Document:

EX-10.8

 

EXHIBIT 10.8

CONFIRMATION OF ADVANCE

	 	 	 	 	 	 	 
	Institution:

	 	ABC Bank
	 	Advance Number:
	 	XXXXX
	 

	 	11301 Airport Blvd
	 	Settlement Date:
	 	MM/DD/YYYY
	 

	 	Denver, CO 12345-6789
	 	Maturity Date:
	 	MM/DD/YYYY
	Customer ID:

	 	XXXX	 	 	 	 

The Federal Home Loan Bank of Topeka (FHLBank) hereby issues an advance on behalf of the above
institution.

Terms of the advance shall be:

	 	 	 
	Advance Type:

	 	Regular Fixed Amortized
	Amount:

	 	$XXX,XXX.00
	Principal:

	 	Principal payments according to the attached schedule
	Rate:

	 	X.XXX% — Interest payable monthly and at maturity
	 

	 	(Interest accrued on an Actual/Actual day basis.)

Prepayment Fee: The prepayment fee is the present value (discounted at the reference
rate and determined by FHLBank in its discretion) of the difference between (a) the
scheduled interest payments to be paid on the advance through remaining maturity and (b)
the interest payments which would be collected on the advance through remaining maturity
if it bore interest at the reference rate. The reference rate is the internal rate of
return which equates the principal balance of the advance with the future cash flows
which would be due on the advance if each unpaid principal payment bore interest,
payable monthly, at the effective yield of a Federal Home Loan Bank obligation having
the closest remaining maturity and coupon to such principal payment. If the reference
rate is greater than the rate on the advance, no fee is charged.

Other: Past-due principal and interest will be charged interest at 3.00% per annum in excess of
the line of credit interest rate.

	 	 	 	 	 
	 	 	 	 	 
	Lending Officer
	 	 	 	 
	April X, 20XX
	 	 	 	 

CONFIRMATORY APPLICATION AND ACKNOWLEDGMENT

The undersigned hereby confirms that it has applied for the Advance referred to above, and that it
has accepted and unconditionally agrees to repay such Advance upon the terms and conditions stated
above and in the Advance, Pledge and Security Agreement between the parties and FHLBank’s Member
Products Policy as amended from time to time.

	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	By:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 
	 

	 	 	 	 	 	(Signature)
	 	(Title)	 	 

(Please return one signed copy of FHLBank within (5) business days)EX-10.1 EXECUTIVE LONG-TERM INCENTIVE COMPENSATION

 

Exhibit 10.1

NACCO INDUSTRIES, INC.

EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN

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

1. Purpose of the Plan

     The purpose of this Executive Long-Term Incentive Plan (the “Plan”) is to further the
long-term profits and growth of NACCO Industries, Inc. (the “Company”) by enabling the Company to
attract and retain key executive employees of the Company 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 encourage enhancement of the Company’s stockholder value.

2. Definitions

	 	(a)	 	“Average Award Share Price” means the lesser of (i) the average of the closing
price per share of Class A Common Stock on the New York Stock Exchange on the Friday
(or if Friday is not a trading day, the last trading day before such Friday) for each
week during the calendar year preceding the commencement of the Performance Period (or
such other previous calendar year as determined by the Committee not later than the
90th day of the Performance Period) or (ii) the average of the closing price
per share of Class A Common Stock on the New York Stock Exchange on the Friday (or if
Friday is not a trading day, the last trading day before such Friday) for each week of
the applicable Performance Period.
	 
	 	(b)	 	“Award” means an award paid to a Participant under this Plan for a Performance
Period (or portion thereof) in an amount determined pursuant to a formula which is
established by the Committee not later than the 90th calendar day of the
Performance Period on which the Award is based. The Committee shall allocate the
amount of an Award between the cash component, to be paid in cash, and the equity
component, to be paid in Award Shares pursuant to a formula which is established by the
Committee not later than the 90th calendar day of the Performance Period on
which the Award is based.
	 
	 	(c)	 	“Award Shares” means shares of Class A Common Stock that are issued pursuant
to, and with such restrictions as are imposed by, the terms of this Plan. Such shares
may be shares of original issuance or treasury shares or a combination of the
foregoing.
	 
	 	(d)	 	“Class A Common Stock” means the Company’s Class A Common Stock, par value
$1.00 per share.
	 
	 	(e)	 	“Committee” means 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 3, so long as any such committee
consists of not less than two directors of the Company and so long as

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	 	 	 	each member of the Committee (i) is not an employee of the Company or any of its
subsidiaries and (ii) is a “disinterested person” within the meaning of Rule 16b-3.
	 
	 	(f)	 	“Guidelines” means the guidelines that are approved by the Committee 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 will control.
	 
	 	(g)	 	“Participant” means any salaried employee of the Company who in the judgment of
the Committee occupies a key executive position in which his efforts may significantly
contribute to the profits or growth of the Company. Employees of the Company’s
subsidiaries shall not be eligible to participate in this Plan.
	 
	 	(h)	 	“Performance Period” means any period of one or more years (or portion thereof)
on which an Award is based. The Committee shall establish the applicable Performance
Period(s) not later than the 90th calendar day of the Performance Period on
which an Award will be based.
	 
	 	(i)	 	“Rule 16b-3” means Rule 16b-3 promulgated under the Securities Exchange Act of
1934 (or any successor rule to the same effect), as in effect from time to time.
	 
	 	(j)	 	“Section 162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as
amended, or any successor provision.
	 
	 	(k)	 	“Target Award” means a dollar amount equal to the award to be paid to a
Participant under the Plan assuming that the performance targets are met.

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 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; provided, however, that no such action may be taken by the Committee that would cause
any Awards to be made to a Participant who is, or is determined by the Committee to be likely to
become, a “covered employee” to be includable as “applicable employee remuneration” of such
Participant, as such terms are defined in Section 162(m). 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.

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4. Eligibility

     Each Participant, including directors of the Company who are also salaried employees of the
Company, shall be eligible to participate in this Plan and receive Awards in accordance with
Section 5.

5. Awards

     The Committee may, from time to time and upon such conditions as it may determine, authorize
the payment 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 Performance Period, the Committee
shall approve (i) a Target Award to be granted to each Participant and (ii) a formula
for determining the amount of each Award, which formula is based upon the Company’s
average return on equity or return on total capital employed for the Performance
Period. Each grant shall specify an initial allocation between the cash portion of the
Award and the equity portion of the Award.
	 
	 	(b)	 	No later than March 15th of the following calendar year, the
Committee shall approve (i) a preliminary calculation of the amount of each Award based
upon the application of the formula and actual performance to the Target Awards
previously determined in accordance with Section 5(a); and (ii) a final calculation of
the amount of each Award to be paid to each Participant for the Performance Period.
Notwithstanding the foregoing, (1) the Committee shall have the power to decrease the
amount of any Award below the amount determined in accordance with Section 5(b)(i); (2)
the Committee shall have the power to increase the amount of any Award above the amount
determined in accordance with Section 5(b)(i) and/or to adjust the allocation between
the cash portion of the Award and the equity portion of the Award; provided, however,
that no such increase, change or adjustment may be made which would cause any amount
paid to a Participant who is, or is determined by the Committee to be likely to become,
a “covered employee” to be includable as “applicable employee remuneration” of such
Participant, as such terms are defined in Section 162(m); and (4) 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.
	 
	 	(c)	 	Each Award shall be paid partly in cash and partly in Award Shares. The number
of Award Shares to be issued to a Participant shall be based upon the number of shares
of Class A Common Stock that can be purchased with the equity portion of the Award at
the Average Award Share Price (subject to adjustment as described in Subsection (b)
above). Awards shall be paid subject to all withholdings and deductions pursuant to
Section 6. Notwithstanding any other provision of the Plan, the maximum amount paid to
a Participant in a single year as a result of Awards under this Plan shall not exceed
$5,000,000.

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	 	(d)	 	Award Shares shall entitle such Participant to voting, dividend and other
ownership rights. Each Award shall provide that the transferability of the Award
Shares shall be prohibited or restricted in the manner and to the extent prescribed by
the Committee at the date of payment for a period of ten years, or such other shorter
or longer period as may be determined by the Committee from time to time.
	 
	 	(e)	 	Each payment of Award Shares shall be evidenced by an agreement executed on
behalf of the Company by an executive officer and delivered to and accepted by such
Participant; each such agreement shall contain such terms and provisions, consistent
with this Plan, as the Committee may approve, including, without limitation,
prohibitions and restrictions regarding the transferability of Award Shares (other than
a transfer (i) by will or the laws of descent and distribution, (ii) pursuant to a
domestic relations order meeting the definition of a qualified domestic relations order
under Section 206(d)(3)(B) of the Employee Retirement Income Security Act of 1974, as
amended, or (iii) to a trust for the benefit of a Participant or his spouse, children
or grandchildren (provided that Award Shares transferred to such a trust shall continue
to be Award Shares subject to this Plan).
	 
	 	(f)	 	Multiple Awards may be granted to a Participant; provided, however, that no two
Awards to a Participant may have identical performance periods.
	 
	 	(g)	 	Notwithstanding any provision of the Plan to the contrary, Awards payable
hereunder shall be paid within two and one-half months after the end of the first
calendar year in which the Award is no longer subject to a substantial risk of
forfeiture.

6. Withholding Taxes

     To the extent that the Company is required to withhold federal, state or local taxes in
connection with any Award paid to a Participant under this Plan, and the amounts available to the
Company for such withholding are insufficient, it shall be a condition to the receipt of such Award
that the Participant make arrangements satisfactory to the Company for the payment of the balance
of such taxes required to be withheld, which arrangements (in the discretion of the Committee) may
include relinquishment of a portion of such Award. The Company and a Participant may also make
similar arrangements with respect to the payment of any other taxes derived from or related to the
Award with respect to which withholding is not required.

7. Amendment, Termination and Adjustments

     The Committee may alter or amend this Plan 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 or any Award Shares of such Participant; and further provided,
however, that, without further approval by the stockholders of the Company, no such action shall
(i) increase the maximum number of Award Shares to be issued under this Plan specified in Section 8
(except that adjustments and additions expressly authorized by this Section 7 shall not be limited
by this clause (i)), (ii) cause Rule 16b-3 to become inapplicable to

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this Plan or (iii) cause any amount of an Award to a Participant who is, or is determined by
the Committee to be likely to become, a “covered employee” to be includable as “applicable employee
remuneration” of such Participant, as such terms are defined in Section 162(m). The Committee may
make or provide for such adjustment in the total number of Award Shares to be issued under this
Plan specified in Section 8 as the Committee in its sole discretion, exercised in good faith, may
determine is equitably required to reflect (a) any stock dividend, stock split, combination of
shares, recapitalization or any other change in the capital structure of the Company, (b) 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 (c) any other corporate transaction or event having an effect similar to any of the foregoing.
All Target Awards and Awards granted prior to any termination of this Plan shall continue to be
subject to the terms of this Plan. In the case of termination of employment by reason of death,
permanent disability or retirement pursuant to the terms of the qualified pension plan applicable
to the Participant (or, for Participants who are not covered by a qualified pension plan,
retirement after reaching age 60 with at least 15 years of service), or in the case of other
special circumstances, of a Participant who holds Award Shares as to which the prohibition or
restriction on transfer has not lapsed, or in case of a termination of the Plan pursuant to this
Section 7, the Committee may, in its sole discretion, accelerate the time at which such prohibition
or restriction on transfer will lapse.

8. Award Shares Subject to Plan

     Subject to adjustment as provided in this Plan, the total number of shares of Class A Common
Stock which may be issued as Award Shares under this Plan shall be 300,000.

9. Approval by Stockholders

     The amended and restated Plan shall be submitted for approval by the stockholders of the
Company. If such approval has not been obtained by June 1, 2006, all grants of Target Awards made
on or after January 1, 2006 shall be rescinded.

10. 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

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	 	 	 	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)	 	Limitation on Rights of Employees. No Trust. No trust has been created by the
Company for the payment of Awards under this Plan; nor have the employees 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 a participant
hereunder is a mere unsecured creditor of the Company.

11. Effective Date

     Subject to its approval by the stockholders of the Company, this amended and restated Plan
shall become effective as of January 1, 2006.

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