Document:

EX-10.6 NACCo Materials Long Term Incentive Comp P

 

Exhibit 10.6

 NACCO MATERIALS HANDLING GROUP, INC.

LONG-TERM INCENTIVE COMPENSATION PLAN

(As Amended and Restated as of January 1, 2006)

	1.	 	Effective Date

          The Effective Date of this amendment and restatement of the NACCO Materials Handling Group,
Inc. Long-Term Incentive Compensation Plan (the “Plan”) is January 1, 2006.

	2.	 	Purpose of the Plan

          The purpose of this Plan is to further the long-term profits and growth of NACCO Materials
Handling Group, Inc. (the “Company”) by enabling the Company and its Subsidiaries (collectively,
the “Employers”) to attract and retain key executive employees by offering long-term incentive
compensation to those key executive employees who will be in a position to make significant
contributions to such profits and growth. This incentive is in addition to annual compensation and
is intended to reflect growth in the value of the Company’s stockholders’ equity.

	3.	 	Application of American Jobs Creation Act (“AJCA”)

Awards granted hereunder are subject to the provisions of Code Section 409A, as enacted by
the AJCA. It is intended that the provisions of the Plan that relate to the Awards be
administered in accordance with the requirements of Code Section 409A, so as to prevent the
inclusion in gross income of any Awards hereunder in a taxable year that is prior to the
taxable year or years in which such Awards would otherwise be actually paid or made
available to the Participant.

	4.	 	Definitions

	 	(a)	 	“Award” shall mean an award of Book Value Units granted to a Participant under
this Plan for an Award Term in an amount determined pursuant to a formula which is
established by the Committee not later than the 90th calendar day of the Award Term.
	 
	 	(b)	 	“Award Units” shall mean Book Value Units which are issued pursuant to, and
with such restrictions as are imposed by, the terms of this Plan.
	 
	 	(c)	 	“Award Unit Price” as to any Book Value Unit shall mean the Book Value on the
Quarter Date coincident with or immediately preceding the Grant Date of the Award.
	 
	 	(d)	 	“Award Term” shall mean the period of one or more years on which an Award is
based, as specified in the Guidelines.

 

 

	 	(e)	 	“Beneficiary” shall mean the person(s) designated in writing (on a form
acceptable to the Committee) to receive the payment of all Awards hereunder in the
event of the death of a Participant. In the absence of such a designation and at
anytime when there is no existing Beneficiary hereunder, Participant’s Beneficiary
shall be his surviving legal spouse or, if none, his estate.
	 
	 	(f)	 	“Book Value” as to any Book Value Unit shall mean an amount determined by the
Committee or, if no amount is set by the Committee, as of any date (i) the
stockholders’ equity (as determined in accordance with generally accepted accounting
principles, applied on a consistent basis) allocable to the Common Stock of the
Company, as set forth on the consolidated balance sheet of the Company and its
Subsidiaries as of the Quarter Date coincident with or immediately preceding such date,
divided by (ii) the number of Notional Shares existing as of such Quarter Date;
provided, however, that Book Value and/or the number of Notional Shares may be adjusted
to such an extent as may be determined by the Committee to preserve the benefit of the
arrangement for holders of Book Value Units and the Company, if in the opinion of the
Committee, after consultation with the Company’s independent public accountants,
changes in the Company’s accounting policies, acquisitions or other unusual or
extraordinary items have materially affected the stockholders’ equity allocable to the
Notional Shares.
	 
	 	(g)	 	“Book Value Unit” or “Unit” shall mean a right granted pursuant to the terms
and conditions set forth in Section 7.
	 
	 	(h)	 	“Code” shall mean the Internal Revenue Code of 1986, as amended.
	 
	 	(i)	 	“Committee” shall mean the 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 5.
	 
	 	(j)	 	“Disability” or “Disabled.” A Participant shall be deemed to have a
“Disability” or be “Disabled” if the Participant is determined to be totally disabled
by the Social Security Administration or if the Participant (i) is unable to engage in
any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than

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	 	 	 	12 months, receiving income replacement benefits for a period of not less than 3 months under an
Employer sponsored accident and health plan.
	 
	 	(k)	 	“Grant Date” shall mean the effective date of an Award, as determined under
Section 7(b)(ii) of the Plan.
	 
