Document:

EX-10.2

Exhibit 10.2

NACCO MATERIALS HANDLING GROUP, INC.

LONG-TERM INCENTIVE COMPENSATION PLAN

(Effective January 1, 2008)

1. Effective Date

     Subject to Section 15, the Effective Date of this NACCO Materials Handling Group, Inc.
Long-Term Incentive Compensation Plan (the “Plan”) is January 1, 2008.

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 management employees by offering long-term incentive
compensation to those key management employees who will be in a position to make significant
contributions to such profits and growth. This incentive is in addition to all other compensation.

3. Code Section 409A

It is intended that the compensation arrangements under the Plan be in full compliance with
the requirements of Code Section 409A. The Plan shall be interpreted and administered in a
manner to give effect to such intent. Notwithstanding the foregoing, the Employers and
their affiliates do not guarantee to Participants or Beneficiaries any particular tax
treatment under Code Section 409A.

4. Definitions

	 	(a)	 	“Account” shall mean the record maintained by the Employer in accordance with
Section 7 to reflect the Participant’s Awards under the Plan (plus interest thereon).
The Account shall be further sub-divided into various Sub-Accounts as described in
Section 8.
	 
	 	(b)	 	“Award” shall mean the cash awards granted to a Participant under this Plan for
the Award Terms.
	 
	 	(c)	 	“Award Term” shall mean the period of one or more years on which an Award is
based, as specified in the Guidelines. The Committee shall establish the applicable
Award Term not later than 90 days after the commencement of the Award Term on which an
Award is based and prior to the completion of 25% of such Award Term.
	 
	 	(d)	 	“Beneficiary” shall mean the person(s) designated in writing (on a form
acceptable to the Committee) to receive the payment of a Participant’s Sub-Accounts
hereunder in the event of his death. In the absence of such a designation and at
anytime when there is no existing

 

 

Beneficiary hereunder, a Participant’s Beneficiary shall be his surviving legal
spouse or, if none, his estate.

	 	(e)	 	“Change in Control” means the occurrence of an event described in Appendix 1
hereto.
	 
	 	(f)	 	“Code” shall mean the Internal Revenue Code of 1986, as amended.
	 
	 	(g)	 	“Committee” shall mean the Compensation Committee of the Company’s Board of
Directors, any other committee appointed by the Company’s Board of Directors, or any
sub-committee appointed by the Compensation Committee to administer this Plan in
accordance with Section 5 so long as any such committee or sub-committee consists of
not less than two directors of the Company and so long as each such member of the
committee or sub-committee is an “outside director” for purposes of Code Section
162(m).
	 
	 	(h)	 	“Covered Employee” means any Participant who is a “covered employee” for
purposes of Code Section 162(m) or any Participant who the Committee determines in its
sole discretion is likely to become such a covered employee.
	 
	 	(i)	 	“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 12 months,
receiving income replacement benefits for a period of not less than 3 months under an
Employer sponsored accident and health plan
	 
	 	(j)	 	“Fixed Income Fund” shall mean the Vanguard Retirement Savings Trust IV under
the Company’s qualified 401(k) plan or any equivalent fixed income fund which is
designated as the successor to such fund.
	 
	 	(k)	 	“Grant Date” shall mean the effective date of an Award, which is the January
1st following the end of the Award Term.
	 
	 	(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 this Plan on matters
other than the time and form

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of payment of the Awards, the Guidelines shall control. If there is any
inconsistency between the Guidelines and the Plan regarding the time and form of
payment of the Awards, the Plan 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.” Effective April 1, 2008, a Participant shall be classified as a
Key Employee if he meets the following requirements:

	 	•	 	The Participant, with respect to the Participant’s relationship with the
Employers and their affiliates, met the requirements of Section 416(i)(1)(A)(i),
(ii) or (iii) of the Code (without regard to Section 416(i)(5) thereof) and the
Treasury Regulations issued thereunder at any time during the 12-month period
ending on the most recent Identification Date (defined below) and his
Termination of Employment occurs during the 12-month period beginning on the
most recent Effective Date (defined below). When applying the provisions of
Code Sections 416(i)(1)(A)(i), (ii) or (iii) for this purpose: (i) the
definition of “compensation” (A) shall be as defined under 1.415(c)-2(d)(4)
(i.e., the wages and other compensation for which the Employer is required to
furnish the Employee with a Form W-2 under Code Sections 6041, 6051 and 6052,
plus amounts deferred at the election of the Employee under Code Sections 125,
132(f)(4) or 401(k)) and (B) shall apply the rule of Treasury Regulation Section
1.415(c)-2(g)(5)(ii) which excludes compensation of non-resident alien employees
and (ii) the number of officers described in Code Section 416(i)(1)(A)(i) shall
be 60 instead of 50.
	 
