EX-10(XX) NACCO Comp Plan



 



Exhibit 10(xx)


NACCO INDUSTRIES, INC.

2004 ANNUAL INCENTIVE COMPENSATION PLAN




	1.	 	Purpose of the Plan



          The purpose of the NACCO Industries, Inc. 2004 Annual Incentive
Compensation Plan (the “Plan”) is to further the profits and growth of NACCO
Industries, Inc. (the “Company”) by enabling the Company to attract and retain
key employees of the Company by offering annual incentive compensation to those
key employees who will be in a position to help the Company to meet its
financial and business objectives.




	2.	 	Definitions



          (a) “Award” means cash paid to a Participant under the Plan for the Award
Term in an amount determined in accordance with Section 4. A Participant’s
Award shall be equal to the sum of his 40% Award and his 60% Award, as further
described in Section 4.



          (b) “Award Term” means the period from January 1, 2004 through December
31, 2004.



          (c) “60% Base Amount” means for any Participant a dollar amount, which
shall be equal to the salary midpoint for the Salary Points assigned to the
Participant by the Committee for the Award Term multiplied by 60% of the
short-term incentive compensation target percent for those Salary Points.
Attached hereto as Exhibit A is a schedule listing the 60% Base Amount for each
Participant for the Award Term.



          (d) “40% Base Amount” means for any Participant a dollar amount, which
shall be equal to the salary midpoint for the Salary Points assigned to the
Participant by the Committee for the Award Term multiplied by 40% of the
short-term incentive compensation target percent for those Salary Points.
Attached hereto as Exhibit B is a schedule listing the 40% Base Amount for each
Participant for the Award Term.. Where applicable, the 40% Base Amount and
the 60% Base Amount shall be referred to herein collectively as the “Base
Amount(s).”



          (e) “Committee” means the Nominating, Organization and Compensation
Committee of the Company’s Board of Directors or any other committee appointed
by the Company’s Board of Directors to administer this Plan in accordance with
Section 3, so long as any such committee consists of not less than two
directors of the Company and so long as each member of the Committee is not an
employee of the Company or any of its subsidiaries.




 






 





          (f) “Participant” means any salaried employee of the Company who in the
judgment of the Committee occupies a key position in which his efforts may
significantly contribute to the profits or growth of the Company; provided,
however, that the Committee may select any employee who is expected to
contribute, or who has contributed, significantly to the Company’s
profitability to participate in the Plan and receive an Award hereunder; and
further provided, however, that following the end of the Award Term the
Committee may make one or more discretionary Awards to employees of the Company
who are not Participants. Directors of the Company who are also employees of
the Company are eligible to participate in the Plan. Employees of the
Company’s subsidiaries shall not be eligible to participate in the Plan. The
Committee shall have the power to add Participants at any later date in the
Award Term if individuals subsequently become eligible to participate in the
Plan. Each Participant shall be notified that he is eligible to receive a 60%
Award and or a 40% Award for such Term and the amount of his Base Amounts. If
a Participant receives a change in Salary Points, salary midpoint and/or
short-term incentive compensation target percent, such change and any resulting
change in his Base Amount(s) will be reflected on an amended Exhibit A or
Exhibit B, as applicable. Unless otherwise determined by the Committee, a
Participant must be both employed by the Company and a Participant on December
31 of the Award Term, and the amount of any Award to a Participant who was not
also employed by the Company and a Participant on the first day of the Award
Term shall be not more than the pro-rated amount based upon the number of days
actually employed by the Company in the Award Term. Attached hereto as Exhibit
A is a schedule listing the Participants eligible for a 60% Award for the Award
Term and attached hereto as Exhibit B is a schedule listing the Participants
eligible for a 40% Award for the Award Term.



          (g) “Salary Points” means the salary points assigned to a Participant by
the Committee pursuant to the Hay salary point system, or any successor salary
point system adopted by the Committee.



          (h) “Supplemental Plan” means the NACCO Industries, Inc. Supplemental
Annual Incentive Compensation Plan.




