UNITED STATES SECURITIES AND EXCHANGE COMMISSION

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NjlUJPjorHtEoXzHfaCzgn29O8osG90W5tPmvkGMIuygw3U08Zlvcbo6twAh+voX Pv+39+mn7toFJibcPc/GWA== 0000061986-01-500022.txt : 20010516 0000061986-01-500022.hdr.sgml : 20010516 ACCESSION NUMBER: 0000061986-01-500022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MANITOWOC CO INC CENTRAL INDEX KEY: 0000061986 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION MACHINERY & EQUIP [3531] IRS NUMBER: 390448110 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11978 FILM NUMBER: 1637363 BUSINESS ADDRESS: STREET 1: 500 S 16TH ST STREET 2: STE B CITY: MANITOWOC STATE: WI ZIP: 54221-0066 BUSINESS PHONE: 9206844410 MAIL ADDRESS: STREET 1: 500 S 16TH ST CITY: MANITOWOC STATE: WI ZIP: 54221-0066 10-Q 1 q10mar01.htm FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2001

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________

Commission File Number 1-11978

THE MANITOWOC COMPANY, INC.

(Exact name of registrant as specified in its charter)

Wisconsin 39-0448110

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification Number)

500 So. 16th Street, Manitowoc, Wisconsin 54221-0066

(Address of principal executive offices) (Zip Code)

(920) 684-4410

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ( X ) No ( )

The number of shares outstanding of the Registrant's common stock, $.01 par value, as of March 31, 2001, the most recent practicable date, was 24,266,040.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE MANITOWOC COMPANY, INC.

Consolidated Statements of Earnings

For the Three Months Ended March 31, 2001 and 2000

(Unaudited)

(In thousands, except share data)

	March 31, 2001	March 31, 2000

Net sales	$ 229,351	$ 205,853

Costs and expenses:
Cost of sales	173,321	150,136
Engineering, selling and
administrative expenses	36,001	28,974

Total costs and expenses	209,322	179,110

Earnings from operations	20,029	26,743

Other income (expense):
Interest expense	(4,096)	(2,511)
Other expenses, net	(115)	(371)

Total	(4,211)	(2,882)

Earnings before taxes on income	15,818	23,861

Provision for taxes on income	5,948	8,948

Net earnings	$ 9,870	$ 14,913

Net earnings per share - basic	$ 0.41	$ 0.58
Net earnings per share - diluted	$ 0.40	$ 0.57

Dividends per share	$ 0.075	$ 0.075

Weighted average shares outstanding - basic	24,262,313	25,850,072
Weighted average shares outstanding - diluted	24,543,198	25,997,317

See accompanying notes which are an integral part of these statements.

THE MANITOWOC COMPANY, INC.

Consolidated Balance Sheets

As of March 31, 2001 and December 31, 2000

(Unaudited)

(In thousands, except share data)

	March 31, 2001	December 31, 2000
-ASSETS-
Current Assets:
Cash and cash equivalents	$ 8,186	$ 13,983
Marketable securities	2,071	2,044
Accounts receivable	71,730	88,231
Inventories	101,818	91,178
Other current assets	10,827	7,479
Future income tax benefits	22,756	20,592
Total current assets	217,388	223,507

Intangible assets - net	307,516	308,751
Other non-current assets	14,581	10,332
Property, plant and equipment - net	102,297	99,940
TOTAL ASSETS	$ 641,782	$ 642,530

-LIABILITIES AND STOCKHOLDERS' EQUITY-
Current Liabilities:
Accounts payable and accrued expenses	$ 145,996	$ 144,713
Current portion of long-term debt	270	270
Short term borrowings	68,671	81,000
Product warranties	12,537	13,507
Total current liabilities	227,474	239,490

Non-current Liabilities:
Long-term debt, less current portion	140,337	137,668
Postretirement health benefit obligations	20,481	20,341
Other non-current liabilities	11,524	11,262
Total non-current liabilities	172,342	169,271

Stockholders' Equity:
Common stock
(36,746,482 shares issued)	367	367
Additional paid-in capital	31,586	31,602
Accumulated other comprehensive loss	(2,451)	(2,569)
Retained earnings	342,513	334,433
Treasury stock, at cost
(12,480,442 and 12,487,019 shares)	(130,049)	(130,064)
Total stockholders' equity	241,966	233,769
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 641,782	$ 642,530

See accompanying notes which are an integral part of these statements.

THE MANITOWOC COMPANY, INC.

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2001 and 2000

(In thousands)

(Unaudited)

	March 31, 2001	March 31, 2000
Cash Flows from Operations:
Net earnings	$ 9,870	$ 14,913
Non-cash adjustments to income:
Depreciation	2,893	2,523
Amortization of goodwill	2,315	1,902
Amortization of deferred financing fees	45	169
Loss on sale of property, plant and equipment	64	79

Changes in operating assets and liabilities
excluding the effects of business acquisitions:
Accounts receivable	16,501	(14,807)
Inventories	(10,640)	(3,170)
Other current assets	(3,349)	(677)
Non-current assets	(7,125)	807
Current liabilities	143	(768)
Non-current liabilities	360	141
Net cash provided by operations	11,077	1,112

Cash Flows from Investing:
Purchase of temporary investments - net	(27)	(30)
Business acquisitions - net of cash acquired	-	(30,694)
Proceeds from sale of property, plant, and
equipment	22	22
Capital expenditures	(5,336)	(4,853)
Net cash used for investing	(5,341)	(35,555)

Cash Flows from Financing:
Dividends paid	(1,791)	(1,957)
Treasury stock purchased	-	(22,638)
Proceeds (payments) on long-term borrowings	2,669	(11)
Proceeds (payments) on short-term borrowings - net	(12,329)	67,201
Net cash (used for) provided by financing	(11,451)	42,595

Effect of exchange rate changes on cash	(82)	(10)

Net increase (decrease) in cash and cash equivalents	(5,797)	8,142

Balance at beginning of period	13,983	10,097
Balance at end of period	$ 8,186	$ 18,239

Supplemental cash flow information:
Interest paid	$ 3,786	$ 1,920
Income taxes paid	$ 2,632	$ 4,022

See accompanying notes which are an integral part of these statements.

THE MANITOWOC COMPANY, INC.

Consolidated Statements of Comprehensive Income

For the Three Months Ended March 31, 2001 and 2000

(In thousands)

(Unaudited)

	March 31, 2001	March 31, 2000

Net earnings	$ 9,870	$ 14,913

Other comprehensive income (loss):
Hedging activities - net of income taxes (see Note 8)	(211)	-
Foreign currency translation adjustments	329	(184)
Total other comprehensive income (loss)	118	(184)

Comprehensive income	$ 9,988	$ 14,729

See accompanying notes which are an integral part of these statements.

THE MANITOWOC COMPANY, INC.

Notes to Unaudited Consolidated Financial Statements

For the Three Months Ended March 31, 2001 and 2000

(Unaudited)

Note 1. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the results of operations, cash flows and comprehensive income for the three months ended March 31, 2001 and 2000 and the financial position at March 31, 2001. The interim results are not necessarily indicative of results for a full year and do not contain information included in the company's annual consolidated financial statements and notes for the year ended December 31, 2000. The consolidated balance sheet as of December 31, 2000 was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. It is suggested that these financial statements be read in conjunction with financial statements and the notes thereto included in the company's latest annual report.

All dollar amounts are in thousands throughout these notes, except where otherwise indicated.

Note 2. The components of inventories at March 31, 2001 and December 31, 2000 are summarized as follows:

	March 31, 2001	December 31, 2000

Components:
Raw materials	$ 34,881	$ 33,935
Work-in-process	38,316	32,914
Finished goods	50,487	45,880

Total inventories at FIFO costs	123,684	112,729

Excess of FIFO costs over
LIFO value	(21,866)	(21,551)

Total inventories	$ 101,818	$ 91,178

Inventories are carried at lower of cost or market using the first-in, first-out (FIFO) method for 50% and 57% of total inventories at March 31, 2001 and December 31, 2000, respectively. The remainder of the inventories are costed using the lower of the last-in, first-out (LIFO) method.

Note 3. The United States Environmental Protection Agency ("EPA") has identified the company as a potentially responsible party ("PRP") under the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"), liable for the costs associated with investigating and cleaning up contamination at the Lemberger Landfill Superfund Site (the "Site") near Manitowoc, Wisconsin.

Approximately 150 PRP's have been identified as having shipped substances to the Site. Eleven of the potentially responsible parties have formed a group (the Lemberger Site Remediation Group, or LSRG) and have successfully negotiated with the EPA and the Wisconsin Department of Natural Resources to settle the potential liability at the Site and fund the cleanup.

Recent estimates indicate that the remaining costs to clean up the Site are nominal. However, the ultimate allocations of cost for the Site are not yet final. Although liability is joint and several, the company's percentage share of liability is estimated to be 11% of the total cleanup costs. Prior to December 31, 1996, the company accrued $3.3 million in connection with this matter. Expenses charged against this reserve for the quarters ended March 31, 2001 and 2000 were not significant. Remediation work at the Site has been completed, with only long-term pumping and treating of ground water and Site maintenance remaining. The remaining estimated liability for this matter, included in other current and noncurrent liabilities at March 31, 2001, is $0.9 million.

As of March 31, 2001, various product-related lawsuits were pending. All of these cases are insured with self-insurance retentions of $1.0 million for Crane accidents; $1.0 million for Foodservice accidents occurring during 1990 to 1996; and $0.1 million for Foodservice accidents occurring during 1997 to 2001. The insurer's contribution is limited to $50.0 million.

Product liability reserves included in accounts payable and accrued expenses at March 31, 2001 were $8.5 million; $2.7 million is reserved specifically for the cases referenced above and $5.8 million is reserved specifically for claims incurred but not reported which were estimated using actuarial methods. The highest current reserve for an insured claim is $0.9 million. Based on the company's experience in defending itself against product liability claims, management believes the current reserves are adequate for estimated settlements on aggregate self-insured and insured claims. Any recoveries from insurance carriers are dependent upon the legal sufficiency of claims and the solvency of insurance carriers.

It is reasonably possible that the estimates for environmental remediation and product liability costs may change in the near future based upon new information that may arise. Presently, there is no reliable means to estimate the amount of any such potential changes.

The company is also involved in various other legal actions arising in the normal course of business. After taking into consideration legal counsel's evaluation of such actions, in the opinion of management, ultimate resolution is not expected to have a material adverse effect on the consolidated financial statements of the company.

Note 4. The company currently has the board of directors' authorization to repurchase up to 2.5 million shares of common stock at management's discretion. As of March 31, 2001, the company had purchased approximately 1.9 million shares at a cost of $49.8 million pursuant to this authorization. There were no common stock repurchases made during the first quarter of 2001.

In February 2001, the board of directors adopted a resolution to pay cash dividends annually rather than quarterly. Thus, in October 2001, and at its regular fall meeting each year thereafter, the board of directors will determine the amount and timing of the annual dividend for that year.

Note 5. The following is a reconciliation of the weighted average shares outstanding used to compute basic and diluted earnings per share.

	Quarter Ended March 31, 2001		Quarter Ended March 31, 2000
		Per Share		Per Share
	Shares	Amount	Shares	Amount

Basic EPS	24,262,313	$ 0.41	25,850,072	$ 0.58
Effect of Dilutive Securities -
Stock Options	280,885	(0.01)	147,245	(0.01)

Diluted EPS	24,543,198	$ 0.40	25,997,317	$ 0.57

Note 6. On May 9, 2000, The Manitowoc Company, Inc. ("Manitowoc") acquired from Legris Industries SA ("Legris") all of the outstanding capital stock of Potain SA, pursuant to a Share Purchase Agreement, dated May 9, 2001, among Manitowoc, Manitowoc France SAS and Legris (the "Acquisition"). The total purchase price for the Acquisition was FRF 2.3 billion (U.S. $307.1 million, based upon exchange rates as of May 7, 2001). The purchase price paid by Manitowoc was determined on the basis of arm's length negotiations between the parties. There is no material relationship between Legris and Manitowoc or any of its affiliates, directors or officers or any of their associates.

