CONTINGENT EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this ______ day of _______________, 20__,
by and between THE MANITOWOC COMPANY, INC., a Wisconsin
corporation (together with its subsidiaries and any upstream
parent company that in the future may control The Manitowoc
Company, Inc. referred to herein as the "Company") and
_______________________, a key employee of the Company (the
"Employee").
WITNESSETH:
WHEREAS, sudden takeovers, acquisitions or changes of
control of domestic corporations have occurred frequently in
recent years, and current conditions may contribute to the
continuation or acceleration of this trend; and
WHEREAS, the possibility of a sudden takeover,
acquisition or change of control can create uncertainty of
employment and may distract and/or cause the loss of valuable
Company officers, to the detriment of the Company and its
shareholders; and
WHEREAS, it is believed that the detriment described can
be substantially reduced by agreement on the terms hereinafter
set forth.
NOW THEREFORE, in consideration of the foregoing premises
and the mutual covenants hereinafter set forth, IT IS AGREED
1.
Continued Employment.
(a)
If a "Change of Control" (as defined below)
of the Company occurs when the Employee is employed by the
Company, the Company will continue thereafter to employ the
Employee, and the Employee will remain in the employ of the
Company, in accordance with the terms and provisions of this
Agreement, for a period of three years following the date of
such change (the "Employment Period").
(b)
As used herein, the phrase "Change of
Control" of the Company means the first to occur of the
following with respect to the Company or any upstream holding
company:
(i) Any "person," as that term is defined in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), but excluding 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 that term is 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) The Company is merged or consolidated with any other
corporation or other entity, 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) the Company engages in a
merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction)
in which no "person" (as defined above) acquires more
than 30% of the combined voting power of the Company's
then outstanding securities. Notwithstanding the
foregoing, a merger or consolidation involving the
Company shall not be considered a "Change of Control" if
the Company is the surviving corporation and shares of
the Company's Common Stock are not converted into or
exchanged for stock or securities of any other
corporation, cash or any other thing of value, unless
persons who beneficially owned shares of the Company's
Common Stock outstanding immediately prior to such
transaction own beneficially less than a majority of the
outstanding voting securities of the Company immediately
following the merger or consolidation;
(iii)
The Company or any subsidiary sells, assigns or
otherwise transfers assets in a transaction or series of
related transactions, if the aggregate market value of
the assets so transferred exceeds 50% of the Company's
consolidated book value, determined by the Company in
accordance with generally accepted accounting principles,
measured at the time at which such transaction occurs or
the first of such series of related transactions occurs;
provided, however, that such a transfer effected pursuant
to a spin-off or split-up where stockholders of the
Company retain ownership of the transferred assets
proportionate to their prorata ownership interest in the
Company shall not be deemed a "Change of Control;"
(iv) The Company dissolves and liquidates substantially all of
its assets;
(v) At any time after the date of this Agreement when the
Continuing Directors cease to constitute a majority of
the Board of Directors of the Company. For this
purpose, a "Continuing Director" shall mean: (A) the
individuals who, at the date of this Agreement constitute
the Board; and (B) any new directors (other than
directors designated by a person who has entered into an
agreement with the Company to effect a transaction
described in clause (i), (ii) or (iii) of this paragraph
1(b) of this Agreement) whose appointment to the Board or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the then-
serving Continuing Directors; or
(vi) A determination by the Board of Directors of the Company,
in view of then current circumstances or impending
events, that a Change of Control of the Company has
occurred, which determination shall be made for the
specific purpose of triggering the operative provisions
of this Agreement and all other similar contingent
employment agreements of the Company.
2.
