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The Manitowoc Company Announces Settlement Agreement with Carl Icahn

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The Manitowoc Company, Inc. (NYSE:MTW) (“Manitowoc” or the “Company”) today announced that it has reached an agreement with Carl C. Icahn pursuant to which the Manitowoc Board of Directors has committed to certain corporate governance provisions for Manitowoc and for the Foodservice entity. As previously announced, Manitowoc plans to separate the Company’s Cranes and Foodservice businesses into two independent, publicly traded companies and anticipates effecting the separation through a tax-free spin-off of the Foodservice business to be completed in the first quarter of 2016.

“We believe the governance details announced today are in the best interests of the Company, Manitowoc shareholders, and future investors in the standalone Foodservice entity. We also welcome the perspective of Mr. Icahn’s representatives to the Board of Directors and believe they will add value. We look forward to working with them constructively. We are highly focused on executing our strategic plan, delivering on our goals, and working towards the successful separation of our Cranes and Foodservice businesses, which is expected in the first quarter of 2016,” said Glen E. Tellock, Chairman and Chief Executive Officer of the Company.

Mr. Icahn stated, “We applaud the ability of Manitowoc’s Board of Directors and management to recognize the importance of separating the companies as well as the importance of good corporate governance. In particular, I would like to thank Glen Tellock, Chairman and Chief Executive Officer of Manitowoc, for standing behind his commitment to shareholders. We strongly believe that the separation of Manitowoc’s core businesses will create two stronger companies and that, in combination with improved corporate governance, shareholder value will be greatly enhanced by this agreement.”

In addition to the commitment announced by Manitowoc on January 29, 2015 to adopt best practices at the spun off company once the separation is complete, Manitowoc announced today that its Board approved certain corporate governance commitments for the anticipated standalone Foodservice entity at the time of its spin-off from Manitowoc, including:

  • Incorporation in Delaware;
  • Annual elections for the Board;
  • Any stockholder rights plan adopted by the Foodservice entity will not have a trigger below 20 percent and, if not ratified by stockholders within 135 days of adoption, will automatically expire; and
  • Holders of 10 percent of the outstanding shares will be permitted to call a special meeting of stockholders.

The agreement with Carl Icahn also provides for, among other things, certain customary “standstill” restrictions, and Manitowoc has committed not to reduce its shareholder rights plan’s trigger below 20 percent for the duration of the standstill agreement. The agreement also includes an option for Mr. Icahn to appoint one representative to the Manitowoc Board as well as a right to appoint an additional representative on the Board of the Foodservice entity after the separation; and a commitment by Mr. Icahn to vote in favor of the Manitowoc nominees for election to the Board at the 2015 Annual Meeting. In addition, the Board approved a limited waiver for Mr. Icahn of the provisions of the Wisconsin business combination statute that enables Mr. Icahn to acquire up to 14.99 percent of Manitowoc’s outstanding voting shares without facing the restrictions of the statute applicable to related party “business combination” transactions with the Company, which is consistent with the comparable business combination threshold applicable for companies incorporated in Delaware. Absent the limited waiver, the Wisconsin statute’s restrictions would be triggered by the acquisition of 10 percent or more of Manitowoc’s voting shares. The settlement agreement between Manitowoc and Mr. Icahn will be included as an exhibit to the Company’s Current Report on Form 8-K to be filed with the Securities and Exchange Commission.

About The Manitowoc Company, Inc.

Founded in 1902, The Manitowoc Company, Inc. is a multi-industry, capital goods manufacturer with 92 manufacturing, distribution, and service facilities in 25 countries. The Company is recognized globally as one of the premier innovators and providers of crawler cranes, tower cranes, and mobile cranes for the heavy construction industry. Manitowoc is also one of the world’s leading innovators and manufacturers of commercial foodservice equipment, which includes 24 market-leading brands of hot- and cold-focused equipment. In addition, both segments are complemented by a slate of industry-leading product support services. In 2014, Manitowoc’s revenues totaled $3.9 billion, with approximately half of these revenues generated outside of the United States.

