Exhibit 10.12
GROVE WORLDWIDE LLC
Short Term Incentive Plan
SECTION 1. Purpose. The purposes of this Grove Worldwide LLC Short
Term Incentive Plan (the "Plan") are to promote the interests of Grove Worldwide
LLC (the "Company") and its members by attracting and retaining exceptional
officers and other key employees of the Company and its Affiliates by means of
performance-related incentives to achieve annual performance goals of the
Company and to enable such officers and key employees to participate in the
growth and financial success of the Company.
SECTION 2. Definitions. As used in the Plan, the following terms
shall have the meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or indirectly,
controls or is controlled by or under common control with the Company and (ii)
any entity in which the Company has a significant equity interest, in either
case as determined by the Committee.
"Award" shall mean a right to receive a Bonus under the terms, and
subject to the conditions, of the Plan.
"Board" shall mean the Management Committee of the Company, as
established pursuant to the LLC Agreement.
"Bonus" shall mean an amount payable to a Participant on achievement
of specified levels of EBITDA during a Year.
"Committee" shall mean the Compensation Committee of the Board or
any person or persons designated by the Board or the Compensation Committee to
administer the Plan.
"Company" shall mean Grove Worldwide LLC, a Delaware limited
liability company, together with any successor thereto.
"Disability" shall mean a Participant's becoming physically or
mentally incapacitated so that he is therefore reasonably expected to be unable,
with reasonable accommodation, for a period of six consecutive months or for an
aggregate of nine months in any 18 consecutive month period to perform the
essential functions of his job.
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"EBITDA" shall mean the net profit of the Company and its
subsidiaries, after all expenses but before any (A) interest, (B) income taxes
or other taxes based on profits, (C) amortization of goodwill, (D) depreciation,
(E) cash expenses directly associated with the implementation of the operations
improvement program, including consulting fees under the Consulting Agreement
referred to in the LLC Agreement and (F) to the extent determined by the
Committee, any nonrecurring or unbudgeted extraordinary items of income or loss.
The Committee may also determine EBITDA with respect to a designated business
unit. The determination of EBITDA for purposes of the Plan shall be made by the
Committee in good faith, which determination shall be conclusive and binding on
the Company and the Participants, including any beneficiaries thereof.
"EBITDA Target" shall mean a target EBITDA for the Company and its
subsidiaries, and/or for a designated business unit determined for a Year based
on management's proposal and as approved by the Committee.
"Effective Date" shall mean April 28, 1998.
"LLC Agreement" shall mean the Second Amended and Restated
Limited Liability Company Agreement of Grove Investors LLC.
"Participant" shall mean any officer or other key employee of the
Company or its Affiliates eligible to receive an award under Section 4 and
selected by the Committee to receive an award under the Plan.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, government
or political subdivision thereof or other entity.
"Plan" shall mean this Grove Worldwide LLC Short Term Incentive
Plan.
"Year" shall mean a fiscal year of the Company.
SECTION 3. Administration.
(a) The Plan shall be administered by the Committee. Subject to the
terms of the Plan and applicable law, and in addition to other express powers
and authorizations conferred on the Committee by the Plan, the Committee shall
have full power and authority to: (i) designate Participants; (ii) determine
business units and the EBITDA Targets for the Company and such business units;
(iii) determine the terms and conditions of Awards under the Plan; (iv)
determine EBITDA for the Company and each designated business unit for each
Year; (v) interpret, administer, reconcile
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any inconsistency, correct any default and/or supply any omission in the Plan
and any instrument or agreement relating to, or Award made under, the Plan; (vi)
establish, amend, suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (vii) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
(b) Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and binding
upon all Persons, including the Company, any Affiliate, any Participant or his
beneficiaries and any member of the Company.
(c) No member of the Committee shall be personally liable for any
action or determination made in good faith with respect to the Plan or any Award
hereunder.
SECTION 4. Eligibility. Any officer or other key employee of the
Company or any of its Affiliates (including any prospective officer or key
employee) as designated by the Committee shall be eligible to be designated as a
Participant in, and receive an Award under, the Plan.
SECTION 5. Grant of Award; Establishment of Target Bonus. With
respect to each Year, each Participant selected by the Committee shall be
entitled to receive an Award under the Plan. The amount of the Bonus payable
under an Award to the Participant on attainment on 100% of the EBITDA Targets
established for him for the Year is referred to as his "Target Bonus" for the
Year and shall generally be expressed as a percentage of the Participant's base
salary. The Target Bonus for each Participant will be established by the
Committee taking into consideration such factors as the Committee deems
appropriate including, without limitation, the Participant's position, level of
responsibilities and remuneration. The Target Bonus will be established with
respect to an EBITDA Target relating to the Company and its subsidiaries as a
whole or to a combination of EBITDA Targets relating to the Company and its
subsidiaries as a whole and the business unit in which the Participant is
employed, as determined by the Committee in its discretion.
SECTION 6. Establishment of EBITDA Targets. The EBITDA Targets
established for a Year shall relate to the Company and its subsidiaries as a
whole and such business units thereof as may be determined by the Committee.
Prior to the beginning of each Year the Committee shall determine the business
units for which EBITDA Targets shall be established and shall establish the
EBITDA Targets for such
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Year. The Committee may in its sole discretion adjust the EBITDA Targets for a
fiscal year for nonrecurring or unbudgeted extraordinary events.
SECTION 7. Amount of Bonus. A Participant's Bonus will be
determined relative to the achievement of the EBITDA Targets as follows:
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Percentage of EBITDA Percentage of Target
Target Achieved Bonus Payable
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Below 100% of EBITDA Bonus is reduced by 5% of
Target Target Bonus for each 1%
below EBITDA Target
100% of EBITDA Target 100% of Target Bonus
Above 100% of EBITDA Bonus is increased by 2-1/2%
Target of Target Bonus for each 1%
above EBITDA Target
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As described in the foregoing chart, there is no limit on the amount
of Bonus a Participant may earn under the Plan. No Bonus shall be in an amount
less than $0.
With respect to EBITDA which falls in between whole percentages, a
Participant's Bonus shall be determined by interpolation (on a linear basis).
SECTION 8. Bonus Payments. Any Bonus that is earned by a Participant
under the Plan will be paid to the Participant in cash no later than 30 days
after the Company's audited financial results for such Year become available.
SECTION 9. Effect Of Termination Of Employment.
No Bonus shall be paid to any Participant in respect of a Year
unless he (i) is employed by the Company or an Affiliate on the last day of the
Year or (ii) terminated employment during the Year on account of his death or
Disability during the Year. If a Participant's employment terminates during the
Year on account of his death or Disability during the Year, such Participant (or
his estate, in the case of his death) shall be entitled to receive a pro-rata
portion of the Bonus otherwise payable under the Plan on account of such Year
(if any) based upon the actual results for the Year and the number of his
completed months of employment during the Year and payable at the same time as
other Bonuses are or would be paid under the Plan for such Year.
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SECTION 10. Amendment and Termination. The Board, or if none, the
Committee may amend, alter, suspend, discontinue or terminate the Plan or any
portion thereof at any time; provided that any such amendment, alteration,
suspension, discontinuance or termination that would materially adversely affect
the rights of any Participant to a Bonus theretofore earned shall not to that
extent be effective without the consent of the affected Participant.
SECTION 11. General Provisions.
(a) Nontransferability. The Participant's rights under this Plan
shall not be transferable during the Participant's lifetime. No rights under
this Plan may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant otherwise than by will or by the laws
of descent and distribution, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided, that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.
(b) No Rights to Participate. No Person shall have any claim to be
selected as a Participant hereunder or to be granted any award hereunder. There
is no obligation for uniformity of treatment of Participants. The terms and
conditions of awards and the Committee's determinations and interpretations with
respect thereto need not be the same with respect to each Participant (whether
or not such Participants are similarly situated).
(c) Delegation. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers or managers of the Company or
any Affiliate, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to take
any action which the Committee has authority to take under this Plan.
(d) Withholding. The Company shall have the right and is hereby
authorized to withhold from any payment due under the Plan or from any
compensation or other amount owing to a Participant the amount of any applicable
withholding taxes in respect of any Bonus and to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes.
(e) Award Letter. Each award made hereunder shall be evidenced by an
Award Letter which shall be delivered to the Participant and shall specify the
terms and conditions under which he may earn and be paid a Bonus and any rules
applicable thereto.
(f) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company from adopting or continuing in effect
other compensation arrangements, which may, but need not, provide for the grant
of options, securities and other types of awards, and such arrangements may be
either generally applicable or applicable only in specific cases.
(g) No Right to Employment. Participation in the Plan shall not be
construed as giving a Participant the right to be retained in the employ of, or
in any other continuing relationship with, the Company or any Affiliate.
(h) Governing Law. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of New York.
(i) Severability. If any provision of the Plan is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any
person, or would disqualify the Plan under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform the
applicable laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan, such
provision shall be stricken as to such jurisdiction or person and the remainder
of the Plan and shall remain in full force and effect.
(j) No Trust or Fund Created. Neither the Plan nor any award
hereunder shall create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company or any affiliate and a
Participant or any other person. To the extent that any person acquires a right
to receive payments from the Company or any Affiliate pursuant to the Plan such
right shall be no greater than the right of any unsecured general creditor of
the Company or any affiliate.
(k) Headings. Headings are used herein solely as a convenience to
facilitate reference and shall not be deemed in any way material or relevant to
the construction or interpretation of the Plan or any provision thereof.