	3.	 	Administration



          This Plan shall be administered by the Committee. The Committee shall
have complete authority to interpret all provisions of this Plan consistent
with law, to prescribe the form of any instrument evidencing any Award granted
or paid under this Plan, to adopt, amend and rescind general and special rules
and regulations for its administration, and to make all other determinations
necessary or advisable for the administration of this Plan. A majority of the
Committee shall constitute a quorum, and the action of members of the Committee
present at any meeting at which a quorum is present or acts unanimously




 






 





approved in writing, shall be the act of the Committee. All acts and decisions
of the Committee with respect to any questions arising in connection with the
administration and interpretation of this Plan, including the severability of
any or all of the provisions hereof, shall be conclusive, final and binding
upon the Company and all present and former Participants, all other employees
of the Company, and their respective descendants, successors and assigns. No
member of the Committee shall be liable for any such act or decision made in
good faith.



	4.	 	Awards



          The Committee may, from time to time and upon such conditions as it may
determine, authorize Awards for Participants, which Awards shall be not
inconsistent with, and shall be subject to all of the requirements of, the
following provisions:



          (a) Performance Targets. The Committee shall determine performance target
descriptions, weightings and targets for the Award Term. The targets
applicable to the 60% Awards shall be attached hereto as Exhibit C and the
targets for the 40% Awards shall be attached hereto as Exhibit D. The
Committee shall have the power to add, delete and amend target descriptions,
weightings and targets during or after the Award Term, which shall be reflected
on an amended Exhibit C or Exhibit D, as applicable. No performance targets
used in this Plan which are applicable to a Participant hereunder shall be used
in the Supplemental Plan in the same year for such Participant.



          (b) 60% Awards. Following the end of the Award Term, the Committee shall
compare the actual performance against the performance targets for each of the
performance target descriptions in Exhibit C which are applicable to the 60%
Awards. Based thereupon, the Committee shall determine the total payout
percentage under the Plan for the 60% Awards (the “60% Payout Percentage”).
The Committee shall then determine the 60% Award for each Participant, which
shall be equal to the Participant’s 60% Base Amount, multiplied by the 60%
Payout Percentage, and further adjusted by such other factors, including an
individual performance factor for each Participant, as the Committee shall
determine are appropriate; provided, however, that no 60% Award may be made to
any Participant which exceeds 200% of his 60% Base Amount.



          (c) 40% Awards. The amount of the 40% Awards shall be determined in
accordance with the provisions of Exhibit D hereto.



          (d) Payment Provisions. Promptly following the approval of the final
Awards, the Company shall pay the amount of such Awards to the Participants in
cash, subject to all withholdings and




 






 





deductions pursuant to Section 5;
provided, however, that no Award shall be payable to a Participant except as
determined by the Committee.



	5.	 	Withholding Taxes



          Any Award paid to a Participant under this Plan, shall be subject to
standard federal, state and local income tax, social security and other
standard withholdings and deductions.




	6.	 	Amendment and Termination



          The Committee may alter or amend this Plan (including the Exhibits hereto)
from time to time or terminate it in its entirety; provided, however, that no
such action shall, without the consent of a Participant, affect the rights in
an outstanding Award of such Participant.




	7.	 	General Provisions



          (a) No Right of Employment. Neither the adoption or operation of this
Plan, nor any document describing or referring to this Plan, or any part
thereof, shall confer upon any employee any right to continue in the employ of
the Company, or shall in any way affect the right and power of the Company to
terminate the employment of any employee at any time with or without assigning
a reason therefor to the same extent as the Company might have done if this
Plan had not been adopted.



          (b) Governing Law. The provisions of this Plan shall be governed by and
construed in accordance with the laws of the State of Delaware.



          (c) Miscellaneous. Headings are given to the sections of this Plan
solely as a convenience to facilitate reference. Such headings, numbering and
paragraphing shall not in any case be deemed in any way material or relevant to
the construction of this Plan or any provisions thereof. The use of the
masculine gender shall also include within its meaning the feminine. The use
of the singular shall also include within its meaning the plural, and vice
versa.




	8.	 	Effective Date



          This Plan shall become effective as of January 1, 2004.