This acquisition was financed through the company's $475 million credit facility and the issuance of the company's 10-3/8% Senior Subordinated Notes due 2011 in the aggregate principal amount of (euro) 175 million (U.S. $156 million, based upon exchange rates as of May 7, 2001). See Management's Discussion and Analysis of Financial Condition and Results of Operations for a summary of the terms of the credit facility and the 10-3/8% Senior Subordinated Notes due 2011, both of which were completed on May 9, 2001.

Founded in 1928, Potain is considered a technology leader in the tower crane market with a long history of product innovations and patents. The company manufactures a variety of tower cranes, including top slewing, luffing jib, topless, and self-erecting units, plus special models for dams and other large building projects. The company employs approximately 2,200 people and has sold more than 88,000 cranes worldwide. Potain operates eight manufacturing facilities for tower cranes and related products in France, Germany, Italy, Portugal and China, and is active in more than 50 countries through distribution subsidiaries or agents.

On April 24, 2001, the assets of Kern Electric were acquired by the Manitowoc Marine Group. The final acquisition price was $0.4 million. Kern Electric, located in Toledo, Ohio, will be managed and operated from the company's Toledo Shiprepair location and will be recognized as the "Manitowoc Electrical Service Division" within the Marine Group. Kern adds electrical capabilities for both the company's marine and industrial operations, provides an expanded customer base, fills a service void, and will allow us additional opportunities for turnkey, automation, and capital projects.

Note 7. The company determines its segments based upon the internal organization that is used by management to make operating decisions and assess performance. Based upon this approach, the company has three reportable segments: Foodservice Equipment (Foodservice), Cranes and Related Products (Cranes), and Marine Operations (Marine).

Information about reportable segments and a reconciliation of total segment sales and profits to the consolidated totals for the quarters ending March 31, 2001 and 2000 are summarized in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," to this Quarterly Report on Form 10-Q. As of March 31, 2001 and December 31, 2000, the total assets by segment were as follows:

	March 31, 2001	December 31, 2000

Foodservice	$ 372,115	$ 359,196
Cranes	156,868	171,867
Marine	77,277	75,757
General corporate	35,522	35,710

Total	$ 641,782	$ 642,530

Note 8. As of January 1, 2001 the company adopted Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement requires all derivative instruments to be recorded on the balance sheet as assets or liabilities, at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or comprehensive income, depending on whether a derivative is designated and qualifies as part of a hedge transaction and if so, the type of hedge transaction.

The company enters into interest rate swap agreements to reduce the impact of changes in interest rates on its floating rate debt. As of March 31, 2001 the company had outstanding one interest rate swap agreement with a financial institution, having a total notional principal amount of $12.5 million and expiring October 2002. The interest rate swap is designated as cash flow hedge instrument based upon the criteria established by SFAS No. 133. For a derivative designated as a cash flow hedge, the effective portion of the derivative's gain or loss due to a change in fair value is initially recorded as a component of other comprehensive income and subsequently reclassified into earnings when the hedged exposure affects earnings. During the period ended March 31, 2001, the cash flow hedge was deemed to be fully effective.

The cumulative effect of adopting SFAS No. 133 as of January 1, 2001 was insignificant. The impact of SFAS No. 133 during the quarter ended March 31, 2001 resulted in a net loss, recognized in comprehensive income, of approximately $0.2 million.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for the Quarters Ended March 31, 2001 and 2000

Net sales and earnings from operations by business segment for the quarter ended March 31, 2001 and 2000 are shown below (in thousands):

	QUARTER ENDED
		March 31, 2001	March 31, 2000

NET SALES:
Foodservice products		$ 101,245	$ 92,929
Cranes and related products		84,258	100,770
Marine		43,848	12,154
Total		$ 229,351	$ 205,853

EARNINGS(LOSS) FROM OPERATIONS:
Foodservice products		$ 9,541	$ 12,180
Cranes and related products		11,363	17,333
Marine		4,569	2,377
General corporate expense		(3,129)	(3,245)
Amortization		(2,315)	(1,902)
Total		20,029	26,743

OTHER INCOME (EXPENSE) - NET		(4,211)	(2,882)

EARNINGS BEFORE TAXES ON INCOME		$ 15,818	$ 23,861

Net sales increased 11.4% to $229.4 million in the first quarter of 2001, from $205.9 million for the same period in 2000. Net earnings for the quarter were $9.9 million, or $.40 per diluted share, compared with $14.9 million, or $.57 per diluted share, in the first quarter of 2000. Weighted average shares outstanding used to calculate diluted earnings per share for the first quarter of 2001 and the prior-year quarter were 24.5 million and 26.0 million, respectively.

Foodservice equipment sales were $101.2 million for the first quarter of 2001, up 9% from the first quarter of 2000. Operating earnings for Foodservice were $9.5 million for the quarter, a 22% drop from the $12.2 million earned during the same period last year. The increase in sales was the result of acquisitions made during 2000. Without the acquisitions, sales and operating earnings would have declined by 22% and 24%, respectively, compared to the same period last year. Capital spending constraints in the beverage equipment industry continue to lower volumes in this business. These volume decreases, along with product mix issues and slower ice-machine sales, contributed to the decline in Foodservice margins.

First quarter sales for the Crane segment were $84.3 million, compared to $100.8 million for 2000, a decline of 16%. Crane segment operating earnings dropped 34% to $11.4 million from $17.3 million in the first quarter of 2000. Sales of our boom trucks continued to be weak due to greater economic pressures on smaller contractors, reflecting the reduced order patterns for light-duty construction equipment that we have seen in the past two quarters. In addition, our Crane segment was impacted with pricing pressures due to the strong U.S. dollar and greater competitiveness with the global market. These factors negatively impacted our crane margins.

We believe prospects for our Crane segment remain solid. Quoting activity for our higher-capacity lift cranes continued to climb, driven by demand in the energy-related markets. This is evidenced by the very positive response we received at BAUMA 2001, the international construction equipment trade fair in Germany. We introduced five major new crane products - a number unprecedented in the lattice-boom crane industry and a testament to our technological and manufacturing capabilities. Including sales made at BAUMA, our overall Crane segment backlog stood at $85 million as of April 13, 2001.

Marine segment sales and operating earnings for the first quarter were $43.8 million and $4.6 million, respectively, compared with $12.2 million and $2.4 million for the same period in 2000. Our acquisition of Marinette Marine in the fourth quarter of 2000 accounted for the majority of the sales and earnings increase. However, our organic sales and earnings growth rates were 22% and 13%, respectively. The marine segment has just completed another active winter repair season. This season included more than 20 dry dockings at our Sturgeon Bay and Toledo facilities, and work continued steadily on the hopper dredge Liberty Island. In addition, quoting activity remained high at our Sturgeon Bay, Toledo, and Cleveland operations, as well as at Marinette Marine.

Interest expense for the quarter ended March 31, 2001 was $4.1 million, compared to $2.5 million for the same period last year. This increase in interest expense is due to the additional debt incurred to fund acquisitions and to repurchase shares of Manitowoc stock during 2000.

Our effective tax rate was approximately 38% for the quarters ended March 31, 2001 and 2000.

Financial Condition at March 31, 2001

Cash flow from operations was positive in the first quarter, totaling $11.1 million, compared with cash from operations of $1.1 million in the first quarter of 2000. This increase was primarily the result of changes in working capital amounts and decreased net income. Total funded debt was $209.3 million at the end of the first quarter 2001, representing a debt-to-capital ratio of 46% at March 31, 2001, as compared to 48% at December 31, 2000.

On May 9, 2001, the company entered into a $475 million senior credit facility consisting of a $175.0 million five-year term loan; a $175.0 million six-year term loan; and a $125.0 million five-year revolving credit facility.

The senior credit agreement includes covenants, which include the maintenance of various debt and net worth ratios, customary representations and warranties, customary events of default, including a change of control, and other customary covenants, including covenants that limit the company's and its subsidiaries' ability to prepay principal, redeem or repurchase the notes or make amendments to the indenture governing the notes; incur additional debt; merge with other entities or make acquisitions; pay dividends or make distributions; make investments or advances; create or become subject to liens; and make capital expenditures.

Borrowings under the agreement bear interest at a rate equal to the sum of the base rate or a Eurodollar rate plus an applicable percentage. For all credit facilities the percentage is based on the company's consolidated leverage ratio, as defined by the agreement. The company will also pay agency fees and commitment fees on the unused portion of the credit facility as defined by the agreement.

Also, on May 9, 2001, the company issued, in a private placement, (euro) 175 million (U.S. $156 million) of 10-3/8% Senior Subordinated Notes ("Notes") due May 2011. The net proceeds of the offering will also be used to finance a portion of the purchase price of Potain SA. The Notes will be unsecured obligations of the company, ranking subordinate in right of payment to all senior debt of the company. The Notes include covenants similar to the senior credit agreement described above. The Notes also contain certain other covenants including restrictions on the repurchase of capital stock and Asset Sales, as defined.

The Notes are being sold to qualified institutional buyers in reliance on Rule 144A and to persons outside of the United States in reliance on Regulation S under the Securities Act of 1933, as amended. The Notes will not be registered under the Securities Act and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirement of the Securities Act and applicable state securities laws.

The proceeds from senior credit facility and the issuance of the Senior Subordinated Notes will be used to finance the acquisition of Potain, retire the existing revolving credit facility and substantially all other outstanding debt, and for general corporate and working capital purposes.

This Quarterly Report on Form 10-Q includes forward-looking statements based on management's current expectations. Reference is made in particular to the description of the company's plans and objectives for future operations, assumptions underlying such plans and objectives and other forward-looking statements in this report. Such forward-looking statements generally are identifiable by words such as "anticipates," "believes," "intends," "estimates," "expects" and similar expressions.

These statements involve a number of risks and uncertainties and must be qualified by factors that could cause results to be materially different from what is presented here. This includes the following factors for each business segment: Foodservice - demographic information affecting two-income families and general population growth; household income; weather; consolidations within restaurant and foodservice equipment industries; global expansion of customers; the commercial ice-machine replacement cycle in the United States; specialty foodservice market growth; future strength of the beverage industry; and the demand for quick-service restaurants and kiosks. Cranes - market acceptance of new and innovative products; cyclicality of the construction industry; the effects of government spending on construction-related projects throughout the world; the ability of the company to effectively integrate Potain; growth in the world market for heavy cranes; the replacement cycle of technologically obsolete cranes; and demand for used equipment in developing countries. Marine - shipping volume fluctuations based on performance of the steel industry; weather and water levels on the Great Lakes; trends in government spending on new vessels; five-year survey schedule; the replacement cycle of older marine vessels; growth of existing marine fleets; consolidation of the Great Lakes marine industry; frequency of casualties on the Great Lakes; and the level of construction and industrial maintenance. Corporate - changes in laws and regulations; successful identification and integration of acquisitions; competitive pricing; domestic and international economic conditions; changes in the interest rate environment; and success in increasing manufacturing efficiencies.

Recently Adopted Accounting Changes

In June 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133." This issuance delayed the effective date of SFAS 133 for the company until the first quarter of 2001.

The company adopted SFAS 133 on January 1, 2001. The effects of the adoption were immaterial.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

See Item 7A of the company's Annual Report on Form 10-K for the year ended December 31, 2000.

PART II. OTHER INFORMATION

Item 5. Other Information

Change in Officer of the Company

On May 8, 2001 the company issued a press release announcing the election, by the board of directors, of Carl J. Laurino as treasurer.

