Document:

exv10w6

 

EXHIBIT 10.6

Award Control Number:

THE KITCHEN COLLECTION, INC.

LONG-TERM INCENTIVE

COMPENSATION AWARD

(NOT TRANSFERABLE)

Form of Award Unit CERTIFICATE

THE KITCHEN COLLECTION, INC.

(the “Company”) pursuant to action of the Compensation

 Committee of its Board of Directors (the
“Committee”), 

hereby grants to 

                                         (the “Grantee”),                      Award Units

having an Award Unit Price $                     per Unit

pursuant to and subject to the provisions of The

Kitchen Collection, Inc. Long-Term Compensation Plan (the 

“Plan”). This Award granted on and this
Certificate executed 

at Chillicothe, OH as of

January 1, 20 — , the “Date of Grant”

The Award Units granted in this Certificate shall have a 

maturity date of  January 1, 20 —  (but shall mature earlier in 

accordance with Plan terms on death, disability or

retirement).

Recipient acknowledges having received a complete copy of the Plan.

	 	 	 	 	 
	THE KITCHEN Collection, Inc.	 	 
	 
	 	 	 	 
	BY
	 	 	 	 
	 

	 	 

President and Chief Executive Officer
	 	 

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

 

 

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 FICA taxes when granted. (However, under current tax law, they
are not subject to 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 shall be subject
to a payment restriction for a period of five years from the Grant Date (the “Maturity Date”);
provided that such payment restrictions automatically lapse upon a termination of employment
by reason of death, 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 Paragraph
4 below, as soon as practicable following the lapse of a payment restriction applicable to an
Award pursuant to Paragraph 2 above, the Company will deliver to the Participant (or, if
applicable, his Beneficiary), a check in full payment of the Book Value Units granted pursuant
to such 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 coinciding with or immediately
preceding the Maturity Date. For Participants who terminated employment 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 death, Disability or Retirement (or 6 months later in
the case of key employees).

	4.	 	Deferral Option: A Participant may 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 that are subject to a deferral election
continue to be subject to the terms and conditions of this Plan and shall 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. Notwithstanding the foregoing, the
deferral elections of a Participant who incurs a Termination of Employment on account of death
or Disability shall receive a payment of the deferred Awards as soon as practicable
thereafter, with the awards valued as of the Quarter Date coincident with or immediately
preceding such date. A Participant who terminates employment for any other reason (including
Retirement) shall not be entitled to receive payment for his Award until the 10th
anniversary of the Grant Date. The Awards for Participants whose Termination of Employment is
on account of Retirement shall continue to be valued in accordance with the terms of the Plan
until the date of payment. The Awards for Participants who incur a
Termination of Employment for reasons other than death, Disability or Retirement shall be valued
based on the Book Value as of the Quarter Date coincident with or immediately preceding the date of
such Termination of Employment (despite the fact that such amounts are not paid until the
10th anniversary of the Grant Date).

 

 

	5.	 	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 may be
transferred to a Beneficiary.

	6.	 	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 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.

	7.	 	Limitation of Rights: No trust has been created by the Company 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 to secure payment of such benefits. This Plan represents
only an unfunded, unsecured promise to pay by the Company, and the grantees hereunder are
unsecured creditors of the Company.

	8.	 	**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, in whole or in part, at any time.exv10w7

 

EXHIBIT 10.7

THE NORTH AMERICAN COAL CORPORATION

2007 ANNUAL INCENTIVE COMPENSATION PLAN

SUMMARY

This Incentive Compensation Plan (the “Plan”) offers a highly attractive incentive
compensation opportunity to senior managers of The North American Coal Corporation (the “Company”
or “NAC”) and its subsidiaries (the “Subsidiaries”) when specified performance objectives under
their control or influence are achieved. This is accomplished through a structure containing the
following elements:

	 	 	 	 	 	 	 
	 	 	n	 	Each Participant is assigned an individual incentive target, stated as a percentage
of their base salary midpoint, that establishes the target incentive compensation Award
they may receive under the Plan when performance objectives are met.
	 
	 	 	 	 	 	 
	 	 	n	 	The individual target Award is allocated among the following performance components:
	 
	 	 	 	 	 	 
	 

	 	 	 	-
	 	North American Coal (NAC) corporate performance.
	 

	 	 	 	-
	 	Bellaire Corporation cash flow.
	 

	 	 	 	-
	 	Business unit results.
	 

	 	 	 	-
	 	Individual achievement.
	 
	 	 	 	 	 	 
	 	 	n	 	Percentage weightings are assigned to each component, based on the
Participant’s accountabilities and their impact on each component.
	 
	 	 	 	 	 	 
	 	 	n	 	One or more performance objectives will be established at the
beginning of the Award Year for each performance component.
	 
	 	 	 	 	 	 
	 	 	n	 	A performance range, which defines the acceptable level of
results, from threshold to maximum, is created for each
performance objective.
	 
	 	 	 	 	 	 
	 	 	n	 	A payout range is defined, which provides for actual incentive
Award payments of up to 150 percent of the incentive target Award,
except to the extent the Committee elects to increase or decrease
the actual pool by up to 10 percent, as described below.
	 
	 	 	 	 	 	 
	 	 	n	 	A performance/payout formula combines the two ranges into a matrix
that defines the level of incentive compensation payment that will
result from each level of performance.
	 
	 	 	 	 	 	 
	 	 	n	 	After audited financials are available, actual Awards will be
calculated based on actual results against the established
objectives.
	 
	 	 	 	 	 	 
	 	 	n	 	A final individual performance adjustment may be made, within a
range of ±10 percent of the calculated Award, based on a judgment
of the Participant’s overall performance.
	 
	 	 	 	 	 	 
	 	 	n	 	All Awards will be paid in cash, within two and one-half months
after the end of the Award Term.

This Incentive Compensation Plan allows management and the Committee to establish, in advance, the
performance expectations and related incentive compensation potential that Plan Participants can
expect for the Award Year. At the end of the Award Year, the Plan focuses judgment of the
management team’s performance on predetermined objectives that should produce fairness in the
determination of Awards.

 

 

PLAN STRUCTURE

Individual Incentive Targets

The primary focus of the Plan is the individual incentive compensation target Award. At the
beginning of each Award Term, each Participant is assigned a target Award, stated as a
percentage of the mid-point of base salary, which is payable under the Plan when all
relevant performance objectives are achieved. The Plan provides for payments above or below
the target Award to reflect acceptable variances from performance objectives.

Performance Goals

The following four sets of performance goals apply for the 2007 Award Term:

Intentionally Omitted

Incentive Award Range

Actual performance results attained probably will not match the established performance
goals exactly. Therefore, the Plan is designed to provide incentive compensation payouts of
up to 150 percent of the target Award if actual results fall within a predetermined range of
acceptable performance.

The Award range is defined as follows:

	 	 	 	 	 	 	 
	 	 	% of	 	 
	Award Level	 	Target	 	Description
	Maximum

	 	 	150	%	 	Highest level of incentive paid.
	 
	 	 	 	 	 	 
	Target

	 	 	100	%	 	Competitive incentive opportunity for
achieving all-important goals.
	 
	 	 	 	 	 	 
	Threshold

	 	25% to 50%
	 	Incentive paid when results meet minimum
acceptable standards.
	 
	 	 	 	 	 	 
	Below threshold

	 	 	0	%	 	Performance does not merit incentive
payment.

Component Weightings

Participants’ potential incentive Awards will be allocated between performance components
based on their individual impact on results. The allocations allow for Awards to be earned
based on the achievement of the performance objectives over which each Participant has the
most control. Weightings will be stated as a percentage and total 100 percent for each
Participant. The weightings will be established at the beginning of each Award Year to
reflect current organizational accountabilities and the relative importance of the various
performance components. The applicable weightings for the 2007 Award Year are as follows:

Intentionally Omitted

When there is more than one goal for a performance component, further percentage weightings
may be assigned, within the overall weightings, to reflect the relative priority of each
goal. For

 

 

example, if the individual component has a 40 percent weighting and there are five
individual goals, each individual goal might be assigned a priority weighting of 20 percent.

