FLYNN
April 2, 1996 Secretary
APPENDIX A
THE MANITOWOC COMPANY, INC.
1995 STOCK PLAN
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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 any other 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. If the employment of a Participant
shall terminate for any reason, all options held by the
Participant which are not vested as of the effective date of
employment termination immediately shall be forfeited to the
Company (and shall once again become available for grant under
the Plan). However, the Committee, in its sole discretion,
shall have the right to immediately vest all or any portion of
such options, subject to such terms as the Committee, in its
sole discretion, deems appropriate; and provided that the
maximum exercise period which may be permitted following
employment termination is the shorter of: (i) one (1) year; or
(ii) the scheduled expiration date of the option.
Options which are vested as of the effective date of employment
termination may be exercised by the Participant within the
period beginning on the effective date of employment
termination, and ending (a) one (1) year following such date in
the case of termination by reason of death, disability, or
retirement; and (b) ninety (90) days following such date in the
case of termination for any other reason.
(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 abov 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 respect 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 o f 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.
APPENDIX TO THE PROXY STATEMENT
PROXY CARD
The Manitowoc Company, Inc.
Proxy/Voting Instructions Solicited on Behalf of the Board of Directors
for Annual Meeting of Shareholders on May 7, 1996
P The undersigned holder of Common Stock of The Manitowoc Company, Inc.
hereby appoints Fred M. Butler and E. Dean Flynn, or either of them, with
full power of substitution, to act as proxy for and to vote all of the
R shares of Common Stock of the undersigned at the Annual Meeting of
Shareholders of The Manitowoc Company, Inc. to be held on the third floor
O of the Company's corporate offices located at 500 South 16th Street,
Manitowoc, Wisconsin, on May 7, 1996, or any adjournment thereof, as follows:
X 1. Election of Directors. Nominees:
Dean H. Anderson, James P. McCann and Robert S. Throop;
Y 2. Approval of The Manitowoc Company, Inc. 1995 Stock Plan;
3. Approval of an increase by 100,000 in the number of shares that may be
issued under The Manitowoc Company, Inc. Deferred Compensation Plan
("Deferred Compensation Plan Share Increase");
4. In their discretion, upon such other business as may properly come before
the Meeting or any adjournment thereof;
all as set out in the Notice and Proxy Statement relating to the Meeting,
receipt of which is hereby acknowledged.
If you hold shares of Company Common Stock in the Dividend Reinvestment Plan
or RSVP Profit Sharing Plan, this proxy constitutes voting instructions for
any shares so held by the undersigned.
You are encouraged to specify your choice by marking the appropriate boxes (SEE
REVERSE SIDE) but you need not mark any box if you wish to vote in accordance
with the Board of Directors' recommendation. The proxies cannot vote your
shares unless you sign and return this card.
SEE REVERSE
SIDE
[X] Please mark your 7831
votes as in this
example.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted "FOR" Proposals
1, 2 and 3.
The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.
FOR WITHHELD
--- --------
1. Election of Directors [ ] [ ]
(see reverse)
For, except vote withheld as to the following nominee(s):
- ------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The Manitowoc Company, Inc.
1995 Stock Plan (see reverse) [ ] [ ] [ ]
3. Deferred Compensation Plan Share
Increase (see reverse) [ ] [ ] [ ]
Please mark box if applicable
- -----------------------------
Yes, I will attend the Annual Meeting
of Stockholders on Tuesday, May 7, 1996. [ ]
Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
If a corporation, please sign full corporate name by President
or other authorized officer.
- ----------------------------------------------
SIGNATURE DATE
- -----------------------------------------------
SIGNATURE (If Held Jointly) DATE
APPENDIX TO THE PROXY STATEMENT
(Pursuant to instruction 3 to item
10 of Schedule 14A -- not delivered
to shareholders.)
DEF COMP PLAN
THE MANITOWOC COMPANY, INC.
DEFERRED COMPENSATION PLAN
SECTION1. PURPOSE.
- ----------------------
The purpose of The Manitowoc Company, Inc. Deferred Compensation
Plan (the "Plan") is to promote the best interests of The Manitowoc
Company, Inc. and its subsidiaries and affiliates (the "Company") and
the stockholders of the Company by (1) attracting and retaining well-
qualified persons for service as nonemployee directors of the Company
and promoting identity of interest between directors and stockholders
of the Company; and (2) attracting and retaining key management
employees possessing a strong interest in the successful operation of
the Company and encouraging their continued loyalty, service, and
counsel to the Company.
It is intended that the Plan will allow participants to elect
voluntarily to defer and convert, in the case of nonemployee
directors, all or a portion of their retainer and meeting fees for
services as a director and, in the case of key employees, a portion of
their compensation, into Manitowoc Stock and other investments for
payment upon retirement, death, disability, or designated distribution
date.
SECTION 2. DEFINITIONS.
- ---------------------------
The following terms have the following meanings unless the
context clearly indicates otherwise:
2.1 "Agreement" means the written agreement entered into
between the Company and a Participant, whereby the Participant agrees
to defer a portion of his Compensation pursuant to the provisions of
the Plan and the Company agrees to make benefit payments in accordance
with the terms of the Plan and such Agreement. An Agreement may be
the "Initial Agreement" applicable to a Participant or a "Modified
Agreement" (in form approved by the Treasurer of the Company),
properly completed and signed.
2.2 "Beneficiary" means the person or entity designated by
the Participant to be the beneficiary of the Deferred Compensation
Account of the Participant. If a valid designation of Beneficiary is
not in effect at the time of the death of a Participant, the estate of
the Participant is deemed to be the sole Beneficiary of such Account.
If a Participant dies before receiving full distribution of his
Account, any remaining distributions shall be made to the Beneficiary.
If a Beneficiary dies while entitled to receive distributions from the
Plan, any remaining payments shall be paid to the estate of the
Beneficiary. Beneficiary designations shall be in writing, filed with
the Treasurer of the Company, and in such form as the Treasurer of the
Company may prescribe for this purpose.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Change of Control" means the first to occur of the
following:
(a) The acquisition by any person or entity, or group
thereof acting in concert, of beneficial ownership
of securities of the Company which, together with
securities previously owned, confer upon the
holder the voting power, on all matters brought to
a vote of stockholders, of thirty percent (30%) or
more of all the then outstanding shares of the
Company.
(b) The sale, assignment or transfer of assets (or
earning power) of the Company or any subsidiary or
subsidiaries, in a transaction or series of
transactions, to a twenty percent (20%)
stockholder (as herein defined) or any affiliate
of a twenty percent (20%) stockholder, if the
aggregate market value thereof exceeds fifty
percent (50%) of the aggregate book value,
determined by the Company in accordance with
generally accepted accounting principles, of all
the assets (or earning power) of the Company
determined on a consolidated basis before such
transaction or the first of such transactions,
unless the Board approved such transaction or
transactions before the date on which the twenty
percent (20%) stockholder became a twenty percent
(20%) stockholder. For purposes of this
definition of Change of Control, a twenty percent
(20%) stockholder means any person, entity, or
group of persons and/or entities acting in
concert, who or which, together with his, its or
their affiliates and associates, is the beneficial
owner of securities of the Company which confer
upon the holder the voting power, on all matters
brought to a vote of stockholders, of twenty
percent (20%) or more of all the then outstanding
shares of the Company.
(c) The merger or consolidation of the Company (or of
one or more subsidiaries of the Company, in a
transaction or series of transactions, if the
aggregate book value of the assets thereof exceeds
fifty percent (50%) of the aggregate book value of
all the assets of the Company determined on a
consolidated basis before such transaction or the
first of such transactions), with or into a twenty
percent (20%) stockholder or any affiliate of a
twenty percent (20%) stockholder, unless the Board
approved such merger or consolidation before the
date on which the twenty percent (20%) stockholder
first became a twenty percent (20%) stockholder.
(d) The dissolution of the Company, unless the Board
approved such dissolution before the date on which
the twenty percent (20%) stockholder first became
a twenty percent (20%) stockholder.
(e) Change in the composition of the Board after which
a majority of the members thereof are not
continuing directors. Continuing director, for
this purpose, means (i) any member of the Board
while such person is a member of the Board, who is
not an acquiring person, or an affiliate or
associate of an acquiring person, or a
representative of an acquiring person or of any
such affiliate or associate, and was a member of
the Board prior to July 4, 1993, or (ii) any
person who subsequently becomes a member of the
Board, who is not an acquiring person, or an
affiliate or associate of an acquiring person, or
a representative of an acquiring person or of any
such affiliate or associate, if such person's
nomination for election or election to the Board
is recommended or approved by a majority of the
continuing directors. As used herein, affiliate
and associate shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the
Exchange Act.
(f) The commencement (within the meaning of Rule 14d-2
of the General Rules and Regulations under the
Exchange Act) of a tender or exchange offer which,
if successful, would result in a change of control
of the Company.
(g) A determination by the Board, in view of then
current circumstances or impending events, that a
change of control of the Company has occurred or
is imminent, which determination shall be made for
the specific purpose of triggering the operative
provisions of the Company's contingent employment
agreements.
2.5 "Company" means The Manitowoc Company, Inc., a
Wisconsin corporation, or any successor corporation.
2.6 "Code" means the Internal Revenue Code of 1986, as
interpreted by regulations and rulings issued pursuant thereto, all as
amended and in effect from time to time.
2.7 "Company Contribution" means the amount of contribution
which may be made each year on behalf of key employee Participants, as
described in Section 7.
2.8 "Compensation" means (i) for nonemployee director
Participants, the Retainer Fee and (ii) for key employee Participants,
"Compensation" has the same meaning as the term "eligible
compensation," as defined in The Manitowoc Company, Inc. RSVP Profit
Sharing Plan (the "RSVP Plan") and incorporated herein by this
reference, without regard to the dollar limits applied to that
definition by Code Section 401(a)(17).
2.9 "Date" means the date an Initial Agreement, a Modified
Agreement, an Investment Election Change Form, a Transfer Election
Form, or an Extraordinary Distribution Request Form is received by the
Treasurer of the Company.
2.10 "Deferred Compensation Account," "Account," or
"Subaccount" means the accounts maintained on the books of the Company
for each Participant.
2.11 "Disability" means disability as set forth in Section
22(e)(3) of the Code.
2.12 "Distribution Date" means the date designated by a
Participant in accordance with Section 7 for the commencement of
payment of amounts credited to his Account.
2.13 "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
2.14 "Extraordinary Distribution Request Form" means the
Plan form (in the form approved by the Treasurer of the Company)
properly completed and signed by a Participant (or a Beneficiary after
the Participant's death) who wishes to request an extraordinary
distribution of amounts credited to his Account.
2.15 "Investment Election Change Form" means the Plan form
(in the form approved by the Treasurer of the Company) properly
completed and signed by a Participant who wishes to change his
investment election prospectively as to new deposits to his Account.
2.16 "Manitowoc Stock" means the common stock, $.01 par
value, of the Company.
2.17 "Participant" means any nonemployee member of the Board
and any key employee of the Company who has executed an Agreement.
Key employee status for a Plan Year is determined as of the last day
of the immediately preceding Plan Year, or, as to newly-hired
employees in their first year of employment, at time of hire based on
current base rate of pay. Key employees, for all Plan purposes,
include only elected officers of the Company and other highly
compensated employees who have Compensation in a Plan Year equal to or
greater than the indexed amount described in Code Section
414(q)(1)(c). A Participant who ceases to be a nonemployee director
or a key employee shall cease making deferrals as of the first day of
the Plan Year following such loss of eligibility, but shall remain an
inactive Participant until all amounts due such person under the Plan
have been distributed in full.
2.18 "Plan Year" means the fiscal year of the Company.
2.19 "Retainer Fee" means those fees paid by the Company to
nonemployee directors for services rendered on the Board or any
committee of the Board, including attendance fees and fees for serving
as committee chair. Any Retainer Fee payable for services during a
month is deemed to accrue to the nonemployee director on the first day
of such month for Plan purposes.
2.20 "Rule 16b-3," "Former Rule," and "New Rule" have the
following meanings. "Rule 16b-3" means Rule 16b-3 of the General
Rules and Regulations under the Exchange Act as promulgated by the
Securities Exchange Commission or its successor, as amended and in
effect from time to time. "Former Rule" means Rule 16b-3, as in
effect prior to May 1, 1991. "New Rule" means Rule 16b-3 promulgated
under the Exchange Act pursuant to Releases Nos. 34-28869 (February 8,
1991) and 34-29131 (April 26, 1991) and as thereafter revised or
amended.
2.21 "Transfer Election Form" means a valid transfer
election form (in the form approved by the Treasurer of the Company)
properly completed and signed by a Participant who wishes to transfer
funds from one investment Subaccount to another.
SECTION 3. AGREEMENTS AND ELECTIONS TO DEFER.
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3.1 Each nonemployee director and key employee as of
July 3, 1993 is initially eligible to defer Compensation accruing on
and after August 1, 1993, provided such Participant's Initial
Agreement Date is before that date. Thereafter, such persons shall be
eligible to commence deferrals only on the first day of any subsequent
Plan Year provided their Initial Agreement Date is before such date.