	 	•	 	The Identification Date for Key Employees is each December 31st
and the Effective Date is the following April 1st. As such, any
Employee who is classified as a Key Employee as of December 31st of a
particular calendar year shall maintain such classification for the 12-month
period commencing on the following April 1st.
	 
	 	•	 	Notwithstanding the foregoing, a Participant shall not be classified as a Key
Employee unless 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 Participant’s Termination of Employment.

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	 	(o)	 	“Maturity Date” shall mean the date established in Section 10(a)(i) for each
Sub-Account under the Plan.
	 
	 	(p)	 	“Non-U.S. Participant” shall mean a Participant who is classified by the
Committee as a non-resident alien with no U.S.-earned income. Such classification
shall be determined as of the Grant Date of each particular Award. Once a Participant
is classified by the Committee as a Non-U.S. Participant with respect to a particular
Award, such classification shall continue in effect until such Award is paid,
regardless of any subsequent change in classification.
	 
	 	(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 or a person who maintains
an Account balance hereunder.
	 
	 	(r)	 	“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 after the Non-U.S. Participant has reached age 60 and completed at
least 15 years of service or, if earlier, a termination that qualifies as a retirement
under local practices and procedures and/or which qualifies the Non-U.S. Participant
for foreign retirement benefits.
	 
	 	(s)	 	“ROTCE Table Rate” shall mean the interest rate determined under the ROTCE
Table that is adopted and approved by the Committee within the first 90 days of each
calendar year, which rate shall be in effect for such calendar year.
	 
	 	(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 initially approved by
the Committee that would be paid to an individual under the Plan for a particular Award
Term assuming that the applicable performance targets are exactly met.
	 
	 	(v)	 	“Termination of Employment” shall mean, with respect to any Participant’s
relationship with the Employers and their affiliates, a separation from service as
defined in Code Section 409A (and the regulations and guidance issued thereunder).
	 
	 	(w)	 	“U.S. Participant” shall mean, with respect to any Award, any Participant who
is not a Non-U.S. Participant.

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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.
	 
	 	(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.
Notwithstanding the foregoing, except as specifically described elsewhere in the Plan,
no such action may be taken by the Committee that would cause any Awards made to a
Covered Employee to be treated as “applicable employee remuneration” of such
Participant, as such term is defined in Code Section 162(m).

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 eligible to participate in the Plan; provided, however,
that leased employees (as defined in Code Section 414) shall not be eligible to participate in the
Plan. A person shall become a Participant in the Plan when granted an Award under Section
8(b)(ii).

7. Accounts and Sub-Accounts. 

     Each Employer shall establish and maintain on its books an Account for each Participant who is
or was employed by the Employer which shall reflect the Awards described in Section 8 hereof. Such
Account shall also (a) reflect credits for the interest described in Section 10(b) and debits for
any distributions and (b) be divided into the Sub-Accounts specified in Section 8(d).

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8. Granting of Awards/Crediting of Sub-Accounts. 

     The Committee may, from time to time and upon such conditions as it may determine, authorize
the granting of Awards to Participants for each Award Term, which shall be consistent with, and
shall be subject to all of the requirements of, the following provisions:

	 	(a)	 	Not later than the ninetieth day after the commencement of each Award Term (and
prior to completion of 25% of such Award Term), the Committee shall approve (i) a
Target Award to be granted to each Participant for such Award Term and (ii) a formula
for determining the amount of each Award for such Award Term, which formula is based
upon the Company’s return on total capital employed for such Award Term.
	 
