MANITOWOC CO INC Stock Compensation Disclosure

16. Stock-Based Compensation

The Company's 2025 Omnibus Incentive Plan (the "2025 Omnibus Plan") was approved by shareholders on May 6, 2025 at the Company's 2025 annual meeting. The 2025 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, restricted stock units, and performance share awards. The total number of shares of the Company's common stock originally available for awards under the 2025 Omnibus Plan is 1.8 million shares and is subject to adjustments for stock splits, stock dividends, recycling provisions (described below), and certain other transactions or events in the future. The 2025 Omnibus Plan includes a recycling provision under which, after May 6, 2025, if any shares subject to awards granted under the 2013 Omnibus Plan (as defined below) would again have become available for new grants under the terms of the 2013 Omnibus Plan if the 2013 Omnibus Plan were still in effect, then those shares become available for the purpose of granting awards under the 2025 Omnibus Plan in the same number as the related awards depleted the reserve under the 2013 Omnibus Plan.

The Company’s 2013 Omnibus Incentive Plan (the “2013 Omnibus Plan”) was approved by shareholders on May 7, 2013. The 2013 Omnibus Plan provided for both short-term and long-term incentive awards for employees and non-employee directors. Stock-based awards previously granted under the 2013 Omnibus Plan may be in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, and performance share or performance unit awards.

The Company grants certain share-based payment awards that are classified as liabilities in accordance with ASC 718, "Compensation—Stock Compensation". These awards include cash-settled restricted stock units which vest in three annual increments over a three-year period and cash-settled performance share units which vest after three years and are earned based on the extent to which performance goals are met over the applicable performance period.

Liability-classified awards are measured at fair value at each reporting date until settlement. The fair value of these awards is determined using the closing stock price at the end of the reporting period, and is remeasured at each balance sheet date. Changes in fair value are recognized as compensation expense in engineering, selling, and administrative expenses in the Consolidated Statements of Operations over the requisite service period.

As of December 31, 2025, the Company had a liability of $1.6 million recorded in accounts payable and accrued expenses in the Consolidated Balance Sheets related to awards that are expected to be settled in cash.

The Company recognizes expense net of estimated future forfeitures for all stock-based compensation on a straight-line basis over the vesting period of the entire award. Estimated future forfeitures are based on the Company’s historical experience.

During the years ended December 31, 2025, 2024, and 2023, the Company recorded stock-based compensation expense, including cash-settled liability awards, of $9.7 million, $10.9 million, and $11.5 million, respectively, in engineering, selling, and administrative expense in the Consolidated Statement of Operations. The Company recognizes stock-based compensation expense over the award’s vesting period, subject to the retirement, death, or disability provisions of the 2025 Omnibus Plan or the 2013 Omnibus Plan (as applicable).

Shares are issued out of treasury stock upon exercise for stock options and vesting of restricted stock units and performance share units.

Stock Options

Stock option grants to employees are exercisable in three annual increments over a three-year period beginning on the first anniversary of the grant date and expire 10 years subsequent to the grant date.

The Company did not grant employees stock options in 2025, 2024, or 2023. Stock-based compensation expense is calculated by estimating the fair value of non-qualified stock options at the time of grant and is amortized over the stock options’ vesting period. The Company recognized no expense before income taxes associated with stock options during the years ended December 31, 2025, 2024 and, 2023.

Restricted Stock Units

The Company granted 550,354; 461,632; and 520,132 restricted stock units inclusive of director awards in 2025, 2024, and 2023, respectively. A total of 130,207; 78,894; and 77,576 equity compensation awards were granted to directors in 2025, 2024, and 2023, respectively, which vested immediately upon the grant date, with the exception of the 2025 awards that vest one year from the grant date. The Company recognized $5.5 million, $6.4 million, and $6.3 million of compensation expense associated with restricted stock units during the years ended December 31, 2025, 2024, and 2023, respectively.

With the exception of director grants, the restricted stock units are earned based on service over the vesting period. Restricted stock units granted to employees vest in three annual increments over a three-year period beginning on the first anniversary of the grant date. The expense is based on the fair value of the Company's shares as of the grant date which is the grant date closing stock price.

During the year ended December 31, 2025, the Company modified certain 2023 and 2024 restricted stock units to settle them in cash in lieu of stock. The modification of these awards is shown as a forfeiture of the original award in the table above. The vesting schedule remains unchanged for these awards.

As of December 31, 2025, the Company had $4.1 million of unrecognized compensation expense before income tax and net of estimated forfeitures related to restricted stock units which will be recognized over a weighted average period of 1.6 years.

Performance Share Units

The Company granted 374,798; 365,174; and 316,022 performance share units in 2025, 2024, and 2023, respectively. The performance share units are earned based on service over the vesting period and only to the extent to which performance goals are met over the applicable three-year performance period. The performance goals vary for performance share units each grant year. The Company recognized $3.0 million, $4.5 million, and $5.2 million of compensation expense associated with performance share units during the years ended December 31, 2025, 2024, and 2023, respectively.

The performance goals for the performance share units granted in 2025 are weighted 60% on the 3-year average of the Company’s adjusted return on invested capital ("Adjusted ROIC") percentage from 2025 to 2027 and 40% on cumulative non-new machine sales from January 1, 2025 through December 31, 2027. The Company defines non-new machine sales as parts sales, used crane sales, rental revenue, service revenue and other revenue. The 2025 performance share units, other than those units that are to be settled in cash, include a +/-20% modifier weighted on total shareholder return relative to a defined peer group of companies during the three-year performance period, not to exceed 200% of target shares granted.

The performance goals for the performance share units granted in 2024 are weighted 60% on the 3-year average of the Company's Adjusted ROIC percentage from 2024 to 2026 and 40% on cumulative non-new machine sales from January 1, 2024 through December 31, 2026.The 2024 performance share units include a +/-20% modifier weighted on total shareholder return relative to a defined peer group of companies during the three-year performance period, not to exceed 200% of target shares granted.

The performance goals for the performance share units granted in 2023 are weighted 60% on the 3-year average of the Company’s adjusted EBITDA percentage from 2023 to 2025 and 40% on cumulative non-new machine sales from January 1, 2023 through December 31, 2025. The 2023 performance share units include a +/-20% modifier weighted on total shareholder return relative to a defined peer group of companies during the three-year performance period, not to exceed 200% of target shares granted.

During the year ended December 31, 2025, the Company modified certain 2023 and 2024 performance share units to settle them in cash in lieu of stock. The modification of these awards is shown as a forfeiture of the original award in the table above. The performance conditions and vesting schedules remain unchanged for these awards.

As of December 31, 2025, the Company had $3.1 million of unrecognized compensation expense before income tax and net of estimated forfeitures related to performance share units expected to be recognized over a weighted average period of 1.9 years.

The Company uses the Monte Carlo valuation model to determine fair value of the performance share unit grants. The Company used an average of historical stock prices of selected peers for its volatility assumption. The assumed risk-free rates were based on three-year U.S. Treasury rates in effect at the time of grant. The fair value of each performance share unit was estimated at the date of grant using the following assumptions: