Filed by the Registrant
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Preliminary Proxy Statement | |
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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
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Definitive Proxy Statement | |
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Definitive Additional Materials | |
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Soliciting Material Under Rule 14a-12 |
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No fee required. |
(1) | Title of each class of securities to which transaction applies: | ||
(2) | Aggregate number of securities to which transaction applies: | ||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||
(4) | Proposed maximum aggregate value of transaction: | ||
(5) | Total fee paid: |
(1) | Amount Previously Paid: | ||
(2) | Form, Schedule or Registration Statement No.: | ||
(3) | Filing Party: | ||
(4) | Date Filed: |
(1) | To elect nine directors for the ensuing year; | |
(2) | To act on the proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code and Section 303A.08 of the New York Stock Exchanges listing standards, the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (Amended and Restated Effective February 1, 2010); | |
(3) | To act on the proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code, the NACCO Materials Handling Group Inc. Long-Term Incentive Compensation Plan (Effective January 1, 2010); | |
(4) | To act on the proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code, the Hamilton Beach Brands, Inc. Long-Term Incentive Compensation Plan (Effective January 1, 2010); | |
(5) | To act on the proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code, the NACCO Industries, Inc. Annual Incentive Compensation Plan (Effective January 1, 2010); | |
(6) | To act on the proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code, The North American Coal Corporation Annual Incentive Compensation Plan (Effective January 1, 2010); | |
(7) | To confirm the appointment of the independent registered public accounting firm of the Company for the current fiscal year; and | |
(8) | To transact such other business as may properly come before the meeting. |
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1. | Election of Directors |
Principal Occupation and Business |
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Experience and Other Directorships in |
Director |
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Name
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Age
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Public Companies During Last Five Years
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Since
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Owsley Brown II
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67 | Retired Chairman and Chief Executive Officer of Brown-Forman Corporation (a diversified producer and marketer of consumer products). From prior to 2005 to 2008, Director of Brown-Forman Corporation, and, from prior to 2005 to 2007, Chairman of Brown-Forman Corporation. From prior to 2005 to 2005, Chief Executive Officer of Brown-Forman Corporation. | 1993 | |||||||
Mr. Brown has extensive experience as chairman and chief executive officer of a diversified global producer and marketer of consumer products. From his years of experience as a member of senior management of a major publicly-traded corporation, he brings to our Board of Directors the insight that is required to address many of the operational and strategic issues that we face. He also has extensive knowledge and experience in the areas of corporate finance and general management, which have been of significant value to us. | ||||||||||
Dennis W. LaBarre
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67 | Partner in the law firm of Jones Day. | 1982 | |||||||
Mr. LaBarre is a lawyer with broad experience counseling boards and senior management of publicly-traded and private corporations regarding corporate governance, compliance and other domestic and international business and transactional issues. In addition, he has over 25 years experience as a member of senior management of a major international law firm. These experiences enable him to provide our Board of Directors with an expansive view of the legal and business issues pertinent to the Company, which is further enhanced by his extensive knowledge of the Company and its subsidiaries as a result of his many years of service on our Board of Directors and through his involvement with its committees. |
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Principal Occupation and Business |
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Experience and Other Directorships in |
Director |
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Name
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Age
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Public Companies During Last Five Years
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Since
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Richard de J. Osborne
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76 | Retired Chairman and Chief Executive Officer of ASARCO Incorporated (a leading producer of non-ferrous metals). Current non-executive Chairman of the Board of Directors of Datawatch Corp. and, from prior to 2005 to 2006, Director of Schering Plough Corp. | 1998 | |||||||
Mr. Osbornes experience as chairman and chief executive officer and chief financial officer of a leading producer of non-ferrous metals enables him to provide our Board of Directors with a wealth of experience in and understanding of the mining industry. From this experience, as well as his service on the boards of other publicly-traded corporations, Mr. Osborne offers our Board of Directors a comprehensive perspective for developing corporate strategies and managing risks of a major publicly-traded corporation. | ||||||||||
Alfred M. Rankin, Jr.
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68 | Chairman, President and Chief Executive Officer of the Company. Chairman of the Board of each of NACCO Materials Handling Group, Inc., The North American Coal Corporation, Hamilton Beach Brands, Inc. and The Kitchen Collection, Inc. (all wholly-owned subsidiaries of the Company). Also, Director of Goodrich Corporation and The Vanguard Group, and Chairman of the Board of Directors of the Federal Reserve Bank of Cleveland. | 1972 | |||||||
In over 37 years of service to the Company as a Director and over 20 years in senior management, Mr. Rankin has amassed extensive knowledge of all of our strategies and operations. In addition to his extensive knowledge of the Company, he also brings to our Board of Directors unique insight resulting from his service on the boards of other publicly-traded corporations and the Federal Reserve Bank of Cleveland. Additionally, through his dedicated service to many of Clevelands cultural institutions, he provides a valuable link between our Board of Directors, the Company and the community surrounding our corporate headquarters. | ||||||||||
Michael E. Shannon
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73 | President, MEShannon & Associates, Inc. (a private firm specializing in corporate finance and investments). Retired Chairman, Chief Financial and Administrative Officer, Ecolab, Inc. (a specialty chemicals company). Also, Director of CenterPoint Energy, Inc. from prior to 2005. From prior to 2005 to 2007, Director of Apogee Enterprises, Inc. and Director of Clorox Company. | 2002 | |||||||
Mr. Shannons experience in finance and general management, including his service as chairman and chief financial and administrative officer of a major publicly-traded corporation, enables him to make significant contributions to our Board of Directors, particularly in his capacity as the Chairman of our Audit Review Committee and as our Audit Review Committee financial expert. Through his past and current service on the boards of other publicly-traded corporations, he has a broad and deep understanding of the financial reporting system, the challenges involved in developing and maintaining effective internal controls and the isolation of areas of focus for evaluating risks to the Company. |
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Principal Occupation and Business |
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Experience and Other Directorships in |
Director |
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Name
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Age
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Public Companies During Last Five Years
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Since
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Britton T. Taplin
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53 | Self-employed (personal investments). Former Partner of Western Skies Group, Inc. (a privately-held real estate developer) from prior to 2005 to 2008. From prior to 2005 to 2008, worked in commercial real-estate development business. | 1992 | |||||||
Mr. Taplin is a grandson of the founder of the Company and brings the perspective of a long-term stockholder to our Board of Directors. | ||||||||||
David F. Taplin
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60 | Self-employed (tree farming). | 1997 | |||||||
Mr. Taplin is a grandson of the founder of the Company and brings the perspective of a long-term stockholder to our Board of Directors. | ||||||||||
John F. Turben
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74 | Chairman of Kirtland Capital Partners (a private equity company). | 1997 | |||||||
Mr. Turben brings to our Board of Directors the entrepreneurial perspective of founder and operator of a successful company. Mr. Turben has acquired extensive experience handling transactional and investment issues through his over 20 years of involvement in operating a private equity firm. Through this experience as well as his service on other boards of publicly-traded corporations and private institutions, he provides important insight and assistance to our Board of Directors in the areas of finance, investments and corporate governance, which enable him to be a significant contributor to our Board of Directors. | ||||||||||
Eugene Wong
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75 | Professor Emeritus of the University of California at Berkeley. | 2005 | |||||||
Dr. Wong has broad experience in engineering, particularly in the areas of electrical engineering and software design, which are of significant value to the oversight of our information technology infrastructure, product development and general engineering. He has served as technical consultant to a number of leading and developing nations, which enables him to provide an up-to-date international perspective to our Board of Directors. Dr. Wong has also co-founded and managed several corporations, and has served as a chief executive officer of one, enabling him to contribute the unique administrative and management perspective of a corporate chief executive officer. |
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Sole |
Shared |
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Voting and |
Voting or |
Percent |
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Title of |
Investment |
Investment |
Aggregate |
of Class |
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Name
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Class | Power | Power | Amount | (1) | |||||||||||||||
FMR LLC(2)
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Class A | | 869,290 | (2) | 869,290 | (2) | 12.92 | % | ||||||||||||
82 Devonshire Street
Boston, MA 02109 |
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Dimensional Fund Advisors LP(3)
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Class A | 491,495 | (3) | | 491,145 | (3) | 7.30 | % | ||||||||||||
1299 Ocean Avenue
Santa Monica, CA 90401 |
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Beatrice B. Taplin
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Class A | 383,437 | | 383,437 | 5.70 | % | ||||||||||||||
Suite 300
5875 Landerbrook Drive Cleveland, OH 44124-4069 |
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Rankin Associates II, L.P., et al.(4)
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Class A | (4 | ) | (4 | ) | 338,295 | (4) | 5.03 | % | |||||||||||
Suite 300
5875 Landerbrook Drive Cleveland, OH 44124-4069 |
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Owsley Brown II(5)
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Class A | 5,721 | 1,000 | (6) | 6,721 | (6) | | |||||||||||||
Dennis W. LaBarre(5)
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Class A | 6,923 | | 6,923 | | |||||||||||||||
Richard de J. Osborne(5)
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Class A | 4,159 | | 4,159 | | |||||||||||||||
Alfred M. Rankin, Jr.
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Class A | 166,070 | 584,800 | (7) | 750,870 | (7) | 11.16 | % | ||||||||||||
Ian M. Ross(5)
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Class A | 4,780 | | 4,780 | | |||||||||||||||
Michael E. Shannon(5)
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Class A | 4,221 | | 4,221 | | |||||||||||||||
Britton T. Taplin(5)
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Class A | 37,305 | 1,055 | (8) | 38,360 | (8) | 0.57 | % | ||||||||||||
David F. Taplin(5)
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Class A | 16,358 | 83,128 | (9) | 99,486 | (9) | 1.48 | % | ||||||||||||
John F. Turben(5)
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Class A | 8,024 | | 8,024 | 0.12 | % | ||||||||||||||
Eugene Wong(5)
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Class A | 3,274 | | 3,274 | | |||||||||||||||
Kenneth C. Schilling
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Class A | 8,272 | | 8,272 | | |||||||||||||||
Robert L. Benson
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Class A | | | | | |||||||||||||||
Michael J. Morecroft
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Class A | | | | | |||||||||||||||
Douglas L. Darby
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Class A | | | | | |||||||||||||||
All executive officers and directors as a group (42 persons)
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Class A | 311,459 | 670,683 | (10) | 982,142 | (10) | 14.59 | % |
(1) | Less than 0.10%, except as otherwise indicated. | |
(2) | A Schedule 13G/A filed with the SEC with respect to Class A Common on February 16, 2010 reported that Fidelity Management & Research Company, which we refer to as Fidelity, a wholly owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of the shares as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940, which we refer to as the Funds, including Fidelity Low Priced Stock Fund. Edward C. Johnson 3d and FMR |
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LLC, through their control of Fidelity and the Funds, each has sole power to dispose of the shares owned by the Funds. Members of the Edward C. Johnson 3d family own approximately 49% of the voting power of FMR LLC. Mr. Johnson is the Chairman of FMR LLC. | ||
(3) | A Schedule 13G/A filed with the SEC with respect to Class A Common on February 8, 2010 reported that Dimensional Fund Advisors LP, which we refer to as Dimensional, may be deemed to beneficially own the shares of Class A Common reported above as a result of being an investment adviser registered under Section 203 of the Investment Advisers Act of 1940 that furnishes investment advice to four investment companies registered under the Investment Company Act of 1940 and serving as an investment manager to certain other commingled group trusts and separate accounts, which we refer to collectively as the Dimensional Funds, which own the shares of Class A Common. In its role as investment adviser or manager, Dimensional possesses investment and/or voting power over the shares of Class A Common owned by the Dimensional Funds. However, all shares of Class A Common reported above are owned by the Dimensional Funds. Dimensional disclaims beneficial ownership of all such shares. | |
(4) | A Schedule 13D, which was filed with the SEC with respect to Class A Common and most recently amended on February 16, 2010, reported that Rankin Associates II, L.P., which we refer to as Rankin II, the individuals and entities holding limited partnership interests in Rankin II and Rankin Management, Inc., which we refer to as RMI, the general partner of Rankin II, may be deemed to be a group as defined under the Exchange Act and as a result may be deemed as a group to beneficially own 338,295 shares of Class A Common held by Rankin II. Although Rankin II holds the 338,295 shares of Class A Common, it does not have any power to vote or dispose of such shares of Class A Common. RMI has the sole power to vote such shares and shares the power to dispose of such shares with the other individuals and entities holding limited partnership interests in Rankin II. RMI exercises such powers by action of its board of directors, which acts by majority vote and consists of Alfred M. Rankin, Jr., Thomas T. Rankin, Claiborne R. Rankin and Roger F. Rankin, the individual trusts of whom are the stockholders of RMI. Under the terms of the Limited Partnership Agreement of Rankin II, Rankin II may not dispose of Class A Common without the consent of RMI and the approval of the holders of more than 75% of all of the partnership interests of Rankin II. | |
(5) | Pursuant to our Non-Employee Directors Equity Compensation Plan, which we refer to as the Non-Employee Directors Plan, each non-employee director has the right to acquire additional shares of Class A Common within 60 days after March 1, 2010. The shares each non-employee director has the right to receive are not included in the table because the actual number of additional shares will be determined on April 1, 2010 by taking the amount of such directors quarterly retainer required to be paid in shares of Class A Common plus any voluntary portion of such directors quarterly retainer, if so elected, divided by the average of the closing price per share of Class A Common on the Friday (or if Friday is not a trading day, the last trading day before such Friday) for each week of the calendar quarter ending on March 31, 2010. | |
(6) | Owsley Brown II is deemed to share with his spouse voting and investment power over 1,000 shares of Class A Common held by Mr. Browns spouse; however, Mr. Brown disclaims beneficial ownership of such shares. | |
(7) | Alfred M. Rankin, Jr. may be deemed to be a member of the group described in note (4) above as a result of holding through his trust, of which he is trustee, partnership interests in Rankin II and therefore may be deemed to beneficially own, and share the power to dispose of, 338,295 shares of Class A Common held by Rankin II. In addition, Mr. Rankin may be deemed to be a member of a group, as defined under the Exchange Act, as a result of holding through his trust, of which he is trustee, partnership interests in Rankin Associates IV, L.P., which we refer to as Rankin IV. As a result, the group consisting of Mr. Rankin, the other general and limited partners of Rankin IV and Rankin IV may be deemed to beneficially own, and shares voting and investment power over 105,272 shares of Class A Common held by Rankin IV. Mr. Rankin disclaims beneficial ownership of 553,029 shares of Class A Common held by (a) members of Mr. Rankins family, (b) charitable trusts, (c) trusts for the benefit of members of Mr. Rankins family and (d) Rankin II and Rankin IV to the extent in excess of his pecuniary interest in each such entity. |
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(8) | Britton T. Taplin is deemed to share with his spouse voting and investment power over 1,055 shares of Class A Common held by Mr. Taplins spouse; however, Mr. Taplin disclaims beneficial ownership of such shares. Mr. Taplin has pledged 2,169 shares of Class A Common. | |
(9) | David F. Taplin is deemed to share with his step-sister voting and investment power over 83,128 shares of Class A Common as a result of Mr. Taplin being a co-trustee of a trust for the benefit of his step-mother; however, Mr. Taplin has disclaimed beneficial ownership of such shares. | |
(10) | The aggregate amount of Class A Common beneficially owned by all executive officers and directors and the aggregate amount of Class A Common beneficially owned by all executive officers and directors as a group for which they have shared voting or investment power include the shares of Class A Common of which Mr. Brown has disclaimed beneficial ownership in note (6) above, Mr. Rankin has disclaimed beneficial ownership in note (7) above, Mr. B. Taplin has disclaimed beneficial ownership in note (8) above and Mr. D. Taplin has disclaimed beneficial ownership in (9) above. As described in note (5) above, the aggregate amount of Class A Common beneficially owned by all executive officers and directors as a group as set forth in the table above does not include shares that the non-employee directors have the right to acquire within 60 days after March 1, 2010 pursuant to the Non-Employee Directors Plan. |
Sole |
Shared |
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Voting and |
Voting or |
Percent |
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Title of |
Investment |
Investment |
Aggregate |
of Class |
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Name
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Class | Power | Power | Amount | (1) | |||||||||||||||
Clara Taplin Rankin, et al. (2)
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Class B | (2) | (2) | 1,542,757 | (2) | 96.50 | % | |||||||||||||
c/o PNC
Bank, N.A.
3550 Lander Road Pepper Pike, OH 44124 |
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Rankin Associates I, L.P., et al. (3)
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Class B | (3) | (3) | 472,371 | (3) | 29.55 | % | |||||||||||||
Suite 300
5875 Landerbrook Drive Cleveland, OH 44124-4069 |
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Beatrice B. Taplin(4)
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Class B | 337,310 | (4) | | 337,310 | (4) | 21.10 | % | ||||||||||||
Suite 300
5875 Landerbrook Drive Cleveland, OH 44124-4069 |
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Rankin Associates IV, L.P., et al. (5)
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Class B | (5) | (5) | 294,728 | (5) | 18.44 | % | |||||||||||||
Suite 300
5875 Landerbrook Drive Cleveland, OH 44124-4069 |
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Owsley Brown II
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Class B | | | | | |||||||||||||||
Dennis W. LaBarre
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Class B | 100 | | 100 | | |||||||||||||||
Richard de J. Osborne
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Class B | | | | | |||||||||||||||
Alfred M. Rankin, Jr.(6)
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Class B | 63,052 | (6) | 767,099 | (6) | 830,151 | (6) | 51.93 | % | |||||||||||
Ian M. Ross
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Class B | | | | | |||||||||||||||
Michael E. Shannon
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Class B | | | | | |||||||||||||||
Britton T. Taplin
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Class B | | | | | |||||||||||||||
David F. Taplin(7)
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Class B | 15,883 | (7) | | 15,883 | (7) | 0.99 | % | ||||||||||||
John F. Turben
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Class B | | | | | |||||||||||||||
Eugene Wong
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Class B | | | | | |||||||||||||||
Kenneth C. Schilling
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Class B | | | | | |||||||||||||||
Robert L. Benson
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Class B | | | | | |||||||||||||||
Michael J. Morecroft
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Class B | | | | | |||||||||||||||
Douglas L. Darby
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Class B | | | | | |||||||||||||||
All executive officers and directors as a group (42 persons)
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Class B | 80,910 | (8) | 767,099 | (8) | 848,009 | (8) | 53.05 | % |
(1) | Less than 0.10%, except as otherwise indicated. |
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(2) | A Schedule 13D, which was filed with the SEC with respect to Class B Common and most recently amended on February 16, 2010, which we refer to as the Stockholders 13D, reported that, except for the Company and National City Bank, as depository, the signatories to the stockholders agreement, dated as of March 15, 1990, as amended, which we refer to as the stockholders agreement, together in certain cases with trusts and custodianships, which we refer to collectively as the Signatories, may be deemed to be a group as defined under the Exchange Act, and therefore may be deemed as a group to beneficially own all of the Class B Common subject to the stockholders agreement, which is an aggregate of 1,542,757 shares. The stockholders agreement requires that each Signatory, prior to any conversion of such Signatorys shares of Class B Common into Class A Common or prior to any sale or transfer of Class B Common to any permitted transferee (under the terms of the Class B Common) who has not become a Signatory, offer such shares to all of the other Signatories on a pro-rata basis. A Signatory may sell or transfer all shares not purchased under the right of first refusal as long as they first are converted into Class A Common prior to their sale or transfer. The shares of Class B Common subject to the stockholders agreement constituted 96.50% of the Class B Common outstanding on March 1, 2010, or 67.91% of the combined voting power of all Class A Common and Class B Common outstanding on such date. Certain Signatories own Class A Common, which is not subject to the stockholders agreement. Under the stockholders agreement, the Company may, but is not obligated to, buy any of the shares of Class B Common not purchased by the Signatories following the trigger of the right of first refusal. The stockholders agreement does not restrict in any respect how a Signatory may vote such Signatorys shares of Class B Common. | |
(3) | A Schedule 13D, which was filed with the SEC with respect to Class B Common and most recently amended on February 16, 2010, reported that Rankin Associates I, L.P., which we refer to as Rankin I, and the trusts holding limited partnership interests in Rankin I may be deemed to be a group as defined under the Exchange Act and as a result may be deemed as a group to beneficially own 472,371 shares of Class B Common held by Rankin I. Although Rankin I holds the 472,371 shares of Class B Common, it does not have any voting or investment power over such shares of Class B Common. Alfred M. Rankin, Jr., Thomas T. Rankin, Claiborne R. Rankin and Roger F. Rankin, as trustees and primary beneficiaries of trusts acting as general partners of Rankin I, share the power to vote such shares of Class B Common. Voting actions are determined by the general partners owning at least a majority of the general partnership interests of Rankin I. Each of the trusts holding general and limited partnership interests in Rankin I share with each other the power to dispose of such shares. Under the terms of the Second Amended and Restated Limited Partnership Agreement of Rankin I, Rankin I may not dispose of Class B Common or convert Class B Common into Class A Common without the consent of the general partners owning more than 75% of the general partnership interests of Rankin I and the consent of the holders of more than 75% of all of the partnership interests of Rankin I. The Stockholders 13D reported that the Class B Common beneficially owned by Rankin I and each of the trusts holding limited partnership interests in Rankin I is also subject to the stockholders agreement. | |
(4) | Beatrice B. Taplin has the sole voting and investment power over 337,310 shares of Class B Common held in trusts. The Stockholders 13D reported that the Class B Common beneficially owned by Mrs. Taplin is subject to the stockholders agreement. | |
(5) | A Schedule 13D, which was filed with the SEC with respect to Class B Common and most recently amended on February 16, 2010, reported that the trusts holding limited partnership interests in Rankin IV may be deemed to be a group as defined under the Exchange Act and as a result may be deemed as a group to beneficially own 294,728 shares of Class B Common held by Rankin IV. Although Rankin IV holds the 294,728 shares of Class B Common, it does not have any voting or investment power over such shares of Class B Common. Alfred M. Rankin, Jr., Thomas T. Rankin, Claiborne R. Rankin and Roger F. Rankin, as trustees and primary beneficiaries of trusts acting as general partners of Rankin IV, share the power to vote such shares of Class B Common. Voting actions are determined by the general partners owning at least a majority of the general partnership interests of Rankin IV. Each of the trusts holding general and limited partnership interests in Rankin IV share with each other the power to dispose of such |
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shares. Under the terms of the Amended and Restated Limited Partnership Agreement of Rankin IV, Rankin IV may not dispose of Class B Common or convert Class B Common into Class A Common without the consent of the general partners owning more than 75% of the general partnership interests of Rankin IV and the consent of the holders of more than 75% of all of the partnership interests of Rankin IV. The Stockholders 13D reported that the Class B Common beneficially owned by Rankin IV and each of the trusts holding limited partnership interests in Rankin IV is also subject to the stockholders agreement. | ||
(6) | Alfred M. Rankin, Jr. may be deemed to be a member of the group described in note (3) above as a result of holding through his trust, of which he is trustee, partnership interests in Rankin I and as a result may be deemed to beneficially own, and share voting and investment power over 472,371 shares of Class B Common held by Rankin I. In addition, Mr. Rankin may be deemed to be a member of the group described in note (5) above as a result of holding through his trust, of which he is trustee, partnership interests in Rankin IV and as a result may be deemed to beneficially own, and share voting and investment power over 294,728 shares of Class B Common held by Rankin IV. Mr. Rankin disclaims beneficial ownership of 551,172 shares of Class B Common held by (a) a trust for the benefit of a member of Mr. Rankins family and (b) Rankin I and Rankin IV to the extent in excess of his pecuniary interest in each such entity. The Stockholders 13D reported that the Class B Common beneficially owned by Mr. Rankin is subject to the stockholders agreement. | |
(7) | The Stockholders 13D reported that the Class B Common beneficially owned by David F. Taplin is subject to the stockholders agreement. | |
(8) | The aggregate amount of Class B Common beneficially owned by all executive officers and directors as a group and the aggregate amount of Class B Common beneficially owned by all executive officers and directors as a group for which they have shared voting or investment power include the shares of Class B Common of which Mr. Rankin has disclaimed beneficial ownership in note (6) above. |
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Audit Review Committee
|
Compensation Committee
|
|
Richard de J. Osborne
|
Owsley Brown II | |
Michael E. Shannon (Chairman)
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Richard de J. Osborne (Chairman) | |
John F. Turben
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Ian M. Ross | |
Eugene Wong
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Finance Committee
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Executive Committee | |
Dennis W. LaBarre
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Owsley Brown II | |
Alfred M. Rankin, Jr.
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Dennis W. LaBarre | |
Michael E. Shannon
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Richard de J. Osborne | |
Britton T. Taplin
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Alfred M. Rankin, Jr. (Chairman) | |
John F. Turben (Chairman)
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Michael E. Shannon | |
John F. Turben |
| the quality and integrity of our financial statements; | |
| our compliance with legal and regulatory requirements; | |
| the adequacy of our internal controls; | |
| our guidelines and policies to monitor and control our major financial risk exposures; | |
| the qualifications, independence, selection and retention of the independent registered public accounting firm; | |
| the performance of our internal audit function and independent registered public accounting firm; | |
| assisting our Board of Directors and us in interpreting and applying our Corporate Compliance Program and other issues related to Company and employee ethics; and | |
| preparing the Annual Report of the Audit Review Committee to be included in our Proxy Statement. |
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| the review and approval of corporate goals and objectives relevant to compensation for the Chief Executive Officer and other executive officers; | |
| the evaluation of the performance of the Chief Executive Officer and other executive officers in light of these goals and objectives; | |
| the determination and approval of Chief Executive Officer and other executive officer compensation levels; | |
| consideration of whether the risks arising from our employee compensation policies and practices are reasonably likely to have a material adverse effect on us; | |
| making of recommendations to our Board of Directors, where appropriate or required, and the taking of other actions with respect to all other compensation matters, including incentive compensation plans and equity-based plans; and | |
| the review and approval of the Compensation Discussion and Analysis and the preparation of the annual Compensation Committee Report to be included in our Proxy Statement. |
| the review and making of recommendations to our Board of Directors of the criteria for membership on our Board of Directors; | |
| the review and making of recommendations to our Board of Directors of the optimum number and qualifications of directors believed to be desirable; | |
| the establishment and monitoring of a system to receive suggestions for nominees to directorships of the Company; and | |
| the identification and making of recommendations to our Board of Directors of specific candidates for membership on our Board of Directors. |
12
13
| the nature of the related persons interest in the transaction; | |
| the material terms of the transaction, including, without limitation, the amount and type of transaction; | |
| the importance of the transaction to the related person; | |
| the importance of the transaction to us; | |
| whether the transaction would impair the judgment of a director or executive officer to act in our best interest; and | |
| any other matters the Audit Review Committee deems appropriate. |
1. | The name and address of the stockholder recommending the candidate for consideration as such information appears on our records, the telephone number where such stockholder can be reached during normal business hours, the number of shares of Class A Common and Class B Common owned by such stockholder and the length of time such shares have been owned by the stockholder; if such person is not a stockholder of record or if such shares are owned by an entity, reasonable evidence of such persons beneficial ownership of such shares or such persons authority to act on behalf of such entity; | |
2. | Complete information as to the identity and qualifications of the proposed nominee, including the full legal name, age, business and residence addresses and telephone numbers and other contact information, and the principal occupation and employment of the candidate recommended for consideration, including his or her occupation for at least the past five years, with a reasonably detailed description of the background, education, professional affiliations and business and other relevant experience (including directorships, employments and civic activities) and qualifications of the candidate; | |
3. | The reasons why, in the opinion of the recommending stockholder, the proposed nominee is qualified and suited to be one of our directors; | |
4. | The disclosure of any relationship of the candidate being recommended has with us or any of our subsidiaries or affiliates, whether direct or indirect; |
14
5. | A description of all relationships, arrangements and understandings between the proposing stockholder and the candidate and any other person(s) (naming such person(s)) pursuant to which the candidate is being proposed or would serve as a director, if elected; and | |
6. | A written acknowledgement by the candidate being recommended that he or she has consented to being considered as a candidate, has consented to our undertaking of an investigation into that individuals background, education, experience and other qualifications and, in the event that the Nominating and Corporate Governance Committee desires to do so, has consented to be named in our proxy statement and to serve as one of our directors, if elected. |
15
| focus the Board of Directors on the most significant strategic goals and risks of our businesses; | |
| utilize the individual qualifications, skills and experience of the other members of the Board of Directors in order to maximize their contributions to the Board of Directors; | |
| ensure that each other member of the Board of Directors has sufficient knowledge and understanding of our businesses to enable him to make informed judgments; | |
| provide a seamless flow of information from our subsidiaries to the Board of Directors; and | |
| facilitate the flow of information between the Board of Directors and management of the Company and its subsidiaries. |
16
17
Fees Earned or |
Stock |
All Other |
||||||||||||||
Paid in Cash(1) |
Awards(2) |
Compensation(3) |
Total |
|||||||||||||
Name
|
($) | ($) | ($) | ($) | ||||||||||||
Owsley Brown II
|
$ | 48,539 | $ | 27,661 | $ | 6,740 | $ | 82,940 | ||||||||
Dennis W. LaBarre
|
$ | 66,914 | (4) | $ | 27,661 | $ | 6,740 | $ | 101,315 | |||||||
Richard de J. Osborne
|
$ | 70,514 | (4) | $ | 27,661 | $ | 6,608 | $ | 104,783 | |||||||
Ian M. Ross(5)
|
$ | 46,739 | $ | 27,661 | $ | 6,652 | $ | 81,052 | ||||||||
Michael E. Shannon
|
$ | 77,964 | (4) | $ | 27,661 | $ | 6,710 | $ | 112,335 | |||||||
Britton T. Taplin
|
$ | 49,439 | $ | 27,661 | $ | 4,740 | $ | 81,840 | ||||||||
David F. Taplin
|
$ | 45,839 | $ | 27,661 | $ | 6,653 | $ | 80,153 | ||||||||
John F. Turben
|
$ | 76,039 | (4) | $ | 27,661 | $ | 6,710 | $ | 110,410 | |||||||
Eugene Wong
|
$ | 46,739 | (4) | $ | 27,661 | $ | 4,720 | $ | 79,120 |
(1) | Amounts in this column reflect the annual retainers and other fees paid to the directors. They also include payment for certain fractional shares of Class A Common that were earned and cashed out in 2009 under the Non-Employee Directors Plan. | |
(2) | Under the Non-Employee Directors Plan, as described below, the directors are required to receive a portion of their annual retainer in shares of Class A Common, which we refer to as the Mandatory Shares, and are permitted to elect to receive all or any portion of the remainder of the retainer and all fees in the form of shares of Class A Common, which we refer to as the Voluntary Shares. Amounts in this column reflect the aggregate grant date fair value of the Mandatory Shares that were granted to directors under the Non-Employee Directors Plan, determined pursuant to FASB ASC Topic 718. See Note 2 of the consolidated financial statements in the Companys Annual Report on Form 10-K for the year ended December 31, 2009 for more information regarding the accounting treatment of our equity awards. | |
(3) | The amount listed includes $1,505 in Company-paid premium payments for life insurance for the benefit of the directors. The amount listed also includes other Company-paid premium payments for accidental death and dismemberment insurance for the director and his spouse and personal excess liability insurance for the director and members of his immediate family. The amount listed also includes charitable contributions made in our name on behalf of the director and his spouse under our matching charitable gift program in the amount of $2,000 for Britton T. Taplin and Eugene Wong and $4,000 for each other director. | |
(4) | The amount listed includes the amount the director elected to receive in the form of Voluntary Shares rather than in cash. The following directors voluntarily elected to receive the following portion of their cash fees and retainers in the form of Voluntary Shares: $22,500 for Dennis W. LaBarre, $4,500 for Richard de J. Osborne, $13,500 for Michael E. Shannon, $4,500 for John F. Turben and $27,000 for Eugene Wong. | |
(5) | Ian M. Ross will not stand for reelection in 2010 and as a result, will cease to be a director effective May 12, 2010. |
18
| a retainer of $49,500 ($27,000 of which is required to be paid in the form of shares of Class A Common, as described below); | |
| attendance fees of $900 for each meeting attended (including telephonic meetings) of our Board of Directors or a subsidiary board of directors, but not exceeding $1,800 per day; | |
| attendance fees of $900 for each meeting attended (including telephonic meetings) of a committee of our Board of Directors on which the director served or a committee of a subsidiarys board of directors on which the Director served; | |
| a retainer of $4,500 for each committee of our Board of Directors on which the director served (other than the Executive Committee); | |
| an additional retainer of $4,500 for each committee of our Board of Directors on which the director served as chairman (other than the Audit Review Committee); and | |
| an additional retainer of $9,000 for the chairman of the Audit Review Committee of our Board of Directors. |
| by will or the laws of descent and distribution; | |
| pursuant to a qualifying domestic relations order; or | |
| to a trust for the benefit of the director or his spouse, children or grandchildren. |
| the date which is ten years after the last day of the calendar quarter for which such shares were earned; | |
| the date of the death or permanent disability of the director; | |
| five years (or earlier with the approval of our Board of Directors) from the date of the retirement of the director from our Board of Directors; or | |
| the date that a director is both retired from our Board of Directors and has reached 70 years of age. |
19
| review and approval of corporate goals and objectives relevant to compensation for the Chief Executive Officer and other executive officers; | |
| evaluation of the performance of the Chief Executive Officer and other executive officers in light of these performance goals and objectives; | |
| determination and approval of the compensation levels of the Chief Executive Officer and other executive officers based on this evaluation; | |
| consideration of whether the risks arising from the Companys employee compensation policies and practices are reasonably likely to have a material adverse effect on the Company; | |
| making recommendations to our Board of Directors, where appropriate or required, with respect to non-equity-based compensation matters; and | |
| taking other actions with respect to all other compensation matters, including equity-based and other incentive compensation plans. |
20
| Hay point levels, salary midpoints and incentive targets for all new senior management positions and/or changes to current senior management positions; | |
| 2009 salary midpoints, short-term and long-term incentive compensation targets (calculated as a percentage of salary midpoint) and target total compensation for all senior management positions; and | |
| 2009 salary midpoints and/or range movement for all other employee positions. |
Name
|
Title(s)
|
Employed By | ||
Alfred M. Rankin, Jr.
|
Chairman, President and Chief Executive Officer NACCO | NACCO | ||
Kenneth C. Schilling
|
Vice President and Controller NACCO Vice President and Chief Financial Officer NMHG |
NACCO | ||
Robert L. Benson
|
President and Chief Executive Officer NA Coal | NA Coal | ||
Michael J. Morecroft
|
President and Chief Executive Officer HBB Consultant NACCO |
HBB | ||
Douglas L. Darby
|
Vice President, Southern Operations NA Coal | NA Coal |
21
Cash in Lieu of |
Short-Term Plan |
Long-Term Plan |
Target Total |
|||||||||||||||||||||||||||||||||
Salary Midpoint |
Perquisites |
Target |
Target |
Compensation |
||||||||||||||||||||||||||||||||
Named Executive Officer
|
($)/(%) | ($)/(%) | ($)/(%) | ($)/(%) | ($)/(100%) | |||||||||||||||||||||||||||||||
Alfred M. Rankin, Jr.
|
$ | 913,800 | (23%) | $ | 109,656 | (3%) | $ | 822,420 | (20%) | $ | 2,154,284 | (54%) | (1) | $ | 4,000,160 | |||||||||||||||||||||
Kenneth C. Schilling
|
$ | 293,600 | (50%) | $ | 23,488 | (4%) | $ | 117,440 | (20%) | $ | 151,938 | (26%) | (1) | $ | 586,466 | |||||||||||||||||||||
Robert L. Benson
|
$ | 417,200 | (41%) | $ | 41,720 | (4%) | $ | 229,460 | (22%) | $ | 333,760 | (33%) | $ | 1,022,140 | ||||||||||||||||||||||
Michael J. Morecroft
|
$ | 533,500 | (36%) | $ | 53,352 | (4%) | $ | 320,100 | (22%) | $ | 560,175 | (38%) | $ | 1,467,127 | ||||||||||||||||||||||
Douglas L. Darby
|
$ | 246,800 | (53%) | $ | 20,784 | (4%) | $ | 98,720 | (21.5%) | $ | 98,720 | (21.5%) | $ | 465,024 |
(1) | The amounts include the 15% increase from the Hay-recommended long-term plan target awards that the Compensation Committee applies each year to account for the immediately taxable nature of the NACCO Long-Term Plan awards. See Long-Term Incentive Compensation NACCO Long-Term Incentive Compensation. |
| Messrs. Rankins and Schillings base salaries were reduced by 10% effective February 1, 2009; | |
| the short-term plan and long-term plan target awards for all NACCO employees, including Messrs. Rankin and Schilling, were reduced to 25% of the Hay-recommended target award amounts. See Short-Term Incentive Compensation NACCO Short-Term Incentive Compensation and Long-Term Incentive Compensation NACCO Long-Term Incentive Compensation; | |
| Dr. Morecrofts base salary was frozen from January 1, 2009 through June 30, 2009 and then increased by 2.5% as of July 1, 2009; and | |
| the incentive compensation plans at HBB were suspended for 2009 for all employees, including Dr. Morecroft. |
Base Salary and |
||||||||||||||||||||||||||||
Cash in Lieu of |
Short-Term Plan |
Long-Term Plan |
Target Total |
|||||||||||||||||||||||||
Perquisites |
Target |
Target |
Compensation |
|||||||||||||||||||||||||
Named Executive Officer
|
($)/(%) | ($)/(%) | ($)/(%)) | ($)/(100%) | ||||||||||||||||||||||||
Alfred M. Rankin, Jr.
|
$ | 1,138,798 | (60%) | $ | 205,605 | (11%) | $ | 538,571 | (29%) | (1) | $ | 1,882,973 | ||||||||||||||||
Kenneth C. Schilling
|
$ | 265,904 | (80%) | $ | 29,360 | (9%) | $ | 37,985 | (11%) | (1) | $ | 333,249 | ||||||||||||||||
Robert L. Benson
|
$ | 411,320 | (42%) | $ | 229,460 | (24%) | $ | 333,760 | (34%) | $ | 974,540 | |||||||||||||||||
Michael J. Morecroft
|
$ | 584,196 | (100%) | $ | 0 | (0%) | $ | 0 | (0%) | $ | 584,196 | |||||||||||||||||
Douglas L. Darby
|
$ | 240,597 | (55%) | $ | 98,720 | (22.5%) | $ | 98,720 | (22.5%) | $ | 438,037 |
(1) | The amounts include the 15% increase from the Hay-recommended long-term target awards that the Compensation Committee applies each year to account for the immediately taxable nature of the NACCO long-term plan awards. See Long-Term Incentive Compensation NACCO Long-Term Incentive Compensation. |
22
23
| base salary; | |
| cash in lieu of perquisites; | |
| short-term incentives; and | |
| long-term incentives. |
| the use of a broad-based survey reduces volatility and lessens the impact of cyclical upswings or downturns in any one industry that could otherwise skew the survey results in any particular year. | |
| due to the unique nature of the Companys holding group structure, this survey provides internal consistency in compensation among all of the Companys subsidiaries, regardless of industry. |
24
| Messrs. Rankins and Schillings base salaries were reduced by 10% effective February 1, 2009; and | |
| Dr. Morecrofts base salary was frozen from January 1, 2009 through June 30, 2009 and then increased by 2.5% as of July 1, 2009. |
Salary Range |
||||||||||||||||
(in Comparison to |
||||||||||||||||
Salary Midpoint) |
Base Salary |
|||||||||||||||
Salary Midpoint |
Determined by the |
For 2009 and as a |
Change |
|||||||||||||
Determined by the |
Compensation |
Percentage of |
Compared to |
|||||||||||||
Hay Group |
Committee |
Salary Midpoint |
2008 Base Salary |
|||||||||||||
Named Executive Officer
|
($) | (%) | ($)(%) | (%) | ||||||||||||
Alfred M. Rankin, Jr.
|
$ | 913,800 | 80% - 130% | $ | 1,029,142 (126 | %) | −9.2 | % | ||||||||
Kenneth C. Schilling(1)
|
$ | 293,600 | 80% - 120% | $ | 242,416 (82.5 | %) | −5.3 | % | ||||||||
Robert L. Benson
|
$ | 417,200 | 80% - 120% | $ | 369,600 (88.6 | %) | 5.7 | % | ||||||||
Michael J. Morecroft
|
$ | 533,500 | 80% - 120% | $ | 530,844 (99.5 | %) | 1.25 | % | ||||||||
Douglas L. Darby(2)
|
$ | 246,800 | 80% - 120% | $ | 219,813 (89.1 | %) | 14.0 | % |
(1) | Mr. Schilling received a promotion and corresponding Hay point adjustment and salary midpoint increase effective January 1, 2009. The 10% salary reduction that became effective February 1, 2009 was based on his salary in effect on January 1, 2009, resulting in a 5.3% reduction from his 2008 salary. | |
(2) | Mr. Darby received a salary grade adjustment effective January 1, 2009, which increased his salary midpoint and base salary for 2009. |
25
Percentage of Salary |
Amount of 2009 |
|||||||
Midpoint Paid in |
Cash Paid in |
|||||||
Lieu of Perquisites |
Lieu of Perquisites |
|||||||
Named Executive Officer
|
in 2009 (%) | in 2009 ($) | ||||||
Alfred M. Rankin, Jr.
|
12 | % | $ | 109,656 | ||||
Kenneth C. Schilling
|
8 | % | $ | 23,488 | ||||
Robert L. Benson
|
10 | % | $ | 41,720 | ||||
Michael J. Morecroft
|
10 | % | $ | 53,352 | ||||
Douglas L. Darby
|
8.4 | % | $ | 20,784 |
| forecasts of the Companys and subsidiaries operating results and the business models for the next several years (including the annual operating plans for the current fiscal year); |
26
| changes in the industries and businesses that affect ROTCE (e.g., the amount of capital required to generate a projected level of sales); and | |
| the potential impact a change in the ROTCE performance target would have on the Companys or subsidiarys ability to incentivize its employees. |
| the subsidiarys expected ability to take advantage of anticipated changes in industry dynamics; | |
| the anticipated impact of programs that have improved profitability of the subsidiarys business; | |
| the anticipated impact of economic conditions on the subsidiarys business; | |
| major accounting changes; and | |
| the anticipated impact of changes in the subsidiarys business model on the subsidiarys business. |
2009 Net Income
|
$ | 31.1 | ||
Plus: 2009 Interest Expense
|
32.2 | |||
Less: Income taxes on 2009 interest expense at 38%
|
(12.2 | ) | ||
Earnings Before Interest After-Tax
|
$ | 51.1 | ||
2009 Average Equity (12/31/2008 and each of 2009s quarter
ends)
|
$ | 367.3 | ||
2009 Average Debt (12/31/2008 and each of 2009s quarter
ends)
|
$ | 453.6 | ||
Total Capital Employed
|
$ | 820.9 | ||
ROTCE (Before Adjustments)
|
6.2 | % | ||
Adjustments to Earnings Before Interest After-Tax
|
$ | 8.0 | ||
ROTCE (After Adjustments)
|
7.2 | % | ||
27
| the after-tax impact of restructuring costs at HBB and NMHG; | |
| the after-tax impact of disposition costs at NMHG; | |
| the after-tax impact of unsuccessful merger costs related to the failed transaction between HBB and Applica Incorporated; | |
| the after-tax impact of HBB environmental expenses; and | |
| the after-tax impact of refinancing costs. |
| each short-term plan has a one-year performance period; | |
| awards under the short-term plans are paid based on actual performance against pre-established performance targets that are established by the Compensation Committee; and | |
| the performance targets are determined solely in the discretion of the Compensation Committee. |
28
Compensation |
||||||||||||||||||||||||
Committee- |
||||||||||||||||||||||||
Hay- |
Approved |
Short-Term |
||||||||||||||||||||||
Recommended |
Short-Term |
Compensation |
Plan |
|||||||||||||||||||||
Short-Term Plan |
Hay- |
Plan Target |
Committee- |
Payout as a |
||||||||||||||||||||
Target as a |
Recommended |
as a Percentage |
Approved |
Percentage of |
||||||||||||||||||||
Percentage of |
Short-Term Plan |
of Salary |
Short-Term |
Salary |
Short-Term |
|||||||||||||||||||
Salary Midpoint |
Target |
Midpoint |
Plan Target |
Midpoint |
Plan Payout |
|||||||||||||||||||
Named Executive Officer
|
(%) | ($) | (%) | ($) | (%) | ($) | ||||||||||||||||||
Alfred M. Rankin, Jr.
|
90 | % | $ | 822,420 | 22.5 | % | $ | 205,605 | 29.7 | % | $ | 271,399 | ||||||||||||
Kenneth C. Schilling
|
40 | % | $ | 117,440 | 10 | % | $ | 29,360 | 13.2 | % | $ | 38,755 | ||||||||||||
Robert L. Benson
|
55 | % | $ | 229,460 | 55 | % | $ | 229,460 | 80.74 | % | $ | 336,834 | ||||||||||||
Michael J. Morecroft
|
60 | % | $ | 320,100 | 0 | % | $ | 0 | 0 | % | $ | 0 | ||||||||||||
Douglas L. Darby
|
40 | % | $ | 98,720 | 40 | % | $ | 98,720 | 54.2 | % | $ | 133,826 |
| 40% is based on performance against an adjusted net income target; | |
| 30% is based on performance against new project development goals; and | |
| 30% is based on ROTCE performance of NA Coals consolidated mines that operated during 2009 (Red River Mining Company and Mississippi Lignite Mining Company), which we refer to as the Consolidated Mines and which require a capital contribution from NA Coal. |
29
Performance Criteria
|
Performance Target
|
|
NA Coals adjusted net income
|
40% of the 2009 award was based on performance against a target of $23.7 million of adjusted net income for NA Coal. | |
NA Coals new project development
|
30% of the 2009 award was based on performance against a target level of new project development for NA Coal. |
| the NA Coal Compensation Committee determined that the forecasts of the Consolidated Mines future operating results, anticipated changes in its industry and business that affect ROTCE and the impact of a change in the ROTCE performance target on its employee incentives remained substantially unchanged from 2008; and | |
| the NA Coal Compensation Committee recognized that the ROTCE performance target is intended to reflect, among other things, the Consolidated Mines anticipated long-term financial performance. |
30
31
| NACCO Long-Term Plan: The NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan, which we refer to as the NACCO Long-Term Plan, used the Companys consolidated ROTCE as the sole performance criteria for plan payouts for 2009 and prior years. | |
| NACCO Supplemental Long-Term Plan: Under the NACCO Industries, Inc. Supplemental Executive Long-Term Incentive Bonus Plan, which we refer to as the NACCO Supplemental Long-Term Plan, the Compensation Committee has the flexibility to provide additional compensation for outstanding results and extraordinary personal effort. |
32
| The average closing price of Class A Common on the New York Stock Exchange at the end of each week during the year preceding the start of the performance period (or such other previous calendar year as determined by the Compensation Committee no later than the 90th day of the performance period); or | |
| The average closing price of Class A Common on the New York Stock Exchange at the end of each week during the performance period. |
33
| the date which is ten years after the last day of the performance period; | |
| the date of the participants death or permanent disability; or | |
| five years (or earlier with the approval of the Compensation Committee) from the date of retirement. |
| Annual Factor: After a calendar year is completed, the actual adjusted net income less a charge for the capital employed during that year is measured against the adjusted net income less a charge for the capital employed goal for that year to determine the annual net income appreciation of current and new projects, which we refer to as the Annual Factor. | |
| Cumulative Factor: Actual cumulative adjusted net income less a charge for the capital employed for the ten-year term of the plan to date is measured against the cumulative adjusted net income less a charge for the capital employed goals to date to determine the cumulative net income appreciation of current and new projects, which we refer to as the Cumulative Factor, against the ten-year target. | |
| New Project Factor: The NA Coal Compensation Committee also set a goal for the cumulative net income appreciation due to new projects over the ten-year term of the plan. At the end of each calendar year, the present value of expected cumulative net income appreciation of all new projects initiated during that year is measured against the cumulative new project goal to determine the net income appreciation due to the acquisition of new projects, which we refer to as the New Project Factor. |
34
| December 31, 2015; | |
| a change in control; | |
| termination of employment on account of death or disability; or | |
| retirement at or after age 55 with at least ten years of service. |
35
Compensation |
||||||||||||||||||||||||
Hay- |
Committee- |
|||||||||||||||||||||||
Recommended |
Approved |
Compensation |
||||||||||||||||||||||
Long-Term Plan |
Long-Term |
Committee- |
Long-Term |
|||||||||||||||||||||
Award Target as a |
Hay- |
Plan Award |
Approved |
Plan Award |
||||||||||||||||||||
Percentage of |
Recommended |
Target as a |
Long-Term |
Payout as a |
Long-Term |
|||||||||||||||||||
Salary |
Long-Term Plan |
Percentage of |
Plan Award |
Percentage of |
Plan Award |
|||||||||||||||||||
Midpoint |
Award Target |
Salary Midpoint |
Target |
Salary Midpoint |
Payout |
|||||||||||||||||||
Named Executive Officer
|
(%) | ($) | (%) | ($) | (%) | ($) | ||||||||||||||||||
Alfred M. Rankin, Jr.
|
235.75 | % | $ | 2,154,284 | 58.94 | % | $ | 538,571 | 103.76 | % | $ | 948,157 | (1) | |||||||||||
Kenneth C. Schilling
|
51.75 | % | $ | 151,938 | 12.94 | % | $ | 37,985 | 22.77 | % | $ | 66,867 | (1) | |||||||||||
Robert L. Benson
|
80 | % | $ | 333,760 | 80 | % | $ | 333,760 | 141.45 | % | $ | 590,121 | ||||||||||||
Michael J. Morecroft
|
105 | % | $ | 560,175 | 0 | % | $ | 0 | 0 | % | $ | 0 | ||||||||||||
Douglas L. Darby
|
40 | % | $ | 98,720 | 40 | % | $ | 98,720 | 70.72 | % | $ | 174,547 |
(1) | Awards under the NACCO Long-Term Plan are denominated in dollars. The amounts shown in the above-table reflect the grant date fair value of the awards that were earned for services performed in 2009. This amount is the same as the amount that is disclosed in the Summary Compensation Table and is the amount that is used by the Compensation Committee when determining total target compensation. The amounts reported in the Summary Compensation Table are computed in accordance with FASB ASC Topic 718 and are valued using a grant date of January 29, 2010. See Summary Compensation Table. |
Hay Group |
||||||||||||||||
Recommended |
Hay Group |
|||||||||||||||
Short-Term Target |
Recommended |
Combined Payout as |
||||||||||||||
as a Percentage of |
Short-Term |
a Percentage of |
Combined |
|||||||||||||
Salary Midpoint |
Target |
Salary Midpoint |
Payout |
|||||||||||||
Named Executive Officer
|
(%) | ($) | (%) | ($) | ||||||||||||
Alfred M. Rankin, Jr.
|
90 | % | $ | 822,420 | 59.70 | % | $ | 545,539 | ||||||||
Kenneth C. Schilling
|
40 | % | $ | 117,440 | 28.20 | % | $ | 82,795 |
36
Hay Group |
||||||||||||||||
Recommended |
Hay Group |
|||||||||||||||
Long-Term Target as |
Recommended |
Combined Payout as |
||||||||||||||
a Percentage of |
Long-Term |
a Percentage of |
Combined |
|||||||||||||
Salary Midpoint |
Target |
Salary Midpoint |
Payout(2) |
|||||||||||||
Named Executive Officer
|
(%)(1) | ($)(1) | (%) | ($) | ||||||||||||
Alfred M. Rankin, Jr.