	 	(b)	 	Effective no later than April 30th of the calendar year following
the end of the Award Term, the Committee shall approve (i) a preliminary calculation of
the amount of each Award based upon the application of the formula and actual Company
performance to the Target Awards previously determined in accordance with Section 8(a);
and (ii) a final calculation and approval 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 end of the Award Term). Such
approval shall be certified in writing by the Committee before any amount is paid for
any Award granted with respect to an Award Term. Notwithstanding the foregoing, (1)
the Committee shall have the power to decrease the amount of any Award below the amount
determined in accordance with the foregoing provisions and (2) the Committee shall have
the power to increase the amount of any Award above the initial amount determined in
accordance with the foregoing provisions or adjust the amount of thereof in any other
manner determined by the Committee in its sole and absolute discretion.
Notwithstanding the foregoing, (X) no such decrease may occur following a Change in
Control; (Y) no such increase, adjustment or any other change may be made that would
cause an amount to be paid to a Participant who is a Covered Employee be includable as
“applicable employee remuneration” of such Participant, as such term is defined in Code
Section 162(m) and (Z) no Award, including any Award equal to the Target Award, shall
be payable under the Plan to any Participant except as determined and approved by the
Committee.
	 
	 	(c)	 	Calculations of Target Awards for U.S. Participants for an Award Term shall
initially be based on the Participant’s Hay Salary Grade as of January 1st
of the first year of the Award Term. Calculations of Target Awards for Non-U.S.
Participants for an Award Term shall be determined in accordance with the Guidelines in
effect for such Award Term. However, such Target Awards may be changed during or after
the Award Term under the following special

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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 during an Award Term, 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 the 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; provided, however, that (X) no such decrease may occur
following a Change in Control and (Y) no such increase, adjustment or any other
change may be made that would cause an amount to be paid to a Participant who is a
Covered Employee be includable as “applicable employee remuneration” of such
Participant, as such term is defined in Code Section 162(m). 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 31st 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, calculated based on actual Company
performance for the entire Award Term in accordance with Section 8(b)(ii) above and
the number of days the Participant was actually employed by the Employers during the
Award Term.

	 	(d)	 	After approval by the Compensation Committee, each Award shall be credited to
the Participant’s Account in accordance with the following rules. The cash value of
each Award for each Award Term shall be credited to a separate Sub-Account for each
Participant. Such Sub-Accounts shall be classified based on the Grant Date of the
particular Award. For example, the cash value of the Awards with a Grant Date of
1/1/09 shall be credited to the 2009 Sub-Account, the cash value of the Awards with a
Grant Date of 1/1/10 shall be credited to the 2010 Sub-Account, etc.
	 
	 	(e)	 	Notwithstanding any other provision of the Plan, (1) the maximum cash value of
the Awards granted to a Participant under this Plan for any Award Term shall not exceed
$2,250,000 and (2) the maximum cash value of the payment from the Sub-Account that
holds the Awards for any Award Term (including interest) shall not exceed $4,000,000.
	 
	 	(f)	 	Multiple Awards may be granted to a Participant; provided, however, that no two
Awards to a Participant may have identical performance periods.

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	 	(g)	 	All determinations under this Section shall be made by the Committee. Each
Award granted to a Covered Employee shall be granted and administered to satisfy the
requirements for “qualified performance based compensation” under Code Section 162(m).

9. Vesting

     All Awards granted hereunder shall be immediately 100% vested as of the Grant Date.
Participants shall be 100% vested in all amounts credited to their Accounts hereunder.

10. Payment of Sub-Account Balances/Interest

	 	(a)	 	Payment Dates.

	 	(i)	 	Maturity Dates. The Maturity Date of each Sub-Account
shall be the third anniversary of the Grant Date of the Award that was credited
to such Sub-Account. For example, the Maturity Date of the 2009 Sub-Account
(containing Awards with a Grant Date of 1/1/09) shall be 1/1/12. Subject to the
provisions of clause (ii) below, the balance of each Sub-Account shall be paid
to the Participant on the Maturity Date of such Sub-Account.
	 
	 	(ii)	 	Other Payment Dates. Notwithstanding the foregoing, but
subject to the provisions of Section 11 hereof, (A) the payment date of amounts
that were credited to a particular Sub-Account while a Participant was a
Non-U.S. Participant may be any earlier date determined by the Committee and (B)
in the event a Participant dies or incurs a Termination of Employment as a
result of becoming Disabled or Retirement prior to the applicable Maturity Date,
(X) the payment date of all amounts credited to the Participant’s Sub-Accounts
as of the date of death or such Termination of Employment shall be the date of
such death or Termination of Employment and (Y) the Award earned for the Award
Term in which the date of death or Termination of Employment occurs shall be
paid during the period from January 1st through April 30th of the
calendar year following the last day of the Award Term; provided, however, that
if a Participant who incurs a Termination of Employment on account of Disability
or Retirement is a Key Employee, the Participant’s payment date shall not be any
earlier than the 1st day of the 7th month following the
date of his Termination of Employment (or, if earlier, the date of the
Participant’s death).