Duties. Unless otherwise agreed by the Company
and Employee, during the Employment Period the Employee shall
be employed by the Company in the same position/ offices as
those which the Employee held on the date of the Change of
Control of the Company. In such employment the Employee's
duties and authority shall consist of and include all duties
and authority customarily performed and held by a person
holding an equivalent position with a corporation of similar
nature and size, as such duties and authority related to such
position are reasonably defined and delegated from time to
time by the Board of Directors of the Company. However, no
change of the Employee's location of employment outside a 50-
mile radius from his place of employment as of the date of
this Agreement (or any other location later consented to by
the Employee), or in the Employee's title, shall be made
without the prior written consent of the Employee. The
Employee shall have the powers necessary to perform the duties
assigned and shall be provided such supporting services,
staff, secretarial and other assistance, office space and
accouterments as shall be reasonably necessary and appropriate
in light of the duties assigned (but in no event, in any case,
smaller in quantity or size or inferior in quality than that
being furnished to the Employee on the date of the Change of
Control of the Company.
The Employee shall devote his entire business time,
energy and skills to such employment while so employed, but
the Employee shall not be required to devote more than an
average of approximately 30 hours per calendar week to such
employment. The Employee may participate in civic or
charitable activities which do not adversely affect his
ability to carry out his responsibilities hereunder. The
Employee shall be entitled to a minimum of three weeks
(fifteen working days) of paid vacation annually, or such
greater amount as shall be customarily allowed to the Employee
during the fiscal year of the Company prior to the fiscal year
in which the Change of Control of the Company shall occur.
The Employee shall have the sole discretion to determine the
time and intervals of such vacation.
3.
Compensation. While employed under this
Agreement, the Employee shall be compensated as follows:
(a)
The Employee shall receive a salary equal
to his salary as in effect as of the date of the Change of
Control of the Company, subject to adjustment as hereinafter
provided.
(b)
The Employee shall be reimbursed for any
and all monies advanced in connection with his employment for
reasonable and necessary expenses incurred by him on behalf of
the Company.
(c)
The Employee shall be included to the
extent eligible thereunder in any and all plans providing
benefits for the Company's employees, including but not
limited to group life insurance, hospitalization, medical,
retiree health and pension, and shall be provided any and all
other benefits and perquisites (including use of an
automobile, parking privileges and club membership) made
available to other employees of comparable status, at the
expense of the Company on a comparable basis. The Employee
shall be deemed eligible for retiree health if he qualifies on
the basis of years or service (regardless of his age).
(d)
The Employee shall be permitted to
participate in any restricted stock plans, stock option plans
or other stock benefit plans as the Company establishes and
maintains from time to time for its officers and employees.
The Employee's participation level in such stock plans shall
be consistent with the participation level of other officers
and employees of the Company who have positions, duties and
responsibilities comparable to the Employee.
(e)
The Employee shall be included in all
profit sharing, bonus, deferred compensation, split dollar
life insurance, and similar or comparable cash incentive bonus
plans customarily extended by the Company to corporate
officers and key employees of the Company. The Employee shall
be entitled to cash incentive bonuses and profit sharing under
such plans which are consistent with the bonuses and profit
sharing received under such plans by other employees and
officers of the Company who have positions, duties and
responsibilities comparable to those of the Employee;
provided, however, that in no event shall (i) the aggregate of
cash incentive bonuses earned by the Employee for any fiscal
year of the Company during the Employment Period be less than
the Employee's Average Annual Incentive Bonus Compensation
(prorated for any portion of a fiscal year of the Company
during the term of the Employment Period), and (ii) the level
of profit sharing participation be less than the level in
effect prior to the commencement of the Employment Period.
For this purpose, the Employee's "Average Annual Incentive
Bonus Compensation" shall be the average of the aggregate
annual cash incentive bonuses earned by the Employee (whether
paid in the year earned or deferred for payment in subsequent
years) under all short and long-term cash incentive bonus
plans maintained by the Company in which the Employee
participated during the Company's latest three consecutive
fiscal years ended prior to the commencement of the Employment
Period. If the Employee has been employed by the Company for
less than three complete fiscal years prior to the
commencement of the Employment Period, then the Employee's
Average Annual Incentive Bonus Compensation shall be the
average of the bonuses earned by the Employee during such
smaller number of complete fiscal years during which he was
employed by the Company prior to the commencement of the
Employment Period. If the Employee has not been employed for
even one complete fiscal year prior to the commencement of the
Employment Period, then the Employee's Average Annual
Incentive Bonus Compensation shall be calculated by prorating
the bonus earned by the Employee for the portion of the
Company's most recently completed fiscal year during which the
Employee was employed prior to the commencement of the
Employment Period, as though the Employee had been employed
for such full fiscal year. This proration shall be calculated
based upon a 365-day fiscal year.
4.
Annual Compensation Adjustments. At least
annually during the Employment Period, the Board of Directors
of the Company or an appropriate committee thereof, in
accordance with past practice, will consider and appraise the
contributions of the Employee to the Company's operating
efficiency, growth, production and profits, at least annually
during the Employment Period, and the Employee's compensation
rate shall be annually adjusted upward to be commensurate with
increases given to other corporate officers and key employees
generally and as the scope and success of the Company's
operations or the Employee's duties expand.
5.
Disability. If, during the Employment Period,
the Employee shall become disabled by sickness or otherwise so
that he is unable to perform the regular duties of his
employment on a full-time basis, the Company shall pay him
commencing on the date of the disability and continuing for
the first six months thereafter, as sick pay, his normal
salary and all benefits as described in paragraph 3 hereof.
If the disability continues beyond six months, then the
payment of the Employee's normal salary shall be suspended
during the period of disability. During the term of his
disability, and until the expiration of the Employment Period,
the Employee shall continue to receive customary fringe
benefits as provided in paragraphs 3(c) and 3(d) above. The
obligation to provide the foregoing disability benefits shall
survive the termination of this Agreement provided the
disability was incurred before termination. If the disability
terminates prior to the end of the Employment Period, the
Employee may elect to return to full-time employment under
this Agreement in which case this paragraph shall apply to all
subsequent short or long term disabilities.
To determine whether the Employee is disabled for the
purposes of this paragraph, either party may from time to time
request a medical examination of the Employee by a doctor
appointed by the Company, or as the parties may otherwise
agree, and the written medical opinion of such doctor shall be
conclusive and binding upon the parties as to whether or not
the Employee has become disabled and the date when such
disability arose. The cost of any such medical examination
shall be borne by the Company.
6.
Retirement. If, during the Employment Period,
the Employee shall deliver to the Company a statement signed
by him stating that the Employee voluntarily chooses to retire
early from the Company, or if the Employee shall reach the age
of 65, or shall with the mutual agreement of the Company agree
in writing on early retirement, then this Agreement shall
terminate on the effective date of such event and the terms of
the Company's retirement policies or such mutual agreement
shall immediately become effective.
7.
Termination Other Than for Cause.
(a)
At any time during the ninety (90) calendar
day period commencing on the date of completion of the
transaction or series of related transactions causing the
occurrence of a Change of Control (the "Trial Period"), the
Employee shall have the right to elect to terminate his
employment under this Agreement for any reason or no reason at
all and shall thereupon be entitled to the benefits and a
severance payment as set forth in paragraph 7(c) below.
(b)
If during the Employment Period after the
Trial Period: (i) the Employee's duties shall be changed
substantially without his written consent from those specified
in paragraph 2, or (ii) the location of his principal place of
employment shall be moved, without his written consent, more
than thirty (30) miles distant from the location of his
principal place of employment on the date of the Change of
Control of the Company, or (iii) he shall fail to be reelected
to or he shall be removed from any corporate office(s) of the
Company, or (iv) if the Company otherwise violates this
Agreement, or (v) any successor to the principal business of
the Company (whether by merger, purchase of assets,
liquidation or otherwise) as described in paragraph 12 fails
or refuses to assume the Company's obligations under this
Agreement, then the Employee shall have the right to elect to
terminate his employment under this Agreement and shall
thereupon be entitled to the benefits and a severance payment
as set forth in paragraph 7(c) below.
(c)
If during the Employment Period the
Employee's employment hereunder shall be terminated (1) by the
Company for any reason other than the reasons set forth
paragraphs 5, 6, 8 or 9 of this Agreement, or (2) by the
Employee pursuant to paragraph 7(a) or 7(b) above, thereafter
the Employee shall be entitled to participate in group life,
hospitalization and medical insurance and shall receive the
other employee benefits and perquisites described in paragraph
3(c) hereof, for the remainder of the Employment Period
(provided that if the Employee would be eligible to
participate in the Company's retiree health plan (based on
years of service without regard to age) if he had retired as
of the termination date, he shall be entitled to participate
in such retiree health plan upon such termination), and, no
later than thirty (30) calendar days following such
termination, the Company shall pay to the Employee or his
personal representative a severance payment in an amount equal
to the sum of the following:
(i) The Employee's annual base salary through the date of the
termination of employment to the extent not theretofore
paid; plus
(ii) All deferred salary (including "bank" balances in the
Company's incentive compensation plans), profit sharing,
bonuses and other compensation earned by the Employee
(whether vested or unvested or subject to any other
contingencies) during the course of his employment with
the Company prior to the termination of his employment;
plus
(iii) The Employee's base salary for the portion of the
Employment Period remaining unexpired as of the
termination date. For this purpose, the Employee's base
salary shall be his base salary as in effect immediately
prior to the termination of employment. For any fraction
of a year included in the unexpired portion of the
Employment Period, the Employee's base salary shall be
prorated based upon a 365-day year; plus
(iv) Incentive bonus compensation and profit sharing for the
current fiscal year of the Company during which the
termination of employment occurs and for all subsequent
fiscal years of the Company thereafter which are included
in whole or in part in the portion of the Employment
Period remaining unexpired as of the termination date.
The amount of the cash incentive bonus and the profit
sharing for any partial fiscal year included in the
balance of the Employment Period shall be prorated based
on a 365-day fiscal year. The amount of the annual bonus
to be applied in calculating the incentive compensation
payment shall be the average of the annual cash incentive
bonuses earned by the Employee (whether such incentive
bonuses were paid in the year earned or deferred for
payment in subsequent years) under all short and long-
term cash incentive bonus plans maintained by the Company
in which the Employee participated during the Company's
latest three consecutive fiscal years ended prior to the
termination of the Employee's employment. The amount of
the annual profit sharing to be applied in calculating
the profit sharing payment shall be the average of the
annual profit sharing earned by the Employee (whether
such profit sharing was paid in the year earned or
deferred for payment in subsequent years) under the
Company's profit sharing plan in which the Employee
participated during the Company's latest three
consecutive fiscal years ended prior to the termination
of the Employee's employment. If the Employee has been
employed by the Company for less than three complete
fiscal years prior to the date of the termination of his
employment, then the amount of the annual bonus and the
annual profit sharing for purposes of computing these
payments shall be based upon the average of the bonuses
earned and the average of the profit sharing earned by
the Employee during such smaller number of complete
fiscal years during which he was employed by the Company
prior to the date of the termination of his employment.
If the Employee has not been employed for even one
complete fiscal year prior to the date of the termination
of his employment, then his annual bonus and annual
profit sharing for purposes of computing this payment
shall be calculated by prorating the bonus earned and the
profit sharing earned by the Employee for the portion of
the Company's most recently completed fiscal year during
which the Employee was employed, as though the Employee
had been employed for such full fiscal year. Such
proration shall be calculated based upon a 365-day fiscal
year.
(d)
If during the twelve month period prior to
a Change in Control, (i) the Employee voluntarily retires
early from the Company pursuant to paragraph 6 (and the
Employee does not reach the age of 65 prior to the Change in
Control) and such early retirement was not undertaken with
actual knowledge that a Change in Control was imminent, (ii)
the Employee's employment is terminated by the Company for any
reason other than the reasons set forth in paragraphs 5, 8 or
9 or this Agreement, or (iii) the Employee terminates his
employment pursuant to paragraph 7(b) above, the Employee
shall, effective as of the date of termination, (and subject
to paragraph 7(e) below) be entitled to participate in group
life, hospitalization and medical insurance and shall receive
the other employee benefits and perquisites described in
paragraph 3(c) hereof, for a period of three years following
the date of termination (provided that if the Employee would
be eligible to participate in the Company's retiree health
plan (based on years of service without regard to age) if he
had retired as of the termination date, he shall be entitled
to participate in such retiree health plan upon such
termination), and, no later than thirty (30) calendar days
following such Change in Control, the Company shall pay to the
Employee or his personal representative a severance payment in
an amount equal to the sum of the following:
(i) The Employee's annual base salary through the date of the
termination of employment to the extent not theretofore
paid; plus
(ii) All deferred salary (including "bank" balances in the
Company's incentive compensation plans), profit sharing,
bonuses and other compensation earned by the Employee
(whether vested or unvested or subject to any other
contingencies) during the course of his employment with
the Company prior to the termination of his employment;
plus
(iii) An amount equal to three times the Employee's annual
base salary. For this purpose, the Employee's annual
base salary shall be his annual base salary as in effect
immediately prior to the termination of employment; plus
(iv) An amount equal to three times the Employee's annual
incentive bonus compensation and profit sharing. The
amount of the annual incentive bonus to be applied in
calculating the incentive compensation payment shall be
the average of the annual cash incentive bonuses earned
by the Employee (whether such incentive bonuses were paid
in the year earned or deferred for payment in subsequent
years) under all short and long-term cash incentive bonus
plans maintained by the Company in which the Employee
participated during the Company's latest three
consecutive fiscal years ended prior to the termination
of the Employee's employment. The amount of the annual
profit sharing to be applied in calculating the profit
sharing payment shall be the average of the annual profit
sharing earned by the Employee (whether such profit
sharing was paid in the year earned or deferred for
payment in subsequent years) under the Company's profit
sharing plan in which the Employee participated during
the Company's latest three consecutive fiscal years ended
prior to the termination of the Employee's employment.
If the Employee has been employed by the Company for less
than three complete fiscal years prior to the date of the
termination of his employment, then the amount of the
annual bonus and the annual profit sharing for purposes
of computing these payments shall be based upon the
average of the bonuses earned and the average of the
profit sharing earned by the Employee during such smaller
number of complete fiscal years during which he was
employed by the Company prior to the date of the
termination of his employment. If the Employee has not
been employed for even one complete fiscal year prior to
the date of the termination of his employment, then his
annual bonus and annual profit sharing for purposes of
computing this payment shall be calculated by prorating
the bonus earned and the profit sharing earned by the Em-
ployee for the portion of the Company's most recently
completed fiscal year during which the Employee was
employed, as though the Employee had been employed for
such full fiscal year. Such proration shall be
calculated based upon a 365-day fiscal year.
(e)
If it shall be impossible or impracticable
for the Employee to participate directly in certain programs
or plans specified in subparagraph (c) or (d) above, then the
Company shall provide, at the Company's expense, for the
provision to the Employee of benefits as nearly as possible
identical to, and in no event less beneficial to the Employee
than, those which would be provided to the Employee through
direct participation.
(f)
If it is determined that any payment or
distribution by the Company to or for the benefit of the
Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional
payments required under this paragraph 7) (a "Payment") would
be subject to the excise tax imposed by Section 4999 of the
Code, or if any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are referred to
collectively as the "Excise Tax"), then the Employee shall be
entitled to receive an additional payment (a "Gross-Up
Payment") as necessary so that, on an after-tax basis, the
amount he retains is the same as though no Excise Tax applied.
In particular, the amount of the Gross-Up Payment shall be
calculated so that, after payment by the Employee of all
Excise Taxes on the initial Payment(s) and all income taxes
(and any interest and penalties imposed with respect thereto)
and Excise Taxes imposed on the Gross-Up Payment, the Employee
retains (in addition to the net after-tax amount of the
initial Payment) an amount of the Gross-Up Payment equal to
the Excise Taxes imposed upon the initial Payment(s).
(g)
Subject to the provisions of paragraph
7(h), all determinations required to be made under this
paragraph 7, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination,
shall be made by such certified public accounting firm as may
be designated by the Employee (the "Accounting Firm") which
shall provide detailed supporting calculations both to the
Company and the Employee within 15 business days of the
receipt of notice from the Employee that there has been a
Payment, or such earlier time as is requested by the Company.
All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined
pursuant to this paragraph 7, shall be paid by the Company to
the Employee within five days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines that
no Excise Tax is payable by the Employee, it shall furnish the
Employee with a written opinion that failure to report the
Excise Tax on the Employee's applicable federal income tax
return would not result in the imposition of a negligence or
similar penalty. Any determination by the Accounting Firm
shall be binding upon the Company and the Employee. As a
result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should
have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that
the Company exhausts its remedies pursuant to paragraph 7(h)
and the Employee thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for
the benefit of the Employee.
(h)
The Employee shall notify the Company in
writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the
Employee is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date
on which such claim is requested to be paid. The Employee
shall not pay such claim prior to the expiration of the 30-day
period following the date on which it gives such notice to the
Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Company notifies the Employee in writing prior to the
expiration of such period that it desires to contest such
claim, the Employee shall:
(i) Give the Company any information reasonably requested by
the Company relating to such claim;
(ii) Take such action in connection with contesting such claim
as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting
legal representation with respect to such claim by an
attorney reasonably selected by the Company;
(iii)
Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall
indemnify and hold the Employee harmless, on an after-tax
basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions
of this paragraph 7(h), the Company shall control all
proceedings taken in connection with such contest and, at
its sole option, may pursue or forgo any and all adminis-
trative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and
may, at its sole option, either direct the Employee to
pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Employee agrees
to prosecute such contest to a determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the
Company directs the Employee to pay such claim and xxx
for a refund, the Company shall advance the amount of
such payment to the Employee, on an interest-free basis,
and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and
further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable
year of the Employee with respect to which such contested
amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and
the Employee shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(i)
If, after the receipt by the Employee of an
amount advanced by the Company pursuant to paragraph 7(h), the
Employee becomes entitled to receive any refund with respect
to such claim, the Employee shall (subject to the Company's
complying with the requirements of paragraph 7(h)) promptly
pay to the Company the amount of such refund (together with
any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Employee of an amount
advanced by the Company pursuant to paragraph 7(h), a
determination is made that the Employee shall not be entitled
to any refund with respect to such claim and the Company does
not notify the Employee in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
(j)
In the event that any Payment to Employee
pursuant to this Agreement or otherwise would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (or any comparable successor
provision), the Company shall be entitled to withhold any such
excise tax as required by applicable law, together with any
other amounts required to be withheld under any applicable
federal or state law.
8.
Termination for Cause. Employee agrees that this
Agreement may be terminated by the Company at any time for
cause, which shall mean only conviction based upon the
commission of a felony or becoming the subject of a final
nonappealable judgment of a court of competent jurisdiction
holding that the Employee is liable to the Company for damages
for obtaining a personal benefit in a transaction adverse to
the interests of the Company. The Employee shall not be
deemed to have been terminated for cause unless and until
there shall have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not less
than three-quarters (3/4) of the entire membership of the
Board called and held for such purpose (after reasonable
notice to the Employee and an opportunity for the Employee,
together with his counsel, to be heard before the Board),
finding that the Employee was guilty of conduct constituting
cause for termination as set forth in this paragraph 8 and
specifying the particulars thereof in detail. In the event
this agreement is terminated for cause, the Employee shall
forfeit his right to any and all benefits he would otherwise
have been entitled thereafter to receive under the Agreement,
but shall not forfeit his right to benefits accrued up to and
including the date of termination.