|
235.75 | % | $ | 2,154,284 | 205.82 | % | $ | 1,880,742 | ||||||||
Kenneth C. Schilling
|
51.75 | % | $ | 151,938 | 49.24 | % | $ | 144,583 |
(1) | The amounts include the 15% increase from the Hay-recommended long-term target awards that the Compensation Committee applies each year to account for the immediately taxable nature of the NACCO long-term plan awards. See Long-Term Incentive Compensation NACCO Long-Term Incentive Compensation. | |
(2) | Awards under the NACCO Long-Term Plan and NACCO Supplemental Long-Term Plan are denominated in dollars. The amounts shown in the table reflect the grant date fair value of the awards that were earned for services performed in 2009. This amount is different than the amount that is required to be disclosed in the Summary Compensation Table, but is the amount that is used by the Compensation Committee when determining total target compensation. The amounts reported in the Summary Compensation Table are computed in accordance with FASB ASC Topic 718. Because, based on FASB ASC Topic 718, the grant date of the share portion of the Companys awards under the NACCO Supplemental Long-Term Plan was January 29, 2010, the share portion of the awards under the NACCO Supplemental Long-Term Plan are not reflected in the Summary Compensation Table, but are reflected in note (3) to the Summary Compensation Table. Summary Compensation Table. |
37
| in his role as a consultant, Dr. Morecroft had substantial input on financial matters and long-term planning for the Company on a consolidated basis; | |
| the financial results of the 2009 cost-reduction programs that Dr. Morecroft assisted designing and implementing are vital to the long-term interest of the Company and the subsidiaries; | |
| we expect that the potential synergies from more closely associating KC and HBB will result in additional cost savings in the future; | |
| Dr. Morecroft devoted extraordinary effort and leadership skills to his role as a consultant; | |
| the consulting agreement contains non-solicitation, non-interference, confidentiality and post-termination cooperation requirements that survive the term of the agreement; | |
| The consulting agreement contains a non-compete provision that survives for one-year following the term of the agreement. The Compensation Committee believes that the Company and the subsidiaries would be at a competitive disadvantage if Dr. Morecroft were to become employed by a competitor during the one-year period following his termination of employment; and | |
| none of the consulting fees are included in determining Dr. Morecrofts retirement or other benefits. |
38
| 401(k) benefits; | |
| matching benefits; and | |
| profit sharing benefits. |
| Matching Contributions: 100% of the first 5% of before-tax contributions; and | |
| Profit Sharing Contributions: 6.25% of compensation for Mr. Benson and 5.00% for Mr. Darby. In addition, they each receive an additional profit sharing contribution for compensation earned in excess of the Federal Social Security wage base, which was $106,800 in 2009, up to the applicable Internal Revenue Code limit of 5.7% of compensation. |
39
| avoid additional statutory and regulatory restrictions applied to nonqualified deferred compensation plans under Section 409A of the Internal Revenue Code; | |
| simplify plan administration and recordkeeping; | |
| eliminate the risk to the executives based on the unfunded nature of these plans; and | |
| avoid any additional onerous changes and restrictions that may be applied to deferred compensation arrangements in the future. |
| participants account balances, other than excess profit sharing benefits, are credited with earnings during the year based on the rate of return of the Vanguard RST fixed income fund, which is one of the investment funds under the qualified plans. The maximum annual earnings rate for this purpose is 14%; | |
| no interest is credited on excess profit sharing benefits; | |
| the amounts credited under the plans each year will be paid during the period from January 1st to March 15th of the following year; and | |
| the amounts credited under the plans each year will be increased by 15% to reflect the immediately taxable nature of the payments. The 15% increase will apply to all benefits other than the portion of the excess 401(k) benefits that are in excess of the amount needed to obtain a full employer matching contribution under the plans. |
| Mr. Rankin: Mr. Rankin maintains account balances under The NACCO Industries, Inc. Unfunded Benefit Plan, which we refer to as the Frozen NACCO Unfunded Plan, and the Retirement Benefit Plan for Alfred M. Rankin, Jr., which we refer to as the Frozen Rankin Retirement Plan. | |
| Dr. Morecroft: Dr. Morecroft maintains an account balance under the Hamilton Beach Brands, Inc. Unfunded Benefit Plan, which we refer to as the Frozen HBB Unfunded Plan. | |
| Mr. Benson: Mr. Benson maintains an account balance under The North American Coal Corporation Deferred Compensation Plan for Management Employees, which we refer to as the Frozen NA Coal Unfunded Plan. |
| No additional benefits are credited to the frozen plans (other than interest credits). | |
| The frozen account balances are credited with interest each year. Interest credits will be based on the greater of 5% or a ROTCE-based rate. The maximum interest rate for this purpose is 14%. The amount of the annual interest credits, increased by 15% to reflect the immediately taxable nature of the payments, will be paid to these Named Executive Officers during the period from January 1st to March 15th of the following year. | |
| The frozen account balances (including unpaid interest for the year of payment, if any) will be paid at the earlier of termination of employment (subject to a six-month delay if required under Section 409A of the Internal Revenue Code) or a change in control. | |
| Upon payment of the frozen account balances, a determination will be made whether the highest incremental state and federal personal income tax rates in the year of payment exceed the rates that were in effect in 2008 when all other nonqualified participants received their nonqualified plan payment. In the event the rates have increased, an additional tax gross-up payment will be paid to the Named Executive Officer. The Compensation Committee determined that the Company or the |
40
subsidiary, as applicable, and not the executive, should bear the risk of a tax increase after 2008 since the Named Executive Officers would have received payment of their frozen account balances in 2008 were it not for the adverse income tax impact on the Company. No other tax gross-ups (such as gross-ups for excise or other taxes) will be paid. |
| amounts or benefits earned or accrued during their term of employment, including earned but unpaid salary and accrued but unused vacation pay; and | |
| benefits that are provided under the retirement plans, incentive compensation plans and nonqualified deferred compensation plans at termination of employment that are further described in this proxy statement. |
41
42
| The Hay Group prepared an analysis of the short-term and long-term incentive compensation targets for employees of the Company and its subsidiaries compared to an updated 2010 All Industrials survey. Based on this analysis, the Compensation Committee adjusted the short-term and long-term incentive compensation targets for employees at certain Hay salary grades for 2010. | |
| 2.5% of the 10% reduction in base salaries for the employees of NMHG was restored effective January 1, 2010 and 5% of the 10% reduction in base salaries for all NACCO employees who are eligible to participate in the NACCO Short-Term Plan, including Mr. Rankin and Mr. Schilling, was restored effective January 1, 2010. The Compensation Committee does not intend for the remaining salary reductions at NACCO and NMHG to be permanent. If economic and business conditions improve in 2010, the Company and NMHG may take action to modify or eliminate these reductions. | |
| The NACCO and NMHG qualified and nonqualified profit sharing contributions that were suspended for 2009 are expected to be reinstated during 2010 for all employees, including the Named Executive Officers. | |
| The HBB qualified and nonqualified profit sharing contributions that were reduced in 2009 were reinstated effective January 1, 2010 for all eligible employees other than Dr. Morecroft, who retired effective December 31, 2009. | |
| The HBB qualified and nonqualified substitute 401(k) matching contributions that were suspended in 2009 were reinstated effective January 1, 2010 for all eligible employees, other than Dr. Morecroft, who retired effective December 31, 2009. | |
| The short-term incentive compensation plans for NMHG, HBB and KC will be reinstated for all eligible employees during the first quarter of 2010. |
43
| The NMHG, HBB and KC long-term plans that have been in effect from January 1, 2008 through December 31, 2009 have been terminated. No awards are outstanding under the terminated plans. The Compensation Committee adopted substantially similar replacement long-term plans. The NMHG and HBB replacement plans were adopted by the Compensation Committee subject to stockholder approval in order to satisfy the requirements of Section 162(m) of the Internal Revenue Code. See Approval, for purposes of Section 162(m) of the Internal Revenue Code, of the NACCO Materials Handling Group, Inc. Long-Term Incentive Compensation Plan (Effective January 1, 2010) on page 61 and Approval, for purposes of Section 162(m) of the Internal Revenue Code, of the Hamilton Beach Brands, Inc. Long-Term Incentive Compensation Plan (Effective January 1, 2010) on page 64. | |
| The NA Coal Compensation Committee replaced the NA Coal Short-Term Plan with a substantially similar short-term plan. The North American Coal Corporation Annual Incentive Compensation Plan (Effective January 1, 2010), which we refer to as the NA Coal Annual Plan, was adopted by the Compensation Committee subject to stockholder approval in order to obtain income tax deductions for all or a portion of the awards payable to the Named Executive Officers under the plan under Section 162(m) of the Internal Revenue Code. See Approval, for purposes of Section 162(m) of the Internal Revenue Code, of The North American Coal Corporation Annual Incentive Compensation Plan (Effective January 1, 2010) on page 69. | |
| Based on the Compensation Committees consideration of the current and anticipated economic and business conditions, the short-term and long-term incentive compensation award targets for eligible employees of NACCO, including the Named Executive Officers, will be based on the full Hay Group recommended amounts for 2010, as adjusted for the results of the 2010 All Industrials survey. | |
| The NACCO Industries, Inc. Supplemental Short-Term Plan was terminated effective December 31, 2009. The Compensation Committee replaced the Supplemental Short-Term Plan and the NACCO Short-Term Plan with a substantially similar short-term plan that combines the provisions of both such plans. The NACCO Industries, Inc. Annual Incentive Compensation Plan (Effective January 1, 2010), which we refer to as the NACCO Annual Plan, was adopted by the Compensation Committee subject to stockholder approval in order to obtain income tax deductions for all or a portion of the awards payable to the Named Executive Officers under the plan under Section 162(m) of the Internal Revenue Code. See Approval, for purposes of Section 162(m) of the Internal Revenue Code, of the NACCO Industries, Inc. Annual Incentive Compensation Plan (Effective January 1, 2010) on page 66. | |
| The NACCO Long-Term Plan was amended and restated, effective February 1, 2010 to, among other things, increase by 174,044 the number of shares of Class A Common Shares available for issuance and expand the list of permitted performance objectives and to include payment provisions upon a change in control. The NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (Amended and Restated Effective February 1, 2010) was adopted by the Board of Directors subject to stockholder approval in order to satisfy the approval requirements of Section 162(m) of the Internal Revenue Code. See Approval, for purposes of Section 162(m) of the Internal Revenue Code and Section 303A.08 of the New York Stock Exchanges listing standards, of the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (Amended and Restated Effective February 1, 2010) on page 58. |
RICHARD DE J. OSBORNE, CHAIRMAN
|
IAN M. ROSS | |
OWSLEY BROWN II
|
EUGENE WONG |
44
Change in |
||||||||||||||||||||||||||||||||
Pension Value (4) |
||||||||||||||||||||||||||||||||
and Nonqualified |
||||||||||||||||||||||||||||||||
Non-Equity |
Deferred |
|||||||||||||||||||||||||||||||
Bonus |
Stock |
Incentive Plan |
Compensation |
All Other |
||||||||||||||||||||||||||||
Name and Principal |
Salary(1) |
(2)(3) |
Awards(3) |
Compensation(3) |
Earnings(5) |
Compensation |
Total |
|||||||||||||||||||||||||
Position
|
Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||
Alfred M. Rankin, Jr.
|
2009 | 1,138,798 | 552,245 | 665,388 | 554,168 | (6) | 473,137 | 104,598 | (7) | 3,488,334 | ||||||||||||||||||||||
Chairman, President
|
2008 | 1,238,504 | | | 161,421 | (6) | 146,631 | 419,611 | 1,966,167 | |||||||||||||||||||||||
and Chief Executive Officer of the Company
|
2007 | 1,196,940 | | 907,065 | 1,387,706 | (6) | 576,361 | 472,295 | 4,540,367 | |||||||||||||||||||||||
Kenneth C. Schilling
|
2009 | 265,904 | 67,215 | 46,904 | 58,718 | (6) | 4,951 | 3,325 | (7) | 447,017 | ||||||||||||||||||||||
Vice President and
|
2008 | 274,552 | | | 26,019 | (6) | 7,861 | 40,330 | 383,820 | |||||||||||||||||||||||
Controller of the Company and Vice President and Chief Financial
Officer of NMHG
|
2007 | 262,960 | | 35,058 | 111,942 | (6) | 15,064 | 50,148 | 475,172 | |||||||||||||||||||||||
Robert L. Benson
|
2009 | 411,320 | | | 926,955 | (9) | 164,380 | 126,378 | (7) | 1,629,033 | ||||||||||||||||||||||
President and Chief Executive Officer of NA Coal(8)
|
2008 | 389,720 | | | 607,684 | 129,051 | 121,588 | 1,248,043 | ||||||||||||||||||||||||
Michael J. Morecroft
|
2009 | 584,196 | | | | (11) | 122,533 | 895,245 | (7) | 1,601,974 | ||||||||||||||||||||||
President and Chief
|
2008 | 575,712 | | | 69,726 | (11) | 101,080 | 784,813 | 1,531,331 | |||||||||||||||||||||||
Executive Officer of HBB and Consultant to the Company(10)
|
2007 | 544,284 | | | 834,788 | (11) | 63,398 | 167,686 | 1,610,156 | |||||||||||||||||||||||
Douglas L. Darby
|
2009 | 240,597 | | | 307,833 | (9) | 59,022 | 57,782 | (7) | 665,234 | ||||||||||||||||||||||
Vice President Southern Operations of NA Coal(12)
|
(1) | As required under the current disclosure requirements of the SEC, the amounts reported under the Salary column include both the base salary and the fixed dollar amount of cash paid in lieu of perquisites for each Named Executive Officer. Refer to the Compensation Discussion and Analysis, which begins on page 20, for further information on the Companys compensation philosophy with respect to perquisites. | |
(2) | The discretionary cash bonuses that were granted to Messrs. Rankin and Schilling for 2009 consist of the sum of (i) the discretionary cash bonuses described under the heading Other Compensation of Named Executive Officers Discretionary Cash Bonuses, which were $274,140 and $44,040 for Messrs. Rankin and Schilling, respectively, and (ii) the cash portion of the discretionary award granted under the NACCO Supplemental Long-Term Plan described in Other Compensation of Named Executive Officers Discretionary Awards Under the NACCO Supplemental Long-Term Plan and further described in note (3) below, which were $278,105 and $23,175 for Messrs. Rankin and Schilling, respectively. | |
(3) | As required under current disclosure requirements of the SEC, the amounts reported in the Stock Award column represent the aggregate grant date fair value of the shares of Class A Common that were granted to Named Executive Officers of the Company for awards under the NACCO Long-Term Plan and the NACCO Supplemental Long-Term Plan computed in accordance with FASB ASC Topic 718. Based on FASB ASC Topic 718, the grant date of the Companys awards under the NACCO Long-Term Plan and the NACCO Supplemental Long-Term Plan for this purpose is the date on which the shares are issued, |
45
which is the date after the end of the fiscal year in which the services are performed. However, based on additional SEC guidance, the share awards that are payable under the NACCO Long-Term Plan are required to be reported for the year in which the employees service inception date for such award occurs (i.e., the year earned), while the discretionary share awards that are payable under the NACCO Supplemental Long-Term Plan are required to be reported for the year in which such awards are granted (i.e., the year paid). As a result, the share awards shown in the table reflect the following: | ||
2009: The amount shown reflects the shares
that were granted on the service inception date in March 2009
and issued January 29, 2010 under the NACCO Long-Term Plan
for 2009 performance but does not reflect the shares that were
issued in the discretion of the Compensation Committee on
January 29, 2010 under the NACCO Supplemental Plan for 2009
performance.
|
||
2008: The amount shown reflects that no
shares were issued for 2008 performance.
|
||
2007: The amount shown reflects the shares
that were granted on the service inception date in March 2007
and issued on February 12, 2008 under the NACCO Long-Term
Plan for 2007 performance.
