Document:

Exhibit
4.3

 

GMH COMMUNITIES TRUST

 

EQUITY INCENTIVE PLAN

 

RESTRICTED
COMMON SHARES AWARD AGREEMENT

 

This RESTRICTED COMMON SHARES AWARD, dated as
of                ,
200   (the “Grant Date”), is delivered by GMH Communities Trust, a
Maryland real estate investment trust (the “Company”), to                                      
(the “Participant”).

 

RECITALS

 

A.                                   The
GMH Communities Trust Equity Incentive Plan (the “Plan”) provides for the award
of restricted common shares of beneficial ownership, par value $0.001 per
share, of the Company (“Common Shares”). 
In connection with the Participant’s                            ,
the Compensation Committee of the Board (the “Committee”) has approved an award
of restricted Common Shares to the Participant under the Plan as an inducement
for the Participant to promote the best interests of the Company, its owners,
and its Affiliates (as defined in the Plan) and Subsidiaries (as defined in the
Plan).  A copy of the Plan is attached.

 

B.                                     The
Committee administers the Plan.

 

NOW, THEREFORE, the parties to this
Agreement, intending to be legally bound, hereby agree as follows:

 

1.                                       Restricted
Common Share Award.  Subject to the
terms, conditions and limitations set forth in this Agreement and the Plan, the
Company hereby grants to the Participant                
Common Shares, subject to the restrictions set forth below and in
the Plan (the “Restricted Common Shares”).

 

2.                                       Vesting
and Nonassignability of Restricted Common Shares.

 

(a)                                  Subject
to the acceleration provisions described in subparagraph (b) below and the
limitations described in subparagraph (c) below, the Restricted Common Shares
shall become vested and the restrictions described in subparagraphs (d) and (e)
below shall lapse according to the following vesting schedule, if the
Participant has not incurred a Termination of Employment (as defined in the
Plan) with the Company or any Subsidiary (collectively, the “Employer”) from
the Grant Date until the applicable vesting date:

 

 

	
  Vesting Date

  	
   

  	
  Vested Common Shares

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

The vesting of the Restricted Common Shares shall be cumulative, but
shall not exceed 100% of the Common Shares. 
If the foregoing schedule would produce fractional Common Shares,
the number of Common Shares that vest shall be rounded down to the nearest
whole Common Share, provided that the number of Common Shares that shall vest
as in the final installment shall be adjusted so that the total number of
Common Shares vesting hereunder shall equal 100% of the Restricted Common
Shares.

 

(b)                                 Provided
that the requirements described in subparagraph (d) below have been met, the
Restricted Common Shares shall become 100% vested upon the occurrence of any of
the following: (i) a Change of Control (as defined in the Plan) prior to the
date the Participant has a Termination of Employment, (ii) the Participant has
a Termination of Employment by the Employer without Cause (as defined in the
Plan), (iii) the Participant has a Termination of Employment for Good Reason
(as defined in the Plan), (iv) the Participant has a Termination of Employment
on account of his death, or (v) the Participant has a Termination of Employment
on account of becoming Permanently Disabled (as defined in the Plan).

 

(c)                                  Except
as provided in subparagraph (b) above, if the Participant incurs a Termination
of Employment with the Employer for any reason before the Restricted Common
Shares are fully vested, the Common Shares that are not then vested shall be
forfeited and must be immediately returned to the Company.

 

(d)                                 During
the period before the Restricted Common Shares vest (the “Restriction Period”),
the non-vested Restricted Common Shares may not be assigned, transferred,
pledged or otherwise disposed of by the Participant.  Any attempt to assign, transfer, pledge or
otherwise dispose of the Common Shares contrary to the provisions hereof, and
the levy of any execution, attachment or similar process upon the Common
Shares, shall be null, void and without effect; provided, however, that if the
Participant makes such an attempt, the Company may, subject to the terms of the
Plan, terminate this grant by notice to the Participant.

 

3.                                       Issuance
of Certificates.

 

(a)                                  Common
Share certificates representing the Restricted Common Shares may be issued by
the Company and held in escrow by the Company until the Restricted Common
Shares vest, or the Company may hold non-certificated Common Shares until the
Restricted Common Shares vest.

 

(b)                                 When
the Participant obtains a vested right to Restricted Common Shares, a
certificate representing the vested Common Shares shall be issued to the
Participant, free of the restrictions under Paragraph 2 of this Agreement, but
still subject to any restrictions or limitations set forth in the Plan or under
applicable law or regulations.

 

(c)                                  The
obligation of the Company to deliver Common Shares upon the vesting of the
Restricted Common Shares shall be subject to all applicable laws, rules and
regulations and such

 

 

approvals by governmental agencies as may be deemed appropriate to
comply with relevant securities laws and regulations.

 

4.                                       Changes
in Common Shares or Assets of the Company, Acquisition or Liquidation of the
Company and other Corporate Events. 
The provisions of Section 12.3 of the Plan applicable to changes in
Common Shares or assets of the Company, the acquisition or liquidation of the
Company or other corporate events, shall apply to this grant, and, in the event
of an occurrence described in Section 12.3 of the Plan, the Committee may
take such actions as it deems appropriate pursuant to the Plan.