	 	(l)	 	“Guidelines” shall mean the guidelines that are approved by the Committee for
each Award Term for the administration of the Awards granted under the Plan. To the
extent that there is any inconsistency between the Guidelines and the Plan, the
Guidelines shall control.
	 
	 	(m)	 	"Hay Salary Grade” shall mean the salary grade or points assigned to a
Participant by the Company pursuant to the Hay Salary System, or any successor salary
system subsequently adopted by the Company.
	 
	 	(n)	 	“Key Employee” shall mean a key employee, as defined in Section 416(i) of the
Code (without regard to paragraph (5) thereof) of an Employer as long as the stock of
NACCO Industries, Inc. (or a related entity) is publicly traded on an established
securities market or otherwise on the date of the employee’s Termination of Employment.
Key Employees are identified on a controlled group-wide basis and include non-resident
alien employees (whether or not such employees are eligible to participate in the
Plan). The selected identification date for Key Employees is December 31st. As such,
any employee who is classified by the Company as a Key Employee as of December 31st of
a particular Plan Year shall maintain such classification for the 12-month period
commencing the following April 1st. The Company shall have the sole and absolute
discretion to classify employees as Key Employees hereunder. To the extent determined
by the Company, such classification may include up to 75 highly compensated employees
(including some who do not meet the statutory requirements of a Key Employee) as long
as such determination is made in a consistent, reasonable and good faith manner.
	 
	 	(o)	 	“Maturity Date” shall mean the date established by the Committee with respect
to a Post-2004 Award, as determined under Section 9(a) of the Plan.
	 
	 	(p)	 	“Notional Shares” shall mean the number of assumed shares of Common Stock of
the Company as determined by the Committee from time to time in order to implement the
purposes of the Plan. The number of Notional Shares under the Plan (including the Plan
as in effect prior to the Effective Date) shall equal 20 million shares.

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	 	(q)	 	“Participant” shall mean any person who meets the eligibility criteria set
forth in Section 6 and who is granted an Award under the Plan.
	 
	 	(r)	 	“Quarter Date” shall mean the last business day of each calendar quarter.
	 
	 	(s)	 	“Retirement” or “Retire” shall mean the (i) termination of a U.S. Participant’s
employment with the Employers after the Participant has reached age 60 and completed at
least 15 years of service, or (ii) termination of a non-U.S. Participant’s employment
with the Employers which qualifies as a retirement under local practices and procedures
and/or which qualifies the non-U.S. Participant for foreign retirement benefits.
	 
	 	(t)	 	“Subsidiary” shall mean any corporation, partnership or other entity, the
majority of the outstanding voting securities of which is owned, directly or
indirectly, by the Company.
	 
	 	(u)	 	“Target Award” shall mean the dollar value of the Award to be paid to a
Participant under the Plan assuming that the performance targets are met.
	 
	 	(v)	 	“Termination of Employment” shall mean a separation of service as defined in
Code Section 409A (and the regulations and guidance issued thereunder).
	 
	 	(w)	 	“Unforeseeable Emergency” shall mean an event which results in a severe
financial hardship to the Participant as a consequence of (i) an illness or accident of
the Participant, the Participant’s spouse or a dependent within the meaning of Code
Section 152(a), (ii) loss of the Participant’s property due to casualty or (iii) other
similar extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant.

	5.	 	Administration

	 	(a)	 	This Plan shall be administered by the Committee. 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 and all present and former
Participants, all other employees of the Employers, 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.

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	 	(b)	 	The Committee shall have complete authority to interpret all provisions of this
Plan, to prescribe the form of any instrument evidencing any Award granted under this
Plan, to adopt, amend and rescind general and special rules and regulations for its
administration (including, without limitation, the Guidelines) and to make all other
determinations necessary or advisable for the administration of this Plan.

	6.	 	Eligibility

          Any person who is classified by an Employer as a salaried employee of an Employer (including
any Subsidiary acquired after adoption of this Plan) generally at a Hay Salary Grade of 25 or above
(or a compensation level equivalent thereto), who in the judgment of the Committee occupies an
officer or other key executive position in which his efforts may significantly contribute to the
profits or growth of an Employer, may be awarded Book Value Units. Notwithstanding the foregoing,
the following persons shall not be eligible to participate in the Plan: (a) directors of an
Employer who are not classified as salaried employees of an Employer or (b) leased employees (as
such term is defined in Code Section 414). A person who satisfies the requirements of this Section
6 shall become a Participant in the Plan when granted an Award hereunder.

	7.	 	Granting of Awards

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

	 	(a)	 	Not later than the ninetieth day of each calendar year, the Committee shall
approve (i) a Target Award to be granted to each Participant for such year and (ii) a
formula for determining the amount of each Award, which formula is based upon the
Company’s return on total capital employed for the applicable Award Term.
	 
	 	(b)	 	Effective no later than April of the calendar year following the Award Term,
the Committee shall approve (i) a preliminary calculation of the amount of each Award
based upon the application of the formula (as in effect at the calculation date) and
actual performance to the Target Awards previously determined in accordance with
Section 7(a); and (ii) a final calculation of the amount of each Award to be granted to
each Participant for the Award Term (with the specified “Grant Date” of such Award
being January 1st of the calendar year following the Award Term). The
Committee shall have the power to increase or decrease the amount of any Award above or
below the amount determined in accordance with Section 7(b)(i); provided, however, no
Award, including any Award equal to the Target Award, shall be payable under the Plan
to any Participant except as determined by the Committee.

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	 	(c)	 	Calculations of Target Awards shall initially be based on the Participant’s Hay
Salary Grade as of January 1 of the first year of the Award Term. However, Target
Awards may be changed during or after an Award Term under the following circumstances
(as determined by the Chief Executive Officer of the Company with the consent of the
Committee (in their sole and absolute discretion)): (i) if a Participant receives a
change in Hay Salary Grade, salary midpoint and/or
long-term incentive compensation target percentage, such change may be reflected in a
pro-rata Target Award, (ii) employees hired into or promoted into a position eligible
to participate in the Plan (as specified in Section 6 above) during an Award Term
will, if designated as a Plan Participant by the Chief Executive Officer of the
Company with the consent of the Committee, be assigned a pro-rated Target Award based
on their length of service during an Award Term and (iii) the Committee may increase
or decrease the amount of the Target Award at any time, in its sole and absolute
discretion. In order to be eligible to receive an Award for an Award Term, the
Participant must be employed by an Employer and must be a Participant on December 31
of the last year of an Award Term. Notwithstanding the foregoing, if a Participant
dies, becomes Disabled or Retires during the Award Term, the Participant shall be
entitled to a pro-rata portion of the Award for such Award Term, based on the number
of days the Participant was actually employed by the Employers during the Award Term.
	 
	 	(d)	 	Each Award shall be granted in the form of Book Value Units. The number of
Book Value Units to be issued to a Participant shall be determined by dividing the
amount of the Award by the Award Unit Price. Notwithstanding any other provision of
the Plan, the maximum cash value of the Awards granted to a Participant under this Plan
in a single year shall not exceed $2,250,000.
	 
	 	(e)	 	Multiple Awards may be granted to a Participant; provided, however, that no two
Awards to a Participant may have identical performance periods.

	8.	 	Vesting

          All Book Value Units granted pursuant to an Award hereunder shall be immediately 100% vested
as of the Grant Date.

	9.	 	Payment of Awards

	 	(a)	 	Maturity Date.

	 	(i)	 	In the Guidelines adopted for each Award Term, the Committee
shall establish a Maturity Date for the Book Value Units granted in each Award
for such Award Term

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	 	 	 	which shall generally be the fifth anniversary of the Grant
Date of such Award (or such other date specified in the Guidelines); provided,
however, that once established, the Maturity Date of an Award as specified in
the Guidelines may not thereafter be changed.
	 
	 	(ii)	 	Notwithstanding the foregoing, (A) in the event a Participant
dies prior to the Maturity Date, the Maturity Date of all of the Participant’s
outstanding Awards shall be the date of such Participant’s death and (B) in the
event a Participant incurs a Termination of Employment as a result of becoming
Disabled or Retirement prior to the Maturity Date (and prior to making a
deferral election described in Subsection (c) below), the Maturity Date of all
of the Participant’s Awards shall be the date of his Disability or Retirement;
provided, however, that if a Participant who incurs a Termination of Employment
on account of Retirement is a Key Employee, the Participant’s Maturity Date
shall be the six month anniversary of the date of his Termination of Employment
(or, if earlier, the date of the Participant’s death).

	 	(b)	 	Payment Date, Form of Payment and Value.

	 	(i)	 	Payment Date and Form. Unless a Participant timely makes
a deferral election under Subsection (c) of this Section, the Participant’s
Employer or former Employer shall deliver to the Participant (or, if applicable,
his Beneficiary), a check in full payment of the Book Value Units granted
pursuant to each Award as soon as practicable following the Maturity Date of
such Award.
	 
	 	(ii)	 	Value. For Participants who are employed on the Maturity
Date, the value of the Book Value Units shall be based on the Book Value as of
the Quarter Date  on or immediately preceding the Maturity Date. For
Participants who incur a Termination of Employment for reasons other than
Disability or Retirement, the value of the Book Value Units shall be based on
the Book Value as of the Quarter Date coincident with or immediately preceding
the date of Termination (despite the fact that such amounts are not paid until
the Maturity Date). For Participants who die or incur a Termination of
Employment due to Disability or Retirement, the value of such Book Value Units
shall be based on the Book Value as of the Quarter Date coincident with or
immediately preceding the Maturity Date; provided, however, that if a
Participant who incurs a Termination of Employment on account of Retirement is a
Key Employee whose payment is delayed

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	 	 	for 6 months, the value of the Book Value
Units shall be based on the Book Value as of the Quarter Date coincident with or
immediately preceding the payment date.
	 
	(c)	 	Deferral Option. A Participant who is a citizen or resident of the
United States may make an irrevocable election to defer receipt of 100% of an Award
granted to him for a particular Award Term. A separate deferral election may be made
with respect to each Award granted under the
Plan. Such a deferral election must be made, in writing, on a form approved by the
Committee and (i) will not be valid unless the election is made at least 12 months
prior to the Maturity Date of the Award and (ii) will not be given effect until at
least 12 months after the date on which such election is made. If a valid and timely
deferral election is made with respect to an Award, the payment of such Award will
automatically be deferred until the 10th anniversary of the Grant Date of
such Award. The Awards that are subject to such a deferral election shall continue
to be valued in accordance with the terms of the Plan until the date of payment.
Awards that are deferred until the 10th anniversary of the Grant Date
shall be paid as soon as practicable thereafter in the form of a single, lump-sum
payment and shall be based on the Book Value as of the Quarter Date coincident with
or immediately preceding such date. Notwithstanding the foregoing, any deferral
election under this Subsection (c) shall automatically terminate (and shall be of no
further effect) upon a Participant’s death or Termination of Employment due to
Disability and payment of all such deferred Awards shall be made as soon as
practicable following the date of such death or Termination of Employment due to
Disability, based on the Book Value as of the Quarter Date coincident with or
immediately preceding such date.
	 
	(d)	 	Notwithstanding the foregoing, the Committee may at any time, upon written
request of the Participant, cause to be paid to such Participant an amount equal to all
or any part of the Participant’s Awards, if the Committee determines, based on such
reasonable evidence that it shall require, that such a payment or payments is necessary
for the purpose of alleviating the consequences of an Unforeseeable Emergency occurring
with respect to the Participant. Payments made on account of an Unforeseeable
Emergency shall be permitted only to the extent the amount does not exceed the amount
reasonably necessary to satisfy the emergency need (plus an amount necessary to pay
taxes and penalties reasonably anticipated as a result of the distribution) and may not
be made to the extent such Unforeseeable Emergency is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant’s assets (to the extent such liquidation would not itself cause severe
financial hardship).

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	10.	 	Amendment, Termination and Adjustments

	 	(a)	 	The Committee, in its sole and absolute discretion, may alter or amend this
Plan from time to time; provided, however, that no such amendment shall, without the
consent of a Participant, affect the amount of any outstanding Award or any Award Units
of such Participant.
	 
	 	(b)	 	The Committee, in its sole and absolute discretion, may terminate this Plan in
its entirety at any time; provided that, except as provided in this Subsection (b), no
such termination shall, without the consent of a Participant, affect the amount of any
outstanding Award or any Award Units of such Participant. Except as otherwise provided
in an amendment to the Plan, all Target Awards and Awards granted prior to any
termination of this Plan shall continue to be subject to the terms of this Plan.
Notwithstanding the foregoing, upon a complete termination of the Plan, the Committee,
in its sole and absolute discretion, shall have the right to change the time of
distribution of Participants’ Award Units under the Plan, including requiring that all
such Award Units be immediately distributed in the form of lump sum cash payments (but
only to the extent such change is permitted by Code Section 409A).
	 
	 	(c)	 	Any amendment or termination of the Plan shall be in the form of a written
instrument executed by an officer of the Company on the order of the Committee. Such
amendment or termination shall become effective as of the date specified in the
instrument or, if no such date is specified, on the date of its execution.
	 
	 	(d)	 	The Committee may make or provide for an adjustment in the total number of
Award Units to be issued under this Plan as the Committee in its sole discretion,
exercised in good faith, may determine is equitably required to reflect (i) any stock
dividend, stock split, combination of shares, recapitalization or any other change in
the capital structure of the Company, (ii) any merger, consolidation, spin-off,
split-off, spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase securities, or (iii)
any other corporate transaction or event having an effect similar to any of the
foregoing.

	11.	 	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 an Employer, 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

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	 	 	 	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, except when
preempted by federal law.
	 
	 	(c)	 	Expenses. Expenses of administering the Plan shall be paid by the
Employers, as directed by the Company.
	 
	 	(d)	 	Assignability. No Award granted to a Participant under this Plan shall
be transferable by him for any reason whatsoever; provided, however, that upon the
death of a Participant the right to the proceeds of an Award may be transferred to a
Beneficiary.
	 
	 	(e)	 	Taxes. There shall be deducted from each payment under the Plan the
amount of any tax required by any governmental authority to be withheld and paid over
to such governmental authority for the account of the person entitled to such payment.
	 
	 	(f)	 	Limitation on Rights of Participants; No Trust.

	 	(i)	 	No trust has been created by the Employers for the payment of
Book Value Units granted under this Plan; nor have the grantees of Book Value
Units been granted any lien on any assets of the Employers to secure payment of
such benefits. This Plan represents only an unfunded, unsecured promise to pay
by the Employer or former Employer of the Participant, and the Participants and
Beneficiaries are merely unsecured creditors of the Participant’s Employer or
former Employer.
	 
	 	(ii)	 	Notwithstanding any other provision of the Plan to the contrary
(but except as provided in Section 12 hereof), no Employer shall be required to
make any payment hereunder to any Participant or Beneficiary if the Employer is
“Insolvent” at the time such payment is due to be made or if the payment would
jeopardize the solvency of the Employer; provided that the payment shall be made
during the first calendar year in which funds of the Employer are sufficient to
make the payment without jeopardizing the solvency of the Employer. For
purposes of the Plan, an Employer shall be considered Insolvent at such time as
it (1) is unable to pay its debts as they mature or (2) is subject to a pending
voluntary or involuntary proceeding as a debtor under the United States
Bankruptcy Code (or similar foreign law).

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	 	(g)	 	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.
	 
	 	(h)	 	Miscellaneous.

	 	(i)	 	Headings. 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.
	 
	 	(ii)	 	Construction. 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.
	 
	 	(iii)	 	Time of Payment/Processing. All payments under the Plan
shall be made on, or as soon as practicable after, the specified payment date
(and, in any event, no later than December 31 of the year that includes the
specified payment date or, if later, by the 15th day of the third
calendar month following the specified payment date). Notwithstanding the
foregoing, if the calculation of the amount payable for the Awards is not
administratively practicable due to events beyond the control of the Employer
and the Participant, the payment shall be made during the first calendar year in
which the payment is administratively practicable.
	 
	 	(iv)	 	Acceleration of Payments. Notwithstanding any provision of the
Plan to the contrary, payments of Awards hereunder may be accelerated (i) to the
extent necessary to comply with a certificate of divestiture (as defined in Code
Section 1043(b)(2)), (ii) to the extent necessary to pay the FICA taxes imposed
under Code Section 3101, and the income withholding taxes related thereto or
(iii) if the Plan (or a portion thereof) fails to satisfy the requirements of
Code Section 409A; provided that the amount of such payment may not exceed the
amount required to be included as income as a result of the failure to comply
with Code Section 409A.

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	12.	 	Liability of Employers, Transfers and Guarantees.

	 	(a)	 	In general. The provisions of this Section 12 shall apply
notwithstanding any other provision of the Plan to the contrary.
	 
	 	(b)	 	Liability for Payment/Transfers of Employment.

	 	(i)	 	Subject to the provisions of clause (ii) of this Section, the
Employers shall each be liable for the payment of the Awards which are payable
hereunder to or on behalf of the Participants who are (or were) its employees.
	 
	 	(ii)	 	Notwithstanding the foregoing, if the Awards hereunder which are
payable to or on behalf of a Participant are based on the Participant’s
employment with more than one Employer, the following provisions shall apply:

	 	(1)	 	Each Award shall be granted by the Employer for
whom the Participant was performing services during the Award Term. In
the event that a Participant performed services for more than one
Employer during the Award Term, the Award shall be divided so that the
Participant shall receive a pro-rata number of Book Value Units from each
Employer, based on the Participant’s service with, and compensation from,
each such Employer (as determined by the Committee in its sole and
absolute discretion).
	 
	 	(2)	 	Notwithstanding the provisions of clause (1), (A)
each Employer shall be solely liable for the payment of the Awards it
granted to its employees or former employees; (B) if a Participant has
been employed by more than one Employer, the Employer who employs the
Participant at the time of the payment of the Award shall pay the entire
amount of such Award; (C) each Employer (unless it is Insolvent) shall
reimburse the paying Employer for its allocable share of the
Participant’s Award; (D) if any responsible Employer is Insolvent at the
time of payment, the last Employer shall not be required to make a
distribution to the Participant with respect to amounts which are
allocable to service with that Employer (until the time specified in
Section 11(f)(ii)); and (E) each Employer shall (to the extent permitted
by applicable law) receive an income tax deduction for the Employer’s
allocable share of the payment of the Participant’s Award.

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	 	(c)	 	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 (unless it is Insolvent) shall guarantee and
be responsible for the payment thereof.

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	NACCO MATERIALS HANDLING GROUP, INC.
	 	 
	 	 	 	 	 	 	 	 
	 	March
30, 2006 

	 	 	 	By: 	 	/s/ Charles A. Bittenbender	 	 
	 	 

Date

	 	 	 	 	 

     Charles A. Bittenbender

     Title: Assistant Secretary
	 	 

13EX-10.7 NACCO Long Term Incentive Comp Award

 

Exhibit 10.7

Award Control Number: <insert #> 

NACCO MATERIALS HANDLING GROUP, INC.

LONG-TERM INCENTIVE COMPENSATION AWARD

(NOT TRANSFERABLE)

Form of Award Unit CERTIFICATE

NACCO MATERIALS HANDLING GROUP, INC.

(the “Company”) pursuant to action of the Compensation
Committee of its Board of Directors (the “Committee”), hereby
grants to
<insert employee name> (the “Grantee”), <insert units>
Award Units
having a Award Unit Price $___ per Unit
pursuant to and subject to the provisions of the
NACCO MATERIALS HANDLING GROUP, INC. Long-Term
Compensation Plan (the “Plan”). This Award granted on and
this Certificate executed at Portland, Oregon, as of
January 1, 2007, the “Date of Grant”
The Award Units granted in this Certificate shall have a maturity
date of January 1, 2012  (but shall mature earlier in
accordance with Plan terms on death, disability or retirement).
Recipient acknowledges having received a complete copy of the Plan.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	By:
	 	****************************	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	President and Chief Executive Officer	 	 

Please review carefully the summary of general provisions pertinent to this award on the
reverse side.

 

 

Form of Award Unit Certificate

General Provisions**

	1.	 	Vesting/Taxes: These Award Units are fully vested as of the Grant Date. As a
result, they are subject to US FICA taxes when granted. (However, under current tax law, they
are not subject to US Federal, state or local income taxes until paid out.) All payments
under the Plan will be reduced by the amount of any employment or other taxes that are
required to be withheld therefrom.

	2.	 	Payment Restrictions: The Book Value Units granted under the Award are subject to a
payment restriction for a period of five years from the Grant Date (the “Maturity Date”).
However, these payment restrictions automatically lapse upon death or a termination of
employment due to Disability or Retirement. The Committee may not accelerate the time at
which such payment restrictions will lapse. In addition, the Maturity Date for certain “key
employees” (generally, the top 50 paid employees across the NACCO group) will be delayed until
6 months after retirement.

	3.	 	Payment Date / Value: Unless a Participant makes a deferral election under Section 4,
as soon as practicable following the lapse of a payment restriction applicable to an Award
pursuant to Section 2, the employer or former employer of the Participant will deliver to the
Participant (or, if applicable, his Beneficiary), a check in full payment of the Book Value
Units granted pursuant to the Award. For participants who are employed on the Maturity Date,
the value of the Book Value Units is based on the Book Value as of the Quarter Date coincident
with or immediately preceding the Maturity Date. For Participants who terminate employment
before the Maturity Date for reasons other than Disability or Retirement, the value of the
Book Value Units is based on the Book Value as of the ending Quarter Date coincident with or
immediately preceding the date of termination (despite the fact that payment is not made until
Maturity Date). Finally, for Participants who die or who terminate employment before the
Maturity Date due to Disability or Retirement, the value of the Book Value Units is based on
the Book Value as of the ending Quarter Date coincident with or immediately preceding the
death, Disability or Retirement (or 6 months later in the case of key employees).

	4.	 	Deferral Option: A Participant who is a citizen or resident of the United States has
the ability to make an irrevocable election to defer receipt of his entire Award under the
Plan. A separate deferral election must be made with respect to each Award granted under the
Plan. The Awards which are subject to a deferral election continue to be subject to the terms
and conditions of the Plan and will continue to be valued in accordance with the terms of the
Plan until the date of payment. In order to make a deferral election, the election (i) must
apply to 100% of an Award granted for a particular year, (ii) must be made at least 12 months
prior to the Maturity Date of the Award and (iii) will not be given effect until at least 12
months after the date on which the election is made. If a valid and timely deferral election
is made with respect to an Award, the payment of the Award will automatically be deferred
until the 10th anniversary of the Grant Date of such Award and will then be paid in
the form of a lump sum payment as soon as practicable after the 10th anniversary
date. Deferred Awards will be valued based on the Book Value as of the Quarter Date
coincident with or immediately preceding the 10th anniversary date.
Notwithstanding the foregoing, all deferral elections will automatically terminate (and will
be void and of no further effect) upon a Participant’s death or termination of employment due
to Disability. If a deferral election is voided, payment of the deferred Awards will be made
as soon as practicable following the date of the Participant’s death or termination of
employment due to Disability, based on the Book Value as of the Quarter Date coincident with
or immediately preceding such date.
	 
	 	 	Assignability: This Award is not transferable for any reason whatsoever; provided,
however, that upon the death of a Participant the right to the proceeds of this Award will be
transferred to a Beneficiary.
	 
	 	 	No Right of Employment: Neither the adoption or operation of the 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 any Subsidiary, or shall in any way affect
the right and power of the Company or any Subsidiary to terminate the employment of any
employee at any time with or without assigning a reason therefor to the same extent as the
Company or any Subsidiary might have done if this Plan had not been adopted.
	 
	 	 	Limitation of Rights: No trust has been created by the Company or any Subsidiary for
the payment of Book Value Units granted under this Plan; nor have the grantees of Awards been
granted any lien on any assets of the Company or any Subsidiary to secure payment of such
benefits. This Plan represents only an unfunded, unsecured promise to pay by the Company and
the Subsidiaries, and the grantees hereunder are unsecured creditors of the Company and
Subsidiaries.

**Disclaimers:

The IRS has not issued the final guidance that is needed to bring the Plan into
compliance with the requirements of the American Jobs Creation Act of 2004 (the “Act”).
Additional Plan amendments may be required. You will be notified if any amendments
are made and, if any substantive changes are required, you will be issued a revised
Certificate at that time.

Words used in this Award Certificate that are defined in the Plan are used herein as so
defined. The terms of this Award are subject to all terms and conditions of the Plan document.
The Company reserves the right
to amend or terminate the Plan at any time.

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