|
||
The amount shown is based on grant date fair value as determined in accordance with FASB ASC Topic 718, rather than the value of the award as of the service inception date, because the amount reflects the actual amount received by the Named Executive Officers for 2009 and 2007 performance and more accurately reflects the amount of the Named Executive Officers total compensation for 2009 and 2007. | ||
The current disclosure requirements of the SEC require that the cash portion of the awards that are paid under the NACCO long-term plans be included in the year in which it was earned, not paid. As a result, the total amount of the awards under the NACCO Long-Term Plan are reported in the same year (the year earned, not paid); however, the share portion of the awards under the NACCO Supplemental Long-Term Plan and the cash portion of such awards are reported in different years in the Summary Compensation Table. Based on the applicable requirements, the cash portion of the awards paid under the NACCO Supplemental Long-Term Plan for 2009 performance is shown under the Bonus column in the above table. | ||
In order to disclose the total NACCO long-term plan awards for each of the years in which the awards were earned, the following table sets forth the stock portion of long-term plan compensation for Messrs. Rankin and Schilling in the year it was earned (regardless of when the shares were issued), as well as what their total compensation would have been if the stock portion of the award under the NACCO Supplemental Long-Term Plan for 2009 was included in the Summary Compensation Table in the year it was earned: |
Stock Awards |
Total |
|||||||||||
Named Executive Officer
|
Year | ($) | ($) | |||||||||
Mr. Rankin
|
2009 | $ | 1,319,868 | $ | 4,142,814 | |||||||
Mr. Schilling
|
2009 | $ | 101,444 | $ | 501,557 |
(4) | Amounts listed in this column include the aggregate change in the actuarial present value of accumulated plan benefits under all defined benefit pension plans of the Company and its subsidiaries, as described in more detail in the Pension Benefits Table on page 55. For 2009, the following amounts were included: $4,951 for Mr. Schilling, $18,673 for Dr. Morecroft, $139,245 for Mr. Benson and $56,087 for Mr. Darby. $0 was included for Mr. Rankin because he does not participate in any defined benefit pension plans. | |
(5) | Amounts listed in this column also include the interest that is in excess of 120% of the federal long-term interest rate, compounded monthly, that was credited to the executives accounts under the nonqualified deferred compensation plans of the Company and its subsidiaries, as described in more detail in the Nonqualified Deferred Compensation Table on page 52. For 2009, the following amounts were included: $473,137 for Mr. Rankin; $0 for Mr. Schilling; $103,860 for Dr. Morecroft; $25,135 for Mr. Benson and $2,935 for Mr. Darby. | |
(6) | The amounts listed for Mr. Rankin and Mr. Schilling include the cash payments under the NACCO Short-Term Plan and the NACCO Long-Term Plan that were earned during 2009, 2008 and 2007, respectively. Refer to note (3) above. |
46
(7) | All other compensation earned or allocated during 2009 for each of the Named Executive Officers is as follows: |
Alfred M. |
Kenneth C. |
Robert L. |
Michael J. |
Douglas L. |
||||||||||||||||
Rankin, Jr. | Schilling | Benson | Morecroft | Darby | ||||||||||||||||
Employer Qualified Matching Contributions
|
$ | 2,589 | $ | 605 | $ | 12,250 | $ | 0 | $ | 12,250 | ||||||||||
Employer Nonqualified Matching Contributions
|
$ | 0 | $ | 0 | $ | 21,878 | $ | 0 | $ | 7,148 | ||||||||||
Employer Qualified Profit Sharing Contributions
|
$ | 0 | $ | 0 | $ | 19,160 | $ | 0 | $ | 19,160 | ||||||||||
Employer Nonqualified Profit Sharing Contributions
|
$ | 0 | $ | 0 | $ | 56,318 | $ | 0 | $ | 14,297 | ||||||||||
Other Qualified Employer Retirement Contributions
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,444 | $ | 0 | ||||||||||
Other Nonqualified Employer Retirement Contributions
|
$ | 62,850 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
Employer Paid Life Insurance Premiums
|
$ | 9,918 | $ | 1,746 | $ | 11,705 | $ | 9,062 | $ | 3,444 | ||||||||||
Consulting Fees
|
$ | 0 | $ | 0 | $ | 0 | $ | 880,000 | $ | 0 | ||||||||||
Perquisites and Other Personal Benefits
|
$ | 28,267 | $ | 0 | $ | 1,405 | $ | 3,674 | $ | 0 | ||||||||||
Other
|
$ | 974 | $ | 974 | $ | 3,662 | $ | 1,065 | $ | 1,483 | ||||||||||
Total
|
$ | 104,598 | $ | 3,325 | $ | 126,378 | $ | 895,245 | $ | 57,782 |
The Company does not provide Mr. Rankin with any defined benefit pension benefits. Of the $104,598 in other compensation shown above for Mr. Rankin, $62,850 represents defined contribution retirement benefits earned in 2009. | ||
The $28,267 listed for Mr. Rankins perquisites and other personal benefits is the aggregate incremental cost to the Company of his personal use of the corporate aircraft to attend board meetings of other non-related for-profit companies. The Compensation Committee has determined that it is in the best interest of the Company and its stockholders that Mr. Rankin serve on these boards. The aggregate incremental cost is determined on a per flight basis and includes the cost of actual fuel used, the hourly cost of aircraft maintenance for the applicable number of flight hours, landing fees, trip related hanger and parking costs and crew expenses and other variable costs specifically incurred. | ||
Perquisites for Mr. Benson include spousal travel and meal expenses and related tax gross-ups. Perquisites for Dr. Morecroft include travel vouchers and related tax-gross up. | ||
Amounts listed in Other include the annual employer-paid premiums paid for personal excess liability insurance and executive travel accident insurance, payments in lieu of life insurance, floating holiday pay, employer flex credits and employer-paid wellness subsidies. | ||
(8) | Mr. Benson was not a Named Executive Officer for 2007. | |
(9) | The amounts listed for 2009 include a cash payment of $336,834 and $133,286 to Mr. Benson and Mr. Darby, respectively, under the NA Coal Short-Term Plan and $590,121 and $174,547, respectively, representing the value of their awards under the NA Coal Long-Term Plan. | |
(10) | Dr. Morecroft retired effective December 31, 2009. | |
(11) | The HBB Short-Term Plan and the HBB Long-Term Plan were suspended for 2009 and no amounts were paid to any HBB employee, including Dr. Morecroft, under those plans for 2009. The amount listed for 2008 is the cash payment to Dr. Morecroft under the HBB Short-Term Plan. No awards were paid to any participant under the HBB Long-Term Plan for 2008. The amounts listed for 2007 include the value of the awards to Dr. Morecroft under the Frozen HBB Long-Term Plan for that year. | |
(12) | Mr. Darby was not a Named Executive Officer for 2008 and 2007. |
47
Estimated Future or |
||||||||||||||||||||||||||
Estimated Future or Possible |
Possible Payouts Under |
Grant Date |
||||||||||||||||||||||||
Payouts Under Non-Equity |
Equity Incentive Plan |
Fair Value |
||||||||||||||||||||||||
Incentive Plan Awards(1) | Awards |
of Stock |
||||||||||||||||||||||||
Grant |
Target |
Maximum |
Target |
Maximum |
Awards(2) |
|||||||||||||||||||||
Name
|
Date | Plan Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||
Alfred M. Rankin, Jr.
|
N/A |
NACCO Short-Term Plan(3) |
$ | 205,605 | $ | 308,408 | $ | 0 | $ | 0 | N/A | |||||||||||||||
1/29/10 |
NACCO Long-Term Plan(4) |
$ | 188,500 | $ | 282,750 | $ | 350,070 | $ | 525,107 | $ | 665,388 | |||||||||||||||
Kenneth C. Schilling
|
N/A |
NACCO Short-Term Plan(3) |
$ | 29,360 | $ | 44,040 | $ | 0 | $ | 0 | N/A | |||||||||||||||
1/29/10 |
NACCO Long-Term Plan(4) |
$ | 13,295 | $ | 19,942 | $ | 24,690 | $ | 37,036 | $ | 46,904 | |||||||||||||||
Robert L. Benson
|
N/A |
NA Coal Short-Term Plan(3) |
$ | 229,460 | $ | 344,190 | $ | 0 | $ | 0 | N/A | |||||||||||||||
N/A |
NA Coal Long-Term Plan(5) |
$ | 333,760 | N/A | $ | 0 | $ | 0 | N/A | |||||||||||||||||
Michael J. Morecroft
|
N/A | N/A(6) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | N/A | |||||||||||||||
Douglas L. Darby
|
N/A |
NA Coal Short-Term Plan(3) |
$ | 98,720 | $ | 148,080 | $ | 0 | $ | 0 | N/A | |||||||||||||||
N/A |
NA Coal Long-Term Plan(5) |
$ | 98,720 | N/A | $ | 0 | $ | 0 | N/A |
(1) | There are no minimum or threshold payouts to the Named Executive Officers under any of the incentive plans of the Company and its subsidiaries. | |
(2) | Amounts in this column reflect the grant date fair value of shares of Class A Common that were granted and issued to Named Executive Officers of the Company for the 2009 performance period under the NACCO Long-Term Plan. The amounts shown in this column are also reflected in the Summary Compensation Table on page 45. The amount shown is based on grant date fair value as determined in accordance with FASB ASC Topic 718, rather than the value of the award as of the service inception date, because the amount reflects the actual amount received by the Named Executive Officers for 2009 performance and more accurately reflects the amount of the Named Executive Officers total compensation for 2009. | |
(3) | Awards under the NACCO Short-Term Plan and the NA Coal Short-Term Plan are based on a one-year performance period that consists solely of the 2009 calendar year. The awards are paid out, in cash, as soon as practicable after they are calculated and approved by the Compensation Committee. Therefore, there is no post-2009 payout opportunity under these plans. The amounts disclosed in this table are the target and maximum awards that were initially communicated to the executives when the targets were established by the Compensation Committee, which reflect the reduced award targets for the Named Executive Officers of the Company. The amount the executives actually received, after the final payout was calculated based on the actual performance compared to the pre-established performance goals, is disclosed in the Summary Compensation Table and the related footnotes. |
48
(4) | These amounts reflect the awards under the NACCO Long-Term Plan. Awards under the NACCO Long-Term Plan are based on a one-year performance period that consists solely of the 2009 calendar year. The awards are paid out, partially in stock and partially in cash, as soon as practicable after they are calculated and approved by the Compensation Committee. Therefore, there is no post-2009 payout opportunity for an award under the NACCO Long-Term Plan. The amounts disclosed in this table are the dollar values of the target and maximum awards that were initially communicated to the executives when the targets were established by the Compensation Committee, which reflect the reduced award targets for the Named Executive Officers of the Company. The cash portion of the payment, representing 35% of the total payment, is listed under the Estimated Future or Possible Payouts Under Non-Equity Incentive Plan Awards column of this table. The remaining 65% of those amounts, reflecting the stock portion of the payments, is listed under the Estimated Future or Possible Payouts Under Equity Incentive Plan Awards column of this table. To determine the number of shares that are actually issued, the stock portion of the dollar value of the award is divided by the average closing price of shares of Class A Common on the New York Stock Exchange at the end of each week during the relevant period specified in the NACCO Long-Term Plan, as discussed beginning on page 32 under the heading Compensation Discussion and Analysis Long-Term Incentive Compensation NACCO Long-Term Incentive Compensation. The number of shares of Class A Common that the Named Executive Officers actually received, after the target award was adjusted to reflect actual company performance against the pre-established performance goals, is disclosed in the Stock Vested Table below. The amounts listed above do not reflect stock awards issued in 2010 under the NACCO Supplemental Long-Term Plan for 2009 performance. See note (3) to the Summary Compensation Table. | |
(5) | These amounts reflect the dollar value of Mr. Bensons and Mr. Darbys award targets for the 2009 performance period under the NA Coal Long-Term Plan. There is no maximum award limit. The value of the actual awards for 2009 is disclosed in note (9) to the Summary Compensation Table on page 47. | |
(6) | The HBB Short-Term Plan and the HBB Long-Term Plan were suspended for 2009. No target amounts were adopted and no awards were made to any HBB employee under the plans for 2009, including Dr. Morecroft. |
49
Number of Shares |
||||||||
Acquired on Vesting |
Value Realized on Vesting |
|||||||
Name
|
(#) | ($) | ||||||
Alfred M. Rankin, Jr.
|
12,200 | $ | 665,388 | |||||
Kenneth C. Schilling
|
860 | $ | 46,904 | |||||
Robert L. Benson
|
0 | $ | 0 | |||||
Michael J. Morecroft
|
0 | $ | 0 | |||||
Douglas L. Darby
|
0 | $ | 0 |
| the account balances as of the date of the change in control under the NA Coal Long-Term Plan, the HBB Long-Term Plan and the HBB Frozen Long-Term Plan and all of the nonqualified defined contribution plans will automatically be paid in the form of a lump sum payment in the event of a change in control of the Company or the participants employer; and | |
| the change in control provisions under the NA Coal Long-Term Plan and the HBB Long-Term Plan, in addition to providing for the immediate payment of the account balance (plus interest) as of the date of the change in control, also provide for the payment of a pro-rated award target for the year of the change in control. |
| any employee benefit plan; |
50
| the Company; | |
| the applicable subsidiary or one of its affiliates; or | |
| the parties to the stockholders agreement discussed under Amount and Nature of Beneficial Ownership Class B Common Stock on page 8; |
| the individuals and entities who beneficially owned, directly or indirectly, more than 50% of the combined voting power of the Company immediately prior to such business combination continue to hold at least 50% of the voting securities of the successor; and | |
| at the time of the execution of the initial agreement, or of the action of the Board of Directors of the Company providing for such business combination, at least a majority of the members of the Board of Directors of the Company were incumbent directors. |
Estimated Total |
Estimated Total |
Estimated Total |
||||||||||||||
Value of Cash |
Value of Cash |
Value of Cash |
||||||||||||||
Payments Based |
Payments Based |
Payments Based |
||||||||||||||
on Long-Term |
on Accrued Balance |
on Accrued Balance |
||||||||||||||
Plan Award Target |
in Long-Term Plan |
in Nonqualified |
Estimated Total |
|||||||||||||
in Year of Change |
in Year of Change |
Deferred |
Value of all Cash |
|||||||||||||
in Control |
in Control |
Compensation Plans |
Payments |
|||||||||||||
Name
|
($)(1) | ($)(2) | ($)(3) | ($) | ||||||||||||
Alfred M. Rankin, Jr.
|
$ | 0 | $ | 0 | $ | 13,913,926 | $ | 13,913,926 | ||||||||
Kenneth C. Schilling
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Robert L. Benson
|
$ | 333,760 | $ | 1,034,615 | $ | 642,535 | $ | 2,010,910 | ||||||||
Michael J. Morecroft
|
$ | 0 | $ | 2,993,129 | $ | 2,081,425 | $ | 5,074,554 | ||||||||
Douglas L. Darby
|
$ | 98,720 | $ | 212,704 | $ | 108,707 | $ | 420,131 |
(1) | This column reflects the award targets for Messrs. Benson and Darby for 2009 under the NA Coal Long-Term Plan. Under the change in control provisions of that plan, they would have been entitled to receive their award targets for 2009 if a change in control had occurred on December 31, 2009. The Companys long-term plans did not contain any change in control provisions in 2009 and no award targets were granted under the HBB Long-Term Plan for 2009. |
51
(2) | This column reflects the December 31, 2009 account balance of Dr. Morecroft under the Frozen HBB Long-Term Plan and the account balances of Messrs. Benson and Darby under the NA Coal Long-Term Plan, reduced by the 2009 award. Under the change in control provisions of those plans, these Named Executive Officers would have been entitled to receive payment of their entire account balances under those plans if a change in control had occurred on December 31, 2009. The Companys long-term plans did not contain any change in control provisions in 2009. | |
(3) | This column reflects the account balances of the Named Executive Officers as of December 31, 2009 under all of the defined contribution, nonqualified deferred compensation plans. Under the change in control provisions of those plans, all of the Named Executive Officers would have been entitled to receive payment of their entire account balances under those plans if a change in control had occurred on December 31, 2009. These plans are discussed in more detail under Nonqualified Deferred Compensation Benefits below. |
Aggregate |
||||||||||||||||||||||
Nonqualified |
Executive |
Registrant |
Aggregate |
Withdrawals/ |
Aggregate |
|||||||||||||||||
Deferred |
Contributions |
Contributions |
Earnings |
Distributions |
Balance |
|||||||||||||||||
Compensation |
in 2009 |
in 2009 |
in 2009(2) |
in 2009 |
at 12/31/09 |
|||||||||||||||||
Name
|
Plan | ($)(1) | ($) | ($) | ($) | ($) | ||||||||||||||||
Alfred M. Rankin, Jr.
|
Frozen NACCO Unfunded Plan | $ | 0 | (3) | $ | 0 | (3) | $ | 351,483 | $ | 206,634 | (4) | $ | 4,458,199 | (5) | |||||||
Frozen Rankin Retirement Plan | $ | 0 | (3) | $ | 0 | (3) | $ | 735,494 | $ | 429,952 | (4) | $ | 9,328,938 | (6) | ||||||||
NACCO Excess Plan | $ | 48,511 | $ | 62,850 | (7) | $ | 17,836 | $ | 517,531 | (8) | $ | 128,789 | (9) | |||||||||
Kenneth C. Schilling
|
NACCO Excess Plan | $ | 0 | $ | 0 | (7) | $ | 29 | $ | 32,213 | (8) | $ | 0 | (9) | ||||||||
Robert L. Benson
|
Frozen NA Coal Unfunded Plan | $ | 0 | (3) | $ | 0 | (3) | $ | 36,633 | $ | 22,526 | (4) | $ | 496,107 | (11) | |||||||
NA Coal Excess Plan | $ | 51,756 | $ | 78,196 | (7) | $ | 16,476 | $ | 141,774 | (8) | $ | 146,428 | (12) | |||||||||
NA Coal Long-Term Plan | $ | 0 | $ | 590,121 | (13) | $ | 32,388 | $ | 0 | $ | 1,624,736 | (14) | ||||||||||
Michael J. Morecroft
|
Frozen HBB Unfunded Plan | $ | 0 | (3) | $ | 0 | (3) | $ | 159,861 | $ | 126,432 | (4) | $ | 2,081,425 | (10) | |||||||
HBB Excess Plan | $ | 0 | $ | 0 | (7) | $ | 0 | $ | 115,345 | (8) | $ | 0 | (15) | |||||||||
Frozen HBB Long-Term Plan | $ | 0 | (16) | $ | 0 | (16) | $ | 207,331 | $ | 548,356 | (17) | $ | 2,993,129 | (18) | ||||||||
Douglas L. Darby
|
NA Coal Excess Plan | $ | 80,493 | $ | 21,446 | (7) | $ | 6,769 | $ | 83,053 | (8) | $ | 108,707 | (12) | ||||||||
NA Coal Long-Term Plan | $ | 0 | $ | 174,547 | (13) | $ | 6,637 | $ | 0 | $ | 387,251 | (14) |
(1) | These amounts, which were otherwise payable in 2009 but were deferred at the election of the executives, are also included in the Salary, Bonus and/or Non-Equity Incentive Plan Compensation columns of the Summary Compensation Table. | |
(2) | The above-market earnings portion of the amounts shown in this column is also reflected in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column and described in the footnotes of the Summary Compensation Table. | |
(3) | As described in more detail in the Compensation Discussion and Analysis beginning on page 20, the Frozen NACCO Unfunded Plan, the Frozen Rankin Retirement Plan, the Frozen HBB Unfunded Plan and the Frozen NA Coal Unfunded Plan were each frozen effective December 31, 2007 and we refer to these plans collectively as the Frozen Unfunded Plans. No additional contributions (other than interest credits) were made to these plans since that date. |
52
(4) | The Named Executive Officers who participate in the Frozen Unfunded Plans will receive payment of their December 31, 2007 account balances the earlier of a change in control or termination of employment (with a six month delay if required by Section 409A of the Internal Revenue Code). However, the interest that is accrued under the Frozen Unfunded Plans each calendar year is paid to those Named Executive Officers no later than March 15th of the following year. Because the interest that was credited to their accounts for 2008 was paid in 2009, it is reflected as a distribution for 2009. | |
(5) | The account balance under the Frozen NACCO Unfunded Plan includes all above-market earnings that are also required to be disclosed in the Summary Compensation Table. Of Mr. Rankins December 31, 2009 account balance, $148,678 is currently reported as nonqualified deferred compensation earnings in the Summary Compensation Table. In addition, $2,715,310 of the account balance was previously reported in prior Summary Compensation Tables. | |
(6) | The account balance under the Frozen Rankin Retirement Plan includes all above-market earnings that are also required to be disclosed in the Summary Compensation Table. Of Mr. Rankins December 31, 2009 account balance, $311,118 is currently reported as nonqualified deferred compensation earnings in the Summary Compensation Table. In addition, $5,644,025 of the account balance was previously reported in prior Summary Compensation Tables. | |
(7) | These amounts are also reflected in the All Other Compensation column of the Summary Compensation Table and specifically identified in note (7) to the Summary Compensation Table. | |
(8) | The Named Executive Officers will each receive payment of the amounts earned under the active nonqualified defined contribution deferred compensation plans for each calendar year (including interest) no later than March 15th of the following year. Because the payments for 2008 were made in 2009, they are reflected as a distribution in 2009. Because the payments for 2009 will be made in 2010, they are reflected in the Named Executive Officers aggregate balance as of December 31, 2009 and are not reflected as a distribution in 2009. | |
(9) | The account balance under the NACCO Industries, Inc. Excess Retirement Plan, which we refer to as the NACCO Excess Plan, includes all employer and employee contributions and above-market earnings that are also required to be disclosed in the Summary Compensation Table. Of their December 31, 2009 account balances, $124,901 of Mr. Rankins account balance and $0 of Mr. Schillings account balance are currently reported as salary, bonus, non-equity incentive plan compensation, nonqualified deferred compensation earnings or all other compensation in the Summary Compensation Table. Since the account balance under the NACCO Excess Plan is paid out each year, none of their account balances was previously reported in prior Summary Compensation Tables. | |
(10) | Dr. Morecroft is a participant in the Frozen HBB Unfunded Plan. The account balance includes all above-market earnings that are also required to be disclosed in the Summary Compensation Table for 2009. Of Dr. Morecrofts December 31, 2009 account balance, $34,101 is currently reported as nonqualified deferred compensation earnings in the Summary Compensation Table. In addition, $1,579,545 of the account balance was previously reported in prior Summary Compensation Tables. | |
(11) | The account balance under the Frozen NA Coal Unfunded Plan includes all above-market earnings that are also required to be disclosed in the Summary Compensation Table. Of Mr. Bensons December 31, 2009 account balance, $13,943 is currently reported as nonqualified deferred compensation earnings in the Summary Compensation Table. In addition, $67,596 of the account balance was previously reported in prior Summary Compensation Tables. | |
(12) | The account balance under The North American Coal Corporation Excess Retirement Plan includes all employer and employee contributions and above-market earnings that are also required to be disclosed in the Summary Compensation Table. Of their December 31, 2009 account balances, $141,143 of Mr. Bensons balance and $104,873 of Mr. Darbys balance is currently reported as salary, non-equity incentive plan compensation, nonqualified deferred compensation earnings or all other compensation in the Summary Compensation Table. Since the account balance under the NA Coal Excess Plan is paid out each year, none of their account balance was previously reported in prior Summary Compensation Tables. |
53
(13) | Messrs. Benson and Darby are participants in the NA Coal Long-Term Plan. This amount reflects the value of the awards they received under the plan for 2009 performance, which award is also reflected in both the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table and in the Grants of Plan-Based Awards Table. | |
(14) | The NA Coal Long-Term Plan account balance includes all employer contributions and above-market earnings that are also required to be disclosed in the Summary Compensation Table for 2009. Of their December 31, 2009 account balance, $590,121 for Mr. Benson and $174,547 for Mr. Darby is currently reported as non-equity incentive plan compensation in the Summary Compensation Table. There are no above-market earnings credited under the NA Coal Long-Term Plan. $666,444 of Mr. Bensons account balance and none of Mr. Darbys account balance was previously reported in prior Summary Compensation Tables. | |
(15) | The account balance under the Hamilton Beach Brands, Inc. Excess Retirement Plan includes all employer contributions and above-market earnings that are also required to be disclosed in the Summary Compensation Table. Dr. Morecrofts December 31, 2009 account balance in the Summary Compensation Table does not contain any nonqualified deferred compensation earnings. Because the account balance under the HBB Excess Plan is paid out each year, none of Dr. Morecrofts account balance was previously reported in prior Summary Compensation Tables. | |
(16) | As described in more detail in the Compensation Discussion and Analysis beginning on page 20, the Frozen HBB Long-Term Plan was frozen effective December 31, 2007. No additional contributions (other than interest credits) were made to that plan since that date. | |
(17) | The awards Dr. Morecroft received under the Frozen HBB Long-Term Compensation Plan for pre-2008 award periods are generally subject to a five-year holding period. He received payment of his 2003 award in 2009. | |
(18) | This amount reflects the value of all of Dr. Morecrofts awards that remain outstanding under the Frozen HBB Long-Term Plan. |
54
Number |
Present Value of |
Payments |
||||||||||||
of Years |
Accumulated |
During Last |
||||||||||||
Credited Service |
Benefit |
Fiscal Year |
||||||||||||
Name
|
Plan Name | (#) | ($) | ($) | ||||||||||
Alfred M. Rankin, Jr.
|
N/A(1) | N/A | N/A | N/A | ||||||||||
Kenneth C. Schilling
|
Part I of the Combined Plan | 2.1 | (2) | $ | 25,826 | $0 | ||||||||
The SERP | 2.1 | (2) | $ | 2,227 | $0 | |||||||||
Robert L. Benson
|
Part I of the Combined Plan | 28.1 | (3) | $ | 625,959 | $0 | ||||||||
The SERP | 28.1 | (3) | $ | 466,755 | $0 | |||||||||
Michael J. Morecroft
|
Part II of the Combined Plan | 5.0 | (4) | $ | 148,500 | $0 | ||||||||
Douglas L. Darby
|
Part I of the Combined Plan | 23.4 | (3) | $ | 322,961 | $0 | ||||||||
The SERP | 23.4 | (3) | $ | 88,751 | $0 |
(1) | Mr. Rankin has never participated in any defined benefit pension plans of the Company or its subsidiaries. | |
(2) | For Mr. Schilling, the number of years of credited service taken into account to determine pension benefits was frozen as of December 31, 1993. | |
(3) | For Messrs. Benson and Darby, the number of years of credited service taken into account to determine pension benefits was frozen as of December 31, 2004. | |
(4) | For Dr. Morecroft, the number of years of credited service taken into account to determine pension benefits was frozen as of December 31, 1996. |
55
| a discount rate of 5.90% for the Combined Plan and 5.65% for the SERP; | |
| the RP2000 mortality table with mortality improvement projected to 2017 and no collar adjustment; and | |
| assumed retirement age of 65 with no pre-retirement decrement. |
56
57
2. | Approval, for purposes of Section of 162(m) of the Internal Revenue Code and Section 303A.08 of the New York Stock Exchanges listing standards, of the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (Amended and Restated Effective February 1, 2010) |
58
59
Name and Position
|
Dollar Value(s) | |||
Alfred M. Rankin, Jr. Chairman, President and Chief
Executive Officer of the Company
|
$ | 2,985,080 | (1) | |
Kenneth C. Schilling Vice President and Controller
of the Company and Vice President and Chief Financial Officer of
NMHG
|
$ | 172,210 | (1) | |
Robert L. Benson President and Chief Executive
Officer of NA Coal
|
$ | 0 | (2) | |
Michael J. Morecroft President and Chief Executive
Officer of HBB
|
$ | 0 | (2) | |
Douglas L. Darby Vice President, Southern Operations
of NA Coal
|
$ | 0 | (2) | |
Executive Officer Group (42 persons)
|
$ | 3,902,870 | (2) | |
NACCO Executive Officer Group (7 persons)
|
$ | 3,902,870 | (2) | |
Non-Executive Director Group (0 persons)
|
$ | 0 | (3) | |
NACCO Non-Executive Officer Employee Group (4 persons)
|
$ | 189,760 |
(1) | The amounts include the 15% increase from the Hay-recommended long-term target awards that the Compensation Committee applies each year to account for the immediately taxable nature of the NACCO Long-Term Plan awards. See Long-Term Incentive Compensation NACCO Long-Term Incentive Compensation. | |
(2) | Executive officers who are not employed by the Company, including Messrs. Benson, Morecroft and Darby, are not eligible to participate in the NACCO Long-Term Plan. | |
(3) | Directors who are not employees of NACCO are not eligible to participate in the NACCO Long-Term Plan. |
60
3. | Approval, for purposes of Section of 162(m) of the Internal Revenue Code, of the NACCO Materials Handling Group, Inc. Long-Term Incentive Compensation Plan (Effective January 1, 2010) |
61
62
Name and Position
|
Dollar Value(s) | |||
Alfred M. Rankin, Jr. Chairman, President and Chief
Executive Officer of the Company
|
$ | 0 | (1) | |
Kenneth C. Schilling Vice President and Controller
of the Company and Vice President and Chief Financial Officer of
NMHG
|
$ | 0 | (1) | |
Robert L. Benson President and Chief Executive
Officer of NA Coal
|
$ | 0 | (1) | |
Michael J. Morecroft President and Chief Executive
Officer of HBB
|
$ | 0 | (1) | |
Douglas L. Darby Vice President, Southern Operations
of NA Coal
|
$ | 0 | (1) | |
Executive Officer Group (42 persons)
|
$ | 2,336,980 | (2) | |
NMHG Executive Officer Group (10 persons)
|
$ | 2,336,980 | (2) | |
Non-Executive Director Group (0 persons)
|
$ | 0 | (3) | |
NMHG Non-Executive Officer Employee Group (159 persons)
|
$ | 3,151,735 |
(1) | None of the Named Executive Officers are eligible to participate in the NMHG Long-Term Plan because they are not employees of NMHG or its subsidiaries. | |
(2) | Executive Officers who are not employed by NMHG are not eligible to participate in the NMHG Long-Term Plan. | |
(3) | Directors who are not employees of NMHG are not eligible to participate in the NMHG Long-Term Plan. |
63
4. | Approval, for purposes of Section 162(m) of the Internal Revenue Code, of the Hamilton Beach Brands, Inc. Long-Term Incentive Compensation Plan (Effective January 1, 2010) |
64
Name and Position
|
Dollar Value(s) | |||
Alfred M. Rankin, Jr. Chairman, President and Chief
Executive Officer of the Company
|
$ | 0 | (1) | |
Kenneth C. Schilling Vice President and Controller
of the Company and Vice President and Chief Financial Officer of
NMHG
|
$ | 0 | (1) | |
Robert L. Benson President and Chief Executive
Officer of NA Coal
|
$ | 0 | (1) | |
Michael J. Morecroft President and Chief Executive
Officer of HBB
|
$ | 0 | (2) | |
Douglas L. Darby Vice President, Southern Operations
of NA Coal
|
$ | 0 | (1) | |
Executive Officer Group (42 persons)
|
$ | 1,156,642 | (1) | |
HBB Executive Officer Group (6 persons)
|
$ | 1,156,642 | (1) | |
Non-Executive Director Group (0 persons)
|
$ | 0 | (3) | |
HBB Non-Executive Officer Employee Group (60 persons)
|
$ | 991,060 |
(1) | Executive Officers who are not employed by HBB, including Messrs. Rankin, Schilling, Benson and Darby are not eligible to participate in the HBB Long-Term Plan. | |
(2) | Dr. Morecroft is not eligible to participate in the HBB Long-Term Plan for 2010 or later years because he retired effective December 31, 2009. | |
(3) | Directors who are not employees of HBB are not eligible to participate in the HBB Long-Term Plan. |
65
5. | Approval, for purposes of Section 162(m) of the Internal Revenue Code, of the NACCO Industries, Inc. Annual Incentive Compensation Plan (Effective January 1, 2010) |
66
67
Name and Position
|
Dollar Value(s) | |||
Alfred M. Rankin, Jr. Chairman, President and Chief
Executive Officer of the Company
|
$ | 943,900 | ||
Kenneth C. Schilling Vice President and Controller
of the Company and Vice President and Chief Financial Officer of
NMHG
|
$ | 119,800 | ||
Robert L. Benson President and Chief Executive
Officer of NA Coal
|
$ | 0 | (1) | |
Michael J. Morecroft President and Chief Executive
Officer of HBB
|
$ | 0 | (1) | |
Douglas L. Darby Vice President, Southern Operations
of NA Coal
|
$ | 0 | (1) | |
Executive Officer Group (42 persons)
|
$ | 1,580,240 | (1) | |
NACCO Executive Officer Group (7 persons)
|
$ | 1,580,240 | (1) | |
Non-Executive Director Group (0 persons)
|
$ | 0 | (2) | |
NACCO Non-Executive Officer Employee Group (9 persons)
|
$ | 300,160 |
(1) | Executive Officers who are not employed by the Company, including Messrs. Benson, Morecroft and Darby are not eligible to participate in the NACCO Annual Plan. | |
(2) | Directors who are not employees of NACCO are not eligible to participate in the NACCO Annual Plan. |
68
6. | Approval, for purposes of Section 162(m) of the Internal Revenue Code, of The North American Coal Corporation Annual Incentive Compensation Plan (Effective January 1, 2010) |
69
Name and Position
|
Dollar Value(s) | |||
Alfred M. Rankin, Jr. Chairman, President and Chief
Executive Officer of the Company
|
$ | 0 | (1) | |
Kenneth C. Schilling Vice President and Controller
of the Company and Vice President and Chief Financial Officer of
NMHG
|
$ | 0 | (1) | |
Robert L. Benson President and Chief Executive
Officer of NA Coal
|
$ | 236,225 | ||
Michael J. Morecroft President and Chief Executive
Officer of HBB
|
$ | 0 | (1) | |
Douglas L. Darby Vice President, Southern Operations
of NA Coal
|
$ | 99,800 | ||
Executive Officer Group (42 persons)
|
$ | 684,481 | (1) | |
NA Coal Executive Officer Group (8 persons)
|
$ | 684,481 | ||
Non-Executive Director Group (0 persons)
|
$ | 0 | (2) | |
NA Coal Non-Executive Officer Employee Group (22 persons)
|
$ | 911,759 |
(1) | Executive Officers who are not employed by NA Coal, including Messrs. Rankin, Schilling and Morecroft are not eligible to participate in the NA Coal Annual Plan. | |
(2) | Directors who are not employees of NA Coal are not eligible to participate in the NA Coal Annual Plan. |
70
71
Equity Compensation Plan Information | ||||||||||||
Number of Securities |
||||||||||||
Number of Securities |
Remaining Available for |
|||||||||||
to Be Issued |
Weighted-Average |
Future Issuance Under |
||||||||||
Upon Exercise of |
Exercise Price of |
Equity Compensation Plans |
||||||||||
Outstanding Options, |
Outstanding Options, |
(Excluding Securities |
||||||||||
Plan Category
|
Warrants and Rights | Warrants and Rights | Reflected in Column(a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Class A Shares:
|
||||||||||||
Equity compensation plans approved by security holders
|
0 | N/A | 325,311 | |||||||||
Equity compensation plans not approved by security holders
|
0 | N/A | 0 | |||||||||
Total
|
0 | N/A | 325,311 | |||||||||
Class B Shares:
|
||||||||||||
Equity compensation plans approved by security holders
|
0 | N/A | 80,100 | |||||||||
Equity compensation plans not approved by security holders
|
0 | N/A | 0 | |||||||||
Total
|
0 | N/A | 80,100 |
7. | Confirmation of Appointment of the Independent Registered Public Accounting Firm of the Company for the Current Fiscal Year |
72
73
74
1. | Purpose of the Plan |
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 and specified in the Guidelines; provided, however, that with respect to any Qualified Performance-Based Award, such determination shall be made not later than 90 days after the commencement of the applicable 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 based upon the achievement of Performance Objectives which is established by the Committee; provided, however, that with respect to any Qualified Performance-Based Award, such formula shall be established not later than 90 days after the commencement of the Performance Period on which the Award is based and prior to the completion of 25% of such Performance Period. 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; provided, however, that with respect to any Qualified Performance-Based Award, such formula shall be established not later than 90 days after the commencement of the Performance Period on which the Award is based and prior to the completion of 25% of such Performance Period. | |
(c) | Award Shares means fully-paid, non-assessable shares of Class A Common Stock that are issued pursuant to, and with such restrictions as are imposed by, the terms of this Plan and the Guidelines. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing and, in the discretion of the Company, may be issued as certificated or uncertificated shares. | |
(d) | Change in Control means the occurrence of an event described in Appendix 1 hereto. | |
(e) | Class A Common Stock means the Companys Class A Common Stock, par value $1.00 per share. | |
(f) | Committee means the Compensation Committee of the Companys Board of Directors or any other committee appointed by the Companys 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 each member of the Committee (i) is an outside director for purposes of Section 162(m) and (ii) is a non-employee director for purposes of Rule 16b-3. |
A-1
(g) | Covered Employee means any Participant who is a covered employee for purposes of Section 162(m) or any Participant who the Committee determines in its sole discretion could become a covered employee. | |
(h) | 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. | |
(i) | Participant means any person who is classified as a salaried employee of the Company (including directors of the Company who are also salaried employees 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 Companys subsidiaries are not eligible to participate in this Plan. | |
(j) | Payment Period means, with respect to any Performance Period, the period from January 1 to March 15 of the calendar year immediately following the calendar year in which such Performance Period ends. | |
(k) | Performance Period means any period of one or more years (or portion thereof) on which an Award is based, as established by the Committee. Any Performance Period(s) applicable to a Qualified Performance-Based Award shall be established by the Committee not later than 90 days after the commencement of the Performance Period on which such Qualified Performance-Based Award will be based and prior to completion of 25% of such Performance Period. | |
(l) | Performance Objectives shall mean the performance objectives established pursuant to the Plan for Participants. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or any Subsidiary, division, business unit, department or function of the Company. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Any Performance Objectives applicable to a Qualified Performance-Based Award shall be based on one or more, or a combination, of the following criteria, or the attainment of specified levels of growth or improvement in one or more of the following criteria: return on equity, return on total capital employed, diluted earnings per share, total earnings, earnings growth, return on capital, return on assets, return on sales, earnings before interest and taxes, revenue, revenue growth, gross margin, return on investment, increase in the fair market value of shares, share price (including, but not limited to, growth measures and total stockholder return), operating profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), inventory turns, financial return ratios, market share, earnings measures/ratios, economic value added, balance sheet measurements (such as receivable turnover), internal rate of return, customer satisfaction surveys or productivity, net income, operating profit or increase in operating profit, market share, increase in market share, sales value increase over time, economic value income, economic value increase over time, new project development, adjusted standard margin or net sales. | |
(m) | Qualified Performance-Based Award shall mean any Award or portion of an Award granted to a Covered Employee that is intended to satisfy the requirements for qualified performance-based compensation under Section 162(m). | |
(n) | Retire means a termination of employment that entitles the Participant to immediate commencement of his pension benefits under The Combined Defined Benefit Plan of NACCO Industries, Inc. and its Subsidiaries or, for Participants who are not members of such plan, a termination of employment after reaching age 60 with at least 15 years of service with the Company or a member of the Companys controlled group (as defined in Code Section 414). | |
(o) | 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. |
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(p) | Salary Points means the salary points assigned to a Participant by the Committee for the applicable Performance Period pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee. | |
(q) | Section 162(m) means Section 162(m) of the Internal Revenue Code of 1986, as amended, or any successor provision. | |
(r) | Target Award means a dollar amount calculated by multiplying (i) the designated salary midpoint that corresponds to a Participants Salary Points by (ii) the long-term incentive compensation target percent for those Salary Points for the applicable Performance Period, as determined by the Committee. The Target Award is the award that would be paid to a Participant under the Plan if each Performance Objective was met. |
3. | Administration |
4. | Eligibility |
5. | Awards |
(a) | 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 Companys achievement of Performance Objectives; provided, however, that with respect to any Qualified |
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Performance-Based Award, the Committee shall approve the foregoing not later than the ninetieth day of the applicable Performance Period and prior to the completion of 25% of such Performance Period. Each grant shall specify an initial allocation between the cash portion of the Award and the equity portion of the Award. |
(b) | Prior to the end of the Payment Period, 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. Such approval shall be certified by the Committee before any amount is paid under any Award with respect to that Performance Period. Notwithstanding the foregoing, the Committee shall have the power to (1) decrease the amount of any Award below the amount determined in accordance with Section 5(b)(i); (2) increase the amount of any Award above the amount determined in accordance with Section 5(b)(i) and/or (3) adjust the allocation between the cash portion of the Award and the equity portion of the Award; provided, however, that (A) no such decrease may occur following a Change in Control and (B) no such increase, change or adjustment may be made that would cause any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under Code Section 162(m)). 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 fully paid during the Payment Period and shall be paid partly in cash and partly in Award Shares. The number of Award Shares to be issued to a Participant shall be determined by dividing the equity portion of the Award by the Average Award Share Price (subject to adjustment as described in Subsection (b) above). The Company shall pay any and all brokerage fees and commissions incurred in connection with any purchase by the Company of shares which are to be issued as Award Shares and the transfer thereto to Participants. 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 calendar year as a result of Awards under this Plan shall not exceed $10,000,000 or such lesser amount specified in the Guidelines. | |