Laurino joined the company's corporate staff in 2000 as its assistant treasurer and served in that capacity until his latest appointment. Prior to joining Manitowoc, Laurino spent 15 year in the commercial banking industry with Firstar Bank, Norwest Bank, and Associated Bank. A graduate of the University of Wisconsin - Eau Claire, Laurino holds a bachelor's degree in finance.

The press release is incorporated herein by reference to Exhibit 20 of this report. The reader is referred to this Exhibit for more information.

Item 6. Exhibits and Reports on Form 8-K

Exhibits: See exhibit index following the signatures on this Report, which is incorporated herein by reference.
Reports on form 8-K: During the quarter ended March 31, 2001 the company filed a Current Report on Form 8-K dated as of March 26, 2001 stating that it issued a press release announcing anticipated net sales and diluted earnings per share for the first quarter of 2001.

Subsequent to the quarter ended March 31, 2001, the company filed a second Current Report on Form 8-K, dated April 16, 2001, stating that the company issued a press release announcing its intent to offer in a private placement (Euro) 175 million of its Senior Subordinated Notes due 2011.

A third Current Report on Form 8-K was filed dated April 17, 2001 stating that the company issued a press release announcing its earnings for the first quarter ended March 31, 2001.

In addition, a fourth Current Report on Form 8-K was filed dated April 20, 2001 to provide the unaudited pro forma condensed consolidated financial statements of the company and Potain SA.

On May 11, 2001, a fifth Current Report on Form 8-K was filed announcing the acquisition of Potain SA from Legris Industries SA and updating the unaudited pro forma condensed consolidated financial statements of the company and Potain SA as filed on the Current Report on Form 8-K dated April 20, 2001.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

THE MANITOWOC COMPANY, INC.

(Registrant)

/s/ Terry D. Growcock

-------------------------------------------

Terry D. Growcock

President and

Chief Executive Officer

/s/ Glen E. Tellock

-------------------------------------------

Glen E. Tellock

Senior Vice President and

Chief Financial Officer

/s/ Maurice D. Jones

-------------------------------------------

Maurice D. Jones

General Counsel and Secretary

May 15, 2001

THE MANITOWOC COMPANY, INC.

EXHIBIT INDEX

TO FORM 10-Q

FOR QUARTERLY PERIOD ENDED

MARCH 31, 2001

		Filed
Exhibit No.	Description	Herewith
10	The Manitowoc Company, Inc. Management Incentive Compensation Plan (Economic Value Added (EVA) Bonus Plan) as amended February 20, 2001	X
20.1	Press release dated May 8, 2001 regarding the appointment of Carl J. Laurino as treasurer.	X

* Pursuant to Item 601(b) (2) of Regulation S-K, the Registrant agrees to furnish to the Securities and Exchange Commission upon request, a copy of any unfiled exhibits or schedules to such document.

10Q-1st-2001

EX-10 2 eva401.txt INCENTIVE PLAN MANAGEMENT INCENTIVE COMPENSATION PLAN{PRIVATE } ECONOMIC VALUE ADDED (EVA) BONUS PLAN AS AMENDED FEBRUARY 13, 2001 ARTICLE I STATEMENT OF PURPOSE 1.1 The purpose of the Plan is to provide a system of incentive compensation which will promote the maximization of shareholder value over the long term. In order to align management incentives with shareholder interests, incentive compensation will reward the creation of value. This Plan will tie incentive compensation to Economic Value Added ("EVA") and, thereby, reward management for creating value and penalize management for destroying value. 1.2 EVA is the performance measure of value creation. EVA reflects the benefits and costs of capital employment. Managers create value when they employ capital in an endeavor that generates a return that exceeds the cost of the capital employed. Managers destroy value when they employ capital in an endeavor that generates a return that is less than the cost of capital employed. By imputing the cost of capital upon the operating profits generated by a business group, EVA measures the total value created (or destroyed) by management. EVA = (Net Operating Profit After Tax - Capital Charge) 1.3 Each Plan Participant is placed in a classification. Each classification has a prescribed target bonus. The bonus earned in any one year is the result of multiplying the Actual Bonus Percentage times the Participant's base pay. Bonuses that fall within a pre-specified range will be fully paid out. Positive and negative bonuses falling out- side this range are banked forward in the Participant's Bonus Bank, with one-third of the net positive balance paid out each year in cash. 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 two different Participating Groups. For the purpose of this plan, the Participating Groups are listed on Exhibit C. 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) Plus: FIFO Inventory Plus: Other Current Assets Less: Non-Interest Bearing Current Liabilities (NIBCL's - See Note 1) Plus: Net PP&E Plus: Other Operating Assets Plus: Capitalized Research & Development Plus: Goodwill acquired after July 3, 1993 Plus: Accumulated Amortization on Goodwill acquired after July 3, 1993 Plus (Less): Special Items (one-time) - ----------------------------------------------------------------- Equals: Capital Notes: (1) NIBCL's include trade A/P to another Manitowoc unit, but do not include the contingent liability associat- ed with Bonus Banks. 2.3 Each component of Capital will be measured by computing an average balance based on the ending monthly balance for the twelve months of the Fiscal Year. 2.4 "Cost of Capital" or "C*" means the weighted average of the after tax cost of debt and equity for the year in question. The Cost of Capital will be reviewed annually and revised if it has changed significantly. Calculations will be carried to one decimal point. The cost of capital for the initial year is 12.6%. See Exhibit A. In subsequent plan years the methodology for the calculation of the Cost of Capital will be: 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 projected debt to capital ratio of 40%. The Risk Free Rate is the average daily closing yield rate on 30 year U.S. Government Bonds for the month of December immediately preceding the Plan Year, the BETA is one, and the Market Risk Premium is 5%. The Debt Yield is the projected weighted average yield on the Company's long term obligations for the 12 month period ending December 31 of the Plan Year, and the tax rate is 39% for U.S. Companies, and the full statutory rate of the country where a foreign division or subsidiary is based. The debt to capital ratio, BETA, and Market Risk Premium should be reviewed at least every three years with the assistance of Stern Stewart. d) Short-term debt is to be treated as long-term for purposes of computing the cost of capital. 2.5 "Capital Charge" means the deemed opportunity cost of employing Capital in the business of each Participating Group. The Capital Charge is computed as follows: Capital Charge > Capital X Cost of Capital (C*) 2.6 "Net Operating Profit After Tax" or "NOPAT" "NOPAT" means the after tax cash earnings attributable to the capital employed in the Participating Group for the year in question. The components of NOPAT are as follows: Operating Earnings Plus: Increase (Decrease) in Capitalized R & D (See Note 1) Plus: Increase (Decrease) in Bad Debt Reserve Plus: Increase (Decrease) in Inventory Reserves Plus: Amortization of Goodwill acquired after July 3, 1993 Less: Other Expense (Excluding interest on debt) Plus: Other Income (Excluding investment income) Equals: Net Operating Profit Before Tax Less: Taxes (See Note 2) Equals: Net Operating Profit After Tax (1) Since R & D is Capitalized, the difference in the balance is the expensed amount for that year. (2)Taxes is assumed to be 39% of Net Operating Profit Before Tax. (For exceptions see 2.4(c)). 2.7 "Economic Value Added" or "EVA" means the NOPAT that remains after subtracting the Capital Charge, expressed as follows: NOPAT Less: Capital Charge Equals: EVA EVA may be positive or negative. ARTICLE III DEFINITION AND COMPUTATION OF TARGET BONUS VALUE 3.1 "Actual EVA" means the EVA as calculated for each Participating Group for the year in question. 3.2 "Target EVA" means the level of EVA that is expected in order for the Participating Group to receive the Target Bonus Value. The Target EVA for the first year is set at the expected EVA for the year prior to the first year of the plan after adjusting for inventory write-offs, Manitex relocation, FAS 106 and 109 and the $5 million product liability settlement (except for $1.2 million). After the first year, the Base-Line EVA is revised according to the following formula: (Last Year's Actual EVA + Last Year's Target EVA) Target EVA = --------------------------- + Expected Improvement 2 in EVA "Expected Improvement in EVA" means the constant EVA improvement that is added to shift the target up each year. This is determined by the expected growth in EVA per year. See Exhibit B for the Expected Improvement for each Participating Group. 3.3 "Target Bonus Value" means the "Target Bonus Percentage" times a Participant's base pay. 3.4 "Target Bonus Percentage" is determined by a Participant's classification as shown on Exhibit B. 3.5 "Actual Bonus Value" means the bonus earned (*) by a Participant and is computed as the Actual Bonus Percentage times a Participant's base pay. 3.6 "Actual Bonus Percentage" is determined by multiplying the Target Bonus Percentage by the Bonus Performance Value. 3.7 "Bonus Performance Value" means the difference between the Actual EVA and the Target EVA divided by the Leverage Factor plus 1.0. 3.8 "Leverage Factor" is the negative (positive) deviation from Target EVA necessary before a zero (two times Target) bonus is earned. See Exhibit C for the Leverage Factor of each Participating Group. 3.9 A Participant's classification is determined by each business unit manager. They are subject to approval by the CEO and the Compensation Committee of the Board of Directors. * Note: A portion of the Actual Bonus Value may be placed in the Participants' Bonus Bank. See Article IV for details on the Bonus Bank. ARTICLE IV DESCRIPTION OF BONUS BANKS 4.1 Establishment of a Bonus Bank. To encourage a long-term commitment by Participants to the Company, a portion of exceptional bonuses (amounts above Target and negative bonuses) shall be credited to "at risk" deferred accounts ("Bonus Banks"), with the level of payout contingent on sustained high performance and improvements and continued employment as provided herein. 4.2 Although a Bonus Bank may, as a result of negative EVA, have a deficit, no Plan Participant shall be required, at any time, to reimburse his/her Bonus Bank. 4.3 "Bonus Bank" means, with respect to each Participant, a bookkeeping record of an account to which amounts are credited, or debited as the case may be, from time to time under the Plan and from which bonus payments to such Participant are debited. 