 

5.                                       Escrow
Agent.  The Participant acknowledges
that the Company may appoint an escrow holder to retain physical custody of
each certificate or other indicia of ownership of the Restricted Common Shares
until these are vested and restrictions have lapsed.

 

6.                                       Grant
Subject to Plan Provisions.  This
grant is made pursuant to the Plan, the terms of which are incorporated herein
by reference, and in all respects shall be interpreted in accordance with the
Plan.  The grant is subject to
interpretations, regulations and determinations concerning the Plan established
from time to time by the Committee in accordance with the provisions of the
Plan, including, but not limited to, provisions pertaining to (i) rights and
obligations with respect to withholding taxes, (ii) the registration,
qualification or listing of the Common Shares, (iii) changes in capitalization
of the Company, and (iv) other requirements of applicable law.  The Committee shall have the authority to interpret
and construe the grant pursuant to the terms of the Plan, and its decisions
shall be conclusive as to any questions arising hereunder.

 

7.                                       Withholding.  The Participant shall be required to pay to
the Company, or make other arrangements satisfactory to the Company to provide
for the payment of, any federal, state, local or other taxes that the Company
is required to withhold with respect to the grant or vesting of the Restricted
Common Shares.  Subject to Committee
approval, the Participant may elect to satisfy any tax withholding obligation
of the Company with respect to the Restricted Common Shares by having Common
Shares withheld up to an amount that does not exceed the minimum applicable
withholding tax rate for federal (including FICA), state, local and other tax
liabilities.

 

8.                                       No
Employment or Other Rights.  This
grant shall not confer upon the Participant any right to be retained by or in
the employ or service of the Company and shall not interfere in any way with
the right of the Company to terminate the Participant’s employment or service
at any time.  Subject to the terms of any
Employment Agreement entered into by the Participant and the Company, the right
of the Company to terminate at will the Participant’s employment or service at
any time for any reason is specifically reserved.

 

9.                                       Owner
Rights. The Participant shall have all of the rights and privileges of an
owner of the Company with respect to the Restricted Common Shares, except that
the Participant shall not have the right to sell or transfer such shares of
Restricted Common Shares until such time as the Restriction Period lapses. With
respect to the right to receive dividends and distributions, during the
Restriction Period, the Participant shall receive any dividends and other
distributions paid or made with respect to the Common Shares.  In the event of a
dividend or distribution payable in Common Shares or other property (other than
cash) or a reclassification, split up or similar event during the Restriction
Period, the Common Shares or other property (other than cash) issued or

 

 

declared with respect to the non-vested Restricted Common Shares shall
be subject to the same terms and conditions relating to vesting as the Common
Shares to which they relate.  Any dividends or distributions
payable in cash with respect to the Common Shares shall be paid directly to the
Participant and shall not be subject to any restrictions, regardless of whether
the underlying Common Shares have vested.

 

10.                                 Section 83(b)
Election.  The Participant agrees
that he shall give notice to the Company, in writing, as to whether he has made
an election pursuant to section 83(b) of the Internal Revenue Code of
1986, as amended, with respect to this grant, within twenty (20) days of making
such an election.  The Participant
acknowledges that he shall be solely responsible for any and all tax
liabilities incurred by him in connection with his receipt of the Restricted
Common Shares or that are attributable to his making of failing to make such an
election.

 

11.                                 Assignment
by Company.  The rights and
protections of the Company hereunder shall extend to any successors or assigns
of the Company and to the Company’s parents, Subsidiaries, and Affiliates.  This Agreement may be assigned by the Company
without the Participant’s consent.

 

12.                                 Applicable
Law.  The validity, construction,
interpretation and effect of this instrument shall be governed by and construed
in accordance with the laws of the State of Maryland without giving effect to
the conflicts of laws provisions thereof.

 

13.                                 Notice.  Any notice to the Company provided for in
this instrument shall be addressed to the Company in care of the Compensation
Committee of the Board of Trustees at the Company’s headquarters, and any
notice to the Participant shall be addressed to such Participant at the current
address shown on the payroll of the Company, or to such other address as the
Participant may designate to the Company in writing.  Any notice shall be delivered by hand, sent
by telecopy or enclosed in a properly sealed envelope addressed as stated
above, registered and deposited, postage prepaid, in a post office regularly
maintained by the United States Postal Service.

 

14.                                 No
Personal Liability.  The Participant
agrees that no member of the Committee or executive of the Company shall be
personally liable for any actions taken or not taken in good faith in
connection with the Plan.

 

IN WITNESS WHEREOF, the Company has caused
its duly authorized officers to execute and attest this instrument, and the
Participant has placed his or her signature hereon, effective as of the Grant
Date.

 

	
  Attest:

  	
  GMH COMMUNITIES TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
				

 

 

I hereby accept the grant of Restricted Common Shares described in this
Agreement, and I agree to be bound by the terms of the Plan and this
Agreement.  I hereby further agree that
all of the decisions and determinations of the Committee shall be final and
binding.

 

 

	
   

  	
   

  
	
   

  	
  Participant

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DateExhibit
10.1

 

SHORT-TERM
INCENTIVE PLAN

 

Effective
January 1, 2005

 

 

ARTICLE I

 

Statement
of Purpose

 

1.1           The
purpose of the Plan is to provide a system of incentive compensation which will
promote the maximization of shareholder value over the long term.  In order to align eligible salaried employees’
incentives with shareholder interests, incentive compensation will reward the
creation of value.  The Plan will tie
incentive compensation to Economic Value Added (“EVA®”) and, thereby, reward employees
for creating value.  Effective for the
fiscal year commencing January 1, 2005, this Plan replaces the Management
Incentive Compensation Plan (Economic Value Added (EVA®) Bonus Plan), created
effective July 4, 1993, as amended (the “Prior Plan”), subject to the Bonus
Bank transition rules set forth in Article IV.

 

1.2           EVA is the performance measure of value creation.  EVA reflects the benefits and costs of
capital employment.  Employees create
value when they employ capital in an endeavor that generates a return that
exceeds the cost of the capital employed. 
Employees destroy value when they employ capital in an endeavor that
generates a return that is less than the cost of capital employed.  By imputing the cost of capital upon the
operating profits generated by a business group, EVA measures the total value
created by employees.

 

EVA = (Net Operating Profit After Tax - Capital
Charge)

 

1.3           Each
Plan Participant is placed in a classification. 
Each classification has a prescribed target annual incentive award (bonus)
opportunity (expressed as a percentage of base salary).  A Participant’s target award opportunity, in
any one year, is the result of multiplying their Target Bonus Percentage times
the Participant’s base pay.  A
Participant’s incentive award earned in any one year is the result of multiplying
the Actual Bonus Percentage times the Participant’s base pay.  Incentive awards earned can range from 20% to
250% of the target award opportunity. 
Earned awards will be fully paid out after the end of the year, subject
to the three-year transition period for negative Bank Balances outstanding
after the payment of the fiscal 2004 incentive awards under the Prior Plan (see
Section 4.2).

 

1

 

ARTICLE
II

 

Definition
of EVA and the Components of EVA

 

Unless the context
provides a different meaning, the following terms shall have the following
meanings.

 

2.1           “Participating
Group” means a business division or group of business divisions which are
uniquely identified for the purpose of calculating EVA and EVA based bonus
awards.  Some Participants’ awards may be
a mixture of more than one Participating Group.

 

For the purpose of this
plan, the Participating Groups are listed on Exhibit B.

 

2.2.          “Capital”
means the net investment employed in the operations of each Participating
Group.  The components of Capital are as
follows:

 

	
   

  	
  Gross Accounts
  Receivable (including trade A/R from another Manitowoc unit – See Notes 2 and
  3)

  
	
  Plus:

  	
  FIFO Inventory (See
  Note 3)

  
	
  Plus:

  	
  Other Current Assets

  
	
  Less:

  	
  Non-Interest Bearing
  Current Liabilities (NIBCL’s - See Note 1)

  
	
  Plus:

  	
  Net PP&E

  
	
  Plus:

  	
  Other Operating Assets

  
	
  Plus:

  	
  Capitalized Research
  & Development

  
	
  Plus:

  	
  Goodwill acquired after
  July 3, 1993

  
	
  Plus:

  	
  Accumulated
  Amortization on Goodwill acquired after July 3, 1993

  
	
  Plus (Less): Special
  Items

  
	
  Equals:

  	
  Capital

  

 

	
  Notes:

  	
  (1) NIBCL’s include
  trade A/P to another Manitowoc unit (see Note 2), but do not include the
  contingent liability associated with Bonus Banks and include liabilities
  associated with receivable factoring programs as well as capital lease
  obligations.

  
	
   

  	
   

  
	
   

  	
  (2) Intercompany trade
  payables and receivables will be excluded from EVA capital if outstanding
  longer than the approved payment date per intercompany payment terms.

  
	
   

  	
   

  
	
   

  	
  (3) Accounts receivable
  reserve balances recorded at acquisition date will be treated as reductions
  to EVA capital and changes excluded from NOPAT up to the balance in the
  acquisition reserve for a 12-month period subsequent to the acquisition date.
  Inventory reserve balances recorded at acquisition date will be treated the
  same as accounts receivable above except for spare parts inventory which will
  be excluded from Capital and NOPAT over a three-year period at a rate of 1/3
  less each year.

  

 

2.3           Each
component of Capital will be measured by computing an average balance based on
the ending monthly balance for the twelve months of the Fiscal Year.

 

2.4           “Cost
of Capital” or “C*” means the weighted average of the after tax cost
of debt and equity for the year in question. 
The Cost of Capital will be reviewed annually and revised if it has
changed significantly.  Calculations will
be carried to one decimal point.  The
Cost of Capital for fiscal 2004 is 7.5%. 
In subsequent Plan years the methodology for the calculation of the Cost
of Capital will be (formula is presented in Exhibit A):

 

2

 

a)   Cost of Equity = Risk Free Rate + (Beta x
Market Risk Premium)

 

b)   Debt Cost of Capital = Debt Yield x (1 - Tax
Rate)

 

c)   The weighted average of the Cost of Equity
and the Debt Cost of Capital is determined by reference to a fixed debt to
capital ratio of 40%.  The Risk Free Rate
is the average daily closing yield rate on 30 year U.S. Government Bonds for
the month of December immediately preceding the Plan Year, the BETA is one, and
the Market Risk Premium is 5%.  The Debt
Yield is the projected weighted average yield on the Company’s long term
obligations for the 12 month period ending December 31 of the Plan Year, and
the tax rate is 39%. (The actual annual effective tax rate for the corporation
(from continuing operations) will be used to calculate NOPAT for select
management participants.

 

The debt to capital
ratio, BETA, and Market Risk Premium assumptions should be reviewed and updated
if necessary at least every three years.

 

d)  Short-term debt is to be treated as long-term
for purposes of computing the cost of capital.

 

2.5           “Capital
Charge” means the deemed opportunity cost of employing Capital in the
business of each Participating Group. 
The Capital Charge is computed as follows:

 

Capital Charge = Capital
x Cost of Capital (C*)

 

2.6           “Net
Operating Profit After Tax” or “NOPAT”

 

“NOPAT” means the after
tax cash earnings attributable to the capital employed in the Participating
Group for the year in question.  The
components of NOPAT are as follows:

 

Operating
Earnings

	
  Plus:

  	
  Increase (Decrease) in
  Capitalized R & D (See Note 1)

  
	
  Plus:

  	
  Increase (Decrease) in
  Bad Debt Reserve

  
	
  Plus:

  	
  Increase (Decrease) in
  Inventory Reserves

  
	
  Plus:

  	
  Amortization of
  Goodwill (resulting from annual US GAAP impairment analyses)

  
	
  Less:

  	
  Other Expense
  (Excluding interest on debt and including interest on factored receivables)

  
	
  Plus:

  	
  Other Income (Excluding
  investment income)

  
	
  Equals:

  	
  Net Operating Profit
  Before Tax

  
	
  Less:

  	
  Taxes (See Note 2)

  
	
  Equals:

  	
  Net Operating Profit
  After Tax

  

 

(1)   R
& D is Capitalized, and amortized over a five-year period.  It is defined as per the U.S. Federal R&D
Tax Credit Regulation.

 

(2)   Taxes
are assumed to be 39% of Net Operating Profit Before Tax.  (For exceptions see 2.4(c)).

 

2.7           “Economic
Value Added” or “EVA” means the NOPAT that remains after subtracting
the Capital Charge, expressed as follows:

 

	
   

  	
  NOPAT

  
	
  Less:

  	
  Capital Charge

  
	
  Equals:

  	
  EVA (which may be
  positive or negative)

  

 

3

 

ARTICLE
III

 

Definition
and Computation of Target Bonus Award

 

 

3.1           “Actual
EVA” means the EVA as calculated for each Participating Group for the year in
question.

 

3.2           “Target
EVA” for the year in question means the level of EVA that is expected in order
for the Participating Group to receive the Target Bonus Award.

 

Target EVA = Last Year’s
Actual EVA+ Expected Improvement in EVA

 

3.3           “Expected
Improvement in EVA” means the constant EVA improvement that is added to shift
the target up each year.  This is
determined by the expected growth in EVA per year.  The Expected Improvement factors will be
evaluated and recalibrated by the Committee, as appropriate, no less than every
three years.  See Exhibit C for the
Expected Improvement for each Participating Group.

 

3.4           “Target
Bonus Award” for the year in question means the “Target Bonus Percentage” times
a Participant’s base pay.

 

3.5           “Target
Bonus Percentage” is determined by a Participant’s classification as shown on
Exhibit B.

 

3.6           “Actual
Bonus Award” for the year in question means the bonus earned by a Participant
and is computed as the Actual Bonus Percentage times a Participant’s base pay
for the year in question.

 

3.7           “Actual
Bonus Percentage” is determined by multiplying the Target Bonus Percentage by
the Bonus Performance Value.

 

3.8           “Bonus
Performance Value” means the Actual EVA minus the Target EVA, divided by the
Leverage Factor, plus 1.0 [((Actual EVA – Target EVA)/Leverage factor) + 1.0]; provided,
however, that (a) if the calculation of the Bonus Performance Value is less
than 0.20, the Bonus Performance Value shall be deemed to be zero (0), and (b)
if the calculation of the Bonus Performance Value exceeds 2.5, the Bonus
Performance Value shall be deemed to be 2.5.

 

3.9           “Leverage
Factor” is the negative (positive) deviation from Target EVA necessary before a
zero (two times Target) bonus is earned. 
The Leverage factors will be evaluated and recalibrated, as appropriate,
no less than every three years.  See
Exhibit C for the Leverage Factor of each Participating Group.

 

3.10         “Adjustment
Guidelines” are guidelines the Compensation Committee of the Board of Directors
(Committee) will consider in determining the potential treatment of any material,
non-recurring or unusual items (see Exhibit D).

 

3.11         A
Participant’s classification is determined by the Committee for officers of The
Manitowoc Company, Inc., and by the Senior VP of HR & Administration for
all new participants below the level of corporate officer.

 

4

 

ARTICLE
IV

 

Payment
of Actual Bonus Awards; Bonus Bank Transition

 

4.1           Beginning
with the fiscal 2005 Plan year, Actual Bonus Awards earned will be fully paid
out after the end of the year at such time as the Committee determines, subject
to the three-year transition period for negative Bank Balances outstanding
after the payment of the fiscal 2004 incentive awards made under the Prior Plan.

 

4.2           For
Bank Balances outstanding after the fiscal 2004 awards made under the Prior
Plan, the following will apply:

 

•      Positive Bank Balances:
one-third of the Bank Balance will be paid out each year in cash (paid at the
same time the fiscal 2005 to 2007 incentive awards are paid).

•      Negative Bank Balances:
50% of the amount (if any) by which the Actual Bonus Award earned (if any)
exceeds the Target Bonus Award in each of fiscal 2005, 2006 and 2007, is used
to pay down the negative Bank Balance. 
After three years (fiscal 2005 to 2007 incentive awards), any remaining
negative Bank Balances will be forgiven.

 

4.3           Although
a Bonus Bank may, as a result of negative EVA for fiscal years prior to 2005,
have a negative Bank Balance, no Plan Participant shall be required, at any
time, to reimburse his/her Bonus Bank, except pursuant to the Section 4.2
above.

 

4.4           “Bonus
Bank” means, with respect to each Participant, a bookkeeping record of an
account to which amounts are added to, or deducted from, as the case may be,
from time to time under the Prior Plan (and subject to the transition rules of
this Plan), and from which bonus payments to such Participant are paid out
under the Prior Plan (and subject to the transition rules of this Plan).  Subsequent to the 2007 Plan Year, Bank Balances
will no longer exist.

 

4.5           “Bank
Balance” means, with respect to each Participant, a bookkeeping record of the
net balance of the amounts earned and paid out of such Participant’s Bonus Bank
under the Prior Plan (and subject to the transition rules of this Plan).

 

ARTICLE V

 

Plan Participation,
Transfers and Terminations

 

5.1           Participants.
Except as otherwise provided (primarily in Section 8.1) the Administrator will
determine who shall participate in the Plan (“Participant(s)”).  Employees designated for Plan participation
shall be salaried employees of The Manitowoc Company, Inc. or its affiliates
(the “Company”).  In order for a
Participant to receive or be credited with their Actual Bonus Award for a Plan
Year, the Participant must have (I) remained employed by the Company through
the last day of such Plan Year, (ii) terminated employment with the Company for
any reason during the Plan Year at or after the earlier of attainment of age
sixty, or the first of the month following the date on which the participant’s
attained age plus years of service with the Company equal 80, (iii) suffered a
disability within the meaning of Section 5.3 during the Plan Year, or (iv) died
during the Plan Year.  In all other cases
of termination of employment prior to the last day of the Plan year, a Participant
shall not be entitled to any Actual Bonus Award for such Plan year.

 

5.2           Transfers.  A Participant who transfers his/her
employment from one Participating Unit of the Company to another shall retain his/her
Bonus Bank (subject to the transition rules of Article IV) and will be eligible
to receive future Plan Awards in accordance with the provisions of the
Plan.  If a

 

5

 

Participant transfers to
a non-participating position, any positive Bonus Bank Balance will be paid out
in full as soon as is practical.

 

5.3           Retirement
or Disability.  A Participant who
terminates employment with the Company, at the earlier of attainment of age
sixty, or the first of the month following the date on which the Participant’s
attained age plus years of service with the Company equals 80 for retirement,
or suffers a “disability,” as such term is defined in the Company’s long-term
disability benefits program, while in the Company’s employ shall be eligible to
receive the balance of the Participant’s Bonus Bank.  In the case of retirement, the Participant
will receive any positive Bank Balance in the year immediately following the
Participant’s retirement.  In the case of
disability, while in the Company’s employ, the Participant will receive the
Participant’s positive Bank Balance as soon as practical after qualifying for
benefit payments under the Company’s long-term disability benefits program.

 

5.4           Involuntary
Termination Without Cause or Death. 
A Participant who is terminated without cause or who dies shall receive
any positive Bonus Bank Balance.  Such
payments will be made as soon as is practical.

 

5.5           Voluntary
Termination.  In the event that a
Participant voluntarily terminates employment with the Company, the right of
the Participant to the Participant’s Bonus Bank shall be forfeited unless a
different determination is made by the Committee.

 

5.6           Involuntary
Termination for Cause.  In the event
of termination of employment for cause, the right of the Participant to the
Bonus Bank shall be determined by the Committee.

 

“Cause” shall mean:

 

(i)        any
act or acts of the Participant constituting a felony under the laws of the
United States, any state thereof or any foreign jurisdiction;

(ii)       any
material breach by the Participant of any employment agreement with the Company
or the policies of the Company or the willful and persistent (after written
notice to the Participant) failure or refusal of the Participant to comply with
any lawful directives of the Board;

(iii)      a
course of conduct amounting to gross neglect, willful misconduct or dishonesty;
or

(iv)      any
misappropriation of material property of the Company by the Participant or any
misappropriation of a corporate or business opportunity of the Company by the
Participant.

 

5.7           Breach
of Agreement.  Notwithstanding any
other provision of the Plan or any other agreement, in the event that a
Participant shall breach any non-competition agreement with the Company or
breach any agreement with respect to the post-employment conduct of such
Participant, the Bonus Bank held by such Participant shall be forfeited.

 

5.8           No
Guarantee.  Participation in the Plan
provides no guarantee that a payment under the Plan will be made.  Selection as a Participant is no guarantee
that payments under the Plan will be made or that selection as a Participant
will be made in any subsequent calendar year.

 

ARTICLE
VI

 

General
Provisions

 

6.1           Withholding
of Taxes.  The Company shall have the
right to withhold the amount of taxes, which in the determination of the
Company, are required to be withheld under law with respect to any amount due
or paid under the Plan.

 

6

 

6.2           Expenses.  All expenses and costs in connection with the
adoption and administration of the Plan shall be borne by the Company.

 

6.3           No
prior Right or Offer.  Except and
until expressly granted pursuant to the Plan, nothing in the Plan shall be
deemed to give any employee any contractual or other right to participate in
the benefits of the Plan.

 

6.4           Claims
for Benefits.  In
the event a Participant (a “claimant”) desires to make a claim with respect to
any of the benefits provided hereunder, the claimant shall submit evidence
satisfactory to the Committee of facts establishing their entitlement to a
payment under the Plan.  Any claim with
respect to any of the benefits provided under the Plan shall be made in writing
within ninety (90) days of the event which the claimant asserts entitles him to
benefits. Failure by the claimant to submit a claim within such ninety (90) day
period shall bar the claimant from any claim for benefits under the Plan.

 

6.5           Denial
and Appeal of Claims.  In the event
that a claim which is made by a claimant is wholly or partially denied, the
claimant will receive from the Committee a written explanation of the reason
for denial and the claimant or the claimant’s duly authorized representative
may appeal the denial of the claim to the Committee at any time within ninety
(90) days after the receipt by the claimant of written notice from the
Committee of the denial of the claim.  In
connection therewith, the claimant or the claimant’s duly authorized
representative may request a review of the denied claim; may review pertinent
documents; and may submit issues and comments in writing.  Upon receipt of an appeal, the Committee
shall make a decision with respect to the appeal and, not later than sixty (60)
days after receipt of a request for review, shall furnish the claimant with a decision
on review in writing, including the specific reasons for the decision written
in a manner calculated to be understood by the claimant, as well as specific
reference to the pertinent provisions of the Plan upon which the decision is
based.  In reaching its decision, the
Committee shall have complete discretionary authority to determine all
questions arising in the interpretation and administration of the Plan, and to
construe the terms of the Plan, including any doubtful or disputed terms and
the eligibility of a Participant for benefits.

 

6.6           Action
Taken in Good Faith; Indemnification. 
The Committee may employ attorneys, consultants, accountants or other
persons and the Company’s directors and officers shall be entitled to rely upon
the advice, opinions or valuations of any such persons.  All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all employees who have received awards, the Company and all other
interested parties.  No member of the
Committee, nor any officer, director, employee or representative of the
Company, or any of its affiliates acting on behalf of or in conjunction with
the Committee, shall be personally liable for any action, determination, or
interpretation, whether of commission or omission, taken or made with respect
to the Plan, except in circumstances involving actual bad faith or willful
misconduct.  In addition to such other
rights of indemnification as they may have as members of the Board, as members
of the Committee or as officers or employees of the Company, all members of the
Committee and any officer, employee or representative of the Company or any of
its subsidiaries acting on their behalf shall be fully indemnified and
protected by the Company with respect to any such action, determination or
interpretation against the reasonable expenses, including attorneys’ fees
actually and necessarily incurred, in connection with the defense of any civil
or criminal action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or an award
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
Company ) or paid by them in satisfaction of a judgment in any action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such person claiming indemnification shall
in writing offer the Company the opportunity, at its own expense, to handle and
defend the same.  Expenses (including
attorneys’ fees) incurred in defending a civil or criminal action, suit or

 

7

 

proceeding shall be paid
by the Company in advance of the final disposition of such action, suit or
proceeding if such person claiming indemnification is entitled to be
indemnified as provided in this Section.

 

6.7           Rights
Personal to Participant.  Any rights
provided to a Participant under the Plan shall be personal to such Participant,
shall not be transferable (except by will or pursuant to the laws of descent or
distribution), and shall be exercisable, during the Participant’s lifetime,
only by such Participant.

 

6.8           Bank
Balance Distribution if Plan Terminates or is Suspended.  Upon termination of the Plan or suspension
for a period of more than 90 days, the Bank Balance (if any) of each
Participant shall be distributed as soon as practicable but in no event later
than 90 days from such event.  The
Committee, in its sole discretion, may accelerate distribution of the Bank
Balance, in whole or in part, at any time without penalty.

 

6.9           Non-Allocation
of Award.  In the event of a
suspension of the Plan in any Plan Year, as provided herein in Section 6.8, the
current Bonus for the subject Plan year shall be deemed forfeited and no
portion thereof shall be allocated to Participants.  Any such forfeiture shall not affect the
calculation of EVA in any subsequent year.

 

ARTICLE
VII

 

Limitations

 

7.1           No
Continued Employment.  Nothing
contained herein shall provide any Participant or employee with any right to
continued employment or in any way abridge the rights of the Company to
determine the terms and conditions of employment and whether to terminate
employment of any employee.

 

7.2           No
Vested Rights.  Except as otherwise
provided herein, no Participant or employee or other person shall have any
claim of right (legal, equitable, or otherwise) to any award, allocation, or
distribution or any right, title, or vested interest in any amounts in such
person’s Bonus Bank and no officer or employee of the Company or any other
person shall have any authority to make representations or agreements to the
contrary.  No interest conferred herein
to a Participant shall be assignable or subject to claim by a Participant’s
creditors.  The right of the Participant
to receive a distribution hereunder shall be an unsecured claim against the
general assets of the Company and the Participant shall have no rights in or
against any specific assets of the Company as the result of participation
hereunder.

 

7.3           Not
Part of Other Benefits.  The benefits
provided in this Plan shall not be deemed a part of any other benefit provided
by the Company to its employees.  The
Company assumes no obligation to Plan Participants except as specified
herein.  This is a complete statement,
along with the Schedules and Appendices attached hereto, of the terms and
conditions of the plan.

 

7.4           Other
Plans.  Nothing contained herein
shall limit the Company or the Committee’s power to grant bonuses to employees
of the Company, whether or not Participants in this Plan.

 

7.5           Limitations.  Neither the establishment of the Plan or the
grant of an award hereunder shall be deemed to constitute an express or implied
contract of employment for any period of time or in any way abridge the rights
of the Company to determine the terms and conditions of employment or to
terminate the employment of any employee with or without cause at any time.

 

7.6           Unfunded
Plan.  This Plan is unfunded and is
maintained by the Company in part to provide incentive compensation to a select
group of employees and highly compensated employees.  Nothing herein

 

8

 

shall create or be
construed to create a trust of any kind, or a fiduciary relationship between
the Company and any Participant.

 

ARTICLE
VIII

 

Authority

 

8.1           Plan
Administration.  “Committee” means
the Compensation Committee of the Board of Directors of the Company, or if
there is none, The Board of Directors.  “Administrator”
means the Company’s Senior Vice President-Human Resources & Administration
or, if that position is vacant, the Committee. 
Except as otherwise expressly provided herein, full power and authority
to interpret and administer this Plan shall be vested in the Committee.  The Committee may authorize the Administrator
to determine who shall participate in the Plan, except for the participation of
officers.  Participation of officers
shall require Committee approval.  The
Committee may from time to time make such decisions and adopt such rules and
regulations for implementing the Plan as it deems appropriate for any
Participant under the Plan.  Any decision
taken by the Committee arising out of or in connection with the construction,
administration, interpretation and effect of the Plan shall be final,
conclusive and binding upon all Participants and any person claiming under or
through them.

 

8.2           Board
of Directors Authority.  The Board
shall be ultimately responsible for administration of the Plan.  References made herein to the “Committee”
assume that the Board of Directors has created a Compensation Committee to
administer the Plan.  In the event a
Compensation Committee is not so designated, the Board shall administer the
Plan.  The Board or its Compensation
Committee, as appropriate, shall work with the Company’s CEO and SVP-HR &
Administration in all aspects of the administration of the Plan.

 

ARTICLE
IX

 

Notice

 

9.1           Any
notice to be given pursuant to the provisions of the Plan shall be in writing
and directed to the appropriate recipient thereof at their business address or
office location.

 

ARTICLE X

 

Effective Date

 

10.1         This
Plan shall be effective as of January 1, 2005 and it shall remain in effect,
subject to amendment from time to time, until terminated or suspended by the
Committee.

 

9

 

ARTICLE
XI

 

Amendments

 

11.1         This
Plan may be amended, suspended or terminated at any time at the sole discretion
of the Board upon the recommendation of the Committee.  Provided, however, that no such change in the
Plan shall be effective to eliminate or diminish the distribution of any Award
that has been allocated to the Bank of a Participant prior to the date of such
amendment, suspension or termination. 
Notice of any such amendment, suspension or termination shall be given
promptly to each Participant.

 

ARTICLE
XII

 

Applicable
Law

 

12.1         This
Plan shall be construed in accordance with the provisions of the laws of the
State of Wisconsin.

 

10

 

Exhibit A

 

Calculation
of the Cost of Capital

 

 

Inputs Variables:

 

Risk Free Rate = Average
Daily closing yield on U.S. Government 30 Yr. Bonds (for the month of December
preceding the Plan Year).

 

Market Risk Premium =
5.0% (Fixed)

 

Beta = One (Fixed)

 

Debt/Capital Ratio = 40%
(Fixed)

 

b = Cost of Debt Capital
(Projected & Weighted Average Yield on the Company’s Long Term Debt
Obligations).

 

Marginal Tax Rate = 39.0%
(Historical Average).

 

Calculations:

 

y = Cost of Equity
Capital

   = Risk Free
Rate + (Beta x Market Risk Premium)

 

Weighted Average Cost of
Capital = [Cost of Equity Capital x (1 - Debt/Capital Ratio)] + [Cost of Debt x
(Debt/Capital Ratio) x (1 - Marginal Tax Rate)]

 

c* = [y x (1 -
Debt/Capital)] + [b x (Debt/Capital) x (1 - Marginal Tax Rate)]

 

11

 

Exhibit B

 

Target Bonus Percentages
(as % of base salary)

 

	
  Participant

  Classification

  	
   

  	
  Target Bonus

  Percentage

  	
   

  
	
  I

  	
   

  	
  75

  	
  %

  
	
  II

  	
   

  	
  50

  	
  %

  
	
  III

  	
   

  	
  40

  	
  %

  
	
  IV

  	
   

  	
  35

  	
  %

  
	
  V

  	
   

  	
  30

  	
  %

  
	
  VI

  	
   

  	
  25

  	
  %

  
	
  VII

  	
   

  	
  20

  	
  %

  
	
  VIII

  	
   

  	
  15

  	
  %

  
	
  IX

  	
   

  	
  10

  	
  %

  
	
  X

  	
   

  	
  5

  	
  %

  
	
  XI

  	
   

  	
  2

  	
  %

  

 

12

 

Exhibit C

 

Expected
Improvement and Leverage Factors

 

As of January 1, 2005:

 

	
  Participation Groups

  	
   

  	
  Expected Improvement in EVA

  	
   

  	
  Leverage Factor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Manitowoc Ice,
  Inc.

  	
   

  	
  900,000

  	
   

  	
  2,700,000

  	
   

  
	
  Diversified
  Refrigeration

  	
   

  	
  500,000

  	
   

  	
  2,000,000

  	
   

  
	
  Beverage Group

  	
   

  	
  1,075,000

  	
   

  	
  3,000,000

  	
   

  
	
  Refrigeration
  Group

  	
   

  	
  850,000

  	
   

  	
  2,500,000

  	
   

  
	
  Foodservice
  Group

  	
   

  	
  2,500,000

  	
   

  	
  7,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cranes America

  	
   

  	
  2,500,000

  	
   

  	
  7,500,000

  	
   

  
	
  Cranes EMEA (in
  Euro)

  	
   

  	
  2,500,000

  	
   

  	
  7,500,000

  	
   

  
	
  Cranes Asia

  	
   

  	
  700,000

  	
   

  	
  2,200,000

  	
   

  
	
  Cranes Group

  	
   

  	
  3,500,000

  	
   

  	
  12,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marine Group

  	
   

  	
  600,000

  	
   

  	
  3,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Corporate

  	
   

  	
  3,000,000

  	
   

  	
  14,000,000

  	
   

  

 

13

 

Exhibit D

 

Adjustment
Guidelines for Material and Unexpected Non-Recurring Items

 

•                                          Potential
material and unexpected “non-recurring items” which the Committee may consider
excluding from the “raw” EVA calculation (i.e., impact net operating profit
after-tax or the cost of capital), in order to ensure employees are assessed on
the performance of continuing operations, based on our experience, include:

 

•                        Change in Accounting Principle or Practices (e.g.,
treatment of goodwill, FAS 123-revised 2004, etc.).  Typically, the company may exclude the impact
from both operating results and performance goals

 

•                        Major acquisition (i.e., acquiring a
business with total assets greater than 15% of the company’s/operating unit’s
prior year-end total assets).  In the
event of a major acquisition, the company may exclude the performance of the
acquired unit from both results and goals for an agreed upon period of time.

 

•                        Major disposition (e.g., disposition as
defined by FAS 144).  In the event a
disposition is classified as discontinued under FAS 144, the company may
exclude the performance of the disposed unit from both results and goals.

 

•                        Restructuring (i.e., reorganization of a
specific business or operating unit).  In
the event of a restructuring, the company may exclude the cost of restructuring
from NOPAT but must also exclude any benefits up to the amount of restructuring
costs during the subsequent 12-month period. 
The restructuring liability should also be excluded from the calculation
of capital for the same subsequent 12-month period.

 

•                        Recapitalization (i.e., significant
altering of the company’s current capital structure).  In the event of a recapitalization, the
company may exclude the impact from both results and goals.

 

•                        Other unusual or one-time gains/losses
considered on a case-by-case basis relative to their impact on the company’s/operating
unit’s financial results.

 

•                        Expenses related to significant ERP system
implementations may be
capitalized and amortized over the same period as the ERP asset.

 

14

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