(d) | At such time as the Committee approves a Target Award and formula for determining the amount of each Award, the Committee shall designate whether all or any portion of the Award is a Qualified Performance-Based Award. |
6. | Withholding Taxes |
7. | Change in Control |
(a) | The following provisions shall apply notwithstanding any other provision of the Plan to the contrary. | |
(b) | Amount of Award for Year of Change In Control. In the event of a Change in Control during a Performance Period, the amount of the Award payable to a Participant who is employed on the date of the Change in Control (or who died, become permanently disabled or Retired during such Performance Period and prior to the Change in Control) for such Performance Period shall be equal |
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to the Participants Target Award for such Performance Period, multiplied by a fraction, the numerator of which is the number of days during the Performance Period during which the Participant was employed by the Company prior to the Change in Control and the denominator of which is the number of days in the Performance Period. |
(c) | Time of Payment. In the event of a Change in Control, the payment date of all outstanding Awards (including, without limitation, the pro-rata Target Award for the Performance Period 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. |
8. | Award Shares Terms and Restrictions |
(a) | Award Shares granted to a Participant shall entitle such Participant to voting, dividend and other ownership rights. Each payment of Award Shares shall be evidenced by an agreement executed on behalf of the Company by an authorized 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 | |
(b) | Except as otherwise set forth in this Section, Award Shares shall not be assigned, pledged, hypothecated or otherwise transferred (a Transfer) by a Participant or any other person, voluntarily or involuntarily, other than a Transfer of Award Shares (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 (QDRO), (iii) to a trust for the benefit of a Participant or his spouse, children or grandchildren (provided that Award Shares transferred to such trust shall continue to be Award Shares subject to the terms of this Plan) or (iv) with the consent of the Committee, after the substitution by a Participant of a number of shares of Class A or Class B Common Stock (the New Shares) for an equal number of Award Shares, whereupon the New Shares shall become and be deemed for all purposes to be Award Shares, subject to all of the terms and conditions imposed by the Plan and the Guidelines on the shares for which they are substituted, including the restrictions on Transfer, and the restrictions hereby imposed on the shares for which the New Shares are substituted shall lapse and such shares shall no longer be subject to the Plan or the Guidelines. The Company shall not honor, and shall instruct the transfer agent not to honor, any attempted Transfer and any attempted Transfer shall be invalid, other than Transfers described in clauses (i) through (iv) above. | |
(c) | Each Award shall provide that the transferability of the Award Shares shall be prohibited or restricted for a period of ten years from the last day of the Performance Period, or such other shorter or longer period as may be determined by the Committee (in its sole and absolute discretion) from time to time. Notwithstanding the foregoing, such restrictions shall automatically lapse on the earliest of (i) the date the Participant dies or becomes permanently disabled, (ii) five years (or earlier with the approval of the Committee) after the Participant Retires, (iii) an extraordinary release of restrictions pursuant to Subsection (d) below, or (vi) a release of restrictions as determined by the Committee in its sole and absolute discretion (including, without limitation, a release caused by a termination of the Plan). Following the lapse of restrictions pursuant to this Subsection or Subsection (d) below, the shares shall no longer be Award Shares and, at the Participants request, the Company shall take all such action as may be necessary to remove such restrictions from the stock certificates, or other applicable records with respect to the uncertificated shares, representing the Award Shares, such that the resulting shares shall be fully paid, nonassessable and unrestricted by the terms of the Plan. |
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(d) | Extraordinary Release of Restrictions. At any time following the third anniversary of the date Award Shares are issued, a Participant may request in writing that the Committee authorize the lapse of restrictions on transfer of such Award Shares if the Participant desires to dispose of such Award Shares for (i) the purchase of a principal residence for the Participant, (ii) payment of medical expenses for the Participant, his spouse or his dependents, (iii) payment of expenses for the education of the Participant, his spouse or his dependents or (iv) any other extraordinary reason which the Committee approves in writing, provided that the restrictions on no more than 20% of such Award Shares may be released pursuant to this Subsection. The Committee shall have the sole power to grant or deny any such request. Upon the granting of any such request, the Company shall cause the release of restrictions in the manner described in Subsection (c) of such number of Award Shares as the Committee shall authorize. | |
(e) | Legend. The Company shall cause an appropriate legend, to be placed on each certificate, or other applicable records with respect to uncertificated shares, for the Award Shares, reflecting the foregoing restrictions. |
9. | Amendment, Termination and Adjustments |
(a) | 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 (i) an outstanding Award of a Participant that was previously approved by the Committee for a Performance Period but has not yet been paid or (ii) any Award Shares that were previously issued to a Participant under the Plan. Unless otherwise specified by the Committee, all Award Shares that were issued prior to the termination of this Plan shall continue to be subject to the terms of this Plan following such termination; provided that the transfer restrictions on such Shares shall lapse as otherwise provided in Section 8. | |
(b) | 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 10 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 (collectively, the Extraordinary Events). Any securities that are distributed in respect to Award Shares in connection with any of the Extraordinary Events shall be deemed to be Award Shares and shall be subject to the transfer restrictions set forth herein to the same extent and for the same period as if such securities were the original Award Shares with respect to which they were issued, unless such restrictions are waived or otherwise altered by the Committee. | |
(c) | Notwithstanding the provisions of Subsection (a) or Subsection (b)(iii), 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 10 (except that adjustments and additions expressly authorized by this Section shall not be limited by this clause (i)), (ii) cause Rule 16b-3 to become inapplicable to this Plan or (iii) cause any amount of any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under Code Section 162(m)). |
10. | Award Shares Subject to Plan |
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11. | Approval by Stockholders |
12. | 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 therefore 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 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. | |
(e) | Non-transferability of Awards. Awards shall not be transferable by a Participant. Award Shares paid pursuant to an Award shall be transferable, subject to the restrictions described in Section 5. | |
(f) | Section 409A of the Internal Revenue Code. This Plan is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations issued thereunder, and shall be administered in a manner that is consistent with such intent. |
13. | Effective Date |
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I. | Change in Control. The term Change in Control shall mean the occurrence of (i), (ii) or (iii) below; provided that such occurrence occurs on or after February 1, 2010 and meets the requirements of Treasury Regulation Section 1.409A-3(i)(5) (or any successor or replacement thereto) with respect to a Participant: |
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); |
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. |
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II. | Definitions. The following terms as used herein shall be defined as follow: |
1. | Incumbent Directors means the individuals who, as of December 31, 2009, are Directors of NACCO and any individual becoming a Director subsequent to such date whose election, nomination for election by NACCOs 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 individuals 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 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. |
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1. | Effective Date |
2. | Purpose of the Plan |
3. | Code Section 409A |
4. | Definitions |
(a) | Account shall mean the record maintained by the Employer in accordance with Section 7 to reflect the Participants 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 established by the Committee and specified in the Guidelines. Any Award Term(s) applicable to a Qualified Performance-Based Award shall be established by the Committee not later than 90 days after the commencement of the Award Term on which such Qualified Performance-Based Award will be 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 Participants 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 Participants Beneficiary shall be his surviving legal spouse or, if none, his estate. | |
(e) | Change in Control shall mean 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 Companys Board of Directors, any other committee appointed by the Companys 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 shall mean 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. |
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(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) | Grant Date shall mean the effective date of an Award, which is the January 1st following the end of the Award Term. | |
(k) | 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 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. | |
(l) | Hay Salary Grade shall mean the salary grade or Salary Points assigned to a Participant by the Company pursuant to the Hay Salary System, or any successor salary system subsequently adopted by the Company. | |
(m) | Key Employee. A Participant shall be classified as a Key Employee if he meets the following requirements: |
| The Participant, with respect to the Participants 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 Treasury Regulation Section 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 Participants Termination of Employment. |
(n) | Maturity Date shall mean the date established in Section 10(a)(i) for each Sub-Account under the Plan. | |
(o) | 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. |
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(p) | 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. | |
(q) | Performance Objectives shall mean the performance objectives established pursuant to the Plan for Participants. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or any Subsidiary, division, business unit, department or function of the Company. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Any Performance Objectives applicable to a Qualified Performance-Based Award shall be based on one or more, or a combination, of the following criteria, or the attainment of specified levels of growth or improvement in one or more of the following criteria: return on equity, return on total capital employed, diluted earnings per share, total earnings, earnings growth, return on capital, return on assets, return on sales, earnings before interest and taxes, revenue, revenue growth, gross margin, return on investment, increase in the fair market value of shares, share price (including, but not limited to, growth measures and total stockholder return), operating profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), inventory turns, financial return ratios, market share, earnings measures/ratios, economic value added, balance sheet measurements (such as receivable turnover), internal rate of return, customer satisfaction surveys or productivity, net income, operating profit or increase in operating profit, market share, increase in market share, sales value increase over time, economic value income, economic value increase over time, new project development, adjusted standard margin or net sales. | |
(r) | Qualified Performance-Based Award shall mean any Award or portion of an Award granted to a Covered Employee that is intended to satisfy the requirements for qualified performance-based compensation under Code Section 162(m). | |
(s) | Retirement or Retire shall mean the (i) termination of a U.S. Participants 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. Participants 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. | |
(t) | ROTCE shall mean the return on total capital employed of the Company, as determined for a particular calendar year. | |
(u) | Salary Points means the salary points assigned to a Participant by the Committee for the applicable Award Term pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee. | |
(v) | 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. | |
(w) | Target Award shall mean a dollar amount calculated by multiplying (i) the designated salary midpoint that corresponds to a Participants Hay Salary Grade by (ii) the long-term incentive compensation target percent for that Hay Salary Grade for the applicable Award Term, as determined by the Committee. The Target Award is the Award that would be paid to a Participant under the Plan if each Performance Objective is met at exactly target level. | |
(x) | Termination of Employment shall mean, with respect to any Participants relationship with the Employers and their affiliates, a separation from service as defined in Code Section 409A (and the regulations and guidance issued thereunder). | |
(y) | 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, no such action may be taken by the Committee that would cause any Qualified Performance-Based Awards to be treated as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under Code Section 162(m)). |
6. | Eligibility |
7. | Accounts and Sub-Accounts |
8. | Granting of Awards/Crediting of Sub-Accounts |
(a) | 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 for such Award Term, which formula is based upon the Companys achievement of Performance Objectives, as set forth in the Guidelines; provided, however, that with respect to any Qualified Performance-Based Award, the Committee shall approve the foregoing not later than the ninetieth day of the applicable Award Term and prior to the completion of 25% of such Award Term. At such time, the Committee shall designate whether the Award is a Qualified Performance-Based Award. | |
(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 |
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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 any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under 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 Participants 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 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 any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under 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 Participants 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 1/1/11 shall be credited to the 2011 Sub-Account, the cash value of the Awards with a Grant Date of 1/1/12 shall be credited to the 2012 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 $5,000,000 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 $7,000,000. |
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(f) | Multiple Awards may be granted to a Participant; provided, however, that no two Awards to a Participant may have identical performance periods. | |
(g) | All determinations under this Section shall be made by the Committee. Each Qualified Performance-Based Award shall be granted and administered to comply with the requirements of Code Section 162(m). |
9. | Vesting |
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 2011 Sub-Account (containing Awards with a Grant Date of 1/1/11) shall be 1/1/14. 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, becomes Disabled, or incurs a Termination of Employment as a result of Retirement prior to the applicable Maturity Date, (X) the payment date of all amounts credited to the Participants Sub-Accounts as of the date of death, Disability, or such Termination of Employment shall be the date of such death, Disability, or Termination of Employment and (Y) the Award earned for the Award Term in which the date of death, Disability, 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 Retirement is a Key Employee, the Participants 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 Participants death). |
(b) | Interest. The Participants 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 Participants 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), (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 and (4) no interest in excess of 14% shall be credited to any 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 Participants Sub-Account balances during such month by 5%. In addition, as of the end of each calendar year in which the ROTCE for such calendar year exceeds 5%, the Sub-Accounts shall also be credited with an additional amount determined by multiplying the Participants Sub-Account balances during each month of such calendar year by the excess of the ROTCE rate over 5%, compounded monthly. In the event that, prior to an applicable Maturity Date, a Participant who is not a Covered Employee (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 |
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of the last day of the month prior to such date. When making such calculations, the ROTCE rate shall be equal to the year-to-date ROTCE rate as of the last day of the prior month. |
(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 Participants Sub-Account balances during such month by 14%. In the event that, prior to an applicable Maturity Date, a Participant who is a Covered Employee (1) incurs a Termination of Employment or (2) becomes eligible for a payment from a Sub-Account hereunder, the foregoing interest calculation shall be made as of the last day of the month prior to such date. Notwithstanding the foregoing, the Committee shall have the power to decrease the interest rate set forth in the first sentence of this Section 10(b)(ii) at any time, in its sole and absolute discretion, to the greater of (A) 5% or (B) the year-to-date ROTCE rate as of the last day of the prior month. | |
(iii) | Changes. The Committee may change (or suspend) the interest rate credited on Accounts hereunder at any time. Notwithstanding the foregoing, no such change may be made in a manner that would cause any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under 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 Participants 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 Retirement is a Key Employee whose payment is delayed until the 1st day of the 7th month following such Termination of Employment, such Participants Sub-Accounts shall continue to be credited with interest (in accordance with the rules specified in Section 10(b) but at the rate of 5%) 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. | |
(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 Participants 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 Participants 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 |
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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 Participants 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 as permitted under Code Section 409A 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 and the regulations issued thereunder. | |
(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 Participants 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. | |
(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) | No amendment may cause any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under Code Section 162(m)). | |
(e) | 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 therefore 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. |
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(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 Participants 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. 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 Participants 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 | |
(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 |
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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 Participants employment with more than one Employer, the following provisions shall apply: |
(1) | Upon a transfer of employment, the Participants 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 processing the payment of the entire amount which is allocated to the Participants 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 Participants 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 Participants 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 Employers allocable share of the Participants 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 |
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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); |
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 |
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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, 2009, are Directors of NACCO and any individual becoming a Director subsequent to such date whose election, nomination for election by NACCOs 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 individuals 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 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. |
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1. | Effective Date |
2. | Purpose of the Plan |
3. | Application of Code Section 409A |
4. | Definitions |
(a) | Account shall mean the record maintained by the Employer in accordance with Section 7 to reflect the Participants 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 established by the Committee and specified in the Guidelines. Any Award Term(s) applicable to a Qualified Performance-Based Award shall be established by the Committee not later than 90 days after the commencement of the Award Term on which such Qualified Performance-Based Award will be 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 all amounts hereunder in the event of the death of a Participant. In the absence of such a designation and at any time when there is no existing Beneficiary hereunder, a Participants Beneficiary shall be his surviving legal spouse or, if none, his estate. | |
(e) | Change in Control shall mean 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 Board of Directors of the Company, any other committee appointed by such Board of Directors, or any sub-committee appointed by the Compensation Committee to administer this Plan in accordance with Section 5; provided that 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). |
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(h) | Covered Employee shall mean 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) | Grant Date shall mean the effective date of an Award, which is the January 1st following the end of the Award Term. | |
(k) | 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 on matters other than the time and form 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. | |
(l) | Hay Salary Grade shall mean the salary grade or Salary Points assigned to a Participant by the Employers pursuant to the Hay Salary System, or any successor salary system subsequently adopted by the Employers; provided, however, that for purposes of determining Target Awards for U.S. Participants, the midpoint of the national salary ranges (unadjusted for geographic location) shall be used. | |
(m) | Key Employee. A Participant shall be classified as a Key Employee if he meets the following requirements: |
| The Participant, with respect to the Participants 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 in Treasury Regulation Section 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 Participants Termination of Employment. |
(n) | Maturity Date shall mean the date established under Section 10(a)(i) of the Plan. | |
(o) | 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 |
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Date of a 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 the Sub-Account holding such Award is paid, regardless of any subsequent change in classification. |
(p) | 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. | |