4.4 "Bank Balance" means, with respect to each Participant, a bookkeeping record of the net balance of the amounts credited to and debited against such Participant's Bonus Bank. A Participant's Bank Balance shall initially be equal to zero. 4.5 Payout Rule: If the Bank Balance entering the Plan Year is zero or positive, then 1) Pay any positive bonus earned up to the "Target Bonus Value", 2) Add any unpaid portion of the bonus earned (including negative bonuses) to the Bonus Bank, 3) Pay out 1/3 of any Positive Bank Balance 4) Carry the remaining Bank Balance forward to the next year. If the Bank Balance entering the Plan Year is negative, then 1) Pay 1/3 of the positive bonus earned up to the "Target Bonus Value", 2) Add any unpaid portion of the bonus earned (including negative bonuses) to the Bonus Bank, 3) Pay out 1/3 of any Positive Bank Balance, 4) Carry the remaining Bank Balance forward to the next year. 4.6 A Participant may elect to withdraw, in cash, all or a portion of the Bank Balance. The amount available for such withdrawal is the lesser of the ending Bank Balance of the applicable year or the Bank Balance at the end of the third prior year. ARTICLE V Plan Participation, Transfers and Terminations 5.1 Participant Group. The Committee will have sole discretion in determining who shall participate in the EVA Bonus Plan. Employees designated for Plan participation by the Committee shall be management or highly compensated employees. In order for a Participant to receive or be credited with his or her Actual Bonus Value for a Plan Year, the Participant must have (I) remained employed by the Company or an affiliate through the last day of such Plan Year, (ii) terminated employment with the Company during the Plan Year at or after age fifty-five, for any reason, (iii) suffered a disability within the meaning of Section 5.3 during the Plan Year, or (iv) died during the Plan Year. In all other cases of termination of employment prior to the last day of the Plan Year, a Participant shall not be entitled to any Actual Bonus Value for such Plan Year. 5.2 Transfers. A Participant who transfers his employment from one Participating Unit of the Company to another shall retain his Bonus Bank and will be eligible to receive future EVA Plan Awards in accordance with the provisions of the EVA Plan. Any positive Bonus Bank balance would payout in full as soon as is practical. 5.3 Retirement or Disability. A Participant who terminates employment with the Company, at or after age fifty-five, for any reason ("retirement"), or suffers a "disability," as such term is defined in the Company's long-term disability benefits program, while in the Company's employ shall be eligible to receive the balance of their Bonus Bank. In the case of retirement, the Participant will receive any positive bank balance in the year immediately following their retirement. In the case of disability while in the Company's employ, the Participant will receive their balance as soon as practical after qualifying for benefit payments under the Company's long-term disability benefits program. 5.4 Involuntary Termination Without Cause or Death. A Participant who is Terminated without cause or who dies shall receive any positive Bonus Bank balance. Such payments will be made as soon as is practical. 5.5 Voluntary Termination. In the event that a Participant voluntarily terminates employment with the Company, the right of the Participant to their Bonus Bank shall be forfeited unless a different determination is made by the Committee. 5.6 Involuntary Termination for Cause. In the event of termination of employment for cause, the right of the Participant to the Bonus Bank shall be determined by the Committee. "Cause" shall mean: (i) any act or acts of the Participant constituting a felony under the laws of the United States, any state thereof or any foreign jurisdiction; (ii) any material breach by the Participant of any employment agreement with the Company or the policies of the Company or the willful and persistent (after written notice to the Participant) failure or refusal of the Participant to comply with any lawful directives of the Board; (iii) a course of conduct amounting to gross neglect, willful misconduct or dishonesty; or (iv) any misappropriation of material property of the Company by the Participant or any misappropriation of a corporate or business opportunity of the Company by the Participant. 5.7 Breach of Agreement. Notwithstanding any other provision of the Plan or any other agreement, in the event that a Participant shall breach any non-competition agreement with the Company or breach any agreement with respect to the post-employment conduct of such Participant, the Bonus Bank held by such Participant shall be forfeited. 5.8 No Guarantee. Participation in the Plan provides no guarantee that a payment under the Plan will be paid. Selection as a Participant is no guarantee that payments under the plan will be paid or that selection as a Participant will be made in the subsequent Calendar Year. ARTICLE VI General Provisions. 6.1 Withholding of Taxes. The Company shall have the right to withhold the amount of taxes, which in the determination of the Company, are required to be withheld under law with respect to any amount due or paid under the Plan. 6.2 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 his entitlement to a payment under the Plan. Any claim with respect to any of the benefits provided under the Plan shall be made in writing within ninety (90) days of the event which the claimant asserts entitles him to benefits. Failure by the claimant to submit his claim within such ninety (90) day period shall bar the claimant from any claim for benefits under the Plan. 6.5 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 his 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 his duly authorized representative may request a review of the denied claim; may review pertinent documents; and may submit issues and comments in writing. Upon receipt of an appeal, the Committee shall make a decision with respect to the appeal and, not later than sixty (60) days after receipt of a request for review, shall furnish the claimant with a decision on review in writing, including the specific reasons for the decision written in a manner calculated to be understood by the claimant, as well as specific reference to the pertinent provisions of the Plan upon which the decision is based. In reaching its decision, the Committee shall have complete discretionary authority to determine all questions arising in the interpretation and administration of the Plan, and to construe the terms of the Plan, including any doubtful or disputed terms and the eligibility of a Participant for benefits. 6.6 Action Taken in Good Faith; Indemnification. The Committee may employ attorneys, consultants, accountants or other persons and the Company's directors and officers shall be entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon all employees who have received awards, the Company and all other interested parties. No member of the Committee, nor any officer, director, employee or representative of the Company, or any of its affiliates acting on behalf of or in conjunction with the Committee, shall be personally liable for any action, determination, or interpretation, whether of commission or omission, taken or made with respect to the Plan, except in circumstances involving actual bad faith or willful misconduct. In addition to such other rights of indemnification as they may have as members of the Board, as members of the Committee or as officers or employees of the Company, all members of the Committee and any officer, employee or representative of the Company or any of its subsidiaries acting on their behalf shall be fully indemnified and protected by the Company with respect to any such action, determination or interpretation against the reasonable expenses, including attorneys' fees actually and necessarily incurred, in connection with the defense of any civil or criminal action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or an award granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by Company ) or paid by them in satisfaction of a judgment in any action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person claiming indemnification shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. Expenses (including attorneys' fees) incurred in defending a civil or criminal action, suit or 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 Employee. Any rights provided to an employee under the Plan shall be personal to such employee, shall not be transferable (except by will or pursuant to the laws of descent or distribution), and shall be exercisable, during his lifetime, only by such employee. 