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	 	(b)	 	Interest. The Participant’s Sub-Accounts shall be credited with
interest as follows; provided, however, that (1) no interest shall be credited to a
Sub-Account after the Maturity Date of the Sub-Account, (2) no interest shall be
credited to a Sub-Account following a Participant’s Termination of Employment prior to
a Maturity Date (except as described in Section 10(c)(ii) with respect to delayed
payments made to Key Employees on account of a Termination of Employment) and (3) no
interest shall be credited to the Sub-Accounts after the last day of the month
preceding the payment date of such Sub-Account.

	 	(i)	 	Interest Rate for Non-Covered Employees. At the
end of each calendar month during a calendar year, the Sub-Accounts of
Participants who are not Covered Employees shall be credited with an amount
determined by multiplying the Participant’s Sub-Account balances during such
month by the blended rate earned during the prior month by the Fixed Income
Fund. In addition, as of the end of each calendar year in which the ROTCE Table
Rate adopted by the Compensation Committee for such calendar year exceeds the
Fixed Income Fund rate for such year, the Sub-Accounts shall also be credited
with an additional amount determined by multiplying the Participant’s
Sub-Account balances during each month of such calendar year by the excess of
the ROTCE Table Rate over the Fixed Income Fund rate for such calendar year,
compounded monthly.
	 
	 	(ii)	 	Interest Rate for Covered Employees. At the end of each
calendar month during a calendar year, the Sub-Accounts of Participants who are
Covered Employees shall be credited with an amount determined by multiplying the
Participant’s Sub-Account balances during such month by the blended rate earned
during the prior month by the Fixed Income Fund. In addition, if the Fixed
Income Fund rate for such year is less than 14%, the Sub-Accounts shall also be
credited with an additional amount determined by multiplying the Participant’s
Sub-Account balances during each month of such calendar year by the excess of
14% over the Fixed Income Fund rate for such calendar year, compounded monthly.
Notwithstanding the foregoing, in the event that the ROTCE Table Rate adopted by
the Compensation Committee for such year is less than 14%, the ROTCE Table Rate
shall be substituted for 14% in the preceding sentence.
	 
	 	(iii)	 	Special Rules. In the event that, prior to an
applicable Maturity Date, a Participant (1) incurs a Termination of Employment
or (2) becomes eligible for a payment from a Sub-Account hereunder, the
foregoing interest calculations shall be made as of the last day

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of the month prior to such date. When making such calculations, (X) the
Fixed Income Fund rate shall be equal to the blended rated earned during the
preceding month by the Fixed Income Fund, (Y) the ROTCE Table Rate shall be
equal to the year-to-date ROTCE Table Rate as of the last day of the prior
month and (Z) the 14% rate (when applicable) shall apply until the last day of
the prior month.

	 	(iv)	 	Changes. The Committee may change (or suspend) the
interest rate credited on Accounts at any time. Notwithstanding the foregoing,
no such change may be made in a manner that would cause an amount to be paid to
a Participant who is a Covered Employee to be includable as “applicable employee
remuneration” of such Participant, as such term is defined in Code Section
162(m).  

	 	(c)	 	Payment Date, Form of Payment and Amount.

	 	(i)	 	Payment Date and Form. Except as otherwise described in
Section 11 hereof, the Participant’s Employer or former Employer shall deliver
to the Participant (or, if applicable, his Beneficiary), a check in full payment
of each Sub-Account within 90 days of the applicable payment date of such
Sub-Account.
	 
	 	(ii)	 	Amount. Each Participant shall be paid the entire
balance of each Sub-Account (including interest). If a Participant who incurs a
Termination of Employment on account of Disability or Retirement is a Key
Employee whose payment is delayed until the 1st day of the
7th month following such Termination of Employment, such
Participant’s Sub-Accounts shall continue to be credited with interest (in
accordance with the rules specified in Section 10(b) but at the Fixed Income
Fund rate) through the last day of the month prior to the payment date. Any
amounts that would otherwise be payable to the Key Employee prior to the
1st day of the 7th month following Termination of
Employment shall be accumulated and paid in a lump sum make-up payment within 30
days following such delayed payment date. Amounts that are payable to the
Non-U.S. Participants shall be converted from U.S. dollars to local currency in
accordance with the terms of the Guidelines.