(q) | Performance Objectives shall mean the performance objectives established pursuant to the Plan for Participants. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or any Subsidiary, division, business unit, department or function of the Company. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Any Performance Objectives applicable to a Qualified Performance-Based Award shall be based on one or more, or a combination, of the following criteria, or the attainment of specified levels of growth or improvement in one or more of the following criteria: return on equity, return on total capital employed, diluted earnings per share, total earnings, earnings growth, return on capital, return on assets, return on sales, earnings before interest and taxes, revenue, revenue growth, gross margin, return on investment, increase in the fair market value of shares, share price (including, but not limited to, growth measures and total stockholder return), operating profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), inventory turns, financial return ratios, market share, earnings measures/ratios, economic value added, balance sheet measurements (such as receivable turnover), internal rate of return, customer satisfaction surveys or productivity, net income, operating profit or increase in operating profit, market share, increase in market share, sales value increase over time, economic value income, economic value increase over time, new project development, adjusted standard margin or net sales. | |
(r) | Qualified Performance-Based Award shall mean any Award or portion of an Award granted to a Covered Employee that is intended to satisfy the requirements for qualified performance-based compensation under Code Section 162(m). | |
(s) | Retirement or Retire shall mean the termination of a Participants employment with the Employers after the Participant has reached age 55 and completed at least 5 years of service. | |
(t) | ROTCE shall mean consolidated return on total capital employed of NACCO Industries, Inc. (NACCO), as determined by NACCO for a particular calendar year. | |
(u) | Salary Points means the salary points assigned to a Participant by the Committee for the applicable Award Term pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee. | |
(v) | 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. The Company and the Subsidiaries shall be referred to herein collectively as the Employers. | |
(w) | Target Award shall mean a dollar amount calculated by multiplying (i) the designated salary midpoint that corresponds to a Participants Hay Salary Grade by (ii) the long-term incentive compensation target percent for that Hay Salary Grade for the applicable Award Term, as determined by the Committee. The Target Award is the Award that would be paid to a Participant under the Plan if each Performance Objective is met exactly at target. | |
(x) | Termination of Employment shall mean, with respect to any Participants relationship with the Company and its affiliates, a separation from service as defined in Code Section 409A (and the regulations and guidance issued thereunder). | |
(y) | 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 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. | |
(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, no such action may be taken by the Committee that would cause any Qualified Performance-Based Awards to be treated as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under Code Section 162(m)). |
6. | Eligibility |
7. | Accounts and Sub-Accounts |
8. | Granting of Awards/Crediting to Sub-Accounts |
(a) | 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 for such Award Term, which formula is based upon the Companys achievement of Performance Objectives, as set forth in the Guidelines; provided, however, that with respect to any Qualified Performance-Based Award, the Committee shall approve the foregoing not later than the ninetieth day of the applicable Award Term and prior to the completion of 25% of such Award Term. At such time, the Committee shall designate whether the Award is a Qualified Performance-Based Award. | |
(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 |
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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 amount determined in accordance with the foregoing provisions and/or adjust the amount 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 other change may be made that would cause any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under 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 a Participants 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 circumstances: (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 will be reflected in a pro-rata Target Award, (ii) employees hired into or promoted to 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 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; provided, however, that (X) no such decrease may occur following a Change in Control and (Y) no such increase, adjustment or other change may be made that would cause any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under Code Section 162(m)). In order to be eligible to receive an Award for an Award Term, the Participant must be employed by the Employers and must be a Participant on December 31st of the last year of the 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 based on 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 Participants 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 1/1/11 shall be credited to the 2011 Sub-Account, the cash value of the Awards with a Grant Date of 1/1/12 shall be credited to the 2012 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 $5,000,000 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 $7,000,000. |
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(f) | Multiple Awards may be granted to a Participant; provided, however, that no two Awards to a Participant may have identical performance periods. | |
(g) | All determinations under this Section shall be made by the Committee. Each Qualified Performance-Based Award shall be granted and administered to comply with the requirements of Code Section 162(m). |
9. | Vesting |
10. | Payment of Sub-Account Balances/Interest |
(a) | Payment Dates. |
(b) | Interest. The Participants 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 Participants 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), (3) no interest shall be credited to a Sub-Account after the last day of the month preceding the payment date of such Sub-Account and (4) no interest in excess of 14% shall be credited to any 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 Participants Sub-Account balances during such month by 5%. In addition, as of the end of each calendar year in which the ROTCE for such calendar year exceeds 5%, the Sub-Accounts shall also be credited with an additional amount determined by multiplying the Participants Sub-Account balances during each month of such calendar year by the excess of the ROTCE rate over 5%, compounded monthly. In the event that, prior to an applicable Maturity Date, a Participant who is not a Covered Employee (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 |
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of the last day of the month prior to such date. When making such calculations, the ROTCE rate shall be equal to the year-to-date ROTCE rate as of the last day of the prior month. |
(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 Participants Sub-Account balances during such month by 14%. In the event that, prior to an applicable Maturity Date, a Participant who is a Covered Employee (1) incurs a Termination of Employment or (2) becomes eligible for a payment from a Sub-Account hereunder, the foregoing interest calculation shall be made as of the last day of the month prior to such date. Notwithstanding the foregoing, the Committee shall have the power to decrease the interest rate set forth in the first sentence of this Section 10(b)(ii) at any time, in its sole and absolute discretion, to the greater of (A) 5% or (B) the year-to-date ROTCE rate as of the last day of the prior month. | |
(iii) | Changes. The Committee may change (or suspend) the interest rate credited on Accounts hereunder at any time. Notwithstanding the foregoing, no such change may be made in a manner that would cause any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under 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 Participants Employer (or former Employer) shall deliver to the Participant (or, if applicable, his Beneficiary), a check in full payment of each Sub-Account hereunder 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); provided, however, that if a Participant who incurs a Termination of Employment on account of Retirement is a Key Employee whose payment is delayed until the 1st day of the 7th month following such Termination of Employment, such Participants Sub-Accounts shall continue to be credited with interest (at the rate of 5%) from the date of such Termination of Employment through the last day of the month prior to the actual 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 10 days following such delayed payment date. Amounts that are payable to 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. | |
(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 Participants 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 Participants 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. |
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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 no such amendment shall, without the written consent of a Participant, (i) reduce a Participants 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 as permitted under Code Section 409A or are required to bring such provisions into compliance with the requirements of Code Section 409A and the regulations issued thereunder. | |
(b) | 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). | |
(c) | No amendment may cause any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under Code Section 162(m)). | |
(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 the Employers, or shall in any way affect the right and power of the Employers to terminate the employment of any employee at any time with or without assigning a reason therefore to the same extent as the Employers 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 Commonwealth of Virginia, 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 and no Account balance of a Participant under this Plan shall be 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, any amounts payable hereunder shall be paid to the Participants 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. 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 Participants Employer or former Employer. |
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(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 amounts due hereunder may be accelerated to the extent necessary to (i) comply with federal, state, local or foreign ethics or conflicts of interest laws or agreements or (ii) pay the FICA taxes imposed under Code Section 3101, and the income withholding taxes related thereto. Payments may also be accelerated 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. | |
(iv) | Delayed Payments due to Solvency Issues. Notwithstanding any provision of the Plan to the contrary, 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 Company 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 Company reasonably anticipates that making the payment will not cause such violation. |
14. | Liability of Employers. |
15. | Approval by Stockholders |
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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 either of the following apply (such a Business Combination, an Excluded Business Combination) (A) a Business Combination involving Housewares Holding Co. (or any successor thereto) that relates solely to the business or assets of The Kitchen Collection, Inc. (or any successor thereto) or (B) a Business Combination pursuant to which 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); |
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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. |
1. | Incumbent Directors means the individuals who, as of December 31, 2009, are Directors of NACCO and any individual becoming a Director subsequent to such date whose election, nomination for election by NACCOs 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 individuals 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 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 Hamilton Beach Brands, Inc. and its successors (HB), any direct or indirect subsidiary of HB and any entity that directly or indirectly controls HB. |
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1. | Purpose of the Plan |
2. | Definitions |
(a) | Award means cash paid to a Participant under the Plan for a Performance Period in an amount determined in accordance with Section 5. | |
(b) | Change in Control means the occurrence of an event described in Appendix 1 hereto. | |
(c) | Committee means the Compensation Committee of the Companys Board of Directors or any other committee appointed by the Companys 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 each member of the Committee is (i) an outside director for purposes of Section 162(m) and (ii) is not an employee of the Company or any of its subsidiaries. | |
(d) | Covered Employee means any Participant who is a covered employee for purposes of Section 162(m) or any Participant who the Committee determines in its sole discretion could become a covered employee. | |
(e) | 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. | |
(f) | Participant means any person who is classified by the Company 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 Company; provided, however, that the Committee may select any employee who is expected to contribute, or who has contributed, significantly to the Companys profitability to participate in the Plan and receive an Award hereunder; and further provided, however, that following the end of the Performance Period the Committee may make one or more discretionary Awards to employees of the Company who were not previously designated as Participants. Directors of the Company who are also employees of the Company are eligible to participate in the Plan. Employees of the Companys Subsidiaries shall not be eligible to participate in the Plan. | |
(g) | Payment Period means, with respect to any Performance Period, the period from January 1 to March 15 of the calendar year immediately following the calendar year in which such Performance Period ends. | |
(h) | Performance Period means any period of one year (or portion thereof) on which an Award is based, as established by the Committee. Any Performance Period(s) applicable to a Qualified Performance-Based Award shall be established by the Committee not later than 90 days after the commencement of the Performance Period on which such Qualified Performance-Based Award will be based and prior to completion of 25% of such Performance Period. | |
(i) | Performance Objectives shall mean the performance objectives established pursuant to the Plan for Participants. Performance Objectives may be described in terms of Company-wide objectives or |
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objectives that are related to the performance of the individual Participant or any Subsidiary, division, business unit, department or function of the Company. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Any Performance Objectives applicable to a Qualified Performance-Based Award shall be based on one or more, or a combination, of the following criteria, or the attainment of specified levels of growth or improvement in one or more of the following criteria: return on equity, return on total capital employed, diluted earnings per share, total earnings, earnings growth, return on capital, return on assets, return on sales, earnings before interest and taxes, revenue, revenue growth, gross margin, return on investment, increase in the fair market value of shares, share price (including, but not limited to, growth measures and total stockholder return), operating profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), inventory turns, financial return ratios, market share, earnings measures/ratios, economic value added, balance sheet measurements (such as receivable turnover), internal rate of return, customer satisfaction surveys or productivity, net income, operating profit or increase in operating profit, market share, increase in market share, sales value, sales value increase over time, economic value income, economic value increase over time, new project development, adjusted gross margin or net sales. |
(j) | Qualified Performance-Based Award shall mean any Award or portion of an Award granted to a Covered Employee that is intended to satisfy the requirements for qualified performance-based compensation under Section 162(m). | |
(k) | Retire means a termination of employment that entitles the Participant to immediate commencement of his pension benefits under The Combined Defined Benefit Plan of NACCO Industries, Inc. and its Subsidiaries or, for Participants who are not members of such plan, a termination of employment after reaching age 60 with at least 15 years of service with the Company or a member of the Companys controlled group (as defined in Code Section 414). | |
(l) | Salary Points means the salary points assigned to a Participant by the Committee for the applicable Performance Period pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee. | |
(m) | Section 162(m) means Section 162(m) of the Internal Revenue Code of 1986, as amended, or any successor provision. | |
(n) | 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. | |
(o) | Target Award shall mean the designated salary midpoint that corresponds to a Participants Salary Points, multiplied by the short-term incentive compensation target percent for those Salary Points for the applicable Performance Period, as determined by the Committee. |
3. | Administration |
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4. | Eligibility |
5. | Awards |
(a) | 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 Companys achievement of Performance Objectives; provided, however, that with respect to any Qualified Performance-Based Award, the Committee shall approve the foregoing not later than the ninetieth day of the applicable Performance Period and prior to the completion of 25% of such Performance Period. | |
(b) | Prior to the end of the Payment Period, 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. Such approval shall be certified by the Committee before any amount is paid under any Award with respect to that Performance Period. Notwithstanding the foregoing, the Committee shall have the power to (1) decrease the amount of any Award below the amount determined in accordance with Section 5(b)(i); and/or (2) increase the amount of any Award above the amount determined in accordance with Section 5(b)(i); provided, however, that (A) no such decrease may occur following a Change in Control and (B) no such increase, change or adjustment may be made that would cause any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under Code Section 162(m)). 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 fully paid during the Payment Period and shall be paid in cash. Awards shall be paid subject to all withholdings and deductions pursuant to Section 7. Notwithstanding any other provision of the Plan, the maximum amount paid to a Participant in a single calendar year as a result of Awards under this Plan shall not exceed $6,000,000 or such lesser amount specified in the Guidelines. |
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(d) | At such time as the Committee approves a Target Award and formula for determining the amount of each Award, the Committee shall designate whether all or any portion of the Award is a Qualified Performance-Based Award. |
6. | Change in Control |
(a) | The following provisions shall apply notwithstanding any other provision of the Plan to the contrary. | |
(b) | Amount of Award for Year of Change In Control. In the event of a Change in Control during a Performance Period, the amount of the Award payable to a Participant who is employed on the date of the Change in Control (or who died, become permanently disabled or Retired during such Performance Period and prior to the Change in Control) for such Performance Period shall be equal to the Participants Target Award for such Performance Period, multiplied by a fraction, the numerator of which is the number of days during the Performance Period during which the Participant was employed by the Company (or a controlled group member) prior to the Change in Control and the denominator of which is the number of days in the Performance Period. | |
(c) | Time of Payment. In the event of a Change in Control, the payment date of all outstanding Awards (including, without limitation, the pro-rata Target Award for the Performance Period 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. |
7. | Withholding Taxes |
8. | Amendment and Termination |
9. | Approval by Stockholders |
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 therefore 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 |
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material or relevant to the construction of this Plan or any provisions thereof. The use of the masculine gender shall also include within its meaning the feminine. The use of the singular shall also include within its meaning the plural, and vice versa. |
(d) | American Jobs Creation Act. It is intended that this Plan be exempt from the requirements of Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation Act, and the Plan shall be interpreted and administered in a manner to give effect to such intent. | |
(e) | Limitation on Rights of Participants; No trust. No trust has been created by the Company for the payment of Awards granted under this Plan; nor have the Participants 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 Participants hereunder are unsecured creditors of the Company. | |
(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 from all liability with respect to such Award. |
11. | Effective Date |
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I. | Change in Control. The term Change in Control shall mean the occurrence of (i), (ii) or (iii) below; provided that such occurrence occurs on or after January 1, 2010 and meets the requirements of Treasury Regulation Section 1.409A-3(i)(5) (or any successor or replacement thereto) with respect to a Participant: |
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); |
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. |
II. | Definitions. The following terms as used herein shall be defined as follow: |
1. | Incumbent Directors means the individuals who, as of December 31, 2009, are Directors of NACCO and any individual becoming a Director subsequent to such date whose election, nomination for election by NACCOs 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 |
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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 individuals 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 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. |
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1. | Purpose of the Plan |
2. | Definitions |
(a) | Award means cash paid to a Participant under the Plan for a Performance Period in an amount determined in accordance with Section 5. | |
(b) | Change in Control means the occurrence of an event described in Appendix 1 hereto. | |
(c) | Committee means the Compensation Committee of the Companys Board of Directors or any other committee appointed by the Companys 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 each member of the Committee is (i) an outside director for purposes of Section 162(m) and (ii) is not an employee of the Company or any of its subsidiaries. | |
(d) | Covered Employee means any Participant who is a covered employee for purposes of Section 162(m) or any Participant who the Committee determines in its sole discretion could become a covered employee. | |
(e) | 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. | |
(f) | Participant means any person who is classified by the Employers 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 his Employer; 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 Performance Period the Committee may make one or more discretionary Awards to employees of the Employers who were not previously designated as Participants. Directors of the Company who are also employees of the Company are eligible to participate in the Plan. | |
(g) | Payment Period means, with respect to any Performance Period, the period from January 1 to March 15 of the calendar year immediately following the calendar year in which such Performance Period ends. | |
(h) | Performance Period means any period of one year (or portion thereof) on which an Award is based, as established by the Committee. Any Performance Period(s) applicable to a Qualified Performance-Based Award shall be established by the Committee not later than 90 days after the commencement of the Performance Period on which such Qualified Performance-Based Award will be based and prior to completion of 25% of such Performance Period. | |
(i) | Performance Objectives shall mean the performance objectives established pursuant to the Plan for Participants. Performance Objectives may be described in terms of Company-wide objectives or |
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objectives that are related to the performance of the individual Participant or any Subsidiary, division, business unit, department or function of the Company. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Any Performance Objectives applicable to a Qualified Performance-Based Award shall be based on one or more, or a combination, of the following criteria, or the attainment of specified levels of growth or improvement in one or more of the following criteria: return on equity, return on total capital employed, diluted earnings per share, total earnings, earnings growth, return on capital, return on assets, return on sales, earnings before interest and taxes, revenue, