UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
  
FORM 10-Q
 
ý       Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended March 31, 2016
 
or
 
o          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	 	(I.R.S. Employer	
of incorporation or organization)	 	Identification Number)	

			
2400 South 44th Street,	 	 	
Manitowoc, Wisconsin	 	54221-0066	
(Address of principal executive offices)	 	(Zip Code)	
 
(920) 684-4410
(Registrant’s telephone number, including area code)
 
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  ý   No  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ý   No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

			
Large accelerated filer  x	 	Accelerated filer  o	
 	 	 	
Non-accelerated filer  o	 	Smaller reporting company  o	
(Do not check if a smaller reporting company)	 	 	

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o   No  ý

The number of shares outstanding of the Registrant’s common stock, $.01 par value, as of March 31, 2016 , the most recent practicable date, was 137,016,712 .

PART I.  FINANCIAL INFORMATION
 
Item 1. Financial Statements  

THE MANITOWOC COMPANY, INC.
Condensed Consolidated Statements of Operations
For the Three Months Ended March 31, 2016 and 2015
(Unaudited)(In millions, except per-share and average shares data)

								
 	Three Months Ended
March 31,	
 	2016	 	2015	
Net sales	$	427.4		 	$	406.7		
Costs and expenses:	 	 	 		
Cost of sales	345.5		 	331.3		
Engineering, selling and administrative expenses	72.4		 	82.7		
Amortization expense	0.7		 	0.8		
Restructuring expense	4.4		 	0.2		
Other	1.4		 	—		
Total operating costs and expenses	424.4		 	415.0		
 	 	 	 	
Earnings (loss) from operations	3.0		 	(8.3	)	
 	 	 	 	
Other income (expense):	 		 	 		
Interest expense	(9.7	)	 	(23.3	)	
Amortization of deferred financing fees	(0.9	)	 	(1.1	)	
Loss on debt extinguishment	(72.0	)	 	—		
Other income (expense) - net	1.1		 	(0.2	)	
Total other expense	(81.5	)	 	(24.6	)	
Loss from continuing operations before taxes on income	(78.5	)	 	(32.9	)	
Provision (benefit) for taxes on income	122.3		 	(7.4	)	
Loss from continuing operations	(200.8	)	 	(25.5	)	
 	 	 	 	
Discontinued operations:	 		 	 		
(Loss) earnings from discontinued operations, net of income taxes of $(1.3) and $6.1, respectively	(3.2	)	 	17.1		
Net loss	$	(204.0	)	 	$	(8.4	)	
 	 	 	 	
(Loss) earnings per common share - basic:	 		 	 		
Loss from continuing operations	$	(1.47	)	 	$	(0.19	)	
(Loss) earnings from discontinued operations	(0.02	)	 	0.13		
Loss per common share - basic	$	(1.49	)	 	$	(0.06	)	
 	 	 	 	
Earnings (loss) per common share - diluted:	 		 	 		
Loss from continuing operations	$	(1.47	)	 	$	(0.19	)	
(Loss) earnings from discontinued operations	(0.02	)	 	0.13		
Loss per common share - diluted	$	(1.49	)	 	$	(0.06	)	
 	 	 	 	
Weighted average shares outstanding - basic	136,599,912		 	135,641,914		
Weighted average shares outstanding - diluted	136,599,912		 	135,641,914		
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2

THE MANITOWOC COMPANY, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
For the Three Months Ended March 31, 2016 and 2015
(Unaudited)
(In millions)

	
								
 	Three Months Ended
March 31,	
 	2016	 	2015	
Net loss	$	(204.0	)	 	$	(8.4	)	
Other comprehensive income (loss), net of tax	 	 	 	
Unrealized income (loss) on derivatives, net of income tax (benefit) of $0.0 and $(2.7), respectively	(0.9	)	 	(4.1	)	
Employee pension and postretirement benefits, net of income tax provision of $0.0 and $0.5, respectively	1.2		 	1.4		
Foreign currency translation adjustments	49.2		 	(62.8	)	
Total other comprehensive income (loss), net of tax	49.5		 	(65.5	)	
Comprehensive loss	$	(154.5	)	 	$	(73.9	)	
 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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THE MANITOWOC COMPANY, INC.
Condensed Consolidated Balance Sheets
As of March 31, 2016 and December 31, 2015
(Unaudited)
(In millions, except share data)

								
 	March 31,
2016	 	December 31,
2015	
Assets	 		 	 		
Current Assets:	 		 	 		
Cash and temporary investments	$	87.2		 	$	31.5		
Restricted cash	17.2		 	16.9		
Accounts receivable, less allowances of $13.3 and $12.8, respectively	185.6		 	155.7		
Inventories — net	498.9		 	452.6		
Other current assets	110.1		 	102.7		
Current assets of discontinued operations	—		 	254.2		
  Total current assets	899.0		 	1,013.6		
 	 	 	 	
Property, plant and equipment — net	416.9		 	410.7		
Goodwill	312.7		 	306.5		
Other intangible assets — net	121.3		 	119.3		
Other long-term assets	64.8		 	178.8		
Long-term assets held for sale	5.7		 	5.5		
Long-term assets of discontinued operations	—		 	1,501.5		
  Total assets	$	1,820.4		 	$	3,535.9		
Liabilities and Equity	 		 	 		
Current Liabilities:	 		 	 		
Accounts payable and accrued expenses	$	424.3		 	$	436.3		
Short-term borrowings	33.7		 	67.2		
Product warranties	36.3		 	35.9		
Customer advances	10.3		 	10.3		
Product liabilities	22.0		 	21.9		
Current liabilities of discontinued operations	—		 	312.0		
  Total current liabilities	526.6		 	883.6		
Non-Current Liabilities:	 		 	 		
Long-term debt	269.3		 	1,326.6		
Deferred income taxes	37.7		 	25.6		
Pension obligations	78.4		 	99.4		
Postretirement health and other benefit obligations	37.6		 	44.4		
Long-term deferred revenue	26.2		 	29.7		
Other non-current liabilities	76.7		 	87.3		
Long-term liabilities of discontinued operations	—		 	219.8		
  Total non-current liabilities	525.9		 	1,832.8		
Commitments and contingencies (Note 15)			 			
Total Equity:	 		 	 		
Common stock (300,000,000 shares authorized, 163,175,928 shares issued, 137,016,712 and 136,617,161 shares outstanding, respectively)	1.4		 	1.4		
Additional paid-in capital	560.3		 	558.0		
Accumulated other comprehensive loss	(109.6	)	 	(207.8	)	
Retained earnings	386.3		 	539.5		
Treasury stock, at cost (26,159,216 and 26,558,767 shares, respectively)	(70.5	)	 	(71.6	)	
  Total equity	767.9		 	819.5		
  Total liabilities and equity	$	1,820.4		 	$	3,535.9		

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

4

THE MANITOWOC COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2016 and 2015
(Unaudited)
(In millions)

	
								
 	Three Months Ended
March 31,	
 	2016	 	2015	
Cash Flows from Operations:	 		 	 		
Net loss	$	(204.0	)	 	$	(8.4	)	
Adjustments to reconcile net earnings to cash used for operating activities of continuing operations:	 		 	 		
Discontinued operations, net of income taxes	3.2		 	(17.1	)	
Depreciation	12.2		 	11.8		
Amortization of intangible assets	0.7		 	0.8		
Amortization of deferred financing fees	0.9		 	1.1		
Deferred income taxes	124.1		 	33.1		
Loss on early debt extinguishment	15.4		 	—		
Loss on sale of property, plant and equipment	(0.4	)	 	(0.1	)	
Other	(9.8	)	 	3.4		
Changes in operating assets and liabilities, excluding effects of business acquisitions and divestitures:	 		 	 		
Accounts receivable	(26.1	)	 	(3.8	)	
Inventories	(35.9	)	 	(52.3	)	
Other assets	(4.7	)	 	(36.1	)	
Accounts payable	(11.2	)	 	(29.6	)	
Accrued expenses and other liabilities	(11.5	)	 	23.1		
Net cash used for operating activities of continuing operations	(147.1	)	 	(74.1	)	
Net cash used for operating activities of discontinued operations	(63.0	)	 	(61.6	)	
Net cash used for operating activities	(210.1	)	 	(135.7	)	
 	 	 	 	
Cash Flows from Investing:	 		 	 		
Capital expenditures	(10.9	)	 	(8.5	)	
Proceeds from sale of property, plant and equipment	1.2		 	2.0		
Restricted cash	(0.1	)	 	0.2		
Net cash used for investing activities of continuing operations	(9.8	)	 	(6.3	)	
Net cash used for investing activities of discontinued operations	(2.4	)	 	(3.4	)	
Net cash used for investing activities	(12.2	)	 	(9.7	)	
 	 	 	 	
Cash Flows from Financing:	 		 	 		
Proceeds from revolving credit facility	—		 	175.0		
Payments on long-term debt	(1,345.2	)	 	(22.6	)	
Proceeds from long-term debt	255.2		 	0.7		
Payments on notes financing	(3.7	)	 	(5.5	)	
Debt issuance costs	(7.9	)	 	—		
Exercises of stock options	1.9		 	3.4		
       Dividend from MFS	1,361.7		 	—		
      Cash transferred to MFS	(17.7	)	 	—		
Net cash provided by financing activities of continuing operations	244.3		 	151.0		
Net cash provided by financing activities of discontinued operations	0.2		 	—		
Net cash provided by financing activities	244.5		 	151.0		
 	 	 	 	
Effect of exchange rate changes on cash	1.6		 	(5.4	)	
 	 	 	 	
Net increase in cash and cash equivalents	23.8		 	0.2		
Balance at beginning of period, including cash from discontinued operations	63.4		 	68.0		
Balance at end of period	$	87.2		 	$	68.2		

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5

THE MANITOWOC COMPANY, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2016 and 2015
1. Accounting Policies
During the first quarter of fiscal 2016, the Board of Directors of The Manitowoc Company, Inc. (“Manitowoc,” “MTW,” and the “Company”) approved the tax-free spin-off of the Company’s foodservice business (“MFS”) into an independent, public company (the “Spin-Off”). To consummate the Spin-Off, the Board declared a pro rata dividend of MFS common stock to MTW’s stockholders of record as of the close of business on February 22, 2016 (the "Record Date"), payable on March 4, 2016. Each MTW stockholder received one  share of MFS common stock for every share of MTW common stock held as of the close of business on the Record Date.
In these Condensed Consolidated Financial Statements, unless otherwise indicated, references to Manitowoc, MTW and the Company, refer to The Manitowoc Company, Inc. and its consolidated subsidiaries after giving effect to the Spin-Off, or, in the case of information as of dates or for periods prior to the Spin-Off, the consolidated entities of the Crane business and certain other assets and liabilities that were historically held at the MTW corporate level but were specifically identifiable and attributable to the Crane business.
As a result of the Spin-Off, the Condensed Consolidated Financial Statements and related financial information reflect MFS operations, assets and liabilities, and cash flows as discontinued operations for all periods presented. Refer to Note 2, "Discontinued Operations," for additional information regarding the Spin-Off.
Subsequent to the Spin-Off, the management team determined that Manitowoc has one reportable segment, the Crane business. The Company identified its segment using the “management approach,” which designates the internal organization that is used by management for making operating decisions and assessing performance. The current reporting structure is under review by the management team and may change in future periods.
In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments necessary for a fair statement of the results of operations and comprehensive income for the three months ended March 31, 2016 and 2015 , the cash flows for the same three -month periods, and the financial position at March 31, 2016 and December 31, 2015 , and except as otherwise discussed, such adjustments consist of only those of a normal recurring nature.  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, 2015 .  Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to SEC rules and regulations dealing with interim financial statements.  However, the Company believes that the disclosures made in the Condensed Consolidated Financial Statements included herein are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest annual report on Form 10-K.
All dollar amounts, except share and per share amounts, are in millions of dollars throughout the tables included in these notes unless otherwise indicated.
During the first quarter of 2016, in conjunction with the Spin-Off, the Company identified an out-of-period adjustment related to deferred tax assets which originated prior to 2010, whereby the Company had understated the deferred tax assets by $6.2 million at each balance sheet date prior to March 31, 2016. In the first quarter of 2016, the Company recorded an adjustment to the deferred tax assets and the income tax provision on continuing operations to record the out-of-period adjustment.  Additionally, the Company identified an out-of-period adjustment in MFS’ deferred tax assets, which also originated prior to 2010, whereby the Company had incorrectly understated the deferred tax assets by $2.9 million at each balance sheet date prior to March 31, 2016. In the first quarter of 2016, prior to the Spin-Off, the Company recorded an adjustment to the deferred tax assets and the income tax provision on discontinued operations to correct the out-of-period adjustment.  The Company does not believe that these adjustments are material to its Condensed Consolidated Financial Statements for the quarter ended March 31, 2016 or its comparative annual or quarterly financial statements.
Subsequent to the Company’s earnings release dated May 4, 2016, the Company recorded a reclassification of income tax benefit of $3.2 million from discontinuing operations to continuing operations in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2015.
2. Discontinued Operations

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On March 4, 2016, Manitowoc completed the Spin-Off of MFS. The financial results of MFS are presented as income (loss) from discontinued operations, net of income taxes in the Condensed Consolidated Statements of Operations. The following table presents financial results of MFS through the date of the Spin-Off for the three months ended March 31, 2016 and 2015 :

									
Major classes of line items constituting earnings from discontinued operations before income taxes related to MFS	 	 	 	 	
 	 	Three Months Ended
March 31,	
(in millions)	 	2016	 	2015	
 	 	*	 	 	
Net sales	 	$	219.6		 	$	345.4		
 	 	 	 	 	
Cost of sales	 	141.5		 	238.3		
Engineering, selling and administrative expenses	 	48.3		 	75.9		
Amortization expense	 	5.2		 	7.8		
Restructuring expense	 	0.3		 	0.9		
Separation expense	 	26.9		 	1.5		
Total operating costs and expenses	 	222.2		 	324.4		
(Loss) earnings from operations	 	(2.6	)	 	21.0		
Other (expense) income	 	(1.9	)	 	2.4		
(Loss) earnings from discontinued operations before income taxes	 	(4.5	)	 	23.4		
Benefit (provision) for taxes on earnings	 	(1.3	)	 	6.2		
(Loss) earnings from discontinued operations, net of income taxes	 	$	(3.2	)	 	$	17.2		
 
* Amounts are through March 4, 2016.
The assets and liabilities of MFS have been classified as discontinued operations as of December 31, 2015 . No assets or liabilities of MFS are reflected on the Company's Condensed Consolidated Balance Sheet as of March 31, 2016 . These amounts consisted of the following carrying amounts in each major class at December 31, 2015 .

7

	
						
Carrying amounts of major classes of assets and liabilities included as part of discontinued operations related to MFS	 	 	
(in millions)	 	 	December 31,
2015	
Assets	 	 	 	
Cash and temporary investments	 	 	$	32.6		
Accounts receivable - net	 	 	63.8		
Inventories - net	 	 	145.9		
Other current assets	 	 	11.9		
Property, plant and equipment - net	 	 	116.4		
Goodwill	 	 	845.8		
Other intangible assets - net	 	 	519.6		
Other long-term assets	 	 	16.0		
Long-term assets held for sale	 	 	3.7		
Total major classes of assets of discontinued operations	 	 	$	1,755.7		
 	 	 	 	
Liabilities	 	 	 	
Accounts payable and accrued expenses	 	 	$	271.8		
Current portion of long-term debt	 	 	0.4		
Other current liabilities	 	 	39.8		
Long-term debt	 	 	2.3		
Deferred income taxes	 	 	167.9		
Pension	 	 	29.3		
Postretirement health and other benefit obligations	 	 	3.0		
Other non-current liabilities	 	 	17.3		
Total major classes of liabilities of discontinued operations	 	 	$	531.8		
Manitowoc and MFS entered into several agreements in connection with the separation, including a transition services agreement ("TSA"), separation and distribution agreement, tax matters agreement and an employee matters agreement.
Pursuant to the TSA, Manitowoc, MFS and their respective subsidiaries are providing to each other, on an interim, transitional basis, various services. Services being provided by Manitowoc include, among others, finance, information technology and certain other administrative services. The services generally commenced on March 4, 2016 and are expected to terminate within 12 months of that date. Billings by Manitowoc under the TSA are recorded as a reduction of the costs to provide the respective service in the applicable expense category.
During the three months ended March 31, 2016 and 2015 , the Company recorded $26.9 million and $1.5 million of separation costs related to the Spin-Off consisting primarily of professional and consulting fees, which are included in the results of discontinued operations.
The following selected financial data of various other businesses disposed of prior to 2014, consisting primarily of administrative costs, for the three months ended March 31, 2016 and 2015 , is presented for informational purposes only and does not necessarily reflect what the results of operations would have been had the businesses operated as stand-alone entities.  

									
 	 	Three Months Ended
March 31,	
(in millions)	 	2016	 	2015	
Net sales	 	$	—		 	$	—		
 	 	 	 	 	
Pretax loss from discontinued operations	 	$	—		 	$	(0.2	)	
Benefit for taxes on earnings	 	—		 	(0.1	)	
Net loss from discontinued operations	 	$	—		 	$	(0.1	)	
In 2014, the Company sold its interest in Manitowoc Dong Yue. Subsequent to the sale, Manitowoc Dong Yue had approximately $17.3 million of third party debt outstanding under a loan agreement entered into during the first quarter of 2014 that the Company has fully guaranteed. The loan is fully secured by Manitowoc Dong Yue’s fixed assets as well as finished

8

goods inventory. Manitowoc Dong Yue is repaying the loan over a four -year period, with the last payment due on December 31, 2017.
3. Acquisitions and Disposals
Foodservice businesses
On October 21, 2015 , MFS acquired the remaining 50.0% of outstanding shares of a joint venture in Thailand. Welbilt Thailand is a manufacturer of kitchen equipment in South East Asia. The purchase price, net of cash acquired, was approximately $5.3 million . Allocation of the purchase price resulted in $1.4 million of goodwill and $4.2 million of intangible assets. The results of Welbilt Thailand were included in the results of MFS since the date of acquisition, and, thus, are now classified in discontinued operations.
On December 7, 2015, Manitowoc announced the completion of the sale of a non-material MFS subsidiary, Kysor Panel Systems, a manufacturer of wood frame and high-density rail panel systems for walk-in freezers and coolers for the retail and convenience-store markets. The sale price for the transaction was approximately $85 million , with cash proceeds received of approximately $78 million , which were used to reduce outstanding debt. As a result of to the Spin-Off, the results of this business are classified in discontinued operations.
4. Fair Value of Financial Instruments
The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 by level within the fair value hierarchy.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

																
 	Fair Value as of March 31, 2016	
(in millions)	Level 1	 	Level 2	 	Level 3	 	Total	
Current Assets:	 		 	 		 	 		 	 		
Foreign currency exchange contracts	$	—		 	$	0.4		 	$	—		 	$	0.4		
Total current assets at fair value	$	—		 	$	0.4		 	$	—		 	$	0.4		
Current Liabilities:	 		 	 		 	 		 	 		
Foreign currency exchange contracts	$	—		 	$	2.9		 	$	—		 	$	2.9		
Commodity contracts	—		 	0.1		 	—		 	0.1		
Total current liabilities at fair value	$	—		 	$	3.0		 	$	—		 	$	3.0		

																
 	Fair Value as of December 31, 2015	
(in millions)	Level 1	 	Level 2	 	Level 3	 	Total	
Current Assets:	 		 	 		 	 		 	 		
Foreign currency exchange contracts	$	—		 	$	0.3		 	$	—		 	$	0.3		
Total current assets at fair value	$	—		 	$	0.3		 	$	—		 	$	0.3		
Current Liabilities:	 		 	 		 	 		 	 		
Foreign currency exchange contracts	$	—		 	$	1.1		 	$	—		 	$	1.1		
Commodity contracts	—		 	0.7		 	—		 	0.7		
    Interest rate swap contracts: Float-to-fixed	—		 	1.7		 	—		 	1.7		
Total current liabilities at fair value	$	—		 	$	3.5		 	$	—		 	$	3.5		
Non-current Liabilities:	 	 	 	 	 	 	 	
Interest rate swap contracts: Float-to-fixed	$	—		 	$	0.6		 	$	—		 	$	0.6		
Foreign currency exchange contracts	—		 	0.1		 	—		 	0.1		
Total non-current liabilities at fair value	$	—		 	$	0.7		 	$	—		 	$	0.7		
The fair value of the Company's 12.750% Senior Secured Second Lien Notes due 2021 was $269.4 million as of March 31, 2016 . The fair value of the Company’s 8.50% Senior Notes due 2020 was $623.1 million as of December 31, 2015 and the fair

9

value of the Company’s 5.875% Senior Notes due 2022 was $310.6 million as of December 31, 2015 . These Senior Notes were redeemed on March 3, 2016 . The fair values of the Company’s Term Loans under its Prior Senior Credit Facility, which was replaced by the ABL Revolving Credit Facility (as defined in Note 9) on March 3, 2016 , were as follows as of December 31, 2015 : Term Loan A — $307.7 million and Term Loan B — $116.7 million . See Note 9, “Debt,” for a description of the debt instruments and their related carrying values.
Accounting Standards Codification ("ASC") Topic 820-10, “Fair Value Measurement,” defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820-10 classifies the inputs used to measure fair value into the following hierarchy:

		
Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities	
 	 	
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or	
 	 	
 	Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or	
 	 	
 	Inputs other than quoted prices that are observable for the asset or liability	
 	 	
Level 3	Unobservable inputs for the asset or liability	
The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.  The Company estimates the fair value of its Senior Notes and previously outstanding Term Loans based on quoted market prices of the instruments; because these markets are typically thinly traded, the assets and liabilities are classified as Level 2 within the valuation hierarchy. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, deferred purchase price notes on receivables sold (see Note 10, “Accounts Receivable Securitization”) and short-term variable debt, including any amounts outstanding under the ABL Revolving Credit Facility, approximate fair value, without being discounted as of March 31, 2016 and December 31, 2015 , due to the short-term nature of these instruments.
As a result of its global operating and financing activities, the Company is exposed to market risks from changes in interest rates, foreign currency exchange rates and commodity prices, which may adversely affect the Company’s operating results and financial position. When deemed appropriate, the Company minimizes these risks through the use of derivative financial instruments. Derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes, and the Company does not use leveraged derivative financial instruments. The foreign currency exchange, commodity and interest rate contracts are valued through an independent valuation source that uses an industry standard data provider, with resulting valuations periodically validated through third-party or counterparty quotes. As such, these derivative instruments are classified within Level 2.

10

5. Derivative Financial Instruments
The Company’s risk management objective is to ensure that business exposures to risks that have been identified and measured and are capable of being controlled are minimized or managed using what it believes to be the most effective and efficient methods to manage, eliminate, reduce or transfer such exposures.  Operating decisions consider associated risks, and transactions are structured to minimize or manage risk whenever possible.
Use of derivative instruments is consistent with the overall business and risk management objectives of the Company.  Derivative instruments may be used to manage business risk within limits specified by the Company’s risk policy and to manage exposures that have been identified through the risk identification and measurement process, provided that they clearly qualify as “hedging” activities as defined in the risk policy.  Use of derivative instruments is not automatic, nor is it necessarily the only response to managing pertinent business risk.  Use is permitted only after the risks that have been identified are determined to exceed defined tolerance levels and are considered to be unavoidable.
The primary risks managed by the Company by using derivative instruments are interest rate risk, commodity price risk and foreign currency exchange risk.  Interest rate swaps are used to manage interest rate or fair value risk.  Swap contracts on various commodities are used to manage the price risk associated with forecasted purchases of materials used in the Company’s manufacturing processes.  The Company also enters into various foreign currency derivative instruments to manage foreign currency risk associated with the Company’s projected foreign currency denominated purchases, sales, and receivable and payable balances.
ASC Topic 815-10, “Derivatives and Hedging,” requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position.  In accordance with ASC Topic 815-10, the Company designates commodity swaps, foreign currency exchange contracts and float-to-fixed interest rate derivative contracts as cash flow hedges of forecasted purchases of commodities and purchases and sales currencies, and of variable rate interest payments.  Also in accordance with ASC Topic 815-10, the Company designates fixed-to-float interest rate swaps as fair market value hedges of fixed rate debt, which synthetically swap the Company’s fixed rate debt to floating rate debt.
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and is reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.  Gains and losses on the derivative instruments representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.  In the next twelve months, the Company estimates that $1.6 million of unrealized losses net of tax related to commodity price and currency exchange rate hedging will be reclassified from other comprehensive income into earnings.  Foreign currency and commodity hedging is generally completed prospectively on a rolling basis for between twelve and twenty-four months, respectively, depending on the type of risk being hedged.
As of March 31, 2016 and December 31, 2015 , the Company had the following outstanding commodity and foreign currency exchange contracts that were intended to hedge forecasted transactions:

										
 	 	Units Hedged	 	 	 	
Commodity	 	March 31, 2016	 	December 31, 2015	 	Unit	Type	
Natural Gas	 	69,379		 	175,617		 	MMBtu	Cash Flow	
Steel	 	3,789		 	4,811		 	Tons	Cash Flow	

	
									
 	 	Units Hedged	 	 	
Short Currency	 	March 31, 2016	 	December 31, 2015	 	Type	
European Euro	 	740,555		 	—		 	Cash Flow	
South Korean Won	 	706,322,850		 	1,533,257,930		 	Cash Flow	
Singapore Dollar	 	600,000		 	1,800,000		 	Cash Flow	
Japanese Yen	 	81,971,900		 	245,915,700		 	Cash Flow	
As of December 31, 2015 , the Company had $ 175.0 million notional amount of float-to-fixed interest rate swaps outstanding related to Term Loan A under the Prior Senior Credit Facility that were designated as cash flow hedges. As a result, $ 175.0 million of Term Loan A was hedged at an interest rate of 1.635% , plus the applicable spread based on the Consolidated Total Leverage Ratio of the Company as defined under the Prior Senior Credit Facility at December 31, 2015 .

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As of March 31, 2016 and December 31, 2015 , the Company had no outstanding fixed-to-float interest rate swaps related to the Senior Notes.
See Note 9, “Debt,” for a description of the debt instruments.
For derivative instruments that are not designated as hedging instruments under ASC Topic 815-10, the gains or losses on the derivatives are recognized in current earnings within Other (expense) income, net in the Condensed Consolidated Statements of Operations.  As of March 31, 2016 and December 31, 2015 , the Company had the following outstanding foreign currency exchange contracts that were not designated as hedging instruments:

												
 	 	Units Hedged	 	 	 	 	 	
Short Currency	 	March 31,
2016	 	December 31, 2015	 	 	Recognized Location	 	Purpose	
Euro	 	13,315,716		 	20,490,320		 	 	Other income, net	 	Accounts Payable and Receivable Settlement	
United States Dollar	 	13,150,400		 	17,321,106		 	 	Other income, net	 	Accounts Payable and Receivable Settlement	
Japanese Yen	 	—		 	70,518,463		 	 	Other income, net	 	Accounts Payable and Receivable Settlement	
British Pound Sterling	 	—		 	4,840,238		 	 	Other income, net	 	Accounts Payable and Receivable Settlement	
Singapore Dollar	 	—		 	500,000		 	 	Other income, net	 	Accounts Payable and Receivable Settlement	
Aluminum	 	—		 	175		 	MT	Other income, net	 	De-designated commodity swap	
Steel	 	—		 	3,989		 	MT	Other income, net	 	De-designated commodity swap	
The fair value of outstanding derivative contracts recorded as assets in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 was as follows: 

											
 	 	 	 	ASSET DERIVATIVES	
 	 	 	 	March 31, 2016	 	December 31, 2015	
(in millions)	 	Balance Sheet Location	 	Fair Value	
Derivatives designated as hedging instruments	 	 	 	 		 	 		
Foreign exchange contracts	 	Other current assets	 	$	0.4		 	$	0.3		
Total derivatives designated as hedging instruments	 	 	 	$	0.4		 	$	0.3		

											
Total asset derivatives	 	 	 	$	0.4		 	$	0.3		

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The fair value of outstanding derivative contracts recorded as liabilities in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 was as follows: 

											
 	 	 	 	LIABILITY DERIVATIVES	
 	 	 	 	March 31, 2016	 	December 31, 2015	
(in millions)	 	Balance Sheet Location	 	Fair Value	
Derivatives designated as hedging instruments	 	 	 	 		 	 		
Foreign exchange contracts	 	Accounts payable and accrued expenses	 	$	2.9		 	$	0.2		
Commodity contracts	 	Accounts payable and accrued expenses	 	0.1		 	0.7		
Interest rate swap contracts: Float-to-fixed	 	Accounts payable and accrued expenses	 	—		 	1.7		
Commodity contracts	 	Other non-current liabilities	 	—		 	0.1		
Interest rate swap contracts: Float-to-fixed	 	Other non-current liabilities	 	—		 	0.6		
Total derivatives designated as hedging instruments	 	 	 	$	3.0		 	$	3.3		

											
 	 	 	 	LIABILITY DERIVATIVES	
 	 	 	 	March 31, 2016	 	December 31, 2015	
(in millions)	 	Balance Sheet Location	 	Fair Value	
Derivatives NOT designated as hedging instruments	 	 	 	 		 	 		
Foreign exchange contracts	 	Accounts payable and accrued expenses	 	$	—		 	$	0.9		
Total derivatives NOT designated as hedging instruments	 	 	 	$	—		 	$	0.9		
 	 	 	 	 	 	 	
Total liability derivatives	 	 	 	$	3.0		 	$	4.2		

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6. Inventories
The components of inventories as of March 31, 2016 and December 31, 2015 are summarized as follows:

									
(in millions)	 	March 31,
2016	 	December 31,
2015	
Inventories — gross:	 	 		 	 		
Raw materials	 	$	141.9		 	$	155.3		
Work-in-process	 	129.3		 	116.3		
Finished goods	 	310.9		 	263.8		
Total inventories — gross	 	582.1		 	535.4		
Excess and obsolete inventory reserve	 	(48.7	)	 	(46.2	)	
Net inventories at FIFO cost	 	533.4		 	489.2		
Excess of FIFO costs over LIFO value	 	(34.5	)	 	(36.6	)	
Inventories — net	 	$	498.9		 	$	452.6		
7. Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill for the year ended December 31, 2015 and the three months ended March 31, 2016 are as follows:

					
(in millions)	 	Total	
Balance as of January 1, 2015	 	$	325.3		
Foreign currency impact	 	(18.8	)	
Balance as of December 31, 2015	 	306.5		
Foreign currency impact	 	6.2		
Balance as of March 31, 2016	 	$	312.7		
The Company accounts for goodwill and other intangible assets under the guidance of ASC Topic 350, “Intangibles — Goodwill and Other.” The Company has one single reporting unit, cranes.
The Company performs an annual impairment review at June 30 of every year or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs impairment reviews using a fair-value method based on the present value of future cash flows, which involves management’s judgments and assumptions about the amounts of those cash flows and the discount rates used. The estimated fair value is then compared with the carrying amount of the reporting unit, including recorded goodwill. Goodwill is then subject to risk of write-down to the extent that the carrying amount exceeds the estimated fair value.
As of June 30, 2015, the Company performed its annual impairment analysis relative to goodwill and indefinite-lived intangible assets, and based on those results, no impairment was indicated. The Company continually monitors market conditions and determines if any additional interim reviews of goodwill, other intangibles or long-lived assets are warranted. In the event the Company determines that assets are impaired in the future, the Company would recognize a non-cash impairment charge, which could have a material adverse effect on the Company’s Condensed Consolidated Balance Sheet and Results of Operations.
The gross carrying amount, accumulated amortization and net book value of the Company’s intangible assets other than goodwill at March 31, 2016 and December 31, 2015 are as follows:

14

	
																									
 	 	March 31, 2016	 	December 31, 2015	
(in millions)	 	Gross
Carrying
Amount	 	Accumulated
Amortization	 	Net
Book
Value	 	Gross
Carrying
Amount	 	Accumulated
Amortization	 	Net
Book
Value	
Trademarks and tradenames	 	$	96.5		 	$	—		 	$	96.5		 	$	94.2		 	$	—		 	$	94.2		
Customer relationships	 	10.5		 	(7.4	)	 	3.1		 	10.4		 	(7.1	)	 	3.3		
Patents	 	29.8		 	(27.6	)	 	2.2		 	29.1		 	(26.6	)	 	2.5		
Engineering drawings	 	10.5		 	(9.8	)	 	0.7		 	10.2		 	(9.3	)	 	0.9		
Distribution network	 	18.8		 	—		 	18.8		 	18.4		 	—		 	18.4		
Other intangibles	 	0.3		 	(0.3	)	 	—		 	0.3		 	(0.3	)	 	—		
Total	 	$	166.4		 	$	(45.1	)	 	$	121.3		 	$	162.6		 	$	(43.3	)	 	$	119.3		
Amortization expense for the three months ended March 31, 2016 and 2015 was $0.7 million and $0.8 million , respectively.
8. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses at March 31, 2016 and December 31, 2015 are summarized as follows:

									
(in millions)	 	March 31,
2016	 	December 31,
2015	
Trade accounts payable	 	$	262.9		 	$	268.5		
Interest payable	 	4.2		 	13.2		
Employee related expenses	 	61.1		 	60.1		
Restructuring expenses	 	8.9		 	6.5		
Deferred revenue - current	 	11.9		 	13.3		
Income taxes payable	 	1.8		 	4.4		
Miscellaneous accrued expenses	 	73.5		 	70.3		
Total	 	$	424.3		 	$	436.3		

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9. Debt
Outstanding debt at March 31, 2016 and December 31, 2015 is summarized as follows:

									
(in millions)	 	March 31, 2016	 	December 31, 2015	
Term loan A	 	$	—		 	$	312.8		
Term loan B	 	—		 	119.5		
Senior notes due 2020	 	—		 	613.1		
Senior notes due 2022	 	—		 	299.2		
Senior secured second lien notes due 2021	 	248.1		 	—		
Other	 	63.2		 	66.3		
Deferred financing	 	(8.3	)	 	(17.1	)	
Total debt	 	303.0		 	1,393.8		
Less current portion and short-term borrowings	 	(33.7	)	 	(67.2	)	
Long-term debt	 	$	269.3		 	$	1,326.6		
On March 3, 2016 , the Company entered into a $225.0 million Asset Based Revolving Credit Facility (as amended, the "ABL Revolving Credit Facility") by and among the Company and certain of its domestic and German subsidiaries, as borrowers, the lenders party thereto, Wells Fargo Bank, N.A. as Administrative Agent, and Wells Fargo Bank N.A., JP Morgan Chase Bank, N.A. and Goldman Sachs Bank USA as Joint Lead Arrangers. The ABL Revolving Credit Facility includes a $75.0 million Letter of Credit Facility, $10.0 million of which is available to the German borrower, with a term of 5 years.
The ABL Revolving Credit Facility replaced the $1,050.0 million Third Amended and Restated Credit Agreement (the “Prior Senior Credit Facility”), which the Company entered into on January 3, 2014. The Prior Senior Credit Facility included three different loan facilities. The first was a revolving facility with a five year term in the amount of $500.0 million . The second facility was Term Loan A in the aggregate amount of $350.0 million , with a term of five years. The third facility was Term Loan B in the aggregate amount of $200.0 million , with a term of seven years.
The termination of the Prior Senior Credit Facility resulted in a loss of $5.9 million related to the write-off of deferred financing expenses.
Loans made under the ABL Revolving Credit Facility are subject to a borrowing base and are secured by certain inventories and fixed assets of the Company and the guarantors and are guaranteed by the material direct and indirect subsidiaries of the Company.
The ABL Revolving Credit Facility contains a Fixed Charge Coverage springing financial covenant, which measures the ratio of (i) consolidated earnings before interest, taxes, depreciation, amortization and other adjustments (Adjusted EBITDA), as defined in the credit agreement, to (ii) fixed charges, as defined in the related credit agreement. The financial covenant is triggered only if the Company fails to maintain minimum levels of availability under the credit facility. If triggered, the Company must maintain a Minimum Fixed Charge Coverage Ratio of 1.00 to 1.00 .
The ABL Revolving Credit Facility includes customary representations and warranties, events of default and customary covenants, including without limitation: limitations on indebtedness, capital expenditures, restricted payments, disposals, investments, and acquisitions.
As of December 31, 2015 , the Company had outstanding $175.0 million notional amount of float-to-fixed interest rate swaps outstanding related to Term Loan A under the Prior Senior Credit Facility that were designated as cash flow hedges. As a result, $175.0 million of Term Loan A was hedged at an interest rate of 1.635% , plus the applicable spread based on the Consolidated Total Leverage Ratio of the Company as defined under the Prior Senior Credit Facility.
On February 18, 2016 , the Company entered into an indenture with Wells Fargo Bank, N.A., as trust and collateral agent, and completed the sale of $260.0 million aggregate principal amount of its 12.750% Senior Secured Second Lien Notes due August 15, 2021 (the " 2021 Notes"). Interest on the 2021 Notes is payable semi-annually in February and August of each year. The 2021 Notes were sold pursuant to an exemption from registration under the Securities Act of 1933, as amended, and were resold by the initial purchasers pursuant to Rule 144A (and outside the United States in reliance on Regulation S) under the Securities Act.

16

The 2021 Notes are guaranteed by certain of the Company's 100% owned domestic subsidiaries. These subsidiaries also guarantee the Company's obligations under the ABL Revolving Credit Facility together with certain of the Company's German subsidiaries. The 2021 Notes contain affirmative and negative covenants that limit, among other things, the Company's ability to redeem or repurchase its debt, incur additional debt, make acquisitions, merge with other entities, pay dividends or distributions, repurchase capital stock, and create or become subject to liens and include customary events of default. If an event of default occurs and is continuing with respect to the 2021 Notes, then the trustee or the holders of at least 25% of the principal amount of the outstanding 2021 Notes may declare the principal and accrued interest to be due and payable immediately. In addition, in the case of an event of default arising from certain events of bankruptcy, all unpaid principal of, unamortized discount and accrued and unpaid interest on all outstanding 2021 Notes will become due and payable immediately.
The notes are redeemable, at the company’s option, in whole or in part from time to time, at any time prior to February 15, 2019, at a price equal to 100% of the principal amount thereof plus a “make-whole” premium and accrued but unpaid interest to the date of redemption. In addition, the Company may redeem the 2021 Notes in whole or in part for a premium at any time on or after February 15, 2019 . The following would be the principal and premium paid by the Company, expressed as percentages of the principal amount thereof, if it redeems the 2021 Notes during the periods as set forth below:

				
Start Date (on or after)	End Date (prior to)	Percentage	
2/15/2019	2/15/2020	106.375	%	
2/15/2020	8/15/2020	103.188	%	
8/15/2020	8/15/2021	100.000	%	
In addition, at any time prior to February 15, 2019 , the Company is permitted to, at its option, use the net cash proceeds of one or more public equity offerings to redeem up to 35% of the 2021 Notes at a redemption price of 112.750% , plus accrued but unpaid interest, if any, to the date of redemption; provided that (1) at least 65.0% of the principal amount of the 2021 Notes outstanding remains outstanding immediately after any such redemption; and (2) the Company makes such redemptions not more than 90 days after the consummation of any such public offering. Further, the Company is required to offer to repurchase the 2021 Notes for cash at a price of 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, upon the occurrence of a change of control triggering event.
On March 3, 2016 , the Company redeemed its 8.50% Senior Notes due 2020 (the “ 2020 Notes”) and 5.875% Senior Notes due 2022 (the “ 2022 Notes” and, together with the 2021 Notes and 2020 Notes, the "Senior Notes") for $625.5 million and $330.5 million , or 104.250% and 110.167% as expressed as a percentage of the principal amount, respectively.
The redemption of the 2020 Notes resulted in a loss on debt extinguishment of $31.5 million during the first quarter of 2016 and consisted of $24.6 million related to the redemption premium and $6.9 million related to the write-off of deferred financing fees. Previously monetized derivative assets related to fixed-to-float interest rate swaps were treated as an increase to the debt balance of the 2020 Notes and were being amortized to interest expense over the life of the original swap. As a result of the redemption, the remaining monetization balance of $11.8 million as of March 3, 2016 , was amortized as a reduction to interest expense during the first quarter of 2016 .
The redemption of the 2022 Notes resulted in a loss on debt extinguishment of $34.6 million during the first quarter of 2016 and consisted of $31.2 million related to the redemption premium and $3.4 million related to write-off of deferred financing fees. Previously, derivative liabilities related to termination of fixed-to-float swaps were treated as a decrease to the debt balance of the 2022 Notes and were being amortized to interest expense over the life of the original swap. As a result of the redemption, the remaining balance of $0.7 million as of March 3, 2016 was amortized as an increase to interest expense during the first quarter of 2016 .
Outstanding balances under the Company's Prior Senior Credit Facility and Senior Notes due 2020 and 2022 were repaid with proceeds from the Senior Notes due 2021 and a cash dividend from MFS in conjunction with the Spin-Off.
As of March 31, 2016 , the Company had outstanding $63.2 million of other indebtedness that has a weighted-average interest rate of approximately 5.24% .  This debt includes outstanding line of credit balances and capital lease obligations in its Americas, Asia-Pacific and European regions.
During the quarter ended March 31, 2016 , the highest daily borrowing was $234.0 million and the average borrowing was $117.4 million , while the average interest rate was 3.54% per annum.  The only borrowings during the quarter on the revolving facility were under the Prior Senior Credit Facility. As of March 31, 2016 , the Company did not have any borrowings outstanding under the ABL Revolving Credit Facility. The interest rate of the ABL Revolving Credit Facility fluctuates based