Forward-looking Statements

This press release includes “forward-looking statements” intended to qualify for the safe harbor from liability under the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that are not historical facts, including statements about the separation of the Company into two independent publicly-traded companies, the nature and impact of such a separation, and the capitalization of the two independent companies, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations of the management of the company and are subject to uncertainty and changes in circumstances. Forward-looking statements include, without limitation, statements typically containing words such as “intends,” “expects,” “anticipates,” “targets,” “estimates,” “should” and words of similar import. By their nature, forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results and developments to differ materially include, among others:

  • possible negative effects on the Company’s business operations, assets or financial results as a result of the planned separation of the Company into two independent publicly-traded companies;
  • capitalization of the two independent companies;
  • unanticipated changes in revenues, margins, costs, and capital expenditures;
  • the ability to significantly improve profitability;
  • the ability to direct resources to those areas that will deliver the highest returns;
  • uncertainties associated with new product introductions, the successful development and market acceptance of new and innovative products that drive growth;
  • the ability to focus on the customer, new technologies, and innovation;
  • the ability to focus and capitalize on product quality and reliability;
  • the ability to increase operational efficiencies across each of Manitowoc’s business segments and to capitalize on those efficiencies;
  • the ability to capitalize on key strategic opportunities and the ability to implement Manitowoc’s long-term initiatives;
  • the ability to generate cash and manage working capital consistent with Manitowoc’s stated goals;
  • the ability to convert order and order activity into sales and the timing of those sales;
  • pressure of financing leverage;
  • matters impacting the successful and timely implementation of ERP systems;
  • foreign currency fluctuations and their impact on reported results and hedges in place with Manitowoc;
  • changes in raw material and commodity prices;
  • unexpected issues associated with the quality of materials and components sourced from third parties and the resolution of those issues;
  • unexpected issues associated with the availability and viability of suppliers;
  • the risks associated with growth;
  • geographic factors and political and economic conditions and risks;
  • actions of competitors;
  • changes in economic or industry conditions generally or in the markets served by Manitowoc;
  • unanticipated changes in customer demand, including changes in global demand for high-capacity lifting equipment; changes in demand for lifting equipment and foodservice equipment in emerging economies, and changes in demand for used lifting equipment and foodservice equipment;
  • global expansion of customers;
  • the replacement cycle of technologically obsolete cranes;
  • the ability of Manitowoc’s customers to receive financing;
  • foodservice equipment replacement cycles in national accounts and global chains, including unanticipated issues associated with refresh/renovation plans by national restaurant accounts and global chains;
  • efficiencies and capacity utilization of facilities;
  • issues relating to the ability to timely and effectively execute on manufacturing strategies, including issues relating to new plant start-ups, plant closings, and/or consolidations of existing facilities and operations;
  • issues related to workforce reductions and subsequent rehiring;
  • work stoppages, labor negotiations, labor rates, and temporary labor costs;
  • government approval and funding of projects and the effect of government-related issues or developments;
  • the ability to complete and appropriately integrate restructurings, consolidations, acquisitions, divestitures, strategic alliances, joint ventures, and other strategic alternatives;
  • realization of anticipated earnings enhancements, cost savings, strategic options and other synergies, and the anticipated timing to realize those savings, synergies, and options;
  • unanticipated issues affecting the effective tax rate for the year;
  • unanticipated changes in the capital and financial markets;
  • risks related to actions of activist shareholders;
  • changes in laws throughout the world;
  • natural disasters disrupting commerce in one or more regions of the world;
  • risks associated with data security and technological systems and protections;
  • acts of terrorism; and
  • risks and other factors cited in Manitowoc’s filings with the United States Securities and Exchange Commission.

Manitowoc undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements only speak as of the date on which they are made. Information on the potential factors that could affect the company’s actual results of operations is included in its filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

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