11. Change in Control

	 	(a)	 	The following provisions shall apply notwithstanding any other provision of the
Plan to the contrary.

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	 	(b)	 	Amount of Award for Year of Change In Control. In the event of a
Change in Control 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 who died, became
Disabled or Retired 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.
	 
	 	(c)	 	Time of Payment. In the event of a Change in Control, the payment date
of all amounts credited to the Participant’s Sub-Accounts (including, without
limitation, the pro-rata Target Award for the Award Term during which the Change in
Control occurred) 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.

12. 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 without the written consent of the
affected Participant, no such amendment shall, (i) reduce a Participant’s Account
balance as in effect on the date of the amendment, (ii) reduce the amount of any
outstanding Award that was previously approved by the Committee but not yet paid as of
the date of the amendment, (iii) modify Section 11(b) hereof or (iv) alter the time of
payment provisions described in Sections 10 and 11 of the Plan, except for any
amendments that accelerate the time of payment or are required to bring such provisions
into compliance with the requirements of Code Section 409A and, in either case, are
permitted by Code Section 409A.
	 
	 	(b)	 	The Committee, in its sole and absolute discretion, may terminate this Plan in
whole or in part at any time; provided that, such termination is permitted under Code
Section 409A and, without the written consent of the affected Participant, no such
termination shall, (i) reduce a Participant’s Account balance as in effect on the date
of the termination, (ii) reduce the amount of any outstanding Award that was previously
approved by the Committee but not yet paid as of the date of termination or (iii) alter
the time of payment provisions described in Sections 10 and 11 of the Plan, except for
modifications that accelerate the time of payment or are required to bring such
provisions into compliance with the requirements of Code Section 409A and, in either
case, are permitted by Code Section 409A.

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	 	(c)	 	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’ Sub-Accounts under the Plan, including requiring that
all such Sub-Accounts be immediately distributed in the form of lump sum cash payments
(but only to the extent such change is permitted by Code Section 409A).
	 
	 	(d)	 	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.

13. 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 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 amount payable to a Participant under this Plan
shall be assignable or transferable by him for any reason whatsoever, or be subject to
alienation, anticipation, sale, pledge, encumbrance or other legal process or in any
manner be liable for or subject to the debts or liabilities of the Participant or
Beneficiary; provided, however, that upon the death of a Participant the right to the
amounts payable hereunder shall be paid to the Participant’s 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.

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	 	(f)	 	Limitation on Rights of Participants; No Trust. No trust has been
created by the Employers for the payment of any benefits 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
Employer or former Employer of the Participant, and the Participants and Beneficiaries
are merely unsecured creditors of the Participant’s Employer or former Employer.
	 
	 	(g)	 	Payment to Guardian. If a Sub-Account balance 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 Sub-Account 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
Sub-Account. Such distribution shall completely discharge the Employers from all
liability with respect to such Sub-Account.
	 
	 	(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)	 	Acceleration of Payments. Notwithstanding any provision
of the Plan to the contrary, to the extent permitted under Code Section 409A and
the Treasury Regulations issued thereunder, payments of Sub-Accounts hereunder
may be accelerated (1) to the extent necessary to comply with federal, state,
local or foreign ethics or conflicts of interest laws or agreements, (2) to the
extent necessary to pay the FICA taxes imposed under Code Section 3101, and the
income withholding taxes related thereto or (3) 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

13

 

	 	(iv)	 	Delayed Payments due to Solvency Issues. Notwithstanding
any provision of the Plan to the contrary (but except as otherwise provided in
Section 14), an Employer shall not be required to make any payment hereunder to
any Participant or Beneficiary if the making of the payment would jeopardize the
ability of the Employer to continue as a going concern; provided that any missed
payment is made during the first calendar year in which the funds of the
Employer are sufficient to make the payment without jeopardizing the going
concern status of the Employer.
	 
	 	(v)	 	Payments Violating Applicable Law. Notwithstanding any
provision of the Plan to the contrary, the payment of all or any portion of the
amounts payable hereunder will be deferred to the extent that the Employer
reasonably anticipates that the making of such payment would violate Federal
securities laws or other applicable law (provided that the making of a payment
that would cause income taxes or penalties under the Code shall not be treated
as a violation of applicable law). The deferred amount shall become payable at
the earliest date at which the Employer reasonably anticipates that making the
payment will not cause such violation.

	14.	 	Liability of Employers, Transfers and Guarantees.

	 	(a)	 	In general. The provisions of this Section 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 solely liable for the payment of amounts due hereunder
to or on behalf of the Participants who are (or were) its employees.
	 
	 	(ii)	 	Notwithstanding the foregoing, if the benefits that 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)	 	Upon a transfer of employment, the Participant’s
Sub-Accounts shall be transferred from the prior Employer to the new
Employer and interest shall continue to be credited to the Sub-Accounts
following the transfer (to the extent otherwise required under the terms
of the Plan). Subject to Section 14(b)(ii)(2)(C), the last Employer of
the Participant shall be responsible for

14

 

processing the payment of the entire amount which is allocated to the
Participant’s Sub Accounts hereunder; and

	 	(2)	 	Notwithstanding the provisions of clause (1), (A)
each Employer shall be solely liable for the payment of the amounts
credited to a Participant’s Account which were earned by the Participant
while he was employed by that Employer; (B) each Employer (unless it is
insolvent) shall reimburse the last Employer for its allocable share of
the Participant’s distribution; (C) if any responsible Employer is
insolvent at the time of distribution, 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
payment date specified in Section 13(h)(v)); and (4) each Employer shall
(to the extent permitted by applicable law) receive an income tax
deduction for the Employer’s allocable share of the Participant’s
distribution.

	 	(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 benefits to
or on behalf of its employees, the Company (unless it is insolvent) shall guarantee and
be responsible for the payment thereof.

15. Approval by Stockholders

     This Plan shall be submitted for approval by the stockholders of NACCO Industries, Inc. If
such approval has not been obtained by July 1, 2008, all grants of Target Awards made on or after
January 1, 2008 shall be rescinded.

	 	 	 	 	 
	 	NACCO MATERIALS HANDLING GROUP, INC.

 	 
	Date: May 14, 2008       	By:  	/s/ Charles A. Bittenbender
 	 
	 	 	Title:  Assistant Secretary 	 
	 	 	 	 
	 

15

 

Appendix 1. Change in Control. 

Change in Control. The term “Change in Control” shall mean the occurrence of any of
the events listed in I or II, below; provided that such occurrence meets the requirements
of Treasury Regulation Section 1.409A-3(i)(5) (or any successor or replacement thereto) with
respect to a Participant :

	 	I. i.	 	Any “Person” (as such term is used in Sections 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), other than one or more Permitted Holders (as defined below), is or
becomes the “beneficial owner”(as defined in Rules 13d-3 and 13d-5 of the
Exchange Act), directly or indirectly, of more than 50% of the combined voting
power of the then outstanding voting securities of a Related Company (as
defined below) entitled to vote generally in the election of directors (the
“Outstanding Voting Securities”), other than any direct or indirect
acquisition, including but not limited to an acquisition by purchase,
distribution or otherwise, of voting securities by any Person pursuant to an
Excluded Business Combination (as defined below); or
	 
	 	ii.	 	The consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of
the assets of any Related Company or the acquisition of assets of another
corporation, or other transaction involving a Related Company (“Business
Combination”) excluding, however, such a Business Combination pursuant to
which (such a Business Combination, an “Excluded Business Combination”) the
individuals and entities who beneficially owned, directly or indirectly,
more than 50% of the combined voting power of any Related Company
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the combined voting power of the then
Outstanding Voting Securities of the entity resulting from such Business
Combination (including, without limitation, an entity that as a result of
such transaction owns any Related Company or all or substantially all of the
assets of any Related Company, either directly or through one or more
subsidiaries).
	 
	 	II. i.	 	Any “Person” (as such term is used in Sections 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), other than one or more Permitted Holders, is or becomes the “beneficial
owner”(as defined in Rules 13d-3 and 13d-5 of the Exchange Act), directly or
indirectly, of more than 50% of the combined voting power of the then
Outstanding Voting Securities of NACCO Industries, Inc. (“NACCO”), other than
any direct or indirect acquisition, including but not limited to an acquisition
by purchase, distribution or otherwise, of voting securities:

	 	(A)	 	directly from NACCO that is approved by a majority
of the Incumbent Directors (as defined below); or
	 
	 	(B)	 	by any Person pursuant to an Excluded NACCO
Business Combination (as defined below);

provided, that if at least a majority of the individuals who constitute
Incumbent Directors determine in good faith that a Person has become the
“beneficial owner”(as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of
more than 50% of the

16

 

combined voting power of the Outstanding Voting Securities of NACCO
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares so that such Person is the “beneficial owner”(as defined in
Rules 13d-3 and 13d-5 of the Exchange Act) of 50% or less of the combined
voting power of the Outstanding Voting Securities of NACCO, then no Change in
Control shall have occurred as a result of such Person’s acquisition; or

	 	ii.	 	a majority of the Board of Directors of NACCO ceases to
be comprised of Incumbent Directors; or
	 
	 	iii.	 	the consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of
the assets of NACCO or the acquisition of assets of another corporation, or
other transaction involving NACCO (“NACCO Business Combination”) excluding,
however, such a Business Combination pursuant to which both of the following
apply (such a Business Combination, an “Excluded NACCO Business
Combination”):

	 	(A)	 	the individuals and entities who beneficially
owned, directly or indirectly, NACCO immediately prior to such NACCO
Business Combination beneficially own, directly or indirectly, more than
50% of the combined voting power of the then Outstanding Voting
Securities of the entity resulting from such NACCO Business Combination
(including, without limitation, an entity that as a result of such
transaction owns NACCO or all or substantially all of the assets of
NACCO, either directly or through one or more subsidiaries); and
	 
	 	(B)	 	at the time of the execution of the initial
agreement, or of the action of the Board of Directors of NACCO, providing
for such NACCO Business Combination, at least a majority of the members of
the Board of Directors of NACCO were Incumbent Directors.

	 	 	 	III. Definitions. The following terms as used herein shall be
defined as follow:

	 	1.	 	“Incumbent Directors” means the individuals who,
as of December 31, 2007, are Directors of NACCO and any individual becoming
a Director subsequent to such date whose election, nomination for election
by NACCO’s stockholders, or appointment, was approved by a vote of at least
a majority of the then Incumbent Directors (either by a specific vote or by
approval of the proxy statement of NACCO in which such person is named as a
nominee for director, without objection to such nomination);
provided, however, that an individual shall not be an
Incumbent Director if such individual’s election or appointment to the Board
of Directors of NACCO occurs as a result of an actual or threatened election
contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than
the Board of Directors of NACCO.
	 
	 	2.	 	“Permitted Holders” shall mean, collectively,
(i) the parties to the Stockholders’ Agreement, dated as of March 15, 1990,
as amended from time to time, by and among National City Bank, (Cleveland,
Ohio), as depository, the Participating Stockholders (as defined therein)
and NACCO; provided, however, that for purposes of this definition only, the
definition of Participating Stockholders contained in the Stockholders’

17

 

Agreement shall be such definition in effect of the date of the Change in
Control, (ii) any direct or indirect subsidiary of NACCO and (iii) any
employee benefit plan (or related trust) sponsored or maintained by NACCO or
any direct or indirect subsidiary of NACCO.

	 	3.	 	“Related Company” means NMHG Holding Co. and its
successors (“NMHG”), any direct or indirect subsidiary of NMHG and any
entity that directly or indirectly controls NMHG.

18EX-10.6

Exhibit 10-6

DESCRIPTION OF 2007 COMPENSATION ARRANGEMENTS

WITH LUBIN, DELANO & COMPANY

     During 2007, Lexington Precision Corporation (the “Company”) compensated Michael A. Lubin, its
Chairman of the Board, and Warren Delano, its President, indirectly through payments to Lubin,
Delano & Company, an investment banking firm of which they are the only partners. These
compensation arrangements provided for payment to Lubin, Delano & Company of a basic fee of
$700,000, and provided for a possible incentive fee based upon attaining an operating profit target
for the Company and possible transaction fees as might be agreed upon by the Company and Lubin, Delano & Company in connection with acquisitions, divestitures, financings
and other similar transactions.

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