exv10w1






Exhibit 10.1




NACCO MATERIALS HANDLING GROUP, INC.

2010 ANNUAL INCENTIVE COMPENSATION PLAN




Introduction




     NACCO Materials Handling Group, Inc., (the “Company”) has established an Annual Incentive
Compensation Plan (“Plan”) as part of a competitive compensation program for the officers and
management employees of the Employers. The Plan may consist of one or more programs for different
categories of Participants (each, a “Program”).



Plan Objective




     The Employers desire to attract and retain talented employees to enable the Employers to meet
their financial and business objectives. The objective of the Plan is to provide an opportunity to
earn annual incentive compensation to those employees whose performance has a significant impact on
the Company’s short-term and long-term profitability.



Administration 




     The Plan is administered by the Compensation Committee of the Board of Directors of the
Company (the “Committee”). The Committee:




	 	a.	 	Will designate Plan Participants and the Participants in each Program (if applicable).
	 
	 	b.	 	Will determine the annual performance criteria which generate the incentive
compensation pool for each of the incentive Programs under the Plan.
	 
	 	c.	 	Will determine the total amount of both the target and actual annual
incentive compensation pool(s) for each of the incentive Programs
under the Plan.
	 
	 	d.	 	Will approve individual incentive compensation Awards to Participants
who are officers and employees classified at salary grade 30 or above.
	 
	 	e.	 	May delegate to the Chief Executive Officer of the Company the
approval of incentive compensation Awards to Participants who are
classified in salary grade 29 and below.
	 
	 	f.	 	Except as determined by the Committee, a Participant must be employed
on December 31 of the Award Term in order to be entitled to receive an
Award hereunder. Notwithstanding the foregoing, the Committee may
approve a pro-rated incentive compensation Award for Participants in
the Plan whose employment is terminated (1) due to death, Disability,
Retirement or facility closure or (2) under other circumstances at the
recommendation of the Chief Executive Officer of the Company.





     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 Employers all present and former Participants and employees 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.



Determination of Incentive Compensation Pool(s)




     Each Participant in each Program under the Plan will have an individual target incentive
compensation percentage, which is determined by the Participant’s salary grade. This percentage is
multiplied by the mid-point of the Participant’s salary grade to determine his individual target
incentive compensation Award. The total of the target incentive
compensation Awards



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of each Participant in each Program equals the target corporate incentive
compensation pool (“Target Pool”) for such Program. The Target Pool for each Program is approved
at the beginning of each Award Term by the Committee.




     The actual incentive compensation pool (“Actual Pool”) is determined as of the end of each
Award Term based on actual performance against specific criteria established in the beginning of
the Award Term by the Committee. The Target Pool(s) are adjusted upwards or downwards by
performance adjustment factors to determine the Actual Pool(s). In no event will any Actual Pool
for any Program exceed 150% of the Target Pool, except to the extent that the Committee elects to
increase the Actual Pool for any Program by up to 10%, as described below.



     The Target and Actual Pools for each Program may consist of the sum of two or more subpools,
provided the subpools have individual objectives.



     Subject to the Committee’s right to amend or terminate the Plan at any time, it is the intent
of the Plan that the Actual Pool for each Program, as determined above, will be the final total
incentive compensation pool. However, subject to any threshold performance requirements specified
in the performance targets adopted by the Committee, the Committee, in its sole discretion, may
increase or decrease by up to 10% any Actual Pool or may approve an incentive compensation pool
where there would normally be no pool due to performance which is below the criteria established
for the Award Term.



     The Actual and Target Pools exclude the Marketing Incentive Plan for regional parts, service,
sales and national account managers. However, total compensation or employees covered by the
Marketing Incentive Plan will be based on competitive levels.



Determination of Individual Incentive Compensation Awards




     Salary grades and the corresponding target incentive percentages for each Participant in the
Plan will be established at the beginning of each Award Term and approved by the Committee.
Individual target incentive compensation will then be adjusted by the appropriate pool or subpool
factor. Such adjusted individual incentive compensation will then be further modified based on the
team performance to which an individual belongs compared to the team goals for the Award Term, and
may be further modified based on a Participant’s performance as compared to their individual goals
for the Award Term.


The total of all individual incentive compensation Awards for any Program must not exceed the
Actual Pool for the Year.





Below are examples of actual pool and individual Award calculations.




	 	a.	 	Example calculation for determination actual pool:





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	100%	 	 	 	 	 	 	 	 	 	 	Target	 	 	 	 
	Sample Performance	 	Target	 	 	Actual	 	 	Payout %	 	 	Pool	 	 	Actual	 
	Criteria	 	Performance	 	 	Performance	 	 	of Target	 	 	Weighting	 	 	Pool	 
	Return on Total Capital 

Employed (ROTCE)*
	 	 	10.0	%	 	 	10.0	%	 	 	100.0	%	 	 	15	%	 	 	40.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating Profit Dollars*

	 	$	18.3 	m	 	$	18.3	m	 	 	100.0	%	 	 	30	%	 	 	40.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Market Share
	 	 	28.2	%	 	 	28.2	%	 	 	100.0	%	 	 	30	%	 	 	20.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating Profit Percent*
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	25	%	 	 	100.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	100	%	 	 	 	 








 




			
	*	 	As defined by Committee






	b.	 	Example calculation for determination of individual incentive compensation Award:
	 
	 	 	John Doe:




Midpoint = $90,600

Target Percentage = 15%

Target Amount = $13,590

Actual Bonus = ($13,590 * 100%) = $13,590




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Payment Date/Taxes




     Promptly following the Committee’s approval of the final Awards, the Participant’s Employer
shall pay the amount of such Awards to the Participants in cash, subject to all withholdings and
deductions described in the following sentence; provided, however, that (i) no Award shall be
payable to a Participant except as determined by the Committee and (ii) all Awards shall be paid
during the period from January 1st through March 15th after the close of the
Award Term. Any Award paid to a Participant under this Plan shall be subject to all applicable
federal, state and local income tax, social security and other standard withholdings and
deductions.



Definitions




     (a) “Award” means cash paid to a Participant under the Plan for the Award Term in an amount
determined in accordance with the Plan.



     (b) “Award Term” means the period from January 1, 2010 through December 31, 2010.



     (c) “Disability” means an approved application for disability benefits under the Company’s
long term disability plan or under any applicable government program.



     (d) “Employers” mean the Company, NMHG Oregon, LLC and their Subsidiaries.



     (e) “Participant” means any person who is classified by the Employers as a salaried employee
and in salary grade 22 and above, 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 Employers; provided,
however, that the Committee may select any employee who is expected to contribute, or who has
contributed, significantly to the Employers’ 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 Employers who were not
previously designated as Participants. Directors of the Company who are also employees of the
Company are 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; provided that they are employed by an Employer for at least 90 calendar
days during the Award Term.



     (f) “Retirement” means the termination of a Participant’s employment with the Employers after
the Participant has reached age 60 and completed at least 15 years of service with the Employers
or, if earlier, the termination of a non-U.S. Participant’s employment with the Employers which
qualifies as retirement under local practices and procedures and/or which qualifies the non-U.S.
Participant for foreign retirement benefits.



General Plan 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 Employers, or shall in any way affect the right and
power of an Employer to terminate the employment of any employee at any time with or without
assigning a reason therefor to the same extent as the Employer 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 North Carolina.



     (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.



     (d) American Jobs Creation Act. It is intended that this Plan be exempt from the
requirements of Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation
Act, and the Plan shall be interpreted and administered in a manner to give effect to such intent.



     (e) Limitation on Rights of Participants; No trust. No trust has been created by the
Employers for the payment of Awards granted under this Plan; nor have the Participants been granted
any lien on any assets of the Employers to secure



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payment of such benefits. This Plan represents
only an unfunded, unsecured promise to pay by the Participant’s Employer and a Participant
hereunder is a mere unsecured creditor of his Employer. Notwithstanding the foregoing, in the
event that NMHG Oregon, LLC is unable or refuses to satisfy its obligations hereunder with respect
to the payment of Awards to or on behalf of its employees, the Company shall guarantee and be
responsible for the payment thereof.




     (f) Payment to Guardian. If an Award is payable to a minor, to a person declared
incompetent or to a person incapable of handling the disposition of his property, the Committee may
direct payment of such Award to the guardian, legal representative or person having the care and
custody of such minor, incompetent or person. The Committee may require such proof of
incompetency, minority, incapacity or guardianship as it may deem appropriate prior to the
distribution of such Award. Such distribution shall completely discharge the Employers from all
liability with respect to such Award.



     (g) Effective Date. This Plan shall become effective as of January 1, 2010.



     (h) Amendment and Termination. The Committee may alter or amend this Plan from time
to time or terminate it in its entirety.



Change in Control.




     The provisions of this Section shall apply notwithstanding any other provision of the Plan to
the contrary. In the event of a “Change in Control” (as defined in the NACCO Materials Handling
Group, Inc. Long-Term Incentive Compensation Plan, the “LTIP”) during an Award Term, the amount of
the Award payable to a Participant who is employed on the date of the Change in Control (or whose
employment terminated due to death, Disability, Retirement or facility closure during such Award
Term and prior to the Change in Control) for such Award Term shall be equal to the Participant’s
target Award for such Award Term, multiplied by a fraction, the numerator of which is the number of
days during the Award Term during which the Participant was employed by the Employers prior to the
Change in Control and the denominator of which is the number of days in the Award Term. In the
event of a Change in Control, the payment date of the pro-rata target Award for the Award Term
shall be the date that is between two days prior to, or within 30 days after, the date of the
Change in Control, as determined by the Committee in its sole and absolute discretion.



2010 Performance Targets



The performance targets for each Program under the Plan are attached as an Addendum to this
document.





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