17

on excess availability.  Had the Company borrowed as of March 31, 2016 , the spreads for LIBOR and Prime borrowings were 1.50% and 0.50% , respectively, with excess availability of approximately $160.1 million .
As of March 31, 2016 , the Company had no interest rate swaps outstanding related to its Senior Notes.
The balance sheet values of the Senior Notes as of March 31, 2016 and December 31, 2015 are not equal to the face value of the Senior Notes because of gains (losses) of previously terminated fixed-to-float interest rate hedges and original issue discounts included in the applicable balance sheet values (see Note 5, "Derivative Financial Instruments" for more information).
Effective January 1, 2016, the Company adopted ASC No. 2015-03 and has classified its net deferred financing costs as a direct deduction from long-term debt verses as a deferred asset.
As of March 31, 2016 , the Company was in compliance with all affirmative and negative covenants in its debt instruments, inclusive of the financial covenants pertaining to the ABL Revolving Credit Facility and the 2021 Notes.  Based upon the Company's current plans and outlook, management believes the Company will be able to comply with these covenants during the subsequent twelve months.
10. Accounts Receivable Securitization
The Company maintains an accounts receivable securitization program with a commitment size of $75.0 million , whereby transactions under the program are accounted for as sales in accordance with ASC Topic 860, “Transfers and Servicing.”  Sales of trade receivables under the program are reflected as a reduction of accounts receivable in the accompanying Condensed Consolidated Balance Sheets and the proceeds received, including collections on the deferred purchase price notes, are included in cash flows from operating activities in the accompanying Condensed Consolidated Statements of Cash Flows.  The Company deems the interest rate risk related to the deferred purchase price notes to be de minimis , primarily due to the short average collection cycle of the related receivables ( i.e. , less than 60 days) as noted below.
On March 3, 2016 , the Company entered into a Receivables Purchase Agreement ("RPA") among Manitowoc Funding, LLC ("MTW Funding"), as Seller, The Manitowoc Company, Inc., as Servicer, and Wells Fargo Bank, N.A., as Purchaser and as Agent. The RPA replaced the Fifth Amended and Restated Receivables Purchase Agreement dated December 15, 2014.
Under the RPA (and the related Purchase and Sale Agreements referenced in the RPA), the Company’s domestic trade accounts receivable are sold to MTW Funding which, in turn, sells, conveys, transfers and assigns to a third-party financial institution (“Purchaser”), all of MTW Funding's rights, title and interest in to a pool of receivables to the Purchaser.
The Purchaser receives ownership of the pool of receivables, in each instance. New receivables are purchased by MTW Funding and resold to the Purchaser as cash collections and reduce previously sold investments. The Company acts as the servicer (in such capacity, the "Servicer") of the receivables and as such administers, collects and otherwise enforces the receivables. The Servicer is compensated for doing so on terms that are generally consistent with what would be charged by an unrelated servicer. The Servicer initially receives payments made by obligors on the receivables but is required to remit those payments to the Purchaser in accordance with the RPA. The Purchaser has no recourse for uncollectible receivables.
Trade accounts receivables sold to the Purchaser and being serviced by the Company totaled $47.0 million and $64.2 million as of March 31, 2016 and December 31, 2015 , respectively. 
Due to an average collection cycle of less than 60 days for such accounts receivable, as well as, the Company’s collection history, the fair value of the Company’s deferred purchase price notes approximates book value.  The fair value of the deferred purchase price notes recorded as of March 31, 2016 and December 31, 2015 was $72.4 million and $54.1 million , respectively, and is included in accounts receivable in the accompanying Condensed Consolidated Balance Sheets.
The securitization program also contains customary affirmative and negative covenants. Among other restrictions, these covenants require the Company to meet specified financial tests, which include a minimum fixed charge coverage ratio which is the same as the covenant ratio required per the ABL Revolving Credit Facility. As of March 31, 2016 , the Company was in compliance with all affirmative and negative covenants inclusive of the financial covenants pertaining to the RPA, as amended. Based on management’s current plans and outlook, it believes the Company will be able to comply with these covenants during the subsequent twelve months.
11.  Income Taxes

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For the three months ended March 31, 2016 , the Company recorded income tax expense of $122.3 million , compared to an income tax benefit of $7.4 million for the three months ended March 31, 2015 . The increase in the Company’s tax expense for the three months ended March 31, 2016 relative to the prior year relates primarily to a non-cash charge of $121.1 million in relation to the valuation allowance associated with the Company’s domestic federal and state deferred tax assets and attributes in connection with the Spin-Off. In addition to the non-cash charge, the Company’s effective tax rate varies from the U.S. federal statutory rate of 35% due to results of foreign operations that are subject to income taxes at different statutory rates.
The Company has reserved all of its domestic net deferred tax assets as of March 31, 2016 , with a valuation allowance in accordance with the provisions of ASC 740, “Income Taxes," which requires an estimation of the recoverability of the recorded income tax asset balances. As of March 31, 2016 , the Company has recorded $121.1 million of valuation allowances attributable to its domestic net deferred tax assets. The determination of recording and releasing valuation allowances against deferred tax assets is made, in part, pursuant to the Company’s assessment as to whether it is more likely than not that the Company will generate sufficient future taxable income against which benefits of the deferred tax assets may or may not be realized.
The Company will continue to periodically evaluate its valuation allowance requirements in light of changing facts and circumstances, and may adjust its deferred tax asset valuation allowances accordingly. It is reasonably possible that the Company will either add to, or reverse a portion of its existing deferred tax asset valuation allowances in the future. Such changes in the deferred tax asset valuation allowances will be reflected in the current operations through the Company’s income tax provision, and could have a material effect on operating results.
The Company’s unrecognized tax benefits, excluding interest and penalties, were $16.1 million as of March 31, 2016 , and $19.4 million as of December 31, 2015 . During the next twelve months, it is reasonably possible that $0.6 million of the unrecognized tax benefits, if recognized, would affect the annual effective tax rate.
The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves.  As of March 31, 2016 , the Company believes that it is more likely than not that the tax positions it has taken will be sustained upon the resolution of its audits resulting in no material impact on its consolidated financial position and the results of operations and cash flows.  However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company’s estimates and/or from its historical income tax provisions and accruals and could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest assessments.

19

12. Earnings Per Share
The following is a reconciliation of the average shares outstanding used to compute basic and diluted earnings per share:

						
 	Three Months Ended
March 31,	
 	2016	 	2015	
Basic weighted average common shares outstanding	136,599,912		 	135,641,914		
Effect of dilutive securities	—		 	—		
Diluted weighted average common shares outstanding	136,599,912		 	135,641,914		
For the three months ended March 31, 2016 and March 31, 2015 , the total number of potentially dilutive options was 1.0 million and 1.5 million , respectively. Because the Company had a loss from continuing operations for the quarter, these dilutive options were not included in the computation of diluted net loss per common share, since doing so would decrease the loss per share.
For the three months ended March 31, 2016 and March 31, 2015 , 7.0 million and 2.2 million , respectively, of common shares issuable upon the exercise of stock options were anti-dilutive and were excluded from the calculation of diluted shares.
No dividends were paid during each of the three months ended March 31, 2016 and March 31, 2015 .
13.  Stockholders’ Equity
The following is a roll forward of retained earnings for the three months ended March 31, 2016 and 2015 : 

					
(in millions)	 	Retained Earnings	
Balance at December 31, 2015	 	$	539.5		
Net loss	 	(204.0	)	
Distribution of MFS	 	50.8		
Balance at March 31, 2016	 	$	386.3		

					
(in millions)	 	Retained Earnings	
Balance at December 31, 2014	 	$	486.9		
Net loss	 	(8.4	)	
Balance at March 31, 2015	 	$	478.5		
Authorized capitalization consists of 300 million shares of $0.01 par value common stock and 3.5 million shares of $0.01 par value preferred stock.  None of the preferred shares have been issued.
Currently, the Company has authorization to purchase up to 10 million shares of common stock at management’s discretion.  The Company previously purchased approximately 7.6 million shares at a cost of $49.8 million pursuant to this authorization; however, the Company has not purchased any shares of its common stock under this authorization since 2006.

																	
(in millions)	 	Gains and Losses on Cash Flow Hedges	 	Pension & Postretirement	 	Foreign Currency Translation	 	Total	
Balance at December 31, 2015	 	$	(3.8	)	 	$	(82.6	)	 	$	(121.4	)	 	$	(207.8	)	
Other comprehensive income (loss) before reclassifications	 	(1.7	)	 	—		 	49.2		 	47.5		
Amounts reclassified from accumulated other comprehensive income (loss)	 	0.8		 	1.2		 	—		 	2.0		
Net current period other comprehensive income (loss)	 	(0.9	)	 	1.2		 	49.2		 	49.5		
Distribution of MFS	 	2.1		 	44.5		 	2.1		 	48.7		
Balance at March 31, 2016	 	$	(2.6	)	 	$	(36.9	)	 	$	(70.1	)	 	$	(109.6	)	

20

	
																	
(in millions)	 	Gains and Losses on Cash Flow Hedges	 	Pension & Postretirement	 	Foreign Currency Translation	 	Total	
Balance at December 31, 2014	 	$	(6.3	)	 	$	(95.0	)	 	$	(29.2	)	 	$	(130.5	)	
Other comprehensive loss before reclassifications	 	(6.9	)	 	—		 	(62.8	)	 	(69.7	)	
Amounts reclassified from accumulated other comprehensive income (loss)	 	2.8		 	1.4		 	—		 	4.2		
Net current period other comprehensive (loss) income	 	(4.1	)	 	1.4		 	(62.8	)	 	(65.5	)	
Balance at March 31, 2015	 	$	(10.4	)	 	$	(93.6	)	 	$	(92.0	)	 	$	(196.0	)	
The following is a reconciliation of the reclassifications out of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2016 :

							
 	 	Three Months Ended
March 31, 2016	 	 	
(in millions)	 	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)	 	Recognized Location	
Gains and losses on cash flow hedges	 	 	 	 	
  Commodity contracts	 	$	(1.1	)	 	Cost of sales	
 	 	(1.1	)	 	Total before tax	
 	 	0.3		 	Tax benefit	
 	 	$	(0.8	)	 	Net of tax	
Amortization of pension and postretirement items	 	 	 	 	
  Actuarial losses	 	$	(1.2	)	(a)	 	
 	 	(1.2	)	 	Total before tax	
 	 	—		 	Tax benefit	
 	 	$	(1.2	)	 	Net of Tax	
 	 	 	 	 	
Total reclassifications for the period	 	$	(2.0	)	 	Net of Tax	
(a) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost (see Note 17, “Employee Benefit Plans,” for further details).	

21

	
							
 	 	Three Months Ended
March 31, 2015	 	 	
(in millions)	 	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)	 	Recognized Location	
Gains and losses on cash flow hedges	 	 	 	 	
  Foreign exchange contracts	 	$	(3.2	)	 	Cost of sales	
  Commodity contracts	 	(0.7	)	 	Cost of sales	
  Interest rate swap contracts: Float-to-fixed	 	(0.6	)	 	Interest Expense	
 	 	(4.5	)	 	Total before tax	
 	 	1.7		 	Tax benefit	
 	 	$	(2.8	)	 	Net of tax	
Amortization of pension and postretirement items	 	 	 	 	
  Actuarial losses	 	$	(1.9	)	(a)	 	
 	 	(1.9	)	 	Total before tax	
 	 	0.5		 	Tax benefit	
 	 	$	(1.4	)	 	Net of Tax	
 	 	 	 	 	
Total reclassifications for the period	 	$	(4.2	)	 	Net of Tax	
(a) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost (see Note 17, “Employee Benefit Plans,” for further details).	
14.  Stock-Based Compensation
The Company’s 2013 Omnibus Incentive Plan (the “2013 Omnibus Plan”) was approved by shareholders on May 7, 2013 and replaced the 2003 Incentive Stock and Awards Plan (the “2003 Stock Plan”) and the 2004 Non-Employee Director Stock and Awards Plan (the “2004 Stock Plan”). The 2013 Omnibus Plan also replaced the Company's Short-Term Incentive Plan (the “STIP”) as of December 31, 2013. The 2003 Stock Plan, the 2004 Stock Plan and the STIP are referred to as the “Prior Plans.” No new awards may be granted under the Prior Plans after the respective termination dates; however, outstanding awards under the Prior Plans will continue in force and effect until vested, exercised, forfeited or expired pursuant to their terms. The 2013 Omnibus Plan provides for both short-term and long-term incentive awards for employees and non-employee directors. Stock-based awards may take the form of stock options, stock appreciation rights, restricted stock, restricted stock units and performance shares or performance unit awards. The total number of shares of the Company’s common stock originally available for awards under the 2013 Omnibus Plan was 8.0 million shares, and the amount is subject to adjustment for stock splits, stock dividends and certain other transactions or events in the future. On March 20, 2016, the Board of Directors approved an amendment to the 2013 Plan to reflect the effect of the Spin-Off in accordance with the 2013 Plan’s provisions governing such adjustments; as a result, a total of 28,184,595 shares were available for future awards under the 2013 Plan as of March 31, 2016.
Stock-based compensation expense was $1.3 million and $4.1 million for the three months ended March 31, 2016 and 2015 , respectively.  The Company granted options to acquire 1.7 million and 0.6 million shares of common stock to employees during the three months ended March 31, 2016 and 2015 , respectively.  In addition, the Company issued a total of 1.3 million restricted stock units ("RSUs") to employees and directors during the three months ended March 31, 2016 and 0.5 million restricted stock units to employees and directors during the three months ended March 31, 2015 .  The RSUs granted to employees vest on the third anniversary of the grant date. The RSUs granted to directors vest on the second anniversary of the grant date.
The Company recognizes stock-based compensation expense over the stock-based awards' vesting period.
On March 4, 2016, in connection with the Spin-Off, the Company adjusted its outstanding equity awards in accordance with the terms of the employee matters agreement. For purposes of the vesting of these equity awards, continued employment or service with MTW or with MFS is treated as continued employment for purposes of these awards. The adjustments are summarized as follows:

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•	Stock options, RSUs and Restricted Stock Awards ('RSAs") granted for MTW common stock prior to March 4, 2016 were generally converted into the same number of MTW stock options (with an adjusted exercise price), RSUs and RSAs, as well as, an equal number of MFS stock options, RSUs and RSAs. The underlying performance conditions for the RSUs are consistent with MTW’s original performance targets and future measurement periods, and future performance targets will be established to reflect each Company’s standalone business.	
As no incremental fair value was awarded as a result of the above adjustments, the modifications did not result in significant incremental compensation expense.
In April 2015, the Company issued a total of 0.4 million RSAs to employees as retention awards to provide additional incentive for the employees to continue in employment and contribute toward the successful completion of the Spin-Off. Under the retention agreements, each employee was granted RSAs that will vest on the second anniversary of the Spin-Off if the employee has been continuously employed with the MTW, MFS or an affiliate through that second anniversary.
15.  Contingencies and Significant Estimates
The Company believes that it has obtained and is in substantial compliance with those material environmental permits and approvals necessary to conduct its various businesses.  Based on the facts presently known, the Company does not expect environmental compliance costs to have a material adverse effect on its financial condition, results of operations or cash flows.
As of March 31, 2016 , various product-related lawsuits were pending.  To the extent permitted under applicable law, all of these are insured with self-insurance retention levels and/or coverage with outside insurers.  The Company’s self-insurance retention levels vary by business and have fluctuated over the last 10 years.  The high-end of the Company’s self-insurance retention level is a legacy product liability insurance program inherited in the Grove acquisition for cranes manufactured in the United States for occurrences from January 2000 through October 2002.  As of March 31, 2016 , the largest self-insured retention level for new occurrences currently maintained by the Company is $2.0 million per occurrence and applies to product liability claims for cranes manufactured in the United States.
Product liability reserves in the Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 were $22.0 million and $21.9 million , respectively; $4.3 million and $2.8 million , respectively, was reserved specifically for actual cases and $17.7 million and $19.1 million , respectively, for claims incurred but not reported, which were estimated using actuarial methods.  Based on the Company’s experience in defending product liability claims, management believes the current reserves are adequate for estimated case resolutions on aggregate self-insured claims and insured claims.  Any recoveries from insurance carriers are dependent upon the legal sufficiency of claims and solvency of insurance carriers.
As of March 31, 2016 and December 31, 2015 , the Company had reserved $43.9 million and $43.9 million , respectively, for warranty claims included in product warranties and other non-current liabilities in the Condensed Consolidated Balance Sheets.  Certain of these warranty and other related claims involve matters in dispute that ultimately are resolved by negotiation, arbitration or litigation.
It is reasonably possible that the estimates for environmental remediation, product liability and warranty costs may change in the near future based upon new information that may arise or matters that are beyond the scope of the Company’s historical experience.  Presently, there are no reliable methods to estimate the amount of any such potential changes.
The Company is involved in numerous lawsuits involving asbestos-related claims in which the Company is one of numerous defendants.  After taking into consideration legal counsel’s evaluation of such actions, the current political environment with respect to asbestos-related claims, and the liabilities accrued with respect to such matters, in the opinion of management, ultimate resolution is not expected to have a material adverse effect on the financial condition, results of operations, or cash flows of the Company.
The Company is also involved in various legal actions arising out of the normal course of business, which, taking into account the liabilities accrued and legal counsel’s evaluation of such actions, in the opinion of management, the ultimate resolution, individually and in the aggregate, is not expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.
16. Guarantees
The Company periodically enters into transactions with customers that provide for residual value guarantees and buyback commitments.  These initial transactions are recorded as deferred revenue and are amortized to income on a straight-line basis over a period equal to that of the customer’s third party financing agreement.  The deferred revenue included in other current

23

and non-current liabilities as of March 31, 2016 and December 31, 2015 was $38.2 million and $43.0 million , respectively.  The total amount of residual value guarantees and buyback commitments given by the Company and outstanding as of March 31, 2016 and December 31, 2015 was $41.5 million and $42.9 million , respectively.  These amounts are not reduced for amounts the Company would recover from the repossession and subsequent resale of the units.  The residual value guarantees and buyback commitments expire at various times through 2018. 
During the three months ended March 31, 2016 and 2015 , the Company sold $1.0 million and $0.1 million , respectively, of additional long-term notes receivable to third party financing companies. The Company guarantees the collection of some percentage (up to 100% ) of notes sold to the financing companies.  The Company has accounted for the sales of the notes as a financing of receivables.  The receivables remain on the Company’s Condensed Consolidated Balance Sheets, net of payments made, in other current and non-current assets, and the Company has recognized an obligation equal to the net outstanding balance of the notes in other current and non-current liabilities in the Condensed Consolidated Balance Sheets.  The cash flow benefit of these transactions is reflected in financing activities in the Condensed Consolidated Statements of Cash Flows.  During the three months ended March 31, 2016 and 2015 , the customers paid $4.7 million and $5.5 million , respectively, on the notes to the third party financing companies.  As of March 31, 2016 and December 31, 2015 , the outstanding balance of the notes receivable guaranteed by the Company was $20.8 million and $24.4 million , respectively.
See Note 3, “Discontinued Operations,” for discussion of debt guaranteed by the Company related to Manitowoc Dong Yue.
In the normal course of business, the Company provides its customers a warranty covering workmanship, and in some cases materials, on products manufactured by the Company.  The warranty generally provides that products will be free from defects for periods ranging from 12 to 60 months with certain equipment having longer-term warranties.  If a product fails to comply with the Company’s warranty, the Company may be obligated, at its expense, to correct any defect by repairing or replacing such defective products.  The Company provides for an estimate of costs that may be incurred under its warranty at the time product revenue is recognized.  These costs primarily include labor and materials, as necessary, associated with repair or replacement.  The primary factors that affect the Company’s warranty liability include the number of units shipped and historical and anticipated warranty claims.  As these factors are impacted by actual experience and future expectations, the Company assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary.  Below is a table summarizing the warranty activity for the three months ended March 31, 2016 and the year ended December 31, 2015 : 

									
(in millions)	 	Three Months Ended March 31, 2016	 	Year Ended
December 31, 2015	
Balance at beginning of period	 	$	43.9		 	$	50.2		
Accruals for warranties issued during the period	 	14.2		 	49.8		
Settlements made (in cash or in kind) during the period	 	(15.3	)	 	(52.7	)	
Currency translation	 	1.1		 	(3.4	)	
Balance at end of period	 	$	43.9		 	$	43.9		
17. Employee Benefit Plans
The Company provides certain pension, health care and death benefits for eligible retirees and their dependents.  The pension benefits are funded, while the health care and death benefits are not funded but are paid as incurred.  Eligibility for coverage is based on meeting certain years of service and retirement qualifications.  These benefits may be subject to deductibles, co-payment provisions, and other limitations.  The Company has reserved the right to modify these benefits.
As part of the Spin-Off, and in accordance with the employee matters agreement referred to in Note 2, certain combined plans were split between MTW and MFS. Accordingly, the Company transferred to MFS pension obligations associated with its active, retired and other former employees for those impacted defined benefit pension plans. The allocation of plan assets was determined in accordance with applicable ERISA (The Employee Retirement Income Security Act of 1974), Internal Revenue Service another jurisdictional requirements.
The components of periodic benefit costs for three and three months ended March 31, 2016 and March 31, 2015 are as follows:

24

	
													
 	 	Three Months Ended March 31, 2016	
 	 	U.S.	 	Non-U.S.	 	Postretirement	
 	 	Pension	 	Pension	 	Health and	
(in millions)	 	Plans	 	Plans	 	Other Plans	
Service cost - benefits earned during the period	 	$	—		 	$	0.5		 	$	0.1		
Interest cost of projected benefit obligations	 	2.2		 	1.6		 	0.5		
Expected return on plan assets	 	(1.7	)	 	(1.2	)	 	—		
Amortization of actuarial net loss	 	1.1		 	0.4		 	—		
Net periodic benefit costs	 	1.6		 	1.3		 	0.6		
Net periodic benefit costs associated with MFS	 	0.4		 	0.4		 	0.1		
Net periodic benefit costs included in continuing operations	 	$	1.2		 	$	0.9		 	$	0.5		

													
 	 	Three Months Ended March 31, 2015	
 	 	U.S.	 	Non-U.S.	 	Postretirement	
 	 	Pension	 	Pension	 	Health and	
(in millions)	 	Plans	 	Plans	 	Other Plans	
Service cost - benefits earned during the period	 	$	—		 	$	0.7		 	$	0.1		
Interest cost of projected benefit obligations	 	2.3		 	2.2		 	0.5		
Expected return on plan assets	 	(2.2	)	 	(1.9	)	 	—		
Amortization of actuarial net loss	 	1.3		 	0.6		 	—		
Net periodic benefit costs	 	1.4		 	1.6		 	0.6		
Net periodic benefit costs associated with MFS	 	0.1		 	0.6		 	—		
Net periodic benefit costs included in continuing operations	 	$	1.3		 	$	1.0		 	$	0.6		
18. Restructuring
The Company incurred $4.4 million of restructuring costs related to its workforce reductions at several of its facilities. The following is a roll-forward of all of the Company's restructuring activities for the three months ended March 31, 2016 (in millions): 

																
 	Restructuring Reserve
Balance as of
December 31, 2015	 	Restructuring
Charges	 	Use of Reserve	 	Restructuring Reserve
Balance as of
March 31, 2016	
Total	$	6.5		 	$	4.4		 	$	(2.0	)	 	$	8.9		
19. Recent Accounting Changes and Pronouncements
In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-10 - "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing." The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, which is discussed below and is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year.
In March 2016, the FASB issued ASU 2016-08—"Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” This update affects the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements of Update 2014-09. Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is evaluating the impact, if any, the adoption of this ASU will have on its consolidated financial statements.

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In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This update provided a principles-based approach to revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU provides a five-step model to be applied to all contracts with customers. The five steps are to identify the contract(s) with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when each performance obligation is satisfied. The revenue standard is effective for the first interim period within fiscal years beginning after December 15, 2017 (as finalized by the FASB in August 2015 in ASU 2015-14), and can be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of initial application along with additional disclosures. Early adoption is permitted as of the original effective date—the first interim period within fiscal years beginning after December 15, 2016. The Company is evaluating the impact, if any, the adoption of this ASU will have on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-09 - "Compensation-Stock Compensation" (Topic 718): Improvements to Employee Share-Based Payment Accounting. This update is part of the Simplification Initiative, and its objective is to identify, evaluate and improve areas of GAAP for which cost and complexity can be reduced while maintaining or improving usefulness of the information provided to users of financial statements. The update involves several aspect of the accounting for share-based payment transaction, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The effective date for this ASU if for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the impact, if any, the adoption of this ASU will have on its consolidated financial statements.
In March 2016, the FASB issued ASU No. 2016-06, "Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments." The amendments clarify the steps required to assess whether a call or put option meets the criteria for bifurcation as an embedded derivative. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The Company is evaluating the impact, if any, the adoption of this ASU will have on its consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, "Leases", which is intended to improve financial reporting on leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the impact, if any, the adoption of this ASU will have on its consolidated financial statements.
In January 2016, the FASB issued ASU 2016-01: "Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. Most significantly, ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of an investee) to be measured at fair value with changes in fair value recognized in net income (loss). ASU 2016-01 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is evaluating the impact, if any, the adoption of this ASU will have on its consolidated financial statements.
In August 2015, the FASB issued ASU No. 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” This update clarifies the guidance related to accounting for debt issuance costs related to line-of-credit arrangements. In April 2015, the FASB issued ASU 2015-03 which requires entities to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability; see further discussion of ASU 2015-03 below. The guidance in ASU 2015-03 did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The amendments in this ASU are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, with early application permitted. The guidance will be applied on a retrospective basis. The Company adopted this guidance as required beginning January 1, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements.
In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” This update changes the guidance on accounting for inventory accounted for on a first-in first-out basis (FIFO). Under the revised standard, an entity should measure FIFO inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and

26

transportation. Subsequent measurement is unchanged for inventory measured on a last-in, first-out basis (LIFO). The amendments in this ASU are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. The Company believes the adoption of this ASU will not have a material impact on its consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This update provides guidance on accounting for a software license in a cloud computing arrangement. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. Further, all software licenses are within the scope of Accounting Standards Codification Subtopic 350-40 and will be accounted for consistent with other licenses of intangible assets. The amendments in this ASU are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted this guidance as required beginning January 1, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” To simplify the presentation of debt issuance costs, this update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, rather than as a deferred asset. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The amendments in this ASU are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, with early application permitted. The guidance will be applied on a retrospective basis. The Company adopted this guidance as required beginning January 1, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements.
In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 820)—Amendments to the Consolidation Analysis.” This update amends the current consolidation guidance for both the variable interest entity (VIE) and voting interest entity (VOE) consolidation models. The amendments in this ASU are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted this guidance as required beginning January 1, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements.
In January 2015, the FASB issued ASU No. 2015-01, “Income Statement—Extraordinary and Unusual Items.” This update eliminates from GAAP the concept of extraordinary items. ASU 2015-01 is effective for the first interim period within fiscal years beginning after December 15, 2015, with early adoption permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. A reporting entity may apply the amendments prospectively or retrospectively to all prior periods presented in the financial statements. The Company adopted this guidance as required beginning January 1, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements.

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20.  Subsequent Events

The Condensed Consolidated Financial Statements reflect management’s evaluation of subsequent events through May 10, 2016, the date that the Condensed Consolidated Financial Statements as of and for the quarter-ended March 31, 2016 were issued.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
Results of Operations for the Three Months Ended March 31, 2016 and 2015
On March 4, 2016, the Company completed the spin-off of its former foodservice business (“MFS”) into an independent, public company (the “Spin-Off”). As a consequence, the Company’s former MFS operations are now being presented as discontinued operations. See Note 1, “Accounting Policies,” of the Condensed Consolidated Financial Statements for more information.
Analysis of Net Sales
Consolidated net sales for the three months ended March 31, 2016 increased 5.1% to $427.4 million from $406.7 million for the same period in 2015 . The increase in sales was primarily due to continued strength in tower cranes as a result of improving residential and commercial construction trends, as well as, new product introductions. This improvement was offset by persistent currency headwinds and ongoing softness in mobile cranes driven largely by the underperformance in the U.S. stemming from lower oil prices. Consolidated net sales for the three months ended March 31, 2016 and March 31, 2015 were unfavorably impacted by $3.6 million and $37.4 million , respectively, from the relative strength of the U.S. Dollar versus foreign currencies.
As of March 31, 2016 , total backlog was $502.2 million , a 2.0% decrease from the December 31, 2015 backlog of $512.6 million , and a 34.8% decrease from the March 31, 2015 backlog of $770.0 million . 
Analysis of Operating Earnings
Gross profit for the three months ended March 31, 2016 was $81.9 million , an increase of $6.5 million compared to $75.4 million of consolidated gross profit for the same period in 2015 . For the three months ended March 31, 2016 , the increase s in gross profit were partially the result of increases in net sales noted previously, which also resulted in improved absorption of fixed manufacturing costs. In addition to the overall increase in net sales, first quarter operating margins were positively impacted by actions taken over the last twelve months to right-size the business, including plant rationalizations, reductions in force and other operating efficiency gains.
For the three months ended March 31, 2016 , engineering, selling and administrative (“ES&A”) expenses decreased $10.3 million to $72.4 million versus $82.7 million for the three months ended March 31, 2015 . The decrease in overall ES&A expenses for the three months ended March 31, 2016 compared to the prior year period was due primarily to reduced headcount levels and lower discretionary spending. Corporate ES&A expenses decreased $5.9 million for the three months ended March 31, 2016 compared to prior year periods due to reduced headcount levels, and lower stock based compensation and pension and post-retirement expense. Other expense of $1.4 million for the three months ended March 31, 2016 is comprised primarily of separation equity awards.
The Company's operating earnings for the three months ended March 31, 2016 and 2015 were impacted favorably by $0.4 million and unfavorably by $2.0 million , respectively, from the relative strength of the U.S. Dollar versus foreign currencies.
Analysis of Non-Operating Income Statement Items
The loss on debt extinguishment for the three months ended March 31, 2016 and 2015 was $72.0 million and $ 0.0 million , respectively. The loss for the three months ended March 31, 2016 consisted of:

•	$31.5 million related to the March 3, 2016 redemption of the 2020 Notes, which included $24.6 million related to the redemption premium and $6.9 million related to the write-off of deferred financing fees,	

•	$34.6 million on the redemption of the 2022 Notes comprised of $31.2 million related to redemption premium and $3.4 million related to write-off of deferred financing fees, and	

•	$5.9 million on the termination of the Prior Senior Credit Facility as a result of the write-off of deferred financing expenses.	

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Interest expense for the three months ended March 31, 2016 was $9.7 million versus $23.3 million for the three months ended March 31, 2015 . The decrease was due to a lower average debt balance, partially offset by a higher average interest rate. Additionally, the remaining balance of $0.7 million as of March 3, 2016 in derivative liabilities related to termination of fixed-to-float swaps that were previously treated as a decrease to the debt balance for the 2022 Notes and were being amortized to interest expense over the life of the original swap was amortized as an increase to interest expense during the first quarter of 2016 .
The Company is continuing its restructuring activities in conjunction with its growth plan. As part of the restructuring, the Company undertook actions to balance capacity in its North American operations during three months ended March 31, 2016 . This resulted in $4.4 million of restructuring expense related to workforce reductions in two of its North American facilities compared to $0.2 million in the three months ended March 31, 2015 .
Amortization expense for deferred financing fees was $0.9 million for the three months ended March 31, 2016 compared to $1.1 million for the three months ended March 31, 2015 .
Other income (expense) for the three months ended March 31, 2016 was $1.1 million of income compared to $0.2 million of expense for the same period in 2015 and was comprised primarily of foreign currency translation.
For the three months ended March 31, 2016 , the Company recorded income tax expense of $122.3 million , compared to an income tax benefit of $7.4 million for the three months ended March 31, 2015 . The increase in the Company’s tax expense for the three months ended March 31, 2016 relative to the prior year relates primarily to a one-time increase in valuation allowance associated with the Company’s domestic federal and state deferred tax assets and attributes in connection with the Foodservice separation from the Cranes business. In addition to increasing the tax valuation allowance, the Company’s effective tax rate varies from the U.S. federal statutory rate of 35% due to results of foreign operations that are subject to income taxes at different statutory rates.
The Company's loss from discontinued operations for the three months ended March 31, 2016 was $3.2 million compared to $17.1 million in income for the same period in 2015 . Activity in earnings (loss) from discontinued operations relates primarily to the disposal of the Company's Foodservice segment in March 2016 .
Financial Condition
First Three Months of 2016
Cash and cash equivalents balance as of March 31, 2016 totaled $87.2 million , an increase of $23.8 million from the December 31, 2015 balance of $63.4 million , which includes $31.9 million in cash and cash equivalents of discontinued operations.
Cash flows used for operating activities of continuing operations for the first three months of 2016 were $147.1 million compared to cash flows used for continuing operations of $74.1 million for the first three months of 2015.  During the first three months of 2016 compared to the first three months of 2015, the increase in cash flows used for continuing operations was primarily due to cash prepayment penalty of $56.6 million. The use cash from operations in the first three months of 2016 is consistent with historical seasonal trends as the business uses cash to build working capital in anticipation of seasonal sales increases during summer months.
Cash flows used for investing activities of continuing operations of $9.8 million for the first three months of 2016 consisted of capital expenditures of $10.9 million , with the majority related to equipment purchases in North America and Europe, and change in restricted cash of $0.1 million , partially offset by proceeds from sales of property, plant, and equipment of $1.2 million .
Cash flows provided by financing activities of continuing operations of $244.3 million for the first three months of 2016 consisted primarily of proceeds from the offering of the 2021 Notes, partially offset by cash transfered to MFS in conjunction with the Spin-Off. Further, immediately prior to the Spin-Off, MFS issued long-term debt, the majority of the proceeds from which were provided to MTW in the form of a cash dividend. We used this cash dividend to repay our then-outstanding Senior Credit Facility and 2020 Notes and 2022 Notes.
First Three Months of 2015
Cash and cash equivalents balance as of March 31, 2015 totaled $68.2 million , an increase of $0.2 million from the December 31, 2014 balance of $68.0 million . The balances at March 31, 2015, and December 31, 2014, include cash and cash equivalents of discontinued operations of $16.1 million and $16.5 million, respectively.

29

Cash flows used for operating activities of continuing operations for the first three months of 2015 were $74.1 million . During the first three months of 2015, cash flows used for continuing operations were primarily due to the seasonal increase in working capital in anticipation of seasonal sales increases during summer months.
Cash flows used for investing activities of continuing operations of $6.3 million for the first three months of 2015 primarily consisted of capital expenditures of $8.5 million , with the majority of the capital expenditures related to equipment purchases and the enterprise resource planning ("ERP") system implementation, partially offset by proceeds from sales of property, plant, and equipment of $2.0 million and change in restricted cash of $0.2 million .
Cash flows provided by financing activities of continuing operations of $151.0 million for the first three months of 2015 consisted primarily of proceeds from the revolving credit facility.
Liquidity and Capital Resources
Outstanding debt as of March 31, 2016 and December 31, 2015 is summarized as follows:

									
(in millions)	 	March 31, 2016	 	December 31, 2015	
Term loan A	 	$	—		 	$	312.8		
Term loan B	 	—		 	119.5		
Senior notes due 2020	 	—		 	613.1		
Senior notes due 2022	 	—		 	299.2		
Senior notes due 2021	 	248.1		 	—		
Other	 	63.2		 	66.3		
Deferred financing	 	(8.3	)	 	(17.1	)	
Total debt	 	303.0		 	1,393.8		
Less current portion and short-term borrowings	 	(33.7	)	 	(67.2	)	
Long-term debt	 	$	269.3		 	$	1,326.6		
On March 3, 2016 , the Company entered into a $225.0 million Asset Based Revolving Credit Facility (as amended, the "ABL Revolving Credit Facility") with Wells Fargo Bank, N.A. as Administrative Agent, and JP Morgan Chase Bank, N.A. and Goldman Sachs Bank USA as Joint Lead Arrangers. The ABL Revolving Credit Facility includes a $75.0 million Letter of Credit Facility, $10.0 million of which is available to the German borrower, with a term of 5 years.
The ABL Revolving Credit Facility replaced the $1,050.0 million Third Amended and Restated Credit Agreement (the “Prior Senior Credit Facility”) which was entered on January 3, 2014. The Prior Senior Credit Facility included three different loan facilities. The first was a revolving facility with a five year term in the amount of $500.0 million . The second facility was Term Loan A in the aggregate amount of $350.0 million , with a term of five years. The third facility, Term Loan B in the amount of $200.0 million , had a term of seven years.
The termination of the Prior Senior Credit Facility resulted in a loss of $5.9 million related to the write-off of deferred financing expenses.
On February 18, 2016 , the Company entered into an indenture with Wells Fargo Bank, N.A., as trust and collateral agent, and completed the sale of $260.0 million aggregate principal amount of its 12.750% Senior Secured Second Lien Notes due August 15, 2021 (the " 2021 Notes"). Interest on the 2021 Notes is payable semi-annually in February and August of each year. The notes were registered under the Securities Act and will be resold by the initial purchasers pursuant to Rule 144A (and outside the United States in reliance on Regulation S) under the Securities Act.
On March 3, 2016 , the Company redeemed its 8.50% Senior Notes due 2020 (the “ 2020 Notes”) and 5.875% Senior Notes due 2022 (the “ 2022 Notes”) for $625.5 million and $330.5 million or 104.250% and 110.167% as expressed as a percentage of the principal amount, respectively.
The redemption of the 2020 Notes resulted in a loss on debt extinguishment of $31.5 million during the first quarter of 2016 and consisted of $24.6 million related to redemption premium and $6.9 million related to write-off of deferred financing fees. Previously monetized derivative assets related to fixed-to-float interest rate swaps were treated as an increase to the debt balance of the 2020 Notes and were being amortized to interest expense over the life of the original swap. As a result of the redemption, the remaining monetization balance of $11.8 million as of March 3, 2016 was amortized as a reduction to interest expense during the first quarter of 2016 .

30

The redemption of the 2022 Notes resulted in a loss on debt extinguishment of $34.6 million during the first quarter of 2016 and consisted of $31.2 million related to redemption premium and $3.4 million related to write-off of deferred financing fees. Previously, derivative liabilities related to termination of fixed-to-float swaps were treated as a decrease to the debt balance of the 2022 Notes and were being amortized to interest expense over the life of the original swap. As a result of the redemption, the remaining balance of $0.7 million as of March 3, 2016 was amortized as an increase to interest expense during the first quarter of 2016 .
Outstanding balances under the Company's Prior Senior Credit Facility and Senior Notes due 2020 and 2022 were repaid with proceeds from the Senior Notes due 2021 and a cash dividend from MFS in conjunction with the Spin-Off.
As of March 31, 2016 , the Company had outstanding $63.2 million of other indebtedness that has a weighted-average interest rate of approximately 5.24% . This debt includes outstanding line of credit balances and capital lease obligations in its Americas, Asia-Pacific and European regions.
The revolving facility under the ABL Revolving Credit Facility has a maximum borrowing capacity of $225.0 million and expires in March of  2021 . During the quarter ended March 31, 2016 , the highest daily borrowing was $234.0 million and the average borrowing was $117.4 million , while the average interest rate was 3.54% per annum.  The only borrowings during the quarter on the revolving facility were under the Prior Senior Credit Facility. As of March 31, 2016 , the Company had no borrowings outstanding under the ABL Revolving Credit Facility. The interest rate of the ABL Revolving Credit Facility fluctuates based on excess availability.  Had the Company borrowed as of March 31, 2016 , the spreads for LIBOR and Prime borrowings were 1.50% and 0.50% , respectively, with excess availability of approximately $160.1 million .
As of March 31, 2016 , the Company had no interest rate swaps outstanding related to its Senior Notes.
The balance sheet values of the senior notes as of March 31, 2016 and December 31, 2015 are not equal to the face value of the senior notes because of gains (losses) of previously terminated fixed-to-float interest rate hedges and original issue discounts included in the applicable balance sheet values (see Note 5, "Derivative Financial Instruments" for more information).
As of March 31, 2016 , the Company was in compliance with all affirmative and negative covenants in its debt instruments inclusive of the financial covenants pertaining to the ABL Revolving Credit Facility and the 2021 Notes.  Based upon the Company's current plans and outlook, management believes the Company will be able to comply with these covenants during the subsequent twelve months.
See additional discussion of the Senior Credit Facility and the Senior Notes in Note 9, “Debt,” of the Condensed Consolidated Financial Statements.
The Company’s trailing twelve-month Adjusted EBITDA as of March 31, 2016 was $123.0 million . The Company believes this non-GAAP measure is useful to the reader. The reconciliation of net loss attributable to the Company to Adjusted EBITDA for the trailing twelve months ended March 31, 2016 was as follows: 

				
 	Trailing Twelve
Months,	
(in millions)	March 31, 2016	
Net loss	$	(132.1	)	
Loss from discontinued operations	(115.9	)	
Depreciation and amortization	68.1		
Interest expense and amortization of deferred financing fees	85.9		
Costs due to early extinguishment of debt	72.2		
Restructuring expense	14.4		
Income taxes	91.4		
Pension and post-retirement	14.7		
Stock-based compensation	6.9		
Other	17.4		
Adjusted EBITDA	$	123.0		
The Company maintains an accounts receivable securitization program with a commitment size of $75.0 million , whereby transactions under the program are accounted for as sales in accordance with ASC Topic 860, “Transfers and Servicing.”  Sales of trade receivables under the program are reflected as a reduction of accounts receivable in the accompanying Condensed Consolidated Balance Sheets and the proceeds received, including collections on the deferred purchase price notes, are

31

included in cash flows from operating activities in the accompanying Condensed Consolidated Statements of Cash Flows.  See Note 10, “Accounts Receivable Securitization,” of the Condensed Consolidated Financial Statements for further details regarding the program.
The Company’s liquidity position at March 31, 2016 and December 31, 2015 is summarized as follows:

									
(in millions)	 	March 31, 2016	 	December 31, 2015	
Cash and cash equivalents	 	$	87.2		 	$	31.5		
Revolver borrowing capacity	 	160.1		 	500.0		
Less: Borrowings on revolver	 	—		 	—		
Less: Outstanding letters of credit	 	(26.3	)	 	(5.7	)	
Total liquidity	 	$	221.0		 	$	525.8		
The Company believes its liquidity and expected cash flows from operations should be sufficient to meet expected working capital, capital expenditure and other general ongoing operational needs.
The Company has not provided for additional U.S. income taxes on approximately $484.6 million of undistributed earnings of consolidated non-U.S. subsidiaries included in stockholders’ equity. Such earnings could become taxable upon sale or liquidation of these non-U.S. subsidiaries or upon dividend repatriation of cash balances. It is not practicable to estimate the amount of the unrecognized tax liability on such earnings. At March 31, 2016 , approximately $39.1 million of the Company’s total cash and cash equivalents were held by its foreign subsidiaries. This cash is associated with earnings that the Company has asserted are permanently reinvested. The Company has no current plans to repatriate cash or cash equivalents held by its foreign subsidiaries because it plans to reinvest such cash and cash equivalents to support its operations and continued growth plans outside the U.S. through the funding of capital expenditures, acquisitions, research, operating expenses or other similar cash needs of these operations. Further, the Company does not currently forecast a need for these funds in the U.S. because its U.S. operations and debt service are supported by the cash generated by its U.S. operations.
Critical Accounting Policies
Our critical accounting policies have not materially changed since the 2015 Form 10-K was filed.
Cautionary Statements about Forward-Looking Information
Statements in this report and in other company communications that are not historical facts are forward-looking statements, which are based upon our current expectations, within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements involve risks and uncertainties that could cause actual results to differ materially from what appears within this quarterly report.
Forward-looking statements include descriptions of plans and objectives for future operations, and the assumptions behind those plans. The words “anticipates,” “believes,” “intends,” “estimates,” “targets” and “expects,” or similar expressions, usually identify forward-looking statements. Any and all projections of future performance are forward-looking statements.
In addition to the assumptions, uncertainties, and other information referred to specifically in the forward-looking statements, a number of factors could cause actual results to be significantly different from what is presented in this quarterly report. Those factors include, without limitation, the following:
Cyclicality of the construction industry; the effects of government spending on construction-related projects throughout the world; unanticipated changes in global demand for high-capacity lifting equipment; changes in demand for lifting equipment in emerging economies; the replacement cycle of technologically obsolete cranes; crude oil prices; and demand for used equipment.
Corporate - possible negative effects on the company’s business operations, assets, or financial results as a result of the Spin-Off; changes in laws and regulations, as well as their enforcement, throughout the world; the ability to complete and appropriately integrate, and/or transition, restructure and consolidate acquisitions, divestitures, strategic alliances, joint ventures and other strategic alternatives; in connection with acquisitions, divestitures, strategic alliances and joint ventures, the finalization of the price and other terms, the realization of contingencies consistent with any established reserves, and unanticipated issues associated with transitional services; realization of anticipated earnings enhancements, cost savings, strategic options and other synergies, and the anticipated timing to realize those savings, synergies, and options; the successful development of innovative products and market acceptance of new and innovative products; the ability to focus and capitalize

32

on product quality and reliability; issues relating to the ability to timely and efficiently execute on manufacturing strategies, including issues relating to new plant start-ups, plant closings, and/or consolidations of existing facilities and operations; efficiencies and capacity utilization of facilities; actions of competitors, including competitive pricing; availability of certain raw materials; changes in raw materials and commodity prices; unexpected issues associated with the quality of materials and components sourced from third parties and resolution of those issues; matters impacting the successful and timely implementation of ERP systems; changes in domestic and international economic and industry conditions, including steel industry conditions and the price of oil; changes in the markets we serve; unexpected issues associated with the availability of local suppliers and skilled labor; changes in the interest rate environment; unanticipated changes in capital and financial markets; risks associated with growth; foreign currency fluctuations and their impact on reported results and hedges in place; world-wide political risk; geographic factors and economic risks; pressure of financing leverage; unanticipated changes in revenue, margins, costs and capital expenditures; work stoppages, labor negotiations, rates and temporary labor; issues associated with workforce reductions and subsequent ramp-up; growth of general and administrative expenses, including health care and postretirement costs (resulting from, among other matters, U.S. health care legislation and reforms); unanticipated changes in consumer spending; the ability of our customers to obtain financing; the state of financial and credit markets; the ability to generate cash and manage working capital consistent with our stated goals; non-compliance with debt covenants; unexpected issues affecting the effective tax rate for the year; unanticipated issues associated with the resolution or settlement of uncertain tax positions; unfavorable resolution of tax audits; unanticipated changes in customer demand; the ability to increase operational efficiencies and capitalize on those efficiencies; the ability to capitalize on key strategic opportunities; actions of activist shareholders; risks associated with data security and technological systems and protections; natural disasters disrupting commerce in one or more regions of the world; acts of terrorism; government approval and funding of projects; and other events outside our control.
Item 3.  Quantitative and Qualitative Disclosure about Market Risk

33

The company’s market risk disclosures have not materially changed since the 2015 Form 10-K was filed.  The company’s quantitative and qualitative disclosures about market risk are incorporated by reference from Part II, Item 7A of the company’s Annual Report on Form 10-K, for the year ended December 31, 2015 .
Item 4.  Controls and Procedures
Disclosure Controls and Procedures:   The company’s management, with the participation of the company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the company’s disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the company in the reports that it files or submits under the Exchange Act, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.
Changes in Internal Control Over Financial Reporting:   Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). During the period covered by this report, we made no changes that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

34

PART II.  OTHER INFORMATION
Item 1A. Risk Factors
The company’s risk factors disclosures have not materially changed since the 2015 Form 10-K was filed. The company’s risk factors are incorporated by reference from Part I, Item 1A of the company’s Annual Report on Form 10-K for the year ended December 31, 2015.
Item 6.  Exhibits
(a)   Exhibits:  See exhibit index following the signature page of this Report, which is incorporated herein by reference.

35

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.

		
Date: May 10, 2016	The Manitowoc Company, Inc.	
 	(Registrant)	

 	/s/ Barry L. Pennypacker	
 	Barry L. Pennypacker	
 	President and Chief Executive Officer	
 	 	
 	/s/ Carl J. Laurino	
 	Carl J. Laurino	
 	Senior Vice President and Chief Financial Officer	

36

THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO FORM 10-Q
FOR QUARTERLY PERIOD ENDED
March 31, 2016

	
							
Exhibit No.	 	Description	 	Filed/Furnished
Herewith	 	
 		 	 	 	 	 	
2.1		 	Master Separation and Distribution Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, dated March 3, 2016).	 	 	 	
 	 	 	 	 	 	
4.1		 	Indenture, dated February 18, 2016, between MTW Cranes Escrow Corp. and Wells Fargo Bank, National Association, as trustee and collateral agent (the “2016 Indenture”) (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, dated February 18, 2016).	 	 	 	
 	 	 	 	 	 	
4.2		 	Form of 12.75% Senior Secured Second Lien Note due 2021 (included as Exhibit A to the 2016 Indenture) (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K, dated February 18, 2016).	 	 	 	
 	 	 	 	 	 	
4.3		 	First Supplemental Indenture, dated March 3, 2016, by and among MTW Cranes Escrow Corp., The Manitowoc Company, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated March 3, 2016).	 	 	 	
 	 	 	 	 	 	
10.1		 	Note Purchase Agreement, dated February 8, 2016, between MTW Cranes Escrow Corp., The Manitowoc Company, Inc., the guarantors named therein, and Goldman, Sachs & Co., for itself and on behalf of the several initial purchasers listed on Schedule 1 thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated February 5, 2016).	 	 	 	
 	 	 	 	 	 	
10.2		 	Transition Services Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated March 3, 2016).	 	 	 	
 	 	 	 	 	 	
10.3 (a)		 	Tax Matters Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated March 3, 2016).	 	 	 	
 	 	 	 	 	 	
10.3(b)		 	Employee Matters Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated March 3, 2016).	 	 	 	
 	 	 	 	 	 	
10.4		 	Amendment, dated March 28, 2016, to the Employee Matters Agreement, effective as of March 4, 2016, by and between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated March 28, 2016).	 	 	 	
 	 	 	 	 	 	
10.5		 	Intellectual Property Matters Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, dated March 3, 2016).	 	 	 	
 	 	 	 	 	 	
10.6		 	Credit Agreement, dated March 3, 2016, among Wells Fargo Bank, National Association, as administrative agent, the financial institutions from time to time party thereto, as lenders, and The Manitowoc Company, Inc., Manitowoc Cranes, LLC, Grove U.S. L.L.C., and Manitowoc Crane Group Germany GmbH, as borrowers (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, dated March 3, 2016).	 	 	 	
 	 	 	 	 	 	
10.7		 	Receivables Purchase Agreement, dated March 3, 2016, by and among Manitowoc Funding, LLC, as seller, The Manitowoc Company, Inc., as servicer, and Wells Fargo Bank, N.A., as purchaser and as agent (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K, dated March 3, 2016).	 	 	 	
 	 	 	 	 	 	
10.8		 	The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan, as amended.	 	X	 	
 	 	 	 	 	 	
31		 	Rule 13a - 14(a)/15d - 14(a) Certifications	 	X	(1)	
 		 	 	 	 	 	
32.1		 	Certification of CEO pursuant to 18 U.S.C. Section 1350	 	X	(2)	
 		 	 	 	 	 	
32.2		 	Certification of CFO pursuant to 18 U.S.C. Section 1350	 	X	(2)	
 		 	 	 	 	 	
101		 	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) related notes.	 	X	(1)	
 
(1)  Filed Herewith
(2)  Furnished Herewith

37

THE MANITOWOC COMPANY, INC.
2013 OMNIBUS INCENTIVE PLAN
1. Purpose, Effective Date and Definitions.
(a)      Purpose . The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan has two complementary purposes: (i) to attract, retain, focus and motivate executives and other selected employees, directors, consultants and advisors and (ii) to increase shareholder value. The Plan will accomplish these objectives by offering participants the opportunity to acquire shares of the Company’s common stock, receive monetary payments based on the value of such common stock or receive other incentive compensation on the terms that this Plan provides.
(b)      Effective Date . This Plan will become effective on the date on which the Plan is approved by the Company’s shareholders (the “Effective Date”). If the Company’s shareholders approve this Plan, then the Company’s 2003 Incentive Stock and Awards Plan and the Company’s 2004 Non-Employee Director Stock and Awards Plan (together, the “Prior Plans”) will terminate on the Effective Date and the Company’s Short-Term Incentive Plan will terminate on December 31, 2013, and no new awards may be granted under such plans after their respective termination dates; provided that each such plan shall continue to govern awards outstanding as of the date of such plan’s termination and such awards shall continue in force and effect until terminated pursuant to their terms. The number of Shares reserved in Section 5(a) was adjusted effective as of March 4, 2016 to reflect the effect of the spin-off of the Company’s wholly-owned subsidiary, Manitowoc Foodservice, Inc., that was completed on that date.
(c)      Definitions . Capitalized terms used and not otherwise defined in various sections of the Plan have the meanings given in Section 19.
2.      Administration.
(a)      Administration . In addition to the authority specifically granted to the Administrator in this Plan, the Administrator has full discretionary authority to administer this Plan, including but not limited to the authority to: (i) interpret the provisions of this Plan; (ii) prescribe, amend and rescind rules and regulations relating to this Plan; (iii) correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any agreement covering an Award in the manner and to the extent it deems desirable to carry this Plan or such Award into effect; and (iv) make all other determinations necessary or advisable for the administration of this Plan. All Administrator determinations shall be made in the sole discretion of the Administrator and are final and binding on all interested parties.
Notwithstanding any provision of the Plan to the contrary, the Administrator shall have the discretion to grant an Award with any vesting condition, any vesting period or any performance period if the Award is granted to a newly hired or promoted Participant, or accelerate or shorten the vesting or performance period of an Award, in connection with a Participant’s death, Disability, Retirement or termination by the Company or an Affiliate without Cause or a Change of Control.
Notwithstanding the above statement or any other provision of the Plan, once established, the Administrator shall have no discretion to increase the amount of compensation payable under

an Award that is intended to be performance-based compensation under Code Section 162(m), although the Administrator may decrease the amount of compensation a Participant may earn under such an Award.
(b)      Delegation to Other Committees or Officers . To the extent applicable law permits, the Board may delegate to another committee of the Board, or the Committee may delegate to one or more officers of the Company, any or all of their respective authority and responsibility as an Administrator of the Plan; provided that no such delegation is permitted with respect to Stock-based Awards made to Section 16 Participants at the time any such delegated authority or responsibility is exercised unless the delegation is to another committee of the Board consisting entirely of Non-Employee Directors. If the Board or the Committee has made such a delegation, then all references to the Administrator in this Plan include such other committee or one or more officers to the extent of such delegation.
(c)      No Liability; Indemnification . No member of the Board or the Committee, and no officer or member of any other committee to whom a delegation under Section 2(b) has been made, will be liable for any act done, or determination made, by the individual in good faith with respect to the Plan or any Award. The Company will indemnify and hold harmless each such individual as to any acts or omissions, or determinations made, with respect to this Plan or any Award to the maximum extent that the law and the Company’s by-laws permit.
3.      Eligibility. The Administrator may designate any of the following as a Participant from time to time, to the extent of the Administrator’s authority: any officer or other employee of the Company or its Affiliates; any individual that the Company or an Affiliate has engaged to become an officer or employee; any consultant or advisor who provides services to the Company or its Affiliates; or any Director, including a Non-Employee Director. The Administrator’s granting of an Award to a Participant will not require the Administrator to grant an Award to such individual at any future time. The Administrator’s granting of a particular type of Award to a Participant will not require the Administrator to grant any other type of Award to such individual.
4.      Types of Awards; Assistance to Participants.
(a)      Grants of Awards . Subject to the terms of this Plan, the Administrator may grant any type of Award to any Participant it selects, but only employees of the Company or a Subsidiary (that qualifies under Code Section 422) may receive grants of incentive stock options within the meaning of Code Section 422. Awards may be granted alone or in addition to, in tandem with, or (subject to the prohibition on repricing set forth in Section 15(e)) in substitution for any other Award (or any other award granted under another plan of the Company or any Affiliate, including the plan of an acquired entity).
(b)      Assistance. On such terms and conditions as shall be approved by the Administrator, the Company or any Subsidiary may directly or indirectly lend money to any Participant or other person to accomplish the purposes of the Plan, including to assist such Participant or other person to acquire Shares upon the exercise of Options, provided that such lending is not permitted to the extent it would violate terms of the Sarbanes-Oxley Act of 2002 or any other law, regulation or other requirement applicable to the Company or any Subsidiary.

5.      Shares Reserved under this Plan.
(a)      Plan Reserve . Subject to adjustment as provided in Section 17, an aggregate of 30,145,082 Shares, plus the number of Shares described in Section 5(c), are reserved for issuance under this Plan. The Shares reserved for issuance may be either authorized and unissued Shares or shares reacquired at any time and now or hereafter held as treasury stock. The aggregate number of Shares reserved under this Section 5(a) shall be depleted by the maximum number of Shares, if any, that may be issuable under an Award as determined at the time of grant; provided that the aggregate number of Shares reserved under this Section 5(a) shall be depleted by 1.5 Shares for each Share delivered in payment or settlement of a full-value Award. For this purpose, a full-value Award includes Restricted Stock, Restricted Stock Units payable in Shares, Performance Shares, Performance Units payable in Shares, and any other similar Award payable in Shares under which the value of the Award is measured as the full value of a Share, rather than the increase in the value of a Share. A full-value award does not include Options or Stock Appreciation Rights such that the aggregate number of Shares reserved under this Section 5(a) shall be depleted by one (1) Share for each Share delivered in settlement of a Stock Appreciation Right and by one (1) Share for each Share delivered in payment of Options exercised. Notwithstanding the foregoing, no more than 800,000 Shares may be issued upon the exercise of incentive stock options. For purposes of determining the aggregate number of Shares reserved for issuance under this Plan, any fractional Share shall be rounded to the next highest full Share.
(b)      Replenishment of Shares Under this Plan . If (i) an Award lapses, expires, terminates or is cancelled without the issuance of Shares under the Award (whether due currently or on a deferred basis), (ii) it is determined during or at the conclusion of the term of an Award that all or some portion of the Shares with respect to which the Award was granted will not be issuable, or that other compensation with respect to the Shares covered by the Award will not be payable, on the basis that the conditions for such issuance will not be satisfied, (iii) Shares are forfeited under an Award or (iv) Shares are issued under any Award and the Company subsequently reacquires them pursuant to rights reserved upon the issuance of the Shares, then such Shares shall be recredited to the Plan’s reserve and may again be used for new Awards under this Plan, but Shares recredited to the Plan’s reserve pursuant to clause (iv) may not be issued pursuant to incentive stock options. Additionally, the following Shares may not again be made available for issuance as Awards under the Plan: (i) Shares not issued or delivered as a result of the net settlement of an outstanding Option or SAR, (ii) Shares used to pay the Option Price or withholding taxes related to an outstanding Award, and (iii) Shares repurchased on the open market with the proceeds of the Option Price.
(c)      Addition of Shares from Prior Plans . After the Effective Date, if any Shares subject to awards granted under the Prior Plans would again become available for new grants under the terms of such plan if such plan were still in effect (taking into account, at the time such awards would again become available, such plan’s provisions concerning termination or expiration, if any), then those Shares will be available for the purpose of granting Awards under this Plan, thereby increasing the number of Shares available for issuance under this Plan as determined under Section 5(a).
(d)      Participant Limitations . Subject to adjustment as provided in Section 17, no Participant may be granted Awards that could result in such Participant:

(i)      receiving Options for, and/or Stock Appreciation Rights with respect to, more than 2,000,000 Shares during any fiscal year of the Company;
(ii)      receiving Awards of Restricted Stock and/or Restricted Stock Units, and/or other Stock-based Awards pursuant to Section 12, relating to more than 500,000 Shares during any fiscal year of the Company;
(iii)      receiving Awards of Performance Shares, and/or Awards of Performance Units the value of which is based on the Fair Market Value of Shares, for more than 1,000,000 Shares during any fiscal year of the Company; or
(iv)      receiving Awards with a performance period of more than one year, including Awards of Performance Units the value of which is not based on the Fair Market Value of Shares, Long-Term Incentive Award(s) or Dividend Equivalent Unit(s) that would pay more than $10,000,000 to the Participant during any single fiscal year of the Company,
(v)      receiving Awards with a performance period of not more than one year, including Annual Incentive Awards, Awards of Performance Units the value of which is not based on the Fair Market Value of Shares, or Dividend Equivalent Unit(s) that would pay more than $4,000,000 to the Participant during any fiscal year of the Company.
In all cases, determinations under this Section 5(d) should be made in a manner that is consistent with the exemption for performance‑based compensation that Code Section 162(m) provides.

6.      Options. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each Option, including but not limited to: (a) whether the Option is an “incentive stock option” which meets the requirements of Code Section 422, or a “nonqualified stock option” which does not meet the requirements of Code Section 422; (b) the grant date, which may not be any day prior to the date that the Administrator approves the grant; (c) the number of Shares subject to the Option; (d) the exercise price, which may not be less than the Fair Market Value of the Shares subject to the Option as determined on the date of grant; (e) the terms and conditions of vesting and exercise; and (f) the term, except that an Option must terminate no later than ten (10) years after the date of grant. In all other respects, the terms of any incentive stock option should comply with the provisions of Code Section 422 except to the extent the Administrator determines otherwise. Except to the extent the Administrator determines otherwise, a Participant may exercise an Option in whole or part after the right to exercise the Option has accrued, provided that any partial exercise must be for one hundred (100) Shares or multiples thereof. If an Option that is intended to be an incentive stock option fails to meet the requirements thereof, the Option shall automatically be treated as a nonqualified stock option to the extent of such failure. Unless restricted by the Administrator, and subject to such procedures as the Administrator may specify, the payment of the exercise price of Options made be made by (w) delivery of cash or other Shares or other securities of the Company (including by attestation) having a then Fair Market Value equal to the purchase price of such Shares, (x) by delivery (including by fax) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the Shares and deliver the sale or margin loan proceeds directly to the Company to pay for the exercise price, (y) by surrendering the right to

receive Shares otherwise deliverable to the Participant upon exercise of the Award having a Fair Market Value at the time of exercise equal to the total exercise price, or (z) by any combination of (w), (x) and/or (y). Except to the extent otherwise set forth in an Award agreement, a Participant shall have no rights as a holder of Stock as a result of the grant of an Option until the Option is exercised, the exercise price and applicable withholding taxes are paid and the Shares subject to the Option are issued thereunder.
7.      Stock Appreciation Rights. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each SAR, including but not limited to: (a) whether the SAR is granted independently of an Option or relates to an Option; (b) the grant date, which may not be any day prior to the date that the Administrator approves the grant; (c) the number of Shares to which the SAR relates; (d) the grant price, provided that the grant price shall not be less than the Fair Market Value of the Shares subject to the SAR as determined on the date of grant; (e) the terms and conditions of exercise or maturity, including vesting; (f) the term, provided that an SAR must terminate no later than ten (10) years after the date of grant; and (g) whether the SAR will be settled in cash, Shares or a combination thereof. If an SAR is granted in relation to an Option, then unless otherwise determined by the Administrator, the SAR shall be exercisable or shall mature at the same time or times, on the same conditions and to the extent and in the proportion, that the related Option is exercisable and may be exercised or mature for all or part of the Shares subject to the related Option. Upon exercise of any number of SARs, the number of Shares subject to the related Option shall be reduced accordingly and such Option may not be exercised with respect to that number of Shares. The exercise of any number of Options that relate to an SAR shall likewise result in an equivalent reduction in the number of Shares covered by the related SAR.
8.      Performance and Stock Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each award of Shares, Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, including but not limited to: (a) the number of Shares and/or units to which such Award relates; (b) whether, as a condition for the Participant to realize all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such period as the Administrator specifies; (c) whether the restrictions imposed on Restricted Stock or Restricted Stock Units shall lapse, and all or a portion of the Performance Goals subject to an Award shall be deemed achieved, upon a Participant’s death, Disability or Retirement; (d) the length of the vesting and/or performance period (provided that any period of vesting applicable to Restricted Stock or Restricted Stock Units that are (i) not subject to a Performance Goal and (ii) granted to a Participant other than a Non-Employee Director may not lapse more quickly than ratably over three (3) years from the date of grant, subject to Sections 2 and 17) and, if different, the date on which payment of the benefit provided under the Award will be made; (e) with respect to Performance Units, whether to measure the value of each unit in relation to a designated dollar value or the Fair Market Value of one or more Shares; and (f) with respect to Restricted Stock Units and Performance Units, whether to settle such Awards in cash, in Shares (including Restricted Stock), or a combination thereof.
Except to the extent otherwise set forth in an Award agreement:
(a)      Following the issuance of Shares of Restricted Stock to a Participant and before the Shares are fully vested, the Participant shall be entitled to exercise full voting rights with respect to such Shares, and receive all dividends or distributions paid with respect to such Shares; and

if any such dividends or distributions are paid in Shares, such Shares shall be subject to the same restrictions as the Shares of Restricted Stock with respect to which they were paid. Notwithstanding the foregoing, no dividends or distributions shall be payable to the Participant with respect to, and the Participant shall not have the right to vote the Shares of Restricted Stock with respect to, record dates occurring prior to the grant date of the Award, or with respect to record dates occurring on or after the date, if any, on which the Participant has forfeited such Shares.
(b)      Subject to Section 13, Awards of Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units shall be subject to the transfer restrictions set forth in Section 14 and to forfeiture upon termination of employment or service until the vesting and/or performance conditions set forth in the Award agreement have been satisfied.
(c)      A Participant shall not be entitled to, and shall agree to waive or otherwise surrender, any rights to vote or receive dividends or other distributions paid with respect to Performance Shares, Performance Units valued in Shares or Restricted Stock Units that are granted to the Participant until after the Performance Shares have been earned or the Company has issued Shares in settlement of the Performance Units or Restricted Stock Units in accordance with the Award agreement.
9.      Annual Incentive Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of an Annual Incentive Award, including but not limited to the Performance Goals, performance period, the potential amount payable, and the timing of payment; provided that the Administrator must require that payment of all or any portion of the amount subject to the Annual Incentive Award is contingent on the achievement of one or more Performance Goals during the period the Administrator specifies, although the Administrator may specify that all or a portion of the Performance Goals subject to an Award are deemed achieved upon a Participant’s death, Disability or Retirement (except, in the case of an Award intended to constitute performance-based compensation under Code Section 162(m), to the extent inconsistent with the applicable requirements of Code Section 162(m)), or such other circumstances as the Administrator may specify.
10.      Long-Term Incentive Awards. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of a Long-Term Incentive Award, including but not limited to the Performance Goals, performance period (which must be more than one year), the potential amount payable, and the timing of payment; provided that the Administrator must require that payment of all or any portion of the amount subject to the Long-Term Incentive Award is contingent on the achievement of one or more Performance Goals during the period the Administrator specifies, although the Administrator may specify that all or a portion of the Performance Goals subject to an Award are deemed achieved upon a Participant’s death, Disability or Retirement (except, in the case of an Award intended to constitute performance-based compensation under Code Section 162(m), to the extent inconsistent with the applicable requirements of Code Section 162(m)), or such other circumstances as the Administrator may specify.
11.      Dividend Equivalent Units. Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each award of Dividend Equivalent Units, including but not limited to whether: (a) such Award will be granted in tandem with another Award; (b) payment of the Award will be made concurrently with dividend payments or credited to an account for the

Participant which provides for the deferral of such amounts until a stated time; (c) the Award will be settled in cash or Shares; and (d) as a condition for the Participant to realize all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such period as the Administrator specifies; provided that Dividend Equivalent Units may not be granted in connection with an Option, Stock Appreciation Right or other “stock right” within the meaning of Code Section 409A; and provided further that no Dividend Equivalent Unit granted in tandem with another Award shall include vesting provisions more favorable to the Participant than the vesting provisions, if any, to which the tandem Award is subject; and provided further that any performance period applicable to an Awards of Dividend Equivalent Units must relate to a period of at least one year except that, if the Award is made in the year this Plan becomes effective, at the time of commencement of employment with the Company or on the occasion of a promotion, then the Award may relate to a period shorter than one year.
12.      Other Stock-Based Awards. Subject to the terms of this Plan, the Administrator may grant to Participants other types of Awards, which may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, Shares, either alone or in addition to or in conjunction with other Awards, and payable in Stock or cash. Without limitation except as provided herein (and subject to the limitations of Section 15(e)), such Award may include the issuance of shares of unrestricted Stock, which may be awarded in payment of director fees, in lieu of cash compensation, in exchange for cancellation of a compensation right, as a bonus, or upon the attainment of Performance Goals or otherwise, or rights to acquire Stock from the Company. The Administrator shall determine all terms and conditions of the Award, including but not limited to, the time or times at which such Awards shall be made, and the number of Shares to be granted pursuant to such Awards or to which such Award shall relate; provided that any Award that provides for purchase rights shall be priced at 100% of Fair Market Value on the date of the Award.
13.      Effect of Termination on Awards . If the Participant has in effect an employment, retention, change of control, severance or similar agreement with the Company or any Affiliate that discusses the effect of the Participant’s termination of employment or service on the Participant’s Awards, then such agreement shall control. In any other case, except as otherwise provided by the Administrator in an Award agreement or as otherwise determined by the Administrator prior to or at the time of termination of a Participant’s employment or service, the following provisions shall apply upon a Participant’s termination of employment or service with the Company and its Affiliates.
(a)      Termination of Employment or Service . If a Participant’s service with the Company and its Affiliates as an employee or a Director ends for any reason other than (i) a termination for Cause, (ii) death, (iii) Disability or (iv) Retirement, then:
(i)      Any outstanding unvested Options or SARs shall be forfeited immediately upon such termination, and any outstanding vested Options or SARs shall be exercisable until the earlier of (A) six (6) months following the Participant’s termination date and (B) the expiration date of the Option or SAR under the terms of the applicable Award agreement; provided that, if the Option was granted to a Director, then the vested Options or SARs shall be exercisable until the earlier of twelve (12) months following the Participant’s termination date and the expiration date.

(ii)      All other outstanding Awards made to the Participant, to the extent not then earned, vested or paid to the Participant, shall terminate on the Participant’s last day of employment or service.
(b)      Death, Disability or Retirement of Participant . If a Participant dies during employment with the Company and its Affiliates or while a Director, or if a Participant’s service terminates as a result of Disability or Retirement, then:
(i)      All outstanding Options or SARs shall become fully vested and exercisable by the Participant or, in the case of death, by the Participant’s estate or the person who has acquired the right to exercise such Awards by bequest or inheritance, as follows:
(A)      In the case of the Participant’s death, until the earlier of twelve (12) months following the date of the Participant’s death and the expiration date of the Option or SAR.
(B)      In the case of a termination as a result of Disability, until the earlier of twelve (12) months following the date of the termination and the expiration date of the Option or SAR.
(C)      In the case of a termination as a result of Retirement, until the earlier of ten (10) years following the date of the Participant’s Retirement and the expiration date of the Option or SAR.
(ii)      All restrictions on all outstanding Awards of Restricted Stock or Restricted Units that are not Performance Awards, including all related Dividend Equivalent Units, shall be deemed to have lapsed, and such Awards shall become fully vested, upon the date of death or termination, as applicable.
(iii)      All outstanding Awards of Performance Shares and Performance Units, including all related Dividend Equivalent Units, shall be paid in either unrestricted shares of Stock or cash, as the case may be, following the end of the performance period and based on achievement of the Performance Goals established for such Awards, as if the Participant had not died or terminated service, as applicable, but prorated based on the portion of the performance period that the Participant has completed at the time of death or termination of service.
(iv)      All other outstanding Awards made to the Participant, to the extent not then earned, vested or paid to the Participant, shall terminate on the Participant’s last day of employment or service.
(c)      Termination for Cause . If a Participant’s employment with the Company and its Affiliates or service as a Director is terminated for Cause, all Awards and grants of every type, whether or not then vested, shall terminate no later than the Participant’s last day of employment. The Committee shall have discretion to waive the application of this Section 13(c) in whole or in part and to determine whether the event or conduct at issue constitutes Cause for termination.

(d)      Time of Termination . For purposes of this Section 13, termination of service shall be deemed to occur at 11:59 p.m. (Central Time) on the relevant date described above, except that, if the Participant is terminated for Cause, then the termination shall occur immediately at the time of such termination.
(e)      Consultants and Other Stock-Based Awards . The Administrator shall have the discretion to determine, at the time an Award is made, the effect of the termination of service of a Consultant on Awards held by such individual, and the effect on other Stock-based Awards of the Participant’s termination of employment or service with the Company and its Affiliates.
14.      Restrictions on Transfer, Encumbrance and Disposition . No Award granted under this Plan may be sold, assigned, mortgaged, pledged, exchanged, hypothecated or otherwise transferred, or encumbered or disposed of, by a Participant other than by will or the laws of descent and distribution, and during the lifetime of the Participant such Awards may be exercised only by the Participant or the Participant’s legal representative or by the permitted transferee of such Participant as hereinafter provided (or by the legal representative of such permitted transferee). Notwithstanding the foregoing, (a) unless otherwise prohibited by an Award agreement, a Participant may transfer Awards to (i) his or her spouse, children or grandchildren (“Immediate Family Members”); (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members; or (iii) a partnership in which such Immediate Family Members are the only partners; provided that the transfer will be effective only if the Participant receives no consideration for such transfer; and (b) a Participant may transfer an Award if permitted by the Administrator. Subsequent transfers of transferred Awards are prohibited except transfers to those persons or entities to which the Participant could have transferred such Awards, or transfers otherwise made in accordance with this Section 14. Any attempted transfer not permitted by this Section 14 shall be null and void and have no legal effect. The restrictions set forth in this Section 14, and any risk of forfeiture applicable to an Award, shall be enforceable against any transferee of an Award.
15.      Termination and Amendment of Plan; Amendment, Modification or Cancellation of Awards.
(a)      Term of Plan . Unless the Board earlier terminates this Plan pursuant to Section 15(b), this Plan will terminate when all Shares reserved for issuance have been issued. If the term of this Plan extends beyond ten (10) years from the Effective Date, no incentive stock options may be granted after such time unless the shareholders of the Company have approved an extension of this Plan. In addition, no Award may constitute qualified performance-based compensation within the meaning of Code Section 162(m) unless, to the extent required by Code Section 162(m) for such Award to constitute qualified performance-based compensation, the material terms of the Performance Goals applicable to such Award are disclosed to and reapproved by the shareholders of the Company no later than the first shareholder meeting that occurs in the fifth (5 th ) year following the year in which the shareholders previously approved the Performance Goals.
(b)      Termination and Amendment . The Board or the Administrator may amend, alter, suspend, discontinue or terminate this Plan at any time, subject to the following limitations:

(i)      the Board must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) prior action of the Board, (B) applicable corporate law, or (C) any other applicable law;
(ii)      shareholders must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) Section 16 of the Exchange Act, (B) the Code, (C) the listing requirements of any principal securities exchange or market on which the Shares are then traded, or (D) any other applicable law; and
(iii)      shareholders must approve any of the following Plan amendments: (A) an amendment to materially increase any number of Shares specified in Section 5(a) or the limits set forth in Section 5(d) (except as permitted by Section 17), (B) an amendment to shorten the minimum vesting periods required in Section 8, or (C) an amendment that would diminish the protections afforded by Section 15(e).
(c)      Amendment, Modification, Cancellation and Disgorgement of Awards .
(i)      Except as provided in Section 15(e) and subject to the requirements of this Plan, the Administrator may modify, amend or cancel any Award, or waive any restrictions or conditions applicable to any Award or the exercise of the Award; provided that, except as otherwise provided in the Plan or the Award agreement, any modification or amendment that materially diminishes the rights of the Participant, or the cancellation of the Award, shall be effective only if agreed to by the Participant or any other person(s) as may then have an interest in the Award, but the Administrator need not obtain Participant (or other interested party) consent for the modification, amendment or cancellation of an Award pursuant to the provisions of subsection (ii) or Section 17 or as follows: (A) to the extent the Administrator deems such action necessary to comply with any applicable law or the listing requirements of any principal securities exchange or market on which the Shares are then traded; (B) to the extent the Administrator deems necessary to preserve favorable accounting or tax treatment of any Award for the Company; or (C) to the extent the Administrator determines that such action does not materially and adversely affect the value of an Award or that such action is in the best interest of the affected Participant (or any other person(s) as may then have an interest in the Award). Notwithstanding the foregoing, unless determined otherwise by the Administrator, any such amendment shall be made in a manner that will enable an Award intended to be exempt from Code Section 409A to continue to be so exempt, or to enable an Award intended to comply with Code Section 409A to continue to so comply.
(ii)      Notwithstanding anything to the contrary in an Award agreement, the Administrator shall have full power and authority to terminate or cause the Participant to forfeit the Award, and require the Participant to disgorge to the Company any gains attributable to the Award, if the Participant engages in any action constituting, as determined by the Administrator in its discretion, Cause for termination, or a breach of any agreement between the Participant and the Company or an Affiliate concerning noncompetition, nonsolicitation, confidentiality, trade secrets, intellectual property, nondisparagement or similar obligations.
(iii)      Any Awards granted pursuant to this Plan, and any Stock issued or cash paid pursuant to an Award, shall be subject to any recoupment or clawback policy that is

adopted by, or any recoupment or similar requirement otherwise made applicable by law, regulation or listing standards to, the Company from time to time.
(iv)      Unless the Award agreement specifies otherwise, the Administrator may cancel any Award at any time if the Participant is not in compliance with all applicable provisions of the Award agreement and the Plan.
(d)      Survival of Authority and Awards . Notwithstanding the foregoing, the authority of the Board and the Administrator under this Section 15 and to otherwise administer the Plan with respect to then-outstanding Awards will extend beyond the date of this Plan’s termination. In addition, termination of this Plan will not affect the rights of Participants with respect to Awards previously granted to them, and all unexpired Awards will continue in force and effect after termination of this Plan except as they may lapse or be terminated by their own terms and conditions.
(e)      Repricing and Backdating Prohibited . Notwithstanding anything in this Plan to the contrary, and except for the adjustments provided for in Section 17, neither the Administrator nor any other person may (i) amend the terms of outstanding Options or SARs to reduce the exercise or grant price of such outstanding Options or SARs; (ii) cancel outstanding Options or SARs in exchange for Options or SARs with an exercise or grant price that is less than the exercise or grant price of the original Options or SARs; or (iii) cancel outstanding Options or SARs with an exercise or grant price above the current Fair Market Value of a Share in exchange for cash or other securities. In addition, the Administrator may not make a grant of an Option or SAR with a grant date that is effective prior to the date the Administrator takes action to approve such Award.
(f)      Foreign Participation . To assure the viability of Awards granted to Participants employed or residing in foreign countries, the Administrator may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, accounting or custom. Moreover, the Administrator may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it determines is necessary or appropriate for such purposes. Any such amendment, restatement or alternative versions that the Administrator approves for purposes of using this Plan in a foreign country will not affect the terms of this Plan for any other country. In addition, all such supplements, amendments, restatements or alternative versions must comply with the provisions of Section 15(b)(ii).
(g)      Code Section 409A . The provisions of Code Section 409A are incorporated herein by reference to the extent necessary for any Award that is subject to Code Section 409A to comply therewith.
16.      Taxes .
(a)      Withholding . In the event the Company or one of its Affiliates is required to withhold any Federal, state or local taxes or other amounts in respect of any income recognized by a Participant as a result of the grant, vesting, payment or settlement of an Award or disposition of any Shares acquired under an Award, the Company or its Affiliate may deduct (or require an Affiliate to deduct) from any cash payments of any kind otherwise due the Participant, or with the consent of the Administrator, Shares otherwise deliverable or vesting under an Award, to satisfy such tax or other obligations. Alternatively, the Company or its Affiliate may require such

Participant to pay to the Company or its Affiliate, in cash, promptly on demand, or make other arrangements satisfactory to the Company or its Affiliate regarding the payment to the Company or its Affiliate of the aggregate amount of any such taxes and other amounts. If Shares are deliverable upon exercise or payment of an Award, then, unless restricted by the Administrator and subject to such procedures as the Administrator may specify, a Participant may satisfy all or a portion of the Federal, state and local withholding tax obligations arising in connection with such Award by electing to (i) have the Company or its Affiliate withhold Shares otherwise issuable under the Award, (ii) tender back Shares received in connection with such Award or (iii) deliver other previously owned Shares; provided that the amount to be withheld may not exceed the total minimum federal, state and local tax withholding obligations associated with the transaction to the extent needed for the Company and its Affiliates to avoid an accounting charge. If an election is provided, the election must be made on or before the date as of which the amount of tax to be withheld is determined and otherwise as the Administrator requires. In any case, the Company and its Affiliates may defer making payment or delivery under any Award if any such tax may be pending unless and until indemnified to its satisfaction.
(b)      No Guarantee of Tax Treatment . Notwithstanding any provisions of the Plan, the Company does not guarantee to any Participant or any other Person with an interest in an Award that (i) any Award intended to be exempt from Code Section 409A shall be so exempt, (ii) any Award intended to comply with Code Section 409A or Code Section 422 shall so comply, or (iii) any Award shall otherwise receive a specific tax treatment under any other applicable tax law, nor in any such case will the Company or any Affiliate be required to indemnify, defend or hold harmless any individual with respect to the tax consequences of any Award.
17.      Adjustment Provisions; Change of Control.
(a)      Adjustment of Shares . If: (i) the Company shall at any time be involved in a merger or other transaction in which the Shares are changed or exchanged; (ii) the Company shall subdivide or combine the Shares or the Company shall declare a dividend payable in Shares, other securities (other than stock purchase rights issued pursuant to a shareholder rights agreement) or other property; (iii) the Company shall effect a cash dividend the amount of which, on a per Share basis, exceeds ten percent (10%) of the Fair Market Value of a Share at the time the dividend is declared, or the Company shall effect any other dividend or other distribution on the Shares in the form of cash, or a repurchase of Shares, that the Board determines by resolution is special or extraordinary in nature or that is in connection with a transaction that the Company characterizes publicly as a recapitalization or reorganization involving the Shares; or (iv) any other event shall occur, which, in the case of this clause (iv), in the judgment of the Administrator necessitates an adjustment to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, then the Administrator shall, in such manner as it may deem equitable to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, adjust as applicable: (A) the number and type of Shares subject to this Plan (including the number and type of Shares described in Sections 5(a), (b) and (d)) and which may after the event be made the subject of Awards; (B) the number and type of Shares subject to outstanding Awards; (C) the grant, purchase, or exercise price with respect to any Award; and (D) to the extent such discretion does not cause an Award that is intended to qualify as performance-based compensation under Code Section 162(m) to lose its status as such, the Performance Goals of an Award. In any such case, the Administrator may also (or in lieu of the foregoing) make provision for a cash payment to the holder of an outstanding Award in exchange for the

cancellation of all or a portion of the Award (without the consent of the holder of an Award) in an amount determined by the Administrator effective at such time as the Administrator specifies (which may be the time such transaction or event is effective). However, in each case, with respect to Awards of incentive stock options, no such adjustment may be authorized to the extent that such authority would cause this Plan to violate Code Section 422(b). Further, the number of Shares subject to any Award payable or denominated in Shares must always be a whole number. In any event, previously granted Options or SARs are subject to only such adjustments as are necessary to maintain the relative proportionate interest the Options and SARs represented immediately prior to any such event and to preserve, without exceeding, the value of such Options or SARs.
Without limitation, in the event of any reorganization, merger, consolidation, combination or other similar corporate transaction or event, whether or not constituting a Change of Control (other than any such transaction in which the Company is the continuing corporation and in which the outstanding Stock is not being converted into or exchanged for different securities, cash or other property, or any combination thereof), the Administrator may substitute, on an equitable basis as the Administrator determines, for each Share then subject to an Award and the Shares subject to this Plan (if the Plan will continue in effect), the number and kind of shares of stock, other securities, cash or other property to which holders of Stock are or will be entitled in respect of each Share pursuant to the transaction.
Notwithstanding the foregoing, in the case of a stock dividend (other than a stock dividend declared in lieu of an ordinary cash dividend) or subdivision or combination of the Shares (including a reverse stock split), if no action is taken by the Administrator, adjustments contemplated by this subsection that are proportionate shall nevertheless automatically be made as of the date of such stock dividend or subdivision or combination of the Shares.
For the avoidance of doubt, the grant of an Award shall not affect in any way the right or power of the Company or any of its Affiliates to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s or such Affiliate’s capital structure or business, or any merger, consolidation or business combination of the Company or such Affiliate, or any issuance or modification of any term, condition, or covenant of any bond, debenture, debt, preferred stock or other instrument ahead of or affecting the Stock or the rights of the holders of Stock, or the dissolution or liquidation of the Company or any Affiliate, or any sale or transfer of all or any part of its assets or business or any other Company or Affiliate action or proceeding, whether of a similar character or otherwise.
(b)      Issuance or Assumption . Notwithstanding any other provision of this Plan, and without affecting the number of Shares otherwise reserved or available under this Plan, in connection with any merger, consolidation, acquisition of property or stock, or reorganization, the Administrator may authorize the issuance or assumption of awards under this Plan upon such terms and conditions as it may deem appropriate.
(c)      Change of Control . To the extent the Participant has in effect an employment, retention, change of control, severance or similar agreement with the Company or any Affiliate or is subject to a policy that provides for a more favorable result to the Participant upon a Change of Control with respect to the Participant’s Awards, such agreement or policy shall control. In all other cases, unless provided otherwise in an Award agreement or by the Administrator prior to the date of the Change of Control, in the event of a Change of Control:

(i)      each holder of an Option or SAR shall have the right at any time thereafter to exercise the Option or SAR in full whether or not the Option or SAR was theretofore exercisable; provided that the Company may elect to cancel all outstanding Options or SARs in exchange for a cash payment equal to the excess of the Change of Control Price over the exercise price of the Shares subject to such Option or SAR upon the Change of Control (or for no cash payment if such excess is zero);
(ii)      Shares of Restricted Stock and Restricted Stock Units that are not then vested shall vest upon the date of the Change of Control and each holder of such Restricted Stock or Restricted Stock Units shall have the right, exercisable by written notice to the Company within sixty (60) days after the Change of Control, to receive, in exchange for the surrender of such Restricted Stock, an amount of cash equal to the Change of Control Price of such Restricted Stock or Restricted Stock Units; provided that the Company may elect to cancel each outstanding Restricted Stock Unit in exchange for a cash payment equal to the Change of Control Price upon the Change of Control;
(iii)      each holder of a Performance Share and/or Performance Unit for which the performance period has not expired shall have the right, exercisable by written notice to the Company within sixty (60) days after the Change of Control, to receive, in exchange for the surrender of the Performance Share and/or Performance Unit, an amount of cash equal to the product of the value of the Performance Share and/or Performance Unit, assuming the greater of target or projected actual performance (based on the assumption that the applicable Performance Goals continue to be achieved at the same rate through the end of the performance period as they are at the time of the Change of Control), and a fraction, the numerator of which is the number of whole months that have elapsed from the beginning of the performance period to the date of the Change of Control and the denominator of which is the number of whole months in the performance period; provided that the Company may elect to cancel each outstanding Performance Unit in exchange for a cash payment equal to the value of such Performance Unit;
(iv)      all Incentive Awards for which the performance period has not yet expired shall be deemed to have been earned pro rata, as if the Performance Goals are attained as of the effective date of the Change of Control, by taking the product of (A) the sum of (1) average of the Annual Incentive Award earned by the Participant during the Company’s latest three consecutive fiscal years, and (2) the greater of target or projected actual performance (based on the assumption that the applicable Performance Goals continue to be achieved at the same rate through the end of the performance period as they are at the time of the Change of Control) for any Long-Term Incentive Award, and (B) a fraction, the numerator of which is the number of whole months that have elapsed from the beginning of the performance period to the date of the Change of Control and the denominator of which is the number of whole months in the performance period;
(v)      each holder of an Incentive Award, Performance Share and/or Performance Unit that has been earned but not yet paid shall receive an amount of cash equal to the value of the Incentive Award, Performance Share and/or Performance Unit;

(vi)      each holder of a Dividend Equivalent Unit shall be entitled to receive a cash payment equal to the value of the Dividend Equivalent Unit as of the date of the Change of Control; provided that such payment will be pro rated to the extent, if at all, any related Award is settled on a pro rata basis; and
(vii)      each holder of any type of Award not subject to the foregoing provisions shall be entitled to receive a cash payment based on the value of the Award as of the date of the Change of Control.
For purposes of this Section 17, the “value” of a Performance Share shall be equal to, and the “value” of a Performance Unit for which the value is equal to the Fair Market Value of Shares shall be based on, the Change of Control Price.
Notwithstanding anything to the contrary in this Section 17(c), the terms of any Awards that are subject to Code Section 409A shall govern the treatment of such Awards upon a Change of Control, and the terms of this Section 17(c) shall not apply, to the extent required for such Awards to remain compliant with Code Section 409A, as applicable.
(d)      Application of Limits on Payments .
(i)      Determination of Cap or Payment . Except to the extent the Participant has in effect an employment or similar agreement with the Company or any Affiliate or is subject to a policy that provides for a more favorable result to the Participant upon a Change of Control, if any payments or benefits paid by the Company pursuant to this Plan, including any accelerated vesting or similar provisions (“Plan Payments”), would cause some or all of the Plan Payments in conjunction with any other payments made to or benefits received by a Participant in connection with a Change of Control (such payments or benefits, together with the Plan Payments, the “Total Payments”) to be subject to the tax (“Excise Tax”) imposed by Code Section 4999 but for this Section 17(d), then, notwithstanding any other provision of this Plan to the contrary, the Total Payments shall be delivered either (A) in full or (B) in an amount such that the value of the aggregate Total Payments that the Participant is entitled to receive shall be One Dollar ($1.00) less than the maximum amount that the Participant may receive without being subject to the Excise Tax, whichever of (A) or (B) results in the receipt by the Participant of the greatest benefit on an after-tax basis (taking into account applicable federal, state and local income taxes and the Excise Tax).
(ii)      Procedures .
(A)      If a Participant or the Company believes that a payment or benefit due the Participant will result in some or all of the Total Payments being subject to the Excise Tax, then the Company, at its expense, shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel (“National Tax Counsel”) selected by the Company (which may be regular outside counsel to the Company), which opinion sets forth (1) the amount of the Base Period Income (as defined below), (2) the amount and present value of the Total Payments, (3) the amount and present value of any excess parachute payments determined without regard to any reduction of Total Payments pursuant to Section 6

(a)(ii), and (4) the net after-tax proceeds to the Participant, taking into account applicable federal, state and local income taxes and the Excise Tax if (x) the Total Payments were delivered in accordance with Section 17(d)(i)(A) or (y) the Total Payments were delivered in accordance with Section 17(d)(i)(B). The opinion of National Tax Counsel shall be addressed to the Company and the Participant and shall be binding upon the Company and the Participant. If such National Tax Counsel opinion determines that Section 17(d)(i)(B) applies, then the Plan Payments or any other payment or benefit determined by such counsel to be includable in the Total Payments shall be reduced or eliminated so that under the bases of calculations set forth in such opinion there will be no excess parachute payment. In such event, payments or benefits included in the Total Payments shall be reduced or eliminated by applying the following principles, in order: (1) the payment or benefit with the higher ratio of the parachute payment value to present economic value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before a payment or benefit with a lower ratio; (2) the payment or benefit with the later possible payment date shall be reduced or eliminated before a payment or benefit with an earlier payment date; and (3) cash payments shall be reduced prior to non-cash benefits; provided that if the foregoing order of reduction or elimination would violate Code Section 409A, then the reduction shall be made pro rata among the payments or benefits included in the Total Payments (on the basis of the relative present value of the parachute payments).
(B)      For purposes of this Section 17: (1) the terms “excess parachute payment” and “parachute payments” shall have the meanings given in Code Section 280G and such “parachute payments” shall be valued as provided therein; (2) present value shall be calculated in accordance with Code Section 280G(d)(4); (3) the term “Base Period Income” means an amount equal to the Participant’s “annualized includible compensation for the base period” as defined in Code Section 280G(d)(1); (4) for purposes of the opinion of National Tax Counsel, the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4); and (5) the Participant shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation, and state and local income taxes at the highest marginal rate of taxation in the state or locality of the Participant’s domicile, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes.
(C)      If National Tax Counsel so requests in connection with the opinion required by this Section 17(d)(ii), the Company shall obtain, at the Company’s expense, and the National Tax Counsel may rely on, the advice of a firm of recognized executive compensation consultants as to the reasonableness of any item of compensation to be received by the Participant solely with respect to its status under Code Section 280G.

(D)      The Company agrees to bear all costs associated with, and to indemnify and hold harmless the National Tax Counsel from, any and all claims, damages and expenses resulting from or relating to its determinations pursuant to this Section 17, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of such firm.
(E)      This Section 17 shall be amended to comply with any amendment or successor provision to Code Section 280G or Code Section 4999. If such provisions are repealed without successor, then this Section 17 shall be cancelled without further effect.
18.      Miscellaneous.
(a)      Other Terms and Conditions . The Administrator may provide in any Award agreement such other provisions (whether or not applicable to the Award granted to any other Participant) as the Administrator determines appropriate to the extent not otherwise prohibited by the terms of the Plan.
(b)      Employment and Service . The issuance of an Award shall not confer upon a Participant any right with respect to continued employment or service with the Company or any Affiliate, or the right to continue as a Director. Unless determined otherwise by the Administrator, for purposes of the Plan and all Awards, the following rules shall apply:
(i)      a Participant who transfers employment between the Company and its Affiliates, or between Affiliates, will not be considered to have terminated employment;
(ii)      a Participant who ceases to be a Non-Employee Director because he or she becomes an employee of the Company or an Affiliate shall not be considered to have ceased service as a Director with respect to any Award until such Participant’s termination of employment with the Company and its Affiliates;
(iii)      a Participant who ceases to be employed by the Company or an Affiliate and immediately thereafter becomes a Non-Employee Director, a non-employee director of an Affiliate, or a consultant to the Company or any Affiliate shall not be considered to have terminated employment until such Participant’s service as a director of, or consultant to, the Company and its Affiliates has ceased; and
(iv)      a Participant employed by an Affiliate will be considered to have terminated employment when such entity ceases to be an Affiliate.
Notwithstanding the foregoing, for purposes of an Award that is subject to Code Section 409A, if a Participant’s termination of employment or service triggers the payment of compensation under such Award, then the Participant will be deemed to have terminated employment or service upon his or her “separation from service” within the meaning of Code Section 409A. Notwithstanding any other provision in this Plan or an Award to the contrary, if any Participant is a “specified employee” within the meaning of Code Section 409A as of the date of his or her “separation from service” within the meaning of Code Section 409A, then, to the extent required by Code Section 409A, any payment made to the Participant on account of

such separation from service shall not be made before a date that is six months after the date of the separation from service.
(c)      No Fractional Shares . No fractional Shares or other securities may be issued or delivered pursuant to this Plan, and the Administrator may determine whether cash, other securities or other property will be paid or transferred in lieu of any fractional Shares or other securities, or whether such fractional Shares or other securities or any rights to fractional Shares or other securities will be canceled, terminated or otherwise eliminated.
(d)      Unfunded Plan; Awards Not Includable for Benefits Purposes . This Plan is unfunded and does not create, and should not be construed to create, a trust or separate fund with respect to this Plan’s benefits. This Plan does not establish any fiduciary relationship between the Company and any Participant or other person. To the extent any person holds any rights by virtue of an Award granted under this Plan, such rights are no greater than the rights of the Company’s general unsecured creditors. Income recognized by a Participant pursuant to an Award shall not be included in the determination of benefits under any employee pension benefit plan (as such term is defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended) or group insurance or other benefit plans applicable to the Participant which are maintained by the Company or any Affiliate, except as may be provided under the terms of such plans or determined by resolution of the Board.
(e)      Requirements of Law and Securities Exchange . The granting of Awards and the issuance of Shares in connection with an Award are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required. Notwithstanding any other provision of this Plan or any award agreement, the Company has no liability to deliver any Shares under this Plan or make any payment unless such delivery or payment would comply with all applicable laws and the applicable requirements of any securities exchange or similar entity, and unless and until the Participant has taken all actions required by the Company in connection therewith. The Company may impose such restrictions on any Shares issued under the Plan as the Company determines necessary or desirable to comply with all applicable laws, rules and regulations or the requirements of any national securities exchanges.
(f)      Governing Law; Venue . This Plan, and all agreements under this Plan, will be construed in accordance with and governed by the laws of the State of Wisconsin, without reference to any conflict of law principles. Any legal action or proceeding with respect to this Plan, any Award or any award agreement, or for recognition and enforcement of any judgment in respect of this Plan, any Award or any award agreement, may only be brought and determined in (i) a court sitting in the County of Manitowoc, or the Federal District Court for the Eastern District of Wisconsin sitting in the County of Milwaukee, in the State of Wisconsin, and (ii) a “bench” trial, and any party to such action or proceeding shall agree to waive its right to a jury trial.
(g)      Limitations on Actions . Any legal action or proceeding with respect to this Plan, any Award or any award agreement, must be brought within one year (365 days) after the day the complaining party first knew or should have known of the events giving rise to the complaint.
(h)      Construction . Whenever any words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases where they would so apply; and

wherever any words are used in the singular or plural, they shall be construed as though they were used in the plural or singular, as the case may be, in all cases where they would so apply. Title of sections are for general information only, and this Plan is not to be construed with reference to such titles.
(i)      Severability . If any provision of this Plan or any award agreement or any Award (a) is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or Award, or (b) would disqualify this Plan, any award agreement or any Award under any law the Administrator deems applicable, then such provision should be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Administrator, materially altering the intent of this Plan, award agreement or Award, then such provision should be stricken as to such jurisdiction, person or Award, and the remainder of this Plan, such award agreement and such Award will remain in full force and effect.
19.      Definitions. Capitalized terms used in this Plan or any Award agreement have the following meanings, unless the Award agreement otherwise provides:
(a)      “Administrator” means the Committee; provided that, to the extent the Board has retained authority and responsibility as an Administrator of the Plan, the term “Administrator” shall also mean the Board or, to the extent the Committee has delegated authority and responsibility as an Administrator of the Plan to one or more officers of the Company as permitted by Section 2(b), the term “Administrator” shall also mean such officer or officers.
(b)      “Affiliate” shall have the meaning given in Rule 12b-2 under the Exchange Act. Notwithstanding the foregoing, for purposes of determining those individuals to whom an Option or Stock Appreciation Right may be granted, the term “Affiliate” means any entity that, directly or through one or more intermediaries, is controlled by, controls, or is under common control with, the Company within the meaning of Code Sections 414(b) or (c); provided that, in applying such provisions, the phrase “at least 20 percent” shall be used in place of “at least 80 percent” each place it appears therein.
(c)      “Award” means a grant of Options, Stock Appreciation Rights, Performance Shares, Performance Units, Restricted Stock, Restricted Stock Units, Shares, an Annual Incentive Award, a Long-Term Incentive Award, Dividend Equivalent Units or any other type of award permitted under the Plan.
(d)      “Board” means the Board of Directors of the Company.
(e)      “Cause” means any of the following as determined by the Company: (i) with respect to Participants other than Non-Employee Directors, (A) the failure of the Participant to perform or observe any of the material terms or provisions of any written employment agreement between the Participant and the Company or its Affiliates or, if no written agreement exists, the gross dereliction of the Participant’s duties (for reasons other than the Participant’s Disability) with respect to the Company or its Affiliates; (B) the failure of the Participant to comply fully with the lawful directives of the Board or the board of directors of an Affiliate of the Company, as applicable, or the officers or supervisory employees to whom the Participant reports; (C) the Participant’s dishonesty, misconduct, misappropriation of funds, or disloyalty or disparagement of the Company, any of its Affiliates or its management or employees; or (D) other proper cause

determined in good faith by the Administrator; or (ii) with respect to Non-Employee Directors, (A) fraud or intentional misrepresentation; (B) embezzlement, misappropriation or conversion of assets or opportunities of the Company or any of its Affiliates; or (C) any other gross or willful misconduct as determined by the Committee, in its sole and conclusive discretion.
(f)      “Change of Control” means the first to occur of the following with respect to the Company or any upstream holding company (which, for purposes of this definition, shall be included in references to “the Company”):
(i)      Any “Person,” as that term is defined in Sections 13(d) and 14(d) of the Exchange Act, but excluding the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “Beneficial Owner” (as that term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities; or
(ii)      The Company is merged or consolidated with any other corporation or other entity, other than: (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty percent (60%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (B) the Company engages in a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “Person” (as defined above) acquires thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities. Notwithstanding the foregoing, a merger or consolidation involving the Company shall not be considered a “Change of Control” if the Company is the surviving corporation and shares of the Stock are not converted into or exchanged for stock or securities of any other corporation, cash or any other thing of value, unless persons who beneficially owned shares of the Stock outstanding immediately prior to such transaction own beneficially less than a majority of the outstanding voting securities of the Company immediately following the merger or consolidation;
(iii)      The Company or any Affiliate sells, assigns or otherwise transfers assets in a transaction or series of related transactions, if the aggregate market value of the assets so sold, assigned or otherwise transferred exceeds fifty percent (50%) of the Company’s consolidated book value, determined by the Company in accordance with generally accepted accounting principles, measured at the time at which such transaction occurs or the first of such series of related transactions occurs; provided that such a transfer effected pursuant to a spin-off or split-up where shareholders of the Company retain ownership of the transferred assets proportionate to their pro rata ownership interest in the Company shall not be deemed a “Change of Control”;
(iv)      The Company dissolves and liquidates substantially all of its assets; or

(v)      At any time after the Effective Date when the “Continuing Directors” cease to constitute a majority of the Board. For this purpose, a “Continuing Director” shall mean: (A) the individuals who, at the Effective Date, constitute the Board; and (B) any new Directors (other than Directors designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (ii), or (iii) of this definition) whose appointment to the Board or nomination for election by Company shareholders was approved by a vote of at least two-thirds of the then-serving Continuing Directors.
If an Award is considered deferred compensation subject to the provisions of Code Section 409A, then the Administrator may include an amended definition of “Change of Control” in the Award agreement issued with respect to such Award as necessary to comply with, or as necessary to permit a deferral under, Code Section 409A.
(g)      “Change of Control Price” means the highest of the following: (i) the Fair Market Value of the Shares, as determined on the date of the Change of Control; (ii) the highest price per Share paid in the Change of Control transaction; or (iii) the Fair Market Value of the Shares, calculated on the date of surrender of the relevant Award in accordance with Section 17(c), but this clause (iii) shall not apply if in the Change of Control transaction, or pursuant to an agreement to which the Company is a party governing the Change of Control transaction, all of the Shares are purchased for and/or converted into the right to receive a current payment of cash and no other securities or other property.
(h)      “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes any successor provision and the regulations promulgated under such provision.
(i)      “Committee” means the Compensation Committee of the Board, or such other committee of the Board that is designated by the Board with the same or similar authority. The Committee shall consist only of Non-Employee Directors (not fewer than two (2)) who also qualify as Outside Directors to the extent necessary for the Plan to comply with Rule 16b-3 promulgated under the Exchange Act or any successor rule and to permit Awards that are otherwise eligible to qualify as “performance-based compensation” under Section 162(m) of the Code to so qualify.
(j)      “Company” means The Manitowoc Company, Inc., a Wisconsin corporation, or any successor thereto.
(k)      “Director” means a member of the Board; “Non-Employee Director” means a Director who is not also an employee of the Company or its Subsidiaries; and “Outside Director” means a Director who qualifies as an outside director within the meaning of Code Section 162(m).
(l)      "Disability" means disability as defined in the Company’s long-term disability plan covering exempt salaried employees, except as otherwise determined by the Administrator and set forth in an Award agreement. The Administrator shall make the determination of Disability and may request such evidence of disability as it reasonably determines.
(m)      “Dividend Equivalent Unit” means the right to receive a payment, in cash or Shares, equal to the cash dividends or other distributions paid with respect to a Share as described in Section 11.

(n)      “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any reference to a specific provision of the Exchange Act includes any successor provision and the regulations and rules promulgated under such provision.
(o)      “Fair Market Value” means, per Share on a particular date, the last sales price on such date on the national securities exchange on which the Stock is then traded, as reported in The Wall Street Journal, or if no sales of Stock occur on the date in question, on the last preceding date on which there was a sale on such exchange. If the Shares are not listed on a national securities exchange, but are traded in an over-the-counter market, the last sales price (or, if there is no last sales price reported, the average of the closing bid and asked prices) for the Shares on the particular date, or on the last preceding date on which there was a sale of Shares on that market, will be used. If the Shares are neither listed on a national securities exchange nor traded in an over-the-counter market, the price determined by the Administrator, in its discretion, will be used. If an actual sale of a Share occurs on the market, then the Company may consider the sale price to be the Fair Market Value of such Share.
(p)      “Incentive Award” means the right to receive a cash payment to the extent Performance Goals are achieved (or other requirements are met), and shall include “Annual Incentive Awards” as described in Section 9 and “Long-Term Incentive Awards” as described in Section 10.
(q)      “Option” means the right to purchase Shares at a stated price for a specified period of time.
(r)      “Participant” means an individual selected by the Administrator to receive an Award.
(s)      “Performance Goals” means any goals the Administrator establishes that relate to one or more of the following with respect to the Company or any one or more of its Subsidiaries, Affiliates or other business units: revenue; cash flow; total shareholder return; dividends; debt; net cash provided by operating activities; net cash provided by operating activities less net cash used in investing activities; cost of goods sold; ratio of debt to debt plus equity; profit before tax; gross profit; net profit; net operating profit; net operating profit after taxes; net sales; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; Fair Market Value of Shares; basic earnings per share; diluted earnings per share; return on shareholder equity; average accounts receivable (calculated by taking the average of accounts receivable at the end of each month); accounts receivable; average inventories (calculated by taking the average of inventories at the end of each month); inventories; return on average total capital employed; return on net assets employed before interest and taxes; economic value added; return on year-end equity; current assets; non-interest bearing current liabilities; net property, plant and equipment; operating assets; capitalized research and development; goodwill; accumulated amortization of goodwill; goodwill impairment; capital; cost of capital; cost of equity; cost of debt; bad debt reserves; inventory reserves; taxes; or a combination of the foregoing. As to each Performance Goal, the relevant measurement of performance shall be computed in accordance with generally accepted accounting principles to the extent applicable, but, unless otherwise determined by the Administrator, will exclude the effects of the following: (i) charges for reorganizing and restructuring; (ii) discontinued operations; (iii) asset write-downs; (iv) gains or losses on the disposition of a business; (v) changes in tax or accounting principles, regulations or laws; (vi) mergers, acquisitions, dispositions or recapitalizations; (vii) impacts on interest expense, preferred dividends and share dilution as a result of debt and

capital transactions; and (viii) extraordinary, unusual and/or non-recurring items of income, expense, gain or loss, that, in case of each of the foregoing, the Company identifies in its publicly filed periodic or current reports, its audited financial statements, including notes to the financial statements, or the Management’s Discussion and Analysis section of the Company’s annual report. With respect to any Award intended to qualify as performance-based compensation under Code Section 162(m), such exclusions shall be made only to the extent consistent with Code Section 162(m). To the extent consistent with Code Section 162(m), the Administrator may also provide for other adjustments to Performance Goals in the Award agreement or plan document evidencing any Award. In addition, the Administrator may appropriately adjust any evaluation of performance under a Performance Goal to exclude any of the following events that occurs during a performance period: (i) litigation, claims, judgments or settlements; (ii) the effects of changes in other laws or regulations affecting reported results; and (iii) accruals of any amounts for payment under this Plan or any other compensation arrangements maintained by the Company; provided that, with respect to any Award intended to qualify as performance-based compensation under Code Section 162(m), such adjustment may be made only to the extent consistent with Code Section 162(m). Where applicable, the Performance Goals may be expressed, without limitation, in terms of attaining a specified level of the particular criterion or the attainment of an increase or decrease (expressed as absolute numbers, averages and/or percentages) in the particular criterion or achievement in relation to a peer group or other index. The Performance Goals may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be paid (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur). In addition, in the case of Awards that the Administrator determines at the date of grant will not be considered “performance-based compensation” under Code Section 162(m), the Administrator may establish other Performance Goals and provide for other exclusions or adjustments not listed in this Plan.
(t)      “Performance Shares” means the right to receive Shares to the extent Performance Goals are achieved (or other requirements are met) as described in Section 8.
(u)      “Performance Unit” means the right to receive a cash payment and/or Shares valued in relation to a unit that has a designated dollar value or the value of which is equal to the Fair Market Value of one or more Shares, to the extent Performance Goals are achieved (or other requirements are met) as described in Section 8.
(v)      “Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, or any group of Persons acting in concert that would be considered “persons acting as a group” within the meaning of Treas. Reg. § 1.409A-3(i)(5).
(w)      “Plan” means The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan, as may be amended from time to time.
(x)      “Restricted Stock” means a Share that is subject to a risk of forfeiture or restrictions on transfer, or both a risk of forfeiture and restrictions on transfer, as described in Section Section 8.

(y)      “Restricted Stock Unit” means the right to receive a cash payment and/or Shares equal to the Fair Market Value of one Share that is subject to a risk of forfeiture or restrictions on transfer, or both a risk of forfeiture and restrictions on transfer, as described in Section 8.
(z)      “Retirement” means, except as otherwise determined by the Administrator and set forth in an Award agreement, (i) with respect to Participants other than Non-Employee Directors, termination of employment or service with the Company and its Affiliates on or after the date the Participant has both attained age sixty (60) and completed five (5) years of service with the Company and its Affiliates, and (ii) with respect to Participants who are Non-Employee Directors, the Non-Employee Director’s removal (other than for Cause), non-election (other than for Cause) or resignation on or after reaching the mandatory retirement age set forth in the Company’s Corporate Governance Guidelines.
(aa)      “Section 16 Participants” means Participants who are subject to the provisions of Section 16 of the Exchange Act.
(bb)      “Share” means a share of Stock.
(cc)      “Stock” means the Common Stock of the Company.
(dd)      “Stock Appreciation Right” or “SAR” means the right to receive cash, and/or Shares with a Fair Market Value, equal to the appreciation of the Fair Market Value of a Share during a specified period of time.
(ee)      “Subsidiary” means any corporation, limited liability company or other limited liability entity in an unbroken chain of entities beginning with the Company if each of the entities (other than the last entities in the chain) owns the stock or equity interest possessing more than fifty percent (50%) of the total combined voting power of all classes of stock or other equity interests in one of the other entities in the chain.
ADDENDUM TO

THE MANITOWOC COMPANY, INC.

2013 OMNIBUS INCENTIVE PLAN

APPLICABLE TO EMPLOYEES AND MANAGING DIRECTORS WHO ARE TAX
RESIDENTS OF FRANCE

The terms and conditions detailed below are to be read in conjunction with The Manitowoc Company, Inc 2013 Omnibus Incentive Plan (hereinafter the “Plan”). Defined terms hereinafter are to have the same meaning as that stated in the Plan.

ARTICLE I.    SCOPE OF THE ADDENDUM

This Addendum only governs the grant of the Options to employees of any direct or indirect French subsidiaries of The Manitowoc Company, Inc. and its subsidiaries and affiliates (hereinafter “the Manitowoc Group”) (in accordance with article L 225-180 of the new “Code de Commerce”), and not the other Awards provided for in the Plan.

Notwithstanding any other provisions of the Plan not referred to in this Addendum, the following provisions/amendments are applicable to such employees in respect of the Options. These provisions constitute either exceptions to provisions of the same nature provided for in the Plan, or additional rules to these documents, so that the Options qualify as options under French law for favorable social and tax regime.

ARTICLE II.    GRANT OF OPTIONS

2.1      Granting Period .

The authorization given by the shareholders’ meeting of The Manitowoc Company, Inc. to the Board of Directors and the Compensation and Benefits Committee (hereinafter the “Committee”) for granting the Options is limited to thirty eight (38) months as from the date of this shareholders’ meeting.

2.2     Beneficiaries .

Options may be granted under this Addendum to the following beneficiaries (hereinafter “Employees”):

•	Employees, i.e., individuals having an employment contract with the French company and being at the date of grant of the Options, based in France or abroad under a temporary secondment and individuals having an employment contract with a foreign company of the Manitowoc Group as defined by article L 225-180 of the new “Code de Commerce” and being seconded in France.	

i	Managing Directors (i.e., “Dirigeants Sociaux”) of any French company of the Manitowoc Group as defined by article L 225-180 of the new “Code de Commerce” at the date of grant.	
2.3     Type of Options .

The Options granted under the Plan modified by this Addendum will only be purchase Options (i.e., Shares bought back by the Company). No Options may be granted under this Addendum that are subscription Options (i.e., newly issued Shares of the Company).

Limited stock appreciation right :
No Stock Appreciation Right may be granted after the date of grant of the related Options. In addition, such Stock Appreciation Right must be mentioned in the Option grant letter.

2.4     Date of Grant .

Options cannot be granted during the ten (10) stock exchange sessions preceding and following the publication of the consolidated or annual accounts.

Options cannot be granted during a period starting at the date at which the management of the Company is aware of any information that could have a significant impact on the Company’s Share price and ending ten (10) stock exchange sessions after this information has been made public.

Options cannot be granted within a twenty (20) day period following a distribution of dividends or a capital increase.

2.5     Conditions of Grant .

Options are definitively offered and cannot be cancelled or modified.

No Options can be granted to any Employees holding Shares representing ten percent (10%) or more of The Manitowoc Company, Inc. share capital at the date of the grant of the Options.

The total number of Options granted to Employees and remaining unexercised (outstanding Options) shall never cover a number of Shares exceeding one-third of The Manitowoc Company, Inc. share capital.

Should the Company purchase its Shares before granting Options the purchase Options shall be awarded over the stock within twelve (12) months of their purchase.

The Shares shall be purchased by the issuing Company at least one day before the Options become exercisable.

2.6     Option Price .

The Option price will be the Fair Market Value of Common Stock at the date of grant (i.e., the price per share at the close of the previous day’s trading as reported on the New York Stock Exchange Composite Tape).

Nevertheless, unless otherwise specifically approved by the Committee, this Option price shall not be less than ninety-five percent (95%) of the average stock exchange price during the twenty (20) days preceding the day when the Option is granted. In addition, this Option Price shall not be less than ninety-five percent (95%) of the average purchase price of its own Shares held by The Manitowoc Company, Inc. to be allocated to the Option holder.

ARTICLE III. REGIME OF OPTIONS

3.1      Transferability of the Options .

Notwithstanding any other provisions of the Plan not referred to in this Addendum, an Option is only transferable by death of the Employee. In the event of an Employee’s death, the period during which the legal heirs are entitled to exercise the Option is six (6) months following the Employee’s death.

3.2     Adjustments of the Option Price .

The Option price shall remain unchanged as from the grant of the Options until the exercise of the Options. The Option price shall be adjusted only upon the occurrence of the events specified under French law (article L 225-181 of the new “Code de Commerce”).

No other event may constitute a recognized exception under French regulations except in case of any modifications as provided from time to time by any new French regulations or by any governmental decision.

3.3     Date of Exercise .

Twenty-five percent (25%) of Options granted under this Addendum shall be exercisable after the expiration of a two year period as from the date of grant and an additional twenty-five percent (25%) of Options shall be exercisable thereafter on the anniversary of the date of grant, up to one hundred percent (100%).

3.4     Payment of the Option Price .

The payment of the Option price is allowed either in cash or by compensation of certain, due and payable debts that the Employees hold against the Company.

ARTICLE IV. SALE OF SHARES RESULTING FROM THE EXERCISE OF OPTIONS

4.1     Principles .

Under both French Tax and Social Security Codes, the favorable social security and tax regime applicable to the “acquisition gain” is linked to the sale of the Shares resulting from the exercise of the Options in a period not less than four years as from the grant of the Options (Section 163 bis C).

An additional holding period of two years between the exercise and the sale of the Shares must be respected in addition to the initial period of four years in order for the Beneficiaries to benefit from a more favorable tax regime.

Under the new “Code de Commerce,” the sale of the Shares resulting from the exercise of the Options shall not be forbidden beyond a period of three years starting from the exercise of the Options (section L 225-177).

4.2     Application .

By virtue of the principles mentioned in Section 4.1 above, and except in the events provided under section 91 ter of Annex II of the French Tax Code, when all the conditions provided by this section are fulfilled, the shares shall not be sold, or otherwise disposed of, before a period of two (2) years for shares resulting from Options exercised after the expiration of a two-year period as from the date of grant of the Options.

Notwithstanding the above-mentioned provisions the shares may be sold, or otherwise disposed of, after the expiration of a four-year period as from the date of grant of the Options.

Failing to respect the above-mentioned non transferability period would entail the invalidity of the sale of the shares for the faulty Employee provided such provision complies with U. S. laws and is otherwise enforceable.

According to Section 91 ter of Annex II of the French Tax Code, the initial four (4) year period between grant of Options and sale of Shares is not required in strict limited cases for benefiting from the favorable tax regime:

i	in case of the optionee’s disability or death,	

i	in case of the optionee’s retirement at the request of the Company provided the optionee exercised the options at least three (3) months before the termination of the optionee’s work contract, and still holds the share at the date of the event.	

i	in case of dismissal, provided the optionee exercised the optionee’s options at least three (3) months before the optionee is notified of the optionee’s dismissal.	
In these cases, the sale of the Shares may occur in connection with the event, which means, in particular in case of dismissal and retirement, not before the termination of the contract.

Should any modifications of the French legal and/or tax regime arise that would concern the conditions to qualify for the preferential tax and social security treatment, the Committee would be entitled to modify accordingly and for this sole purpose the dates of exercise of the Options as well as the vesting period applicable to future grants of Options and the holding conditions of the Shares.

Exhibit 31  
Certification of Principal Executive Officer
 
I, Barry Pennypacker, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of The Manitowoc Company, Inc.;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report;	

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedure and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
Date: May 10, 2016

		
 	/s/ Barry L. Pennypacker	
 	Barry L. Pennypacker	
 	President and Chief Executive Officer	

Certification of Principal Financial Officer

I, Carl J. Laurino, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of The Manitowoc Company, Inc.;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report;	

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedure and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.  	
Date: May 10, 2016

		
 	/s/ Carl J. Laurino	
 	Carl J. Laurino	
 	Senior Vice President and Chief Financial Officer	

Exhibit 32.1
 
CERTIFICATION PURSUANT TO
18 U.S.C SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  
In connection with the Quarterly Report of The Manitowoc Company, Inc. (the “company”) on Form 10-Q for the quarter ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Barry L. Pennypacker, Chief Executive Officer of the company, certify, pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company as of the date and for the periods expressed in the Report.	

		
/s/ Barry L. Pennypacker	 	
Barry L. Pennypacker	 	
President and Chief Executive Officer	 	
May 10, 2016	 	
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Manitowoc Company, Inc. and will be retained by The Manitowoc Company, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2
 
CERTIFICATION PURSUANT TO
18 U.S.C SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  
In connection with the Quarterly Report of The Manitowoc Company, Inc. (the “company”) on Form 10-Q for the quarter ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carl J. Laurino, Senior Vice President and Chief Financial Officer of the company, certify, pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company as of the date and for the periods expressed in the Report.	

		
/s/ Carl J. Laurino	 	
Carl J. Laurino	 	
Senior Vice President and Chief Financial Officer	 	
May 10, 2016	 	
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Manitowoc Company, Inc. and will be retained by The Manitowoc Company, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.