9.
Death of Employee. Upon the death of the
Employee during the Employment Period, the payment of base
compensation as provided in subparagraph 3(a) shall continue
through the last day of the month in which death occurs, and
bonuses for the year in which death occurs shall be prorated
on the basis of the number of months elapsed during the fiscal
year as of such day. The other rights and benefits of the
Employee (or his personal representative) shall be as
determined under the applicable programs and plans of the
Company covering the Employee at death.
10.
Restricted Shares. Upon the occurrence of a
Change of Control of the Company, all restrictions upon
unconditional receipt by Employee of shares of stock or other
securities of the Company granted under any restricted stock
or other compensation plan shall immediately be removed, and
such shares shall vest in and be distributed immediately to
Employee. The Company covenants and agrees to take such steps
(including amendment of any existing plan) to insure that all
such plans shall allow or provide for such vesting and
distribution. This paragraph 10 shall not accelerate or
otherwise affect the vesting of stock options held by the
Employee, vesting of which shall be governed by the terms of
the option plan and/or of any option agreement pursuant to
which such options are granted.
11.
Noncompetition.
(a) Scope of Noncompetition. In the event that the
employment of the Employee is terminated pursuant to paragraph
7 prior to the expiration of the Employment Period such that
the Employee receives the payments and benefits referred to in
paragraph 7(c) or 7(d), the Employee agrees that he will not,
for the Noncompetition Period (as hereinafter defined):
(i) Render services, directly or indirectly, to any
"Competitor" (other than the acquisition of an equity
interest in a corporation or other entity registered
under the Securities Exchange Act of 1934, as amended,
not requiring the filing of a Schedule 13D or Schedule
13G or any successor schedules or forms) in connection
with the development, manufacture, distribution, sale,
merchandising or promotion of any "Competitive Product"
or "Competitive Service." "Competitor" means any
corporation, person, firm or organization or division or
part thereof engaged in or about to become engaged in
research and development work on or the production and/or
sale of any Competitive Product or Competitive Service in
any country in which the Company or any of its affiliates
sold a product or service to a customer within the two-
year period ending on the effective date of the
termination of Employee's employment with the Company.
"Competitive Product" or "Competitive Service" means a
product or service, as the case may be, made, offered,
sold or provided by a Competitor, which is the same as,
functionally equivalent to, or otherwise directly
competitive with one made, offered, sold or provided by
the business units of the Company over which the Employee
had a material supervisory or management role.
(ii) Engage either directly or indirectly, in any country in
which the Company or any of its affiliates sold a product
or service to a customer within the two-year period
ending on the effective date of the termination of
Employee's employment with the Company for himself or as
an investor in the development, manufacture, purchase or
sale of any Competitive Product or Competitive Service.
(b) Noncompetition Period. For purposes of this
paragraph 11, the term "Noncompetition Period" means the
period beginning on the effective date of the termination of
Employee's employment with the Company and continuing for (i)
the unexpired term of the Employment Period in the case of a
severance payment made pursuant to paragraph 7(c), or (ii)
three years in the case of a severance payment made pursuant
to paragraph 7(d).
(c) Survival. The noncompetition covenant in this
paragraph 11 shall survive the termination of the Employee's
employment.
(d) Notification to the Company. If the Employee
notifies the Company of the occupation the Employee proposes
to take up after termination of employment with the Company
and furnishes the Company such written or oral information as
it may reasonably request concerning such proposed occupation,
the Company agrees to notify the Employee promptly, and in any
event, within fourteen (14) business days after receipt of the
requested information, whether or not the Company considers
such occupation, based on the information so furnished or
derived from its independent investigation, to come within the
provisions of this Section and, if the Company considers such
occupation to come within the provisions of this Section,
whether the Company will waive any of the provisions thereof.