6.8 Upon termination of the Plan or suspension for a period of more than 90 days, the Bank Balance of each Participant shall be distributed as soon as practicable but in no event later than 90 days from such event. The Committee, in its sole discretion, may accelerate distribution of the Bank Balance, in whole or in part, at any time without penalty. 6.9 Non-Allocation of Award. In the event of a suspension of the Plan in any Plan Year, as provided herein at Article VIII, Section 8, the Current Bonus for the subject Plan year shall be deemed forfeited and no portion thereof shall be allocated to Participants. Any such forfeiture shall not affect the calculation of EVA in any subsequent year. ARTICLE VII Limitations 7.1 No Continued Employment. Nothing contained herein shall provide any employee with any right to continued employment or in any way abridge the rights of the Company and its Participating Units 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 employee or other person shall have any claim of right (legal, equitable, or otherwise)to any award, allocation, or distribution or any right, title, or vested interest in any amounts in his Bonus Bank and no officer or employee of the Company or any Participating Group or any other person shall have any authority to make representations or agreements to the contrary. No interest conferred herein to a Participant shall be assignable or subject to claim by a Participant's creditors. The right of the Participant to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company and the Participant shall have no rights in or against any specific assets of the Company as the result of participation hereunder. 7.3 Not Part of Other Benefits. The benefits provided in this plan shall not be deemed a part of any other benefit provided by the Company to its employees. The Company assumes no obligation to plan Participants except as specified herein. This is a complete statement, along with the Schedules and Appendices attached hereto, of the terms and conditions of the plan. 7.4 Other Plans. Nothing contained herein shall limit the Company or the Compensation 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 deferred compensation to a select group of management 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 Compensation Committee Authority. Except as otherwise expressly provided herein, full power and authority to interpret and administer this plan shall be vested in the Compensation Committee. The Compensation 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 deci- sion taken by the Compensation 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 "Compensation Committee" assume that the Board of Directors has created a Compensation Committee to administer the Plan. In the event a Compensation Committee is not so designated, the Board shall administer the Plan. The Board or its Compensation Committee, as appropriate, shall work with the CEO of the Company in all aspects of the administration of the Plan. ARTICLE IX Notice 9.1 Any notice to be given pursuant to the provisions of the Plan shall be in writing and directed to the appropriate recipient thereof at his business address or office location. ARTICLE X Effective Date 10.1 This Plan shall be effective as of July 4, 1993. 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 Compensation Committee. Provided, however, that no such change in the Plan shall be effective to eliminate or diminish the distribution of any Award that has been allocated to the Bank of a Participant prior to the date of such amendment, suspension or termination. Notice of any such amendment, suspension or termination shall be given promptly to each Participant. ARTICLE XII Applicable Law 12.1 This Plan shall be construed in accordance with the provisions of the laws of the State of Wisconsin. Exhibit A Calculation of the Cost of Capital Inputs Variables: Risk Free Rate > Average Daily closing yield on U.S. Government 30 Yr. Bonds (for the month of December preceding the Plan Year). Market Risk Premium > 5.0% (Fixed) Beta > One (Fixed) Debt/Capital Ratio > 40% (Fixed) b > Cost of Debt Capital (Projected & Weighted Average Yield on the Company's Long Term Debt Obligations). Marginal Tax Rate > 39.0% (Historical Average). However, for exceptions see 2.4(C) - ---------------------------------------------------------------- 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)] - ----------------------------------------------------------------- Exhibit B Participant Target Bonus Classification Percentage I 60% II 50% III 40% IV 35% V 30% VI 25% VII 20% VIII 15% IX 10% X 5% XI 2% Exhibit C Participation Groups Expected Leverage Improvement Factor in EVA MANITOWOC ICE - MII 500,000 2,000,000 KOLPAK 350,000 1,000,000 MCCALL 450,000 500,000 KOLPAK MANUFACTURING 100,000 500,000 FOODSERVICE GROUP (1) 1,500,000 4,000,000 SERVEND 250,000 750,000 FOODSERVICE GROUP (2) 750,000 2,250,000 JOINT VENTURE (CHINA) 100,000 300,000 FOODSERVICE SEGMENT 1,000,000 3,500,000 MANITOWOC CRANES - MCC 1,000,000 3,000,000 RE-MANUFACTURING - MRI 50,000 150,000 FEMCO 200,000 600,000 NORTH CENTRAL CRANE - NCC 40,000 120,000 MTW EUROPE LTD ($)-MEL 75,000 225,000 MTW EUROPE LTD (POUNDS) 50,000 150,000 MCC GROUP (3) 1,500,000 4,000,000 CRAWLER CRANE GROUP (4) 1,100,000 3,400,000 AFTERMARKET GROUP(5) 1,200,000 3,600,000 MANITEX - MIT 500,000 1,000,000 WEST MANITOWOC 200,000 350,000 MARINE 150,000 750,000 CORPORATE 1,000,000 7,000,000 (1) Includes MII, Kolpak, McCall, & Kolpak Manufacturing (2) Includes MII and SerVend (3) Includes MCC, Femco, Re-Man, NCC, and MEL (4) Includes MCC, Re-Man, NCC, and MEL (5) Includes MCC and Femco EX-20.1 3 prlaurino.txt PRESS RELEASE NEWS FOR IMMEDIATE RELEASE THE MANITOWOC COMPANY APPOINTS CARL J. LAURINO AS CORPORATE TREASURER MANITOWOC, WI - May 8, 2001 - The Manitowoc Company, Inc. (NYSE: MTW) announced today that Carl J. Laurino, 39, has been elected treasurer by the company's board of directors. Mr. Laurino assumes his new responsibilities immediately. Laurino joined Manitowoc's corporate staff in 2000 as its assistant treasurer and served in that capacity until his latest appointment. Prior to joining Manitowoc, Laurino spent 15 years in the commercial banking industry with Firstar Bank, Norwest Bank, and Associated Bank. During that period, Laurino held numerous positions of increasing responsibility including commercial loan credit analyst with Associated Bank, commercial loan officer with Norwest Bank, and vice president/commercial banking manager with Firstar Bank of Wisconsin. As treasurer of The Manitowoc Company, Laurino will be responsible for global cash management, development and implementation of foreign currency and interest rate hedging strategies, and management of bank and debt-market relationships. He will also participate in corporate strategic planning, merger and acquisition activities, as well as retirement fund management. Laurino is a graduate of the University of Wisconsin - Eau Claire, with a BBA in finance. The Manitowoc Company, Inc. is a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment for the foodservice industry. It is also a leading producer of lattice-boom cranes, boom trucks, and related products for the construction industry, and is the leading provider of ship repair, conversion, and new-construction services for the Great Lakes maritime industry. Company contact: Thomas G. Musial Senior Vice President - Human Resources & Administration Telephone: 920-683-8160 Fax: 920-683-8126 E-mail: tmusial@manitowoc.com -----END PRIVACY-ENHANCED MESSAGE-----