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 _____ [ONE TO 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 30-
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 45 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 of
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)
If during the Employment 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(b) below.
(b)
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 in paragraphs
5, 6, 8 or 9 of this Agreement, or (2) by the Employee
pursuant to paragraph 7(a) 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.
(c)
If it shall be impossible or impracticable for
the Employee to participate directly in certain programs or
plans specified in subparagraph (b) 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.
(d)
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.
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
12.
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 12, neither the
Company nor Employee may assign any rights or obligations
hereunder without the express written consent of the other
party.
13.
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.
14.
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.
15.
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)