(e) Remedies. In addition to other remedies
provided by law or equity, upon a breach by the Employee of
any of the covenants contained in this paragraph 11, the
Company shall be entitled to have a court of competent
jurisdiction enter an injunction against the Employee
prohibiting any further breach of the covenants contained
herein. The parties further agree that the services to be
performed hereunder are of a unique, special, and
extraordinary character. Therefore, in the event of any
controversy concerning the rights or obligations under this
Agreement, such rights or obligations shall be enforceable in
a court of competent jurisdiction at law or equity by a decree
of specific performance or, if the Company elects, by
obtaining damages or such other relief as the Company may
elect to pursue. Such remedies, however, shall be cumulative
and nonexclusive and shall be in addition to any other
remedies which the Company may have.
12.
Enforceability. The parties agree that nothing
in this Agreement shall in any way abrogate the right of the
Company and the Employee to enforce by injunction or otherwise
the due and proper performance and observance of the several
covenants herein contained to be performed by the Employee or
the Company or to recover damages for breach thereof
13.
Successors and Assigns. If the Company sells,
assigns or transfers all or substantially all of its business,
assets or earning power to any person, or if the Company
merges into or consolidates or otherwise combines with any
person which is the continuing or successor entity, then the
Company shall assign all of its right, title and interest in
this Agreement as of the date of such event to the person
which is either the acquiring or successor corporation, and
such person(s) shall assume and perform from and after the
date of such assignment all of the terms, conditions and
provisions imposed by this Agreement upon the Company. In
case of such assignment by the Company and of assumption and
agreement by such person(s), all further rights as well as all
other obligations of the Company under this Agreement
thenceforth shall cease and terminate. All rights of Employee
hereunder shall inure to the benefit of the Employee and his
heirs and personal representatives. Other than as
specifically provided in this paragraph 13, neither the
Company nor Employee may assign any rights or obligations
hereunder without the express written consent of the other
party.
14.
Termination Prior to Change of Control. Except
as described herein in the event of a Change in Control, this
Agreement is not intended to vest in Employee any right to
continued employment by Company. Absent such a Change in
Control and unless specifically established otherwise by
agreement between the Company and Employee, Employee's
employment status with the Company is one of employment at-
will.
15.
Supplemental Agreement. This Agreement
supercedes any previously existing Contingent Employment
Agreement of like nature between the Company and the Employee;
however, this Agreement supplements, and is not an amendment
to or in derogation of, any other agreement between the
Company and the Employee relating to employment or the terms
and conditions thereof. No person, other than such person as
may be designated by the Board of Directors of the Company,
shall have any authority on behalf of the Company to agree to
modify or change this Agreement. Notwithstanding the
foregoing, this Agreement supercedes and replaces any
contingent employment agreement entered into between the
Employee and the Company prior to the date of this Agreement
which addresses terms of employment, compensation and
severance benefits that would become available to the Employee
in the event of a change of control of the Company, as that
term may be defined in such other contingent employment
agreement. Accordingly, any such other contingent employment
agreements shall be deemed terminated and of no further force
or effect.
16.
Governing Law, Severability. This Agreement is
to be governed by and construed under the internal laws of the
State of Wisconsin. If any provision of this Agreement shall
be held invalid and unenforceable for any reason, such
provision shall be deemed deleted and the remainder of the
Agreement shall be valid and enforceable without such
provision.
IN WITNESS WHEREOF, the Company has caused this Agreement
to be executed and its corporate seal affixed and attested by
its duly authorized officer, and the Employee has hereunto set
his hand and seal as of the date first above written.
THE MANITOWOC COMPANY, INC.
By:________________________________
(Corporate Seal) Xxxxx X. Xxxxxxxx,
President and Chief Executive
Officer
EMPLOYEE:
_______________________________(Seal)