Performance Range

A range of performance acceptable for incentive compensation payment will be established for
each performance objective. For quantitative goals, the range may be set as a percentage of
the objective. For goals that cannot be quantified, the range will be defined in narrative
form.

     The following general definitions will apply. The percentage ranges indicated are only
guidelines; specific percentage ranges or narrative descriptions will be determined for each
goal based on the definitions.

	 	 	 	 	 	 	 
	 	 	Performance	 	 
	Performance	 	Percentage	 	 
	Level 	 	Guideline	 	Definition
	Threshold

	 	 	75	%	 	Minimum acceptable results
justifying payment of
incentives.
	 
	 	 	 	 	 	 
	Objective

	 	 	100	%	 	Results meet high
performance demands
justifying fully
competitive rewards.
	 
	 	 	 	 	 	 
	Maximum

	 	 	125	%	 	Highest foreseeable level
of performance.

Performance/Payout Formula

Combining the performance and payout ranges yields a performance/payout formula as in the
following example:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance	 	Definition	 	 	Results	 	 	Award Levels	 	 	Payout	 
	Threshold
	 	Minimum	 	 	75	%	 	Threshold	 	 	50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Objective
	 	On plan	 	 	100	%	 	Target	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Maximum
	 	Exceeding expectations	 	 	125	%	 	Maximum	 	 	150	%

This formula is applied separately to the results of each established performance element to
determine the incentive amount earned in accordance with assigned weightings. Performance
that falls between the defined levels would result in proportionally adjusted payouts, which
may be calculated mathematically or determined judgmentally.

Corporate Performance Threshold

Notwithstanding any provision of the Plan to the contrary, no incentive compensation Awards
will be earned under the Plan in any Award Year unless the threshold level of the corporate
performance component is achieved. Once the corporate performance threshold is attained,
each performance objective is separate and distinct. This means that partial Awards can be
earned for the attainment of one performance objective even if another is not sufficient to
generate a payout.

 

 

Individual Adjustment Factor

Each individual Award, as calculated above, may be adjusted upward or downward by as much as
10 percent of the total Award, based on management’s perceptions of each individual’s
overall performance.

Partial Awards

Executives who are hired or promoted during an Award Year to positions eligible for
participation in the Plan may be included in the Plan on a prorata basis (as determined by
the Committee, in its sole discretion). Unless otherwise determined by the Committee, a
Participant must be employed by an Employer on December 31 of the Award Term in order to be
entitled to receive an Award hereunder.

Committee Discretion

It is the intent of the Plan that the total incentive compensation, as determined above,
will be the final total corporate incentive compensation to be paid under the Plan.
However, the Committee, in its sole discretion, may increase or decrease, by up to 10
percent, the total incentive compensation Award pool or may approve incentive compensation
Award payments where normally there would be no payment, due to corporate performance which
is below the criteria established for the Award Year.

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 Employers and 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.

PAYMENT DATE/TAXES

     Promptly following the Committee’s 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
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) in no event shall the Awards be paid
later than two and one-half months 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, 2007 through December 31, 2007.

     (c) “Employer” means the Company and the Subsidiaries.

 

 

     (d) “Participant” means any person who is classified by an Employer as a salaried employee,
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 Employers 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. Each
Participant shall be notified that he is eligible to receive an Award and the amount of his target
Award. If a Participant receives a change in salary midpoint, such Participant shall be notified
of any resulting change in his target Award.

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 an Employer, or shall in any way affect the right and power
of the 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 Texas.

     (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.

     (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 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.

     (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 Company and the
Subsidiaries from all liability with respect to such Award.

     (g) Effective Date. This Plan shall become effective as of January 1, 2007.

2007 PERFORMANCE TARGETS

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

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