3.2 Each new nonemployee director and new key employee, on
and after July 4, 1993, shall be entitled to defer Compensation
accruing on and after the first day of the month following his Initial
Agreement Date, provided such Initial Agreement Date is not more than
thirty (30) days after the Date such person initially becomes eligible
under the Plan. Thereafter, such persons shall be eligible to
commence deferrals only as of the first day of any subsequent Plan
Year provided their Initial Agreement Date is before such date.
3.3 A Participant has no further right to defer
Compensation under the Plan after termination of service to the
Company as a nonemployee director, or after termination of employment
in the case of all other Participants, or, if earlier, upon receipt of
written notice from the Treasurer of the Company of revocation of an
employee's status as a key employee. Such revocations by the
Treasurer of the Company are effective only upon the first day of the
Plan Year following the date that the employee is provided such
written notice. If a Participant terminates service with the Company
and subsequently returns to service, he shall be treated as a new
employee (or director if applicable) for all Plan purposes.
3.4 A nonemployee director Participant may make a deferral
election with respect to all or part of his Compensation, in
increments of five percent (5%). A key employee Participant may make
separate deferral elections, in whole percentages, with respect to
regular pay and incentive bonuses. Deferral elections shall not
exceed forty percent (40%) of regular pay for any Plan Year and
deferral elections with regard to incentive bonuses are not subject to
a percentage maximum; provided, however, that the maximum amount of
Compensation of a key employee Participant for any Plan Year which may
be considered for purposes of determining the Company contribution
authorized by Section 7.1 shall not exceed twenty-five percent (25%)
for any Plan Year. Deferral elections remain in effect from year to
year until modified or revoked in accordance with Plan rules.
3.5 Each Participant shall designate on his Initial
Agreement the following information:
(a) the percentage of Compensation to be deferred;
(b) the Subaccounts to which the deferred amounts are
to be allocated;
(c) the Distribution Date;
(d) whether distributions are to be in a lump sum, in
installments, or a combination thereof; and
(e) the Participant's Beneficiaries.
Subject to the restrictions in Section 3.9, below, persons subject to
Section 16 of the Exchange Act shall be afforded a further opportunity
to determine in advance whether applicable withholding requirements on
amounts distributed from Subaccount A are to be satisfied by the
Company through withholding of shares of Manitowoc Stock or whether
the Participant will provide cash from other sources for this purpose.
3.6 Subject to the restrictions in Section 3.9, below, a
Participant may increase the deferral amount specified in his Initial
Agreement by completing and executing a Modified Agreement and
submitting it to the Treasurer of the Company. Such Modified
Agreement shall be effective with respect to Compensation accruing on
and after the first day of the Plan Year beginning after the Date of
the Modified Agreement.
3.7 Subject to the restrictions in Section 3.9, below, a
Participant may reduce, or completely revoke, his deferral election by
completing and executing a Modified Agreement and submitting it to the
Treasurer of the Company. Such Modified Agreement shall be effective
with respect to Compensation accruing on and after the first day of
the Plan Year beginning after the Date of the Modified Agreement;
provided, however, that the effective date of such an election shall
be the first day of the month following the Date of the Modified
Agreement if the Participant establishes to the Treasurer of the
Company that the reason for the reduction/revocation election is an
unanticipated event or events beyond the control of the Participant
that would result in severe financial hardship to the Participant if
the reduction/revocation is not permitted. In the event that the
Treasurer of the Company allows a Participant to reduce or cease
making deferral contributions under the Plan other than on the first
day of a Plan Year, the Participant shall forfeit any Company
Contributions to which his Account would otherwise be entitled for the
Plan Year in which such reduction or revocation occurred.
3.8 A Participant shall be permitted at any time to modify
his Beneficiary election by completing and executing a revised
Beneficiary designation and submitting it to the Treasurer of the
Company.
3.9 A Participant who is subject to Section 16 of the
Exchange Act is subject to the following additional restrictions
regarding his election to defer compensation under the Plan.
(a) The Date of any Initial Agreement or Modified Agreement
making an election pertaining to withholding of shares of Manitowoc
Stock must be at least six (6) months prior to the date the tax is
determined.
(b) During the period that the Plan is under the Former
Rule, a Participant who is subject to Section 16 of the Exchange Act
may, after commencing deferrals under the Plan, make changes
(increases, decreases, or revocations) in the amount of such deferrals
into Subaccount A effective as of the first day of a subsequent Plan
Year for Compensation accruing on and after that date.
(c) On and after the mandatory effective date of the New
Rule, a person who is subject to Section 16 of the Exchange Act may
make changes (increases, decreases, or revocations) in the amount of
such Participant's deferrals into Subaccount A effective as of the
first day of the month coincident with or following the date that is
six (6) months after the Modified Agreement Date directing such
change.
All elections made under this Section 3 by persons subject to Section
16 of the Exchange Act are irrevocable and will remain in effect until
another irrevocable election becomes effective.
SECTION 4. INVESTMENT DIRECTIONS.
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4.1 In connection with his Initial Agreement and
thereafter, from time to time as determined by the Participant (or a
Beneficiary after the Participant's death), each Participant shall
provide written investment directions indicating the portion of such
Participant's deferred amount, including for key employees any Company
contribution, that is to be allocated to Subaccount A or Subaccount B
(as such terms are hereinafter defined in Section 6.5) of the
Participant's Account. Any apportionment of newly deposited funds to
Subaccounts shall be in ten percent (10%) increments.
4.2 Subject to the restrictions in Section 4.4, below, an
investment direction contained in an Initial Agreement and any
Investment Election Change Form shall become effective on the first
day of the month following the Initial Agreement Date or the
Investment Election Change Date.
4.3 Subject to the restrictions in Section 4.4, below, a
Participant (or a Beneficiary after the Participant's death) may
transfer to one or more different Subaccounts all or a part (not less
than ten percent (10%)) of the amounts credited to a Subaccount by
completing and executing a Transfer Election Form and submitting it to
the Treasurer of the Company. Subject to the restrictions in Section
4.4, below, such transfers among Subaccounts shall become effective on
the first day of the calendar month following the Transfer Election
Date.
4.4 A Participant who is subject to Section 16 of the
Exchange Act is subject to the following additional restrictions
regarding his investment directions and investment change directions
under the Plan.
(a) During the period that the Plan is under the Former
Rule, a Participant who is subject to Section 16 of the Exchange Act
may make changes in the investment directions which are incorporated
in his Initial Agreement (or a subsequent Modified Agreement)
effective as of the first day of a subsequent Plan Year. Such person
may not, while the Former Rules are in effect, make any transfers of
existing Account balances into or out of Subaccount A.
(b) On and after the mandatory effective date of the New
Rule, a person who is subject to Section 16 of the Exchange Act may
make any Initial Agreement investment election directing, or any
Investment Election Change Form affecting, the investment funds in
Subaccount A effective the first day of the month coincident with or
following the date that is six (6) months after such Initial Agreement
Date or the Investment Election Change Form Date, whichever is
applicable.
(c) On and after the mandatory effective date of the New
Rule, any transfer of existing Account balances to or from Subaccount
A requested by a person who is then subject to Section 16 of the
Exchange Act shall be effective the first day of the month coincident
with or following the date that is six (6) months after the Transfer
Election Date.
All investment elections made under Section 4 by persons subject to
Section 16 of the Exchange Act are irrevocable and will remain in
effect until another irrevocable investment election becomes
effective.
SECTION 5. DISTRIBUTIONS.
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5.1 Each Participant shall, subject to the restrictions in
Section 5.11, below, designate on his Initial Agreement one of the
following dates as a Distribution Date with respect to amounts
credited to his Account thereafter:
(a) the first day of the calendar month following the
date of the Participant's death;
(b) the first day of the calendar month following the
date of the Participant's Disability;
(c) the first day of the calendar month following the
date of termination of the Participant's service
as a member of the Board if the Participant is a
nonemployee director; or, if the Participant is an
employee of the Company, the first day of the
calendar month following the date of termination
of the Participant's employment with the Company;
(d) the first day of a calendar month specified by the
Participant;
(e) the earliest to occur of a, b, c, or d, or any
combination of such options.
5.2 A Participant shall direct on his Initial Agreement
whether distributions from his Account, or separately as to each
Subaccount, are to be made in (i) a lump sum or (ii) no more than one-
hundred eighty (180) monthly, sixty (60) quarterly, or fifteen (15)
annual installments. Each installment shall be determined by dividing
the Account (or Subaccount, if applicable) balance by the number of
remaining installments. If a Participant receives a distribution on
an installment basis, amounts remaining in his Account (or Subaccount,
if applicable) before payment in full is completed shall continue to
accrue earnings and incur losses in accordance with the terms of the
Plan. Except as provided in Section 5.3, all distributions shall be
made to the Participant.
5.3 If the Distribution Date is the first day of the month
following the Participant's death or a fixed date which in fact occurs
after the Participant's death or if at the time of death the
Participant was receiving distributions in installments, the balance
remaining in the Participant's Account shall be payable to his
Beneficiary. Upon the death of a Beneficiary who is receiving
distributions in installments, the balance remaining in the Account of
the Beneficiary shall be payable to the estate of the Beneficiary.
5.4 All distributions to Beneficiaries shall be in a lump
sum except when the Distribution Date is the first day of the month
following the Participant's death and the Agreement specifies
installment payments to the Beneficiary.
5.5 All distributions from Subaccount A shall be made in
shares of Manitowoc Stock except that cash shall be distributed in
lieu of fractional shares. Distributions from any other Subaccount
shall be paid in cash. Unless a Participant has specified different
distribution methods as to separate Subaccounts, or in the case of
extraordinary distributions as described below, distributions will be
deemed to be made from each Subaccount pro rata.
5.6 A Participant may modify his election as to
Distribution Date and distribution form (to Participant and or
Beneficiary) with respect to Compensation accruing in subsequent Plan
Years by completing and executing a Modified Agreement and submitting
it to the Treasurer of the Company. No more than one such
modification as to Distribution Date and one modification as to
distribution form to Participant and Beneficiary shall be permitted
unless the Treasurer of the Company determines that a greater number
of modifications shall be made uniformly available to all Participants
on a prospective only basis. Any modified Distribution Date or
distribution form election shall be effective only as to amounts
credited to the Participant's Accounts for Plan Years beginning after
the Date of the Modified Agreement making such change.
5.7 Notwithstanding the foregoing, a Participant (or
Beneficiary after the death of the Participant) may request an
extraordinary distribution of all or part of the amount credited to
his Account because of hardship. A distribution shall be deemed to be
because of hardship if such distribution is necessary due to
unanticipated events beyond the control of the Participant that would
result in severe financial hardship to the Participant if the
extraordinary distribution is not permitted.
5.8 A request for an extraordinary distribution shall be
made by completing and executing an Extraordinary Distribution Request
Form and submitting it to the Treasurer of the Company. All
extraordinary distributions shall be subject to approval by the Board.
5.9 The Extraordinary Distribution Request Form shall
indicate:
(a) the amount to be distributed from the Account;
(b) the Subaccount(s) from which the distribution is
to be made; and
(c) the hardship requiring the distribution.
The amount of any extraordinary distribution shall not exceed the
amount determined by the Board to be required to meet the hardship.
5.10 Subject to the restrictions in Section 5.11, below, an
extraordinary distribution shall be made with respect to amounts
credited to all Subaccounts on the first day of the calendar month
next following approval of the extraordinary distribution request by
the Board.
5.11 A Participant who is subject to Section 16 of the
Exchange Act is subject to additional restrictions regarding his
distribution directions under the Plan.
(a) Any Distribution Date elected by a Participant subject
to Section 16 of the Exchange Act shall be effective, and
distributions shall be made pursuant to such election, on the first
day of the month coincident with or following the date that is six (6)
months after the Initial Agreement Date or Modified Agreement Date
establishing such Distribution Date.
(b) For a Participant requesting an extraordinary
distribution who is subject to Section 16 of the Exchange Act, any
portion of such distribution to be paid from Subaccount A shall be
distributed on the first day of the month coincident with or following
the date that is six (6) months after the Date of the Extraordinary
Distribution Request Form.
All distribution elections made under Section 5 by persons subject to
Section 16 of the Exchange Act are irrevocable and will remain in
effect until another irrevocable distribution election becomes
effective.
5.12 Notwithstanding the foregoing, the Treasurer of the
Company may adopt any additional rules and modify existing Plan rules
and procedures, as necessary, to assure compliance with the insider
trading liability rules under Section 16 of the Exchange Act, as
amended and revised, and as in effect from time to time.
5.13 Any remaining balance in a Participant's Account shall
be distributed in a single lump sum amount to the Participant, or his
Beneficiary if applicable, upon the occurrence of a Change in Control
of the Company. Such distribution shall occur not later than thirty
(30) days following the date on which the Change in Control of the
Company occurred and shall include the accelerated distribution of any
installment payments otherwise to be paid.
SECTION 6. ACCOUNTS AND SUBACCOUNTS.
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6.1 The Company shall establish an Account, with one or
more Subaccounts, on its books for each Participant as specified by
the Participant in his Agreement and shall credit to each such
Subaccount any amounts deferred to such Subaccount by the Participant
under the Plan, including for key employees any Company Contribution
allocable to the Account. Such credits for deferred Compensation are
to be made within a reasonable time (not to exceed thirty (30) days)
following the time that the deferred Compensation, but for the
Participant's deferral election, would otherwise have been paid or
made available to the Participant. The credits for Company
Contributions, if any, shall be made as provided in Section 7. The
Company shall deduct amounts it is required to withhold on the
deferred Compensation at the time it is credited to a Participant's
Account, under any state, federal, or local law for payroll or other
taxes or charges, from the Participant's Compensation which is not
deferred, to the maximum extent possible, before reducing the amount
of the Participant's deferrals.
6.2 The Accounts of Participants in the Plan are
immediately vested and nonforfeitable.
6.3 Subaccounts established for Participants shall be
deemed to be fully invested at all times in the investment option
assigned to the Subaccount, as such designations may be revised from
time to time in accordance with Section 6.4, below. The Company shall
separately account for credited amounts as units of the designated
investment vehicle having the value attributable to units of the
investment option at all times, taking into account reinvestment of
all dividends pertaining to such investment, but without adjustment
for any income tax consequences attributable to deemed Company
ownership of such investments.
6.4 The Treasurer of the Company shall provide to each
Participant, not less frequently than semiannually, a statement with
respect to each of his Subaccounts in such form as the Treasurer of
the Company determines to be appropriate, setting forth credited
amounts added during the reporting period, any units of each
investment option attributable to each Subaccount and their current
value, amounts distributed from each Subaccount to the Participant
since the last report, the current balance to the credit of such
Participant in each Subaccount, and other appropriate information.
6.5 The Subaccounts available under the Plan are as set
forth below:
Subaccount A. A bookkeeping account whose value shall be based
on investments in Manitowoc Stock.
Subaccount B. A bookkeeping account whose value shall be based
on investments in the Fidelity Investments Balanced Fund Mutual
Fund.
The Treasurer of the Company shall, from time to time, review the
investment options available under the Plan and may, on a prospective
basis, eliminate, modify, or otherwise change such investment options,
provided, however, that no fewer than two (2) investment options shall
at all times be made available under the Plan including Manitowoc
Stock and one balanced mutual fund.
SECTION 7. COMPANY CONTRIBUTIONS.
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7.1 The Company shall credit to the Accounts of key
employee Participants, in accordance with their investment directions
on file with the Plan, a Company Contribution equal to the amount of
deferred compensation of a key employee for a Plan Year multiplied by
the rate, determined as a percentage of eligible compensation, of
fixed and variable profit sharing contributions plus one percent (1%)
that the Participant has received from his employer for the Plan Year
under the RSVP Plan, subject to the restrictions of Section 3.7 and
Section 3.4.
7.2 Such Company Contribution shall be credited to the
Account of the eligible Participant within a reasonable time (not to
exceed thirty (30) days) following the time the Company deposits its
contributions to the RSVP Plan.
SECTION 8. MANITOWOC STOCK.
- ---------------------------------
8.1 The amount of Manitowoc Stock which may be allocated to
Participants' Accounts under the Plan is determined by the amount of
Compensation deferred under the Plan and the investment directions
provided by Participants. In the event of any merger, share exchange,
reorganization, consolidation, recapitalization, stock dividend, stock
split or other change in corporate structure affecting Manitowoc
Stock, appropriate adjustments shall be made to the units credited to
Subaccount A for each Participant.
8.2 Plan record keeping pertaining to Manitowoc Stock shall
be based on the fair market value of Manitowoc Stock. Fair market
value per share of Manitowoc Stock on any given date is defined for
Plan purposes as the value, as determined by the Treasurer of the
Company, at which shares were traded on that date in representative
trades reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on The
New York Stock Exchange on such date or, if no Manitowoc Stock is
traded on such date, the most recent date on which Manitowoc Stock was
traded.
8.3 Participants shall have no rights as a stockholder
pertaining to Manitowoc Stock units credited to their Plan Accounts.
No Manitowoc Stock unit nor any right or interest of a Participant
under the Plan in any Manitowoc Stock unit may be assigned,
encumbered, or transferred, except by will or the laws of descent and
distribution. The rights of a Participant hereunder with respect to
any Manitowoc Stock unit are exercisable during the Participant's
lifetime only by him or his guardian or legal representative.
8.4 Any shares of Manitowoc Stock distributed to
Participants under the Plan shall be subject to such stock transfer
orders and other restrictions as the Company may deem advisable under
the rules, regulations and other requirements of the Company, any
stock exchange upon which Manitowoc Stock is then listed and any
applicable Federal, state or foreign securities law, and the Company
may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
SECTION 9. GENERAL PROVISIONS.
- ------------------------------------
9.1 The Treasurer of the Company shall administer and
interpret the Plan, and supervise preparation of Agreements, forms,
and any amendments thereto. Interpretation of the Plan shall be
within the sole discretion of the Treasurer of the Company and shall
be final and binding upon each Participant and Beneficiary. The
Treasurer of the Company may adopt and modify rules and regulations
relating to the Plan as it deems necessary or advisable for the
administration of the Plan. If the Treasurer of the Company shall
also be a Participant or Beneficiary, any determinations affecting
such person's participation in the Plan which would otherwise be made
by the Treasurer of the Company shall be made by the Board. Headings
are given to the sections of the Plan solely as a convenience to
facilitate reference. The reference to any statute, regulation, or
other provision of law shall be construed to refer to any amendment to
or successor of such provision of law. With regard to persons subject
to Section 16 of the Exchange Act, transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successor under the Exchange Act. The Plan shall be construed so that
transactions under the Plan will be exempt from Section 16 of the
Exchange Act pursuant to regulations and interpretations issued from
time to time by the Securities and Exchange Commission.
9.2 The right of the Participant or his Beneficiary to
receive a distribution hereunder shall be an unsecured claim against
the general assets of the Company, and neither the Participant nor any
Beneficiary shall have any rights in or against any amount credited to
his Account or any other specific assets of the Company. The right of
a Participant or Beneficiary to the payment of benefits under this
Plan shall not be assigned, encumbered, or transferred, except by will
or the laws of descent and distribution. The rights of a Participant
hereunder are exercisable during the Participant's lifetime only by
him or his guardian or legal representative.
9.3 This Plan is unfunded and is maintained by the Company
primarily for the purpose of providing deferred compensation for
nonemployee directors and a select group of management and highly
compensated employees. Nothing contained in this Plan and no action
taken pursuant to its terms shall create or be construed to create a
trust of any kind, or a fiduciary relationship between the Company and
any Participant or Beneficiary, or any other person. The Company may
authorize the creation of a trust or other arrangements to assist the
Company in meeting the obligations created under the Plan. Any
liability to any person with respect to the Plan shall be based solely
upon any contractual obligations that may be created pursuant to the
Plan. No obligation of the Company hereunder shall be deemed to be
secured by any pledge of, or other encumbrance on, any property of the
Company.
9.4 No later than the date as of which an amount first
becomes includible in the gross income of the Participant for Federal
income tax purposes with respect to any participation under the Plan,
the Participant shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any Federal,
state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount.
9.5 There shall be no time limit on the duration of the
Plan. The Board may, at any time, amend or terminate the Plan without
the consent of the Participants or Beneficiaries, provided, however,
that no amendment or termination may reduce any Account balance
accrued on behalf of a Participant based on deferrals already made, or
divest any Participant of rights to which he would have been entitled
if the Plan had been terminated immediately prior to the effective
date of such amendment. This Section shall not, however, restrict the
right of the Board to cause all Accounts to be distributed in the
event of Plan termination, provided all Participants and Beneficiaries
are treated in a uniform and nondiscriminatory manner in such event.
In addition, no amendment may become effective until stockholder
approval is obtained if the amendment (i) except as expressly provided
in the Plan, materially increases the aggregate number of shares of
Manitowoc Stock that may be allocated in a Plan Year, (ii) materially
increases the benefits accruing to Participants under the Plan or
(iii) materially modifies the eligibility requirements for
participation in the Plan.
9.6 The Plan will become effective on July 4, 1993, subject
to approval by a majority of the votes cast at a duly held meeting of
the Company's stockholders at which a quorum representing a majority
of all outstanding voting stock is, either in person or by proxy,
present.
9.7 Costs of establishing and administering the Plan will
be paid by the Company.
9.8 Compensation and Company Contributions credited to an
Account hereunder shall not be considered "compensation" for the
purpose of computing benefits under any qualified retirement plan
maintained by the Company, but shall be considered compensation for
welfare benefit plans, such as life and disability insurance programs
sponsored by the Company.
9.9 If any of the provisions of the Plan shall be held to
be invalid, or shall be determined to be inconsistent with the purpose
of the Plan, the remainder of the Plan shall not be affected thereby.
9.10 This Plan shall be binding upon and inure to the
benefit of the Company, its successors and assigns and the
Participants and their heirs, executors, administrators, and legal
representatives.
9.11 This Plan shall be construed in accordance with and
governed by the law of the State of Wisconsin to the extent not
preempted by federal law.
