Document:

Exhibit 4.5

 

Execution Version

 

AMENDMENT NO. 1 AND CONSENT

 

This Amendment No. 1 and Consent (this “Amendment”) is entered into
as of May 31, 2007 by and among The Manitowoc Company, Inc., a
Wisconsin corporation (the “Borrower”), JPMorgan
Chase Bank, N.A., individually and as administrative agent (the “Administrative
Agent”), and the other financial
institutions signatory hereto.

 

RECITALS

 

A.       The
Borrower, the Administrative Agent and the Lenders are party to that certain Amended and Restated Credit Agreement dated as of December 14,
2006 (the “Credit Agreement”). Unless
otherwise specified herein, capitalized terms used in this Agreement shall have the meanings ascribed to them by the Credit
Agreement.

 

B.             The Borrower wishes to designate a new Subsidiary
Borrower, Manitowoc Holding Asia SAS,
a société par actions simplifiée organized
under the laws of France (the “New
Subsidiary Borrower”).

 

C.             Certain Subsidiaries of the Borrower wish to effect
a transaction or series of transactions
whereby the New Subsidiary Borrower shall make one or more intercompany loans or capital contributions in an aggregate amount
not in excess of $100,000,000 (the “Downstream Transactions”) to its Wholly-Owned Subsidiary, Manitowoc Crane Group Asia
Pte Ltd., a limited liability company
organized under the laws of Singapore (“Manitowoc Singapore”) (which may downstream such loans or contributions
to one or more of its Wholly-Owned Subsidiaries), or directly to such
Wholly-Owned Subsidiary or Subsidiaries, and Manitowoc Singapore or such Wholly-Owned Subsidiary or Subsidiaries shall use the
proceeds of such loans or
contributions to acquire (i) 100% of the equity interests of an entity
organized under the laws of India, the identity of which has been
previously disclosed in writing to the Lenders, for an aggregate consideration of not more than $70,000,000 (the “Indian
Acquisition”), and (ii) 50% of the equity interests of an entity organized
under the laws of China, the identity of which has been previously disclosed in writing to the Lenders,
for an aggregate consideration of not more than $30,000,000 (the “Chinese Investment”, and together with the Indian
Acquisition, the “Investments”), in
each case on or before December 31, 2007.

 

D.             The
Borrower, the Administrative Agent and the undersigned Lenders wish to amend the Credit Documents and consent to certain
transactions on the terms and conditions set forth below.

 

Now, therefore, in consideration of the mutual execution hereof and
other good and valuable
consideration, the parties hereto agree as follows:

 

1.         Amendments to Credit
Documents. Upon the “Effective Date” (as defined below), the Credit
Documents shall be amended as follows:

 

 

(a)       The following definitions are added to Article 1
of the Credit Agreement in appropriate
alphabetical order:

 

“Domestic
Credit Party” means a Credit Party which is not a Foreign Subsidiary.

 

“Foreign Credit Party” means a Credit Party which
is a Foreign Subsidiary.

 

“Manitowoc
Asia Holdings” means Manitowoc Holding Asia SAS, a société par actions simplifiée organized under the laws of France and a
Wholly-Owned Subsidiary of the Borrower.

 

(b)            The definition of “Restructuring Transactions”
in Article 1 of the Credit Agreement
is amended by adding at the end thereof the following:

 

; provided
that the amount of the dividend in the form of a note payable described in Step
27 of the materials attached to such letter shall be €332,000,000 instead of
€300,000,000

 

(c)       The definition of “Security Documents” in Article 1
of the Credit Agreement is amended by
adding immediately before the words “each Additional Security Document” the following:

 

the
two Pledge Agreements (Acte de Nantissement de Compte d’Instruments Financiers and Acte de Nantissement de parts
sociales) each dated as of May 31, 2007 and made by Manitowoc France SAS in favor of the Collateral Agent
for the benefit of the Secured
Creditors,

 

(d)       Section 6.01 (c) of the Credit
Agreement is amended by adding at the end thereof the following:

 

and
Indebtedness of Foreign Credit Parties in respect of intercompany notes payable described in subsection (y) of Section 6.04

 

(e)             Section 6.01(o) of the Credit Agreement
is deleted in its entirety and replaced
with the following:

 

(o)       Indebtedness
consisting of guarantees (w) by the Domestic Credit Parties of each other’s
Indebtedness and lease and other contractual obligations permitted under
this Agreement, (x) by the Foreign Credit Parties of each other’s and each
Domestic Credit Party’s Indebtedness and lease and other contractual obligations permitted under this Agreement, (y) by
External Subsidiaries of each other’s
and each Credit Party’s Indebtedness and lease and other contractual obligations
permitted under this Agreement or (z) by any Credit Party of any
Indebtedness and lease and other contractual obligations permitted under this Agreement of any External Subsidiary (or by any
Domestic Credit Party of any Indebtedness
and lease and other contractual obligations permitted under this

 

2

 

Agreement of any Foreign
Credit Party) so long as the amount of such Guarantee, when aggregated with (1) the aggregate outstanding principal amount
of Intercompany Loans which are
restricted in amount by the proviso to Section 6.05(i) and (2) the
aggregate amount of contributions, capitalizations and debt forgiveness which are restricted in amount by the
proviso to Section 6.05(j) and which have theretofore been
made and not repaid do not at any time exceed the Dollar Equivalent of
$60,000,000;

 

(f)        Section 6.03(a)(xi) of the Credit Agreement
is deleted in its entirety and replaced with the following

 

(xi)       any
Foreign Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, or transfer
any of its assets to, any Wholly-Owned
Subsidiary of the Borrower so long as (I) the Wholly-Owned Subsidiary of
the Borrower is the survivor of such merger, dissolution or liquidation and, if
either party is a Subsidiary Borrower, such Subsidiary Borrower is the
survivor of such merger dissolution or
liquidation, (II) any security interests granted to the Collateral Agent
for the benefit of the Secured Creditors pursuant to the Security Documents in
the equity interests of such Foreign Subsidiary or Wholly-Owned Subsidiary
shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such
merger, dissolution or liquidation) and (III) any guaranty made in favor
of the Administrative Agent for the benefit of the Secured Creditors by such Foreign Subsidiary or Wholly-Owned Subsidiary
shall remain in full force and effect;

 

(g)       Section 6.03(a)(xvii) of the Credit
Agreement is deleted in its entirety and replaced with the following:

 

(xvii)   prior to December 31,
2007, the Borrower or its Subsidiaries may consummate the Sale
Transaction on terms acceptable to the Administrative Agent; and

 

(h)       Section 6.04 of
the Credit Agreement is amended by inserting after the last sentence
thereof the following:

 

Notwithstanding
clause (b) of this Section 6.04, a Foreign Credit Party may not pay any dividend to an External Subsidiary unless (x) such
dividend is substantially
contemporaneously therewith directly or indirectly remitted as a dividend or distribution to a Domestic Credit
Party, (y) such dividend is in the form of an intercompany note
payable of such Foreign Credit Party which is subordinated
on terms satisfactory to the Administrative Agent to the obligations of such
Foreign Credit Party under the Credit Documents (a “Dividend Note”) or (z) at the time such dividend is paid no
Default has occurred and is continuing and, after giving effect to such
dividend, the “Outflow Amount” (as defined below)
does not exceed €30,000,000. For purposes hereof, “Outflow Amount” means
an amount equal to (1) the aggregate amount of (A) all dividends paid
by Foreign Credit Parties to External Subsidiaries after May 1, 2007 other
than as

 

3

 

permitted by subsection (x) or
(y) of the preceding sentence plus (B) all amounts (including
principal, interest and other amounts) paid by Foreign Credit Parties to non-Credit Parties after May 1, 2007 in
respect of Dividend Notes (other than such amounts substantially
contemporaneously therewith directly or indirectly remitted as a dividend or
distribution to a Domestic Credit Party) minus (2) the amount of all cash
capital contributions received by such paying Foreign Credit Parties from
External Subsidiaries after May 1, 2007. Payments (including principal,
interest and other amounts) on account of Dividend Notes shall only be made if
a dividend in the amount of such payment could then be made pursuant to subsection (z) of the second sentence of
this Section 6.04; provided that the foregoing restriction
shall not apply to such payments to the extent they are either made to a Credit Party or are substantially
contemporaneously therewith directly or indirectly remitted as a
dividend or a distribution to a Domestic Credit Party.

 

(i)         Sections 6.05(i) and
(j) of the Credit Agreement are deleted in their entirety and
replaced with the following:

 

(i)        the
Borrower and its Wholly-Owned Subsidiaries may make intercompany loans and advances between and among
one another (collectively, “Intercompany Loans”); provided that (I) at
no time shall the sum of (A) the aggregate
outstanding principal amount of all Intercompany Loans (excluding Intercompany
Loans outstanding on the Original Effective Date hereof and set forth on
Schedule 1.02) made pursuant to this clause (i) by Credit Parties to External Subsidiaries or by Domestic Credit
Parties to Foreign Credit Parties (excluding for this purpose, however,
the aggregate outstanding principal amount of all Excluded Transfers made
pursuant to this clause (i)), plus (B) the aggregate amount of
contributions, capitalizations and forgiveness theretofore made by Credit Parties to (or in respect of) External
Subsidiaries and by Domestic Credit Parties
to (or in respect of) Foreign Credit Parties, in each case pursuant to Section 6.05(j) (excluding for this
purpose, however, the aggregate amount of Excluded Transfers made
pursuant to Section 6.05(j) and, in any event, net of cash equity
returns), plus (C) the outstanding amount of Guarantees issued pursuant to Section 6.01(o)(z) exceed
the Dollar Equivalent of $60,000,000 (determined
without regard to any write-downs or write-offs of such Intercompany
Loans), (II) no Intercompany Loans may be made by a Credit Party to an External Subsidiary or by a Domestic Credit
Party to a Foreign Credit Party at a lime that an Event of Default
exists and is continuing, (III) any such Intercompany
Loan made by a Credit Party shall be evidenced by an Intercompany Note which shall be pledged to the
Collateral Agent to the extent required
pursuant to the Pledge Agreement, and (IV) each Intercompany Loan made
to any Credit Party by an External Subsidiary shall include (or, if not
evidenced by an Intercompany Note, the books and records of the respective parties shall note that such Intercompany Loan
shall be subject to) the subordination provisions attached as Annex A to
the form of Intercompany Note;

 

(j)        the Borrower and its Wholly-Owned
Subsidiaries may make cash capital contributions to their respective
Wholly-Owned Subsidiaries, and may

 

4

 

capitalize or forgive any
Indebtedness owed to them by a Wholly-Owned Foreign Subsidiary and outstanding under clause (i) of this Section 6.05;
provided that at no time shall (I) the sum of (A) the
aggregate amount of such contributions, capitalizations and forgiveness made by
Credit Parties to External Subsidiaries or by Domestic Credit Parties to
Foreign Credit Parties (excluding for this purpose, however, the aggregate
amount of Excluded Transfers made pursuant to this clause (j) and, in any event, net of cash equity returns), plus (B) the
aggregate outstanding principal amount of Intercompany Loans (excluding
Intercompany Loans outstanding on the Original Effective Date and set
forth on Schedule 1.02) made by Credit Parties to External Subsidiaries and by
Domestic Credit Parties to Foreign Credit Parties, in each case pursuant to Section 6.05(i) (determined
without regard to any write-downs or write-offs thereof) (excluding for this purpose, however, the aggregate outstanding
principal amount of all Excluded Transfers made pursuant to Section 6.05(i),),
plus (C) the outstanding amount of Guarantees issued pursuant to Section 6.01(o)(z),
exceed the Dollar Equivalent of $60,000,000,
(II) Credit Parties may only make capital contributions to, and capitalize or forgive any Indebtedness owed to
them by, a Wholly-Owned Foreign Subsidiary
pursuant to this clause (j) to the extent (A) required to comply with
any thin capitalization rules applicable to such Wholly-Owned
Foreign Subsidiary or (B) that the making of Intercompany Loans to such
Wholly-Owned Foreign Subsidiary would have
adverse tax consequences to the Credit Party making the same, and (III) no such contributions,
capitalizations or forgivenesses may be made by a Credit Party to a External Subsidiary or by a Domestic Credit
Party to a Foreign Credit Party at any
time that an Event of Default exists and is continuing;

 

(j)        A new Section 6.19 is added to the
Credit Agreement as follows:

 

SECTION 6.19. Manitowoc Asia Holdings. The
Borrower shall not permit Manitowoc Asia Holdings to engage in any
activities other than those not materially
different from those engaged in on the date of its designation as a Subsidiary
Borrower, consisting exclusively of acting as a holding company for the
equity of Manitowoc Crane Group Asia Pte Ltd. and other Subsidiaries of the
Borrower and, in any event, shall not permit Manitowoc Asia Holdings to incur Indebtedness other than Indebtedness under the
Credit Documents and other Indebtedness
subordinated on terms satisfactory to the Administrative Agent to the
obligations of Manitowoc Asia Holdings under the Credit Documents.

 

(k)       A new sentence is added
to the end of Section 19 of the Subsidiary Guaranty as follows:

 

EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

5

 

(k)       A new Section 23 is added to the
Subsidiary Guaranty as follows:

 

Section 23. Manitowoc EMEA Holding Sarl. Each
reference to “Liabilities” herein shall, solely with respect to the
obligations guaranteed by Manitowoc EMEA
Holding Sari, be a reference only to Liabilities of the Subsidiary
Borrowers.

 

2.               Consents.

 

(a)       So
long as no Default shall have occurred and be continuing at the time of the
Downstream Transactions or would result therefrom, the Lenders (i) notwithstanding
any term to the contrary in Section 6.05
of the Credit Agreement, consent to the consummation of the Downstream Transactions and (ii) agree that the
Downstream Transactions shall not be
deemed to have been made pursuant to Section 6.05(i) or (j) of
the Credit Agreement and that future computations under Sections 6.05(i) and
(j) of the Credit Agreement
shall be made without taking into account the Downstream Transactions.

 

(b)       So long as no Default then exists or would result
therefrom, the Lenders consent to the
consummation of the Chinese Investment and agree that the Chinese Investment shall not be deemed to have been made
pursuant to Section 6.05(1) and that the amount of the Chinese Investment shall be excluded from any future
computations under Section 6.05(1).

 

(c)       The
Lenders consent to the Administrative Agent and/or the Collateral Agent entering into a joinder to the Subsidiary
Guaranty in the form of Exhibit C hereto and any other security or
pledge agreements and amendments to the Security Documents necessary or desirable in the Administrative Agent’s
judgment to result in (i) the New Subsidiary Borrower becoming a guarantor
of the Obligations of the other Subsidiary Borrowers, (ii) Manitowoc
France SAS becoming a guarantor of the Obligations of the Subsidiary Borrowers
and (iii) Manitowoc France SAS pledging its equity interests in Manitowoc
EMEA Holding Sari and the New Subsidiary Borrower to the Collateral Agent to
secure its Obligations.

 

(d)       The
Lenders waive the requirements set forth in Section 2.20 of the Credit Agreement that (i) the designation of the
New Subsidiary Borrower as a Subsidiary Borrower with respect to
Alternate Currency Loans as contemplated hereby be delivered five (5) Business
Days prior to such designation taking effect and (ii) the Borrower deliver security agreements pledging
substantially all assets of the New Subsidiary Borrower.

 

3.               Alternate
Currency Lenders. Each of the Lenders identified on Schedule 1 hereto
agrees to be an Alternate Currency Lender with respect to Alternate Currency
Loans to be made to the New Subsidiary
Borrower. Such Alternate Currency Loans shall be made, at the Borrower’s option, in Dollars, Euros and/or
Sterling.

 

6

 

4.               Representations
and Warranties of the Borrower.  The
Borrower represents and warrants that:

 

(a)       The execution, delivery and performance by the
Borrower of this Amendment have been duly authorized by all necessary
corporate action and that this Amendment is a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principals of equity, regardless of whether considered in a
proceeding in equity or at law;

 

(b)       After
giving effect to this Amendment, each of the representations and warranties
contained in the Credit Agreement (other than representations and warranties that relate solely to an earlier date) is true
and correct on and as of the date hereof as if made on the date hereof;

 

(c)       After giving effect to this Amendment, no Default
has occurred and is continuing.

 

5.               Effective Date. This Amendment shall become effective upon the execution and delivery hereof by the Borrower,
the Administrative Agent, the Required Lenders (without respect to whether it has been executed and delivered by all
the Lenders) and each of the Lenders
identified on Schedule 1 hereto; provided that Sections 1 and 2 hereof shall
not become effective until the date (the “Effective Date”) when the
following additional conditions have also
been satisfied; and provided further that Section l(h) hereof shall
not become effective unless a consent to this Amendment is obtained from all
Lenders:

 

(a)       the execution and delivery by the Borrower and
the Subsidiary Guarantors of a Reaffirmation of Guaranty in the form of Exhibit A
hereto;

 

(b)            the execution and delivery by the Borrower and the
New Subsidiary Borrower of a
Designation Letter in the form attached hereto as Exhibit B (the “Designation”);

 

(c)       the Administrative Agent having received favorable
written opinions (addressed to the Administrative Agent and the Lenders)
dated the Effective Date of (i) Quarles &
Brady, LLP, counsel for the Borrower and (ii) such local counsel to the Borrower, the New Subsidiary Borrower, Manitowoc
France SAS and Manitowoc EMEA Holding
Sari as the Administrative Agent may request, in each case in form and substance satisfactory to the Administrative
Agent and its counsel. The Borrower hereby requests such counsel to deliver
such opinions;

 

(d)       the Administrative Agent having received
such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the
New Subsidiary Borrower, Manitowoc France SAS and Manitowoc EMEA Holding
Sarl and any other legal matters relating to the New Subsidiary Borrower or the
Designation, all in form and substance satisfactory to the Administrative Agent and its counsel;

 

7

 

(e)             the New Subsidiary Borrower and Manitowoc France
SAS shall each have become a
Subsidiary Guarantor with respect to Obligations of the Subsidiary Borrowers by executing and delivering a joinder to the
Subsidiary Guaranty in the form of Exhibit C hereto;

 

(f)        the Administrative Agent having received from
Manitowoc France SAS such pledge
agreements, opinions and similar documents as the Administrative Agent shall reasonably request to cause Manitowoc France SAS
to pledge all now owned or hereafter acquired equity of Manitowoc EMEA Holding
Sari and the New Subsidiary Borrower to secure the obligations of Manitowoc
France SAS under the Credit Documents;

 

(g)       the Administrative Agent having received from the
Borrower and the New Subsidiary
Borrower such other documents and information (including information relating to “know your customer” rules and
regulations) as the Administrative Agent shall reasonably request;

 

(h)       the
Administrative Agent having received a certificate from an officer of Borrower attaching the organizational structure of
Borrower and its Subsidiaries after giving
effect to the restructuring of certain of its Asian operations; and

 

(i)        the Borrower having paid to the
Administrative Agent for its own account any
separately agreed fees relating hereto, which fees shall be deemed fully earned
and non-refundable on the Effective
Date.

 

6.               Reference to and Effect Upon the Credit Documents.

 

(a)       Except as specifically modified above, the Credit
Agreement and the other Credit
Documents shall remain in full force and effect and are hereby ratified and confirmed.

 

(b)            The
execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy
of the Administrative Agent or any Lender
under the Credit Agreement or any Credit Document, nor constitute a waiver of any provision of the Credit Agreement or any
Credit Document, except as specifically set forth herein. Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof, “herein” or words of similar import shall mean and be a reference to the
Credit Agreement as modified hereby.

 

7.               Costs and Expenses. The Borrower hereby affirms its obligation
under Section 9.03 of the Credit
Agreement to reimburse the Administrative Agent for all reasonable
out-of-pocket expenses incurred by the Administrative Agent in connection with
this Amendment, including but not
limited to the reasonable fees, charges and disbursements of attorneys for the Administrative Agent with
respect thereto.

 

8.               Governing Law. This Amendment shall be construed in accordance with and governed by
the law of the State of New York.

 

8

 

9.               Headings.
Section headings in this Amendment are included herein for convenience of
reference only and shall not constitute a part of this Amendment for any other purposes.

 

10.            Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall
be deemed an original but all such counterparts
shall constitute one and the same instrument.

 

[Signature Pages Follow]

 

9

 

 

IN WITNESS
WHEREOF, the parties have executed this Amendment as of the date and year first above written.

 

 

	
  THE MANITOWOC COMPANY, INC.

  	
   

  	
  JPMORGAN CHASE BANK, N.A., 

  individually
  and as Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Maurice D. Jones

  	
   

  	
  /s/ Michael B. Kelly

  
	
  By:

  	
  Maurice D. Jones

  	
   

  	
  By:

  	
  Michael B. Kelly

  
	
  Its:

  	
  Senior Vice President 

  	
   

  	
  Its:

  	
   

  
	
   

  	
  General
  Counsel & Secretary

  	
   

  	
   

  	
   

  
						

 

 

	
   

  	
   

  	
   

  	
  Bank of America, N.A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Thomas R. Durham

  
	
   

  	
   

  	
   

  	
  By:

  	
  Thomas R. Durham

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Senior Vice President

  

 

 

	
   

  	
   

  	
   

  	
  DEUTSCHE BANK AG  NEW YORK BRANCH

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Evelyn Thierry

  
	
   

  	
   

  	
   

  	
  By:

  	
  Evelyn Thierry

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Vice President

  

 

 

	
   

  	
   

  	
   

  	
  BNP
  Paribas

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Curtis Price

  
	
   

  	
   

  	
   

  	
  By:

  	
  Curtis Price

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Christopher Grumboski

  
	
   

  	
   

  	
   

  	
  By:

  	
  Christopher Grumboski

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  

 

 

	
   

  	
   

  	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Vice President

  

 

 

	
   

  	
   

  	
   

  	
  Associated
  Bank, N.A.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Daniel Holshauer

  
	
   

  	
   

  	
   

  	
  By:

  	
  Daniel Holshauer

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Vice President

  
						

 

	
   

  	
   

  	
   

  	
  NATIXIS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Nicolas Regent

  
	
   

  	
   

  	
   

  	
  By:

  	
  Nicolas Regent

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Peter Van Takler

  
	
   

  	
   

  	
   

  	
  By:

  	
  Peter Van Takler

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Managing Director

  
						

 

 

	
   

  	
   

  	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  First Vice President

  

 

 

	
   

  	
   

  	
   

  	
  M&I Marshall & Ilsley Bank

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  :

  	
   

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ James R. Miller

  
	
   

  	
   

  	
   

  	
  By:

  	
  James R. Miller

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Sr. Vice President

  

 

 

	
   

  	
   

  	
   

  	
  The
  Bank of New York

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Louis D. Serio

  
	
   

  	
   

  	
   

  	
  By:

  	
  Louis D. Serio

  
	
   

  	
   

  	
   

  	
  Its:

  	
  VICE PRESIDENT

  

 

 

	
   

  	
   

  	
   

  	
  UBS LOAN FINANCE LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Richard L. Tavrow

  
	
   

  	
   

  	
   

  	
  By:

  	
  Richard
  L. Tavrow

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Irja R. Otsa

  
	
   

  	
   

  	
   

  	
  By:

  	
  Irja R. Otsa

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Associate
  Director

  

 

 

	
   

  	
   

  	
   

  	
  THE NORTHERN TRUST COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Alex Nirolon

  
	
   

  	
   

  	
   

  	
  By:

  	
  Alex Nirolon

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Second-Vice President

  

 

 

	
   

  	
   

  	
   

  	
  Lehman Commercial Paper Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Frank P. Turner

  
	
   

  	
   

  	
   

  	
  By:

  	
  Frank P. Turner

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Vice President

  

 

 

 

SCHEDULE 1

TO AMENDMENT NO. 1 AND CONSENT

 

ALTERNATE CURRENCY LENDERS*

FOR LOANS TO MANITOWOC HOLDING ASIA SAS

 

1.               Deutsche Bank
AG New York Branch

 

2.               Bank of America,
N.A.

 

3.               BNP Paribas

 

4.               Natexis Banques
Populaires

 

5.               UBS Loan Finance
LLC

 

6.               Lehman Commercial
Paper Inc.

*In addition to JPMorgan
Chase Bank, N.A.

 

 

EXHIBIT A

 

REAFFIRMATION OF GUARANTY

 

Each of the
undersigned acknowledges receipt of a copy of the Amendment No. 1 and
Consent (the “Amendment”; capitalized terms not defined herein are used as
defined in the Amendment) dated as of May 31, 2007, consents to the
Amendment and each of the transactions referenced therein and hereby reaffirms
its obligations under the Subsidiary Guaranty (the “Subsidiary Guaranty”) and
Parent Guaranty (the “Parent Guaranty”), as applicable, each dated as of June 10,
2005 in favor of JPMorgan Chase Bank, N.A., as Administrative Agent, and the
Lenders. Without limiting the foregoing, each of the Borrower and each of the
Guarantors under the Subsidiary Guaranty expressly acknowledges and agrees that
all obligations of Manitowoc Holding Asia SAS under the Facility Documents (as
defined in the Parent Guaranty and Subsidiary Guaranty, respectively) shall
constitute “Liabilities” under the Parent Guaranty and Subsidiary Guaranty,
respectively. Each of the undersigned agrees that the guaranty provided by each
of Manitowoc Holding Asia SAS and Manitowoc France SAS shall be limited as set
forth in the Joinder to Subsidiary Guaranty dated as of the date hereof and that
the guaranty provided by Manitowoc EMEA Holding Sarl may be limited as set
forth in the Amendment. Each of the undersigned that is party to the Pledge
Agreement acknowledges that, to the extent Section l(h) of the
Amendment is effective, the pledge by Manitowoc EMEA Holding Sarl thereunder
secures only its Obligations under the Credit Agreement and its guaranty of the
Obligations of the other Subsidiary Borrowers.

 

	
  Dated
  as of May 31, 2007

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  MANITOWOC COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  CRANE COMPANIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  FOODSERVICE COMPANIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  MARINE GROUP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The
  Manitowoc Company, Inc., as sole managing member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  CRANES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  RE-MANUFACTURING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  GROVE
  U.S. L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Manitowoc
  Cranes, Inc., as sole managing member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  ICE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  KMT
  REFRIGERATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  FP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  BEVERAGE SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  BEVERAGE EQUIPMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  HARFORD
  DURACOOL LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  KMT
  Refrigeration, Inc., as sole managing member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MARINETTE
  MARINE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MANITOWOC
  EMEA HOLDING SARL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MCCANN’S
  ENGINEERING & MANUFACTURING CO., LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Manitowoc
  Beverage Equipment, Inc., as sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
   

  	
  MMG
  HOLDING CO., LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The
  Manitowoc Company, Inc., as sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

EXHIBIT B

 

DESIGNATION LETTER

 

May 31, 2007

 

JPMorgan
Chase Bank, N.A., as Administrative Agent for the Lenders

to the Credit Agreement referred to below,

and the Lenders

Loan Operations

131 South Dearborn Street

Chicago, IL 60670

Attention: Yvonne E. Dixon

 

Ladies
and Gentlemen:

 

We
refer to the Amended and Restated Credit Agreement (as amended, restated,
supplemented or otherwise modified
and in effect from time to time, the “Credit Agreement”) dated as of December 14, 2006 among The Manitowoc Company, Inc.
(the “Borrower”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent. Unless otherwise defined herein, capitalized terms used in this Designation Letter have the
meanings ascribed thereto in the
Credit Agreement.

 

The
Borrower hereby designates Manitowoc Holding Asia SAS (the “Designated
Subsidiary”), a Wholly-Owned
Subsidiary of the Company and a société par
actions simplifiée duly formed under the laws of France, as a “Subsidiary
Borrower” in accordance with Section 2.20 of the Credit Agreement until such designation is
terminated in accordance with Section 2.20 of the Credit Agreement and sets forth on Schedule 1
hereto the contact information about such Designated Subsidiary specified on such schedule. Notwithstanding
anything herein or in the Credit
Agreement to the contrary, the Borrower and the Designated Subsidiary agree
that this designation is made solely
for the purpose of permitting the Designated Subsidiary to be a “Subsidiary Borrower” with respect to Alternate
Currency Loans and that the Designated Subsidiary
shall have no right to request or receive any other form of extension of credit
under the Credit Agreement.

 

The
Designated Subsidiary hereby accepts the above designation and hereby expressly
and unconditionally accepts the
obligations of a Subsidiary Borrower under the Credit Agreement and agrees and confirms that, upon your execution
and return to the Borrower of the enclosed copy of this letter, the Designated Subsidiary shall be a Subsidiary
Borrower for purposes of the Credit
Agreement and agrees to be bound by and perform and comply with the terms and provisions of the Credit Agreement applicable to
it as if it had originally executed the Credit Agreement as a Subsidiary
Borrower. The Designated Subsidiary hereby authorizes and empowers the Borrower
to act as its representative and attomey-in-fact for the purposes of signing documents and giving and receiving notices
(including borrowing requests and interest

 

 

elections
under the Credit Agreement) and other communications in connection with the
Credit Agreement and the transactions
contemplated thereby and for the purposes of modifying or amending any provision of the Credit Agreement
and further agrees that the Administrative Agent and each Lender may conclusively rely on the foregoing
authorization.

 

The
Borrower hereby represents and warrants to the Administrative Agent and each
Lender that, before and after giving effect to this Designation Letter, (i) the
representations and warranties set forth in Article III of the Credit
Agreement are true and correct on the date hereof as if made on and as of the date hereof, and (ii) no
Default has occurred and is continuing. The Designated Subsidiary represents
and warrants that, in so far as they relate to such Designated Subsidiary, each of the representations and warranties set
forth in Article III of the Credit Agreement is true and correct on the date hereof as if made on and
as of the date hereof. This Designation Letter shall be governed by, and construed in accordance with, the internal
laws (without regard to the conflict
of laws provisions) of the State of New York. Without limiting any other
provisions hereof, the Designated
Subsidiary hereby submits to jurisdiction and makes the waivers and otherwise
in all aspects agrees to the terms of Sections 9.09(b), (c) and (d) of
the Credit Agreement as if fully set forth
herein.

 

EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS DESIGNATION LETTER, THE CREDIT AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS DESIGNATION
LETTER BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  MANITOWOC COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
							

 

 

	
   

  	
   

  	
  MANITOWOC
  HOLDING ASIA SAS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
							

 

 

Schedule 1 to Designation Letter

 

1.                          Registered
address: 18 rue de Charbonnieres, 69130 Ecully

 

2.                          Contact
Person: Corinne Pouyet

 

Telephone
number : + + 33 4 72 18 21 65

Facsimile number : + + 33 4 72 18 20
82

Email address of contact person: Corinne.Pouyet@potain.com

 

with a copy to:                        Dean J. Nolden

The Manitowoc Company, Inc.

2400 South 44th Street

Manitowoc, WI 54220

Dean.Nolden@manitowoc.com

 

 

EXHIBIT C

 

JOINDER TO SUBSIDIARY GUARANTY

 

SUPPLEMENT
dated as of May 31, 2007 to Subsidiary Guaranty dated as of June 10,
2005 (as the same may be amended, supplemented or otherwise modified from time
to time, the “Guaranty”), by the
Subsidiaries of The Manitowoc Company, Inc., a Wisconsin corporation (the “Borrower”), party
thereto (individually, a “Guarantor”, and collectively, the “Guarantors”) in
favor of the Administrative Agent (as defined below), for the benefit of the Guaranteed Parties.

 

Reference is made to the Amended and Restated Credit Agreement dated as
of December 14, 2006 (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among
the Borrower, the lenders from time to time party thereto (the “Lenders”) and JPMorgan Chase Bank, N.A., as
Administrative Agent.

 

Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such
terms in the Guaranty and the Credit Agreement.

 

The Guarantors have entered into the Guaranty in order to induce the
Guaranteed Parties to extend credit and take other actions pursuant to the
Facility Documents. Pursuant to Section 2.20 of the Credit Agreement and the Amendment No. 1 and Consent dated
as of the date hereof, each
undersigned Subsidiary is required to enter into the Guaranty as a Guarantor. Section 21
of the Guaranty provides that
additional Subsidiaries of the Borrower may become Guarantors under the Guaranty by execution and delivery of an
instrument in the form of this Supplement. Each undersigned Subsidiary of the
Borrower (each, a “New Guarantor”) is executing this Supplement in accordance with the requirements of
the Credit Agreement to become a Guarantor under the Guaranty in order
to induce the Guaranteed Parties to extend and continue the extension of credit pursuant to the Credit
Agreement and/or to enter into and perform under other Facility Documents.

 

Accordingly, the Administrative Agent and the New Guarantors agree as
follows:

 

SECTION 1. In accordance with Section 21 of the Guaranty,
each New Guarantor by its signature below becomes a Guarantor under the
Guaranty with the same force and effect as if originally named therein as a Guarantor and each New Guarantor hereby agrees
to all the terms thereof and warrants
that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof
(with all references to “the Guaranty” in Section 9 of the Guaranty being deemed references to the
Guaranty and this Supplement), in each case subject to Section 3 below as applicable. Henceforth, each
reference to a “Guarantor” in the Guaranty
shall be deemed to include each New Guarantor. The Guaranty is hereby
incorporated herein by reference.

 

SECTION 2. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single agreement. This Supplement shall become effective
when the Administrative Agent shall have received

 

 

counterparts of this
Supplement that, when taken together, bear the signatures of each New Guarantor and the Administrative Agent.

 

SECTION 3. Notwithstanding any of the foregoing, the Guaranty is
hereby modified solely with respect to
each New Guarantor, as applicable, as follows:

 

(a) obligations and
liabilities of Manitowoc Holding Asia SAS and Manitowoc France SAS (each, a “French Guarantor”) under the Guaranty
shall not include any obligation or liability
which, if incurred, would (i) constitute a misuse of corporate assets as
defined under article L.242-6 of the
French Commercial Code (Code de commerce) or
(ii) breach the prohibition of financial assistance as defined by
article L.225-216 of the French Commercial Code
(Code de commerce) for the
subscription, the acquisition or the refinancing of the acquisition of such French Guarantor’s own shares
or the shares of any of its holding companies;

 

(b) the aggregate amount
payable by each French Guarantor under the Guaranty shall be limited to an amount not exceeding at any time
eighty percent (80%) of the greatest of (i) the aggregate principal
amount (if any) borrowed by such French Guarantor from other Credit Parties and financed directly or indirectly by
borrowings under the Credit Agreement made by such Credit Parties or any of their direct or indirect parent companies, (ii) such
French Guarantor’s capitaux propres (as defined in article
R.123-191 of the French Commercial Code (Code
de commerce)) as at the date such French Guarantor became a party to
the Guaranty, and (iii) such French Guarantor’s capitaux propres (as defined in article
R.123-191 of the French Commercial Code (Code
de commerce)) as reflected in its then most recent annual audited accounts; and

 

(c) each reference to “Liabilities”
in the Guaranty shall, solely with respect to the obligations guaranteed by each New Guarantor, be a
reference only to Liabilities of the Subsidiary
Borrowers.

 

SECTION 4.
Except as expressly supplemented and modified hereby, the Guaranty shall remain in full force and effect.

 

SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY
THE LAW (WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) OF THE STATE OF NEW
YORK.

 

SECTION 6. All communications and notices hereunder shall be in
writing and (other than to the New
Guarantors) given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder
to the New Guarantors shall be given to them at the address set forth under their respective
signature below, with a copy to the Borrower.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the New Guarantors and the Administrative Agent
have duly executed this Supplement to the Guaranty as of the day and year first
above written.

 

 

	
   

  	
   

  	
  MANITOWOC
  HOLDING ASIA SAS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
							

 

 

	
   

  	
   

  	
  MANITOWOC
  FRANCE SAS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
							

 

 

	
   

  	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as Administrative
  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:Exhibit 10.2(a)

 

SHORT-TERM INCENTIVE PLAN

 

Effective January 1, 2005

 

As Amended Effective January 1,
2008

 

 

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.  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 replaced the Management Incentive Compensation Plan (Economic
Value Added (EVA®) Bonus Plan),
created effective July 4, 1993, as amended (the “Prior Plan”).  This Plan was amended effective January 1,
2007 and again effective January 1, 2008.

 

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 subtracting a
capital charge from 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 by the
Participant’s Base Pay.  A Participant’s
incentive award earned in any one year is the result of multiplying the Actual
Bonus Percentage by the Participant’s Base Pay. 
Incentive awards earned can range from 0% to 250% of the target award
opportunity.  Earned awards will be fully
paid out after the end of the year.

 

1.4                                 With respect to any
corporate officer as of the February Committee meeting in a given calendar
year (“Covered Officer”), the Plan is intended to qualify for the “performance-based
compensation” exception from the deductibility limitation under Internal
Revenue Code Section 162(m) and shall be so interpreted and
administered.

 

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 determined by the
Committee and may be revised by the Committee from time-to-time as they deem
appropriate, provided that the Participating Groups for any particular year
shall be established no later than the February Committee meeting.

 

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:

  	
  Gross
  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:

  	
  Capialized
  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), 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 

 

2

 

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.  The Cost of Capital is determined pursuant to
Exhibit A and the following:

 

(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 determined as set
forth in subparagraph 2.4(e).

 

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

 

(d)                                 Short-term debt is to be
treated as long-term debt for purposes of computing the Cost of Capital.

 

(e)                                  For purposes of determining
the Cost of Capital, the “Tax Rate” for any particular year shall be equal to
the audited tax rate of the Company for the previous calendar year.

 

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”
or “NOP” and “Net Operating Profit After Tax” or “NOPAT”

 

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

 

3

 

	
   

  	
  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 (NOP)

  
	
  Less:

  	
  Taxes (See Note 2)

  
	
  Equals:

  	
  Net
  Operating Profit After Tax (NOPAT)

  

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

 

(2)                                  For purposes of calculating
NOPAT, Taxes will be the actual annual effective tax rate for the Company as a
whole for the particular year.

 

2.7                                 “Economic Value Added”
or “EVA” means for Participants in the salary grade of the Company of 210 and
above, the NOPAT that remains after subtracting the Capital Charge, expressed as
follows:

 

	
   

  	
  NOPAT

  
	
  Less:

  	
  Capital Charge

  
	
  Equals:

  	
  EVA (which may be positive or negative)

  

 

“Economic Value Added” or “EVA” means for Participants in the
salary grade of the Company of 209 and below, the NOP that remains after
subtracting the Capital Charge, expressed as follows:

 

	
   

  	
  NOP

  
	
  Less:

  	
  Capital Charge

  
	
  Equals:

  	
  EVA (which may be positive or negative)

  

 

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 for the year in question is
determined as follows:

 

4

 

“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.  It is determined by the
expected growth in EVA per year.  The
Expected Improvement factors are determined by the Committee and will be
evaluated and recalibrated by the Committee, as appropriate, no less than every
three years.  Expected Improvement may be
different for each Participating Group.

 

3.4                                 “Base Pay” for any
particular year, means (a) for all Participants other than Covered
Officers, the base pay actually received for the calendar year; and (b) for
Covered Officers, the base pay actually received prior to the February Committee
meeting and the rate of base pay in effect immediately after the February Committee
meeting in the given calendar year, such that salary increases for a Covered
Officer after the February Committee meeting are not considered for such
year.  Notwithstanding the foregoing, for
a Covered Officer whose employment terminates prior to December 31 of a
calendar year, Base Pay is reduced to a pro-rata amount based on the period of
time actually employed during the year.

 

3.5                                 “Target Bonus Award”
for the year means the “Target Bonus Percentage” multiplied by a Participant’s
Base Pay.

 

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

 

3.7                                 “Actual Bonus Award”
for the year in question means the bonus earned by a Participant and is
computed as the Actual Bonus Percentage multiplied by a Participant’s Base Pay
for the year in question.

 

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

 

3.9                                 “Bonus Performance Value”
is an amount determined as follows:

 

(a)                                  Base Formula.  “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]; subject, however, to the following
subparagraph (b).

 

(b)                                 Floor/Ceiling.  If the calculation of the Bonus Performance
Value is less than zero (0), the Bonus Performance Value shall be deemed to be
zero (0) , and if the calculation of the Bonus Performance Value exceeds 2.5,
the Bonus Performance Value shall be deemed to be 2.5.

 

3.10                           “Leverage Factor” is
the negative (positive) deviation from Target EVA necessary before a zero (two
times Target) bonus is earned.  The
Leverage Factors are determined by the Committee and will be evaluated and
recalibrated, as appropriate, no less than every three years.  The Leverage Factor may be different for each
Participating Group.

 

5

 

3.11                           “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 C).

 

3.12                           A Participant’s
classification is determined by the Board of Direcotors upon recommendation 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.

 

ARTICLE IV

 

Payment of Actual Bonus Awards

 

4.1                                 Beginning with the fiscal
2008 Plan year, Actual Bonus Awards earned will be fully paid out after the end
of the year at such time as the Committee but not later than March 15 of
the calendar year following the performance period, unless (a) deferred
pursuant to Section 4.2 or (b) otherwise permitted pursuant to the
exemption provisions of Section 409A of the Internal Revenue Code.

 

4.2                                 Notwithstanding the
provisions of Section 4.1, the Committee may permit or require a
Participant to defer receipt of the payment of an Actual Bonus Award to the extent
provided under any deferred compensation plan of the Company.  Notwithstanding the foregoing, any deferral
made in accordance with this Section 4.2 shall satisfy the rquirements of Section 409A
of the Internal Revenue Code.

 

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” as defined in the Company’s long term
disability benefits program 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                                 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.

 

6

 

ARTICLE VI

 

General Provisions

 

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

 

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

 

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

 

6.4                                 Claims for Benefits.  In the event a Participant (a “claimant”)
desires to make a claim with respect to any of the benefits provided hereunder,
the claimant shall submit evidence satisfactory to the Committee of facts
establishing 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 the claimant 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 

 

7

 

behalf of or in conjunction with the Committee, shall be personally
liable for any action, determination, or interpretation, whether of commission
or omission, taken or made with respect to the Plan, except in circumstances
involving actual bad faith or willful misconduct.  In addition to such other rights of
indemnification as they may have as members of the Board, as members of the
Committee or as officers or employees of the Company, all members of the
Committee and any officer, employee or representative of the Company or any of
its subsidiaries acting on their behalf shall be fully indemnified and
protected by the Company with respect to any such action, determination or
interpretation against the reasonable expenses, including attorneys’ fees
actually and necessarily incurred, in connection with the defense of any civil
or criminal action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or an award
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
Company ) or paid by them in satisfaction of a judgment in any action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such person claiming indemnification shall
in writing offer the Company the opportunity, at its own expense, to handle and
defend the same.  Expenses (including
attorneys’ fees) incurred in defending a civil or criminal action, suit or
proceeding shall be paid by the Company in advance of the final disposition of
such action, suit or proceeding if such person claiming indemnification is
entitled to be indemnified as provided in this Section.

 

6.7                                 Rights Personal to
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                                 Non-Allocation of Award.  In the event of a suspension of the Plan in
any Plan year for a period of more than 90 days, 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 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 

 

8

 

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 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 

 

9

 

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.

 

8.3                                 162(m) Limitations.  After the February Committee meeting for
any applicable year, the calculation methodology for the maximum possible
benefit entitlement shall be fixed for all Covered Officers.  On or
before such February meeting, the Committee may make appropriate
determinations for such purpose, but if no such determinations are made,
such maximum possible benefit entitlement shall be calculated based on the
provisions then in effect, without later application of discretion,
with the exception that the discretion inherent in Exhibit C shall be
assumed to have been exercised for each of the guidelines (with the result
that the items listed in Exhibit C will be excluded from the EVA
calculation).  Notwithstanding the foregoing, for purposes of determining
the benefits of Participants who are not Covered Officers and in
situations in which the effect is to reduce the actual benefits to a
Covered Officer, the Committee shall retain the discretion inherent in 2.4,
3.3, 3.5, 3.10, 3.11, Exhibit C and elsewhere to alter the
calculation methodology later than the February Committee meeting, up to
and including the time of the final determination of the benefit entitlements.

 

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.

 

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. 
Notice of any such amendment, suspension or termination shall be given
promptly to each Participant.

 

10

 

ARTICLE XII

 

Applicable Law

 

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

 

11

 

Exhibit A

 

Calculation of the Cost of Capital

 

“Cost of Capital” or “C*”
means the weighted average of the after tax cost of debt and equity for the
year in question.  It is calculated as
follows:

 

 

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 =  the Tax Rate as defined in Section 2.4(e)

 

 

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)] 

 

12

 

Exhibit B

 

Target Bonus Percentages (as
% of base salary)

 

	
  Participant

  Classification

  	
   

  	
  Target Bonus

  Percentage

  
	
  I

  	
   

  	
  80%

  
	
  II

  	
   

  	
  60%

  
	
  III

  	
   

  	
  55%

  
	
  IV

  	
   

  	
  50%

  
	
  V

  	
   

  	
  45%

  
	
  VI

  	
   

  	
  40%

  
	
  VII

  	
   

  	
  35%

  
	
  VIII

  	
   

  	
  30%

  
	
  IX

  	
   

  	
  25%

  
	
  X

  	
   

  	
  20%

  
	
  XI

  	
   

  	
  15%

  
	
  XII

  	
   

  	
  10%

  
	
  XIII

  	
   

  	
  5%

  

 

13

 

Exhibit C

 

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, 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.

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