THE MANITOWOC COMPANY, INC.
1999 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
SECTION 1. Purpose
The purpose of The Manitowoc Company, Inc. 1999 Non-employee Director
Stock Option Plan is to promote the long-term growth and financial success of
The Manitowoc Company, Inc. The Plan is intended to secure for the Company and
its shareholders the benefits of the long-term incentives inherent in increased
common stock ownership by members of the Board of Directors of the Company who
are not employees of the Company or its Affiliates. It is intended that the
Plan will induce and encourage highly experienced and qualified individuals to
serve on the Board and assist the Company in promoting a greater identity of
interest between the Company's non-employee directors and the shareholders of
the Company.
SECTION 2. Definitions
The following terms shall have the respective meanings set forth
below, unless the context otherwise requires:
a. "Affiliate" shall mean any corporation, partnership, joint
venture, or other entity in which the Company holds an equity, profit, or
voting interest of more than fifty percent (50%).
b. "Annual Meeting of the Shareholders" shall mean the annual
meeting of shareholders of the Company held each calendar year.
c. "Board" shall mean the Board of Directors of the Company.
d. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
e. "Company" shall mean The Manitowoc Company, Inc., a Wisconsin
corporation, together with any successor thereto.
f. "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
g. "Fair Market Value per Share" shall mean for any day the last
sale price at which a Share traded as reported on the composite tape by the New
York Stock Exchange on the business day immediately preceding such day, or, if
there were no trades of Shares on the composite tape on such business day, on
the most recent preceding business day on which there were trades. Or, if
Shares are not listed or admitted to trading on the New York Stock Exchange when
the determination of fair market value is to be made, Fair Market Value per
Share shall be the mean between the highest and lowest reported sales prices of
Shares on that date on the principal exchange on which the Shares are then
listed. If the Shares are not listed on any national exchange Fair Market Value
per Share shall be the amount determined in good faith by the Board to be the
fair market value of a Share at the relevant time.
h. "Non-employee Director" shall mean a member of the Board who
is not an employee of the Company or any Affiliate.
i. "Option" shall mean a stock option granted hereunder to a Non-
employee Director. An Option shall either be a "First Option," granted when a
Non-employee Director is initially elected to the Board, or an "Annual Option,"
granted annually, thereafter, to each continuing Non-employee Director.
j. "Option Agreement" shall mean any written agreement, contract,
or other instrument or document evidencing any Option granted under the Plan.
k. "Plan" shall mean The Manitowoc Company, Inc. 1999 Non-
employee Director Stock Option Plan.
l. "Shares" shall mean shares of common stock of the Company,
$.01 par value, and such other securities or property as may become subject to
Options pursuant to an adjustment made under Section 4(b) of the Plan.
SECTION 3. Plan Operation
a. The Plan is intended to meet the "formula" plan requirements
of Rule 16b-3 (or any successor provision thereto), as interpreted, adopted
under the Exchange Act and accordingly is intended to be self-governing.
b. The Board shall have no discretion to select the Non-employee
Directors to receive Option grants under the Plan, to determine the number of
Shares subject to the Plan or to each grant, nor the exercise price of the
Options granted pursuant to the Plan.
c. The Plan shall be administered by the Board. The Board may,
by resolution, delegate part or all of its administrative powers with respect to
the Plan.
d. The Board shall have all of the powers vested in it by the
terms of the Plan, such powers to include the authority, within the limits
prescribed herein, to establish the form of the agreement embodying grants of
Options made under the Plan.
e. The Board shall, subject to the provisions of the Plan, have
the power to construe the Plan, to determine all questions arising thereunder
and to adopt and amend such rules and regulations for the administration of the
Plan as it may deem desirable, such administrative decisions of the Board to be
final and conclusive.
f. Except to the extent prohibited by applicable law, the Board
may authorize any one or more of their number or the Secretary or any other
officer of the Company to execute and deliver documents on behalf of the Board.
The Board hereby authorizes the Secretary to execute and deliver all documents
to be delivered by the Board pursuant to the Plan.
SECTION 4. Shares Available for Options
a. Subject to adjustment as provided in Section 4(b):
i. The number of Shares with respect to which Options may
be granted under the Plan shall be *187,500. If, after the effective date
of the Plan, an Option terminates, expires or is canceled prior to the
delivery of all of the Shares issuable thereunder, then the number of
Shares counted against the number of Shares available under the Plan in
connection with the grant of such Option, to the extent of any such
termination, expiration or cancellation, shall again be available for
granting of additional Options under the Plan. If the Exercise Price of
any Option granted under the Plan is satisfied by tendering Shares (by
either actual delivery or by attestation), only the number of Shares issued
net of the Shares tendered shall be deemed delivered for purposes of
determining the maximum number of Shares available for delivery under the
Plan.
ii. The number of Shares covered by an Option under the Plan
shall be counted on the date of grant of such Option against the number of
Shares available for granting Options under the Plan.
iii. Any Shares delivered pursuant to the exercise of an
Option may consist, in whole or in part, of authorized and unissued Shares
or of treasury shares.
b. In the event that the Board shall determine that any dividend
or other distribution (whether in the form of cash, Shares, other securities or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company,
or other similar corporate transaction or event (collectively referred to as
"Events") affects the Shares such that an adjustment is determined by the Board
to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the Board
may, in such manner as it may deem equitable, adjust any or all of (i) the
number and type of Shares subject to the Plan and which thereafter may be made
the subject of Options under the Plan; (ii) the number and type of Shares
subject to outstanding Options; and (iii) the exercise price with respect to any
Option (collectively referred to as "Adjustments"); provided, however, that
Options subject to grant or previously granted to Non-employee Directors under
the Plan at the time of any such Event shall be subject to only such Adjustments
as shall be necessary to maintain the proportionate interest of the Non-employee
Directors and preserve, without exceeding, the value of such Options; and
provided further that the number of Shares subject to any Option shall always be
a whole number.
*Reflects the Company's 3 for 2 stock split of 4/1/99 (125,000 shares
adjusted to 187,500 shares).
SECTION 5. Nonqualified Stock Option Awards to Non-employee Directors
a. Non-employee Directors shall automatically be granted Options
under the Plan in the manner set forth in this Section 5 for no cash
consideration. A Non-employee Director may hold more than one Option under the
Plan in his or her capacity as a Non-employee Director of the Company, but only
on the terms and subject to the conditions set forth herein. All options
granted to Non-employee Directors pursuant to the Plan shall be nonqualified
stock options which do not qualify for special tax treatment under Code Sections
421 or 422.
b. By and simultaneously with the adoption of the Plan by the
Board, subject to approval of the Plan by the shareholders of the Company, each
Non-employee Director at such time shall be granted an Option to purchase two
thousand (2,000) Shares under the Plan (the "First Option"). Thereafter, on the
date on which a Non-employee Director, other than a Non-employee Director who
was serving as a director of the Company on the date of shareholder approval, is
first elected or appointed as a director of the Company during the existence of
the Plan, such Non-employee Director shall automatically be granted an Option to
purchase two thousand (2,000) Shares under the Plan.
c. Following the date of grant of the First Option, on the date
of the first Board meeting occurring in each calendar year, each continuing Non-
employee Director of the Board shall be granted an additional Option to purchase
one thousand (1,000) Shares under the Plan (the "Annual Option"). Annual
Options are not made concurrently with First Options and a Non-employee Director
must be continuing in office in order to be eligible to receive an Annual
Option.
d. The automatic grants to Non-employee Directors shall not be
subject to the discretion of any person.
e. Each Option granted under the Plan shall be evidenced by a
written Agreement. Each Agreement shall be subject to, and incorporate, by
reference or otherwise, the applicable terms of this Plan.
f. No Option shall be granted under the Plan after the tenth
anniversary of the effective date of the Plan. However, the term of any Option
theretofore granted may extend beyond such date.
g. Notwithstanding the provisions of Section 5(b), Options shall
automatically be granted to Non-employee Directors under the Plan only for so
long as the Plan remains in effect and a sufficient number of Shares are
available hereunder for the granting of such Options.
h. No Option, and no right under such Option, shall be
assignable, alienable, saleable or transferable by a Non-employee Director
otherwise than by will or by the laws of descent and distribution other than
with the prior approval of the Board. Each Option shall be exercisable, during
the lifetime of the Non-employee Director, only by such individual or, if
permissible under applicable law, by such individual's guardian or legal
representative. No Options may be pledged, alienated, attached or otherwise
encumbered, and any purported pledge, alienation, attachment or encumbrance
thereof shall be void and unenforceable against the Company or any Affiliate.
SECTION 6. Exercise Price.
a. The price per Share of the Company's common stock which may be
purchased upon exercise of an Option ("Exercise Price") shall be one hundred
percent (100%) of the Fair Market Value per Share on the date the Option is
granted and shall be payable in full at the time the Option is exercised as
follows (except that, in the case of an exercise under paragraph (iii), payment
may be made as soon as practicable after the exercise):
i. in cash or by certified check,
ii. by delivery to the Company of Shares which shall have
been owned for at least six (6) months and have a Fair Market Value per
Share on the date of surrender equal to the Exercise Price, or
iii. by delivery to the Company of a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company from sale or loan proceeds the amount
required to pay the exercise price.
b. Such Exercise Price shall be subject to adjustment as provided
in Section 4(b) hereof.
SECTION 7. Duration and Vesting of Options.
a. The term of each Option granted to a Non-employee Director
shall be for ten (10) years from the date of grant, unless terminated earlier
pursuant to the provisions of Section 8 hereof.
b. Except as otherwise provided in Section 8 hereof, each Option
shall vest and become exercisable according to the following schedule:
i. twenty-five percent (25%) of the total number of Shares
covered by the Option shall become exercisable beginning with the first
anniversary date of the grant of the Option;
ii. thereafter twenty-five percent (25%) of the total number
of Shares covered by the Option shall become exercisable on each subsequent
anniversary date of the grant of the Option until the fourth anniversary
date of the grant of the Option upon which the total number of Shares
covered by Option shall become exercisable.
SECTION 8. Effect of Termination of Membership on the Board.
a. The right to exercise an Option granted to a Non-employee
Director shall be limited as follows, provided the actual date of exercise is in
no event after the expiration of the term of the Option:
i. If a Non-employee Director ceases being a director of
the Company for any reason other than the reasons identified in
subparagraph (b) of this Section 8, the Non-employee Director shall have
the right to exercise the Options as follows, subject to the condition that
no Option shall be exercisable after the expiration of the term of the
Option:
(A) If the Non-employee Director was a member of the Board
of Directors of the Company for five (5) or more years, all
outstanding Options become immediately exercisable upon the date the
Non-employee Director ceases being a director for any reason. The
Non-employee Director may exercise the Options for a period of thirty-
six (36) months from the date the Non-employee Director ceases to be a
director, provided that if the Non-employee Director dies while
serving as a director or before such thirty-six (36) month period has
expired, the Options may be exercised by the Non-employee Director's
legal representative or any person who acquires the right to exercise
an Option by reason of the Non-employee Director's death for a period
of twelve (12) months from the date of the Non-employee Director's
death.
(B) If the Non-employee Director was a member of the Board
of Directors of the Company for fewer than five (5) years, the Non-
employee Director may exercise the Options, to the extent they were
exercisable at the date the Non-employee Director ceases to be a
member of the Board for any reason, for a period of thirty (30) days
following the date the Non-employee Director ceased being a director,
provided that if the Non-employee Director dies while serving as a
director or before such thirty (30) day period has expired, the
Options may be exercised by the Non-employee Director's legal
representative, or any person who acquires the right to exercise an
Option by reason of the Non-employee Director's death, for a period of
twelve (12) months from the date of the Non-employee Director's death.
(C) In the event any Option is exercised by the executors,
administrators, legatees, or distributees of the estate of a deceased
optionee, the Company shall be under no obligation to issue stock
thereunder unless and until the Company is satisfied that the person
or persons exercising the Option are the duly appointed legal
representatives of the deceased optionee's estate or the proper
legatees or distributees thereof.
b. If a Non-employee Director ceases being a director of the
Company due to an act of
i. fraud or intentional misrepresentation or
ii. embezzlement, misappropriation or conversion of assets or
opportunities of the Company or any Affiliate of the Company or
iii. any other gross or willful misconduct as determined by the
Board, in its sole and conclusive discretion,
all Options granted to such Non-employee Director shall immediately be forfeited
as of the date of the misconduct.
SECTION 9. Amendment and Termination of the Plan
a. The Board may at any time amend, alter, suspend, discontinue
or terminate the Plan.
b. Termination of the Plan shall not affect the rights of Non-
employee Directors with respect to Options previously granted to them, and all
unexpired Options shall continue in force and effect after termination of the
Plan, except as they may lapse or be terminated by their own terms and
conditions. Any amendment to the Plan shall become effective when adopted by
the Board, unless specified otherwise.
c. Rights and obligations under any Option granted before any
amendment of this Plan shall not be materially and adversely affected by
amendment of the Plan, except with the consent of the person who holds the
Option, which consent may be obtained in any manner that the Board deems
appropriate.
SECTION 10. General Provisions
a. Nothing contained in the Plan shall prevent the Company or any
Affiliate from adopting or continuing in effect other or additional compensation
arrangements for Non-employee Directors, and such arrangements may be either
generally applicable or applicable only in specific cases.
b. The grant of an Option to a Non-employee Director pursuant to
the Plan shall confer no right on such Non-employee Director to continue as a
director of the Company. Except for rights accorded under the Plan, Non-
employee Directors shall have no rights as holders of Shares as a result of the
granting of Options hereunder.
c. Notwithstanding any other provision of the Plan, the Company
shall have no liability to deliver any Shares under the Plan or make any other
distribution of benefits under the Plan unless such delivery or distribution
would comply with all applicable laws (including, without limitation, the
requirements of the Securities Act of 1933), and the applicable requirements of
any securities exchange or similar entity.
d. To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of Shares, the issuance may be effected on
a non-certificated basis, to the extent no prohibited by applicable law or the
applicable rules of any stock exchange.
e. The validity, construction and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the internal laws of the State of Wisconsin and applicable federal law.
f. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision hereof.
g. The Plan shall be effective as of the date of adoption of the
Plan by the Board, February 16, 1999, subject to approval of the Plan by the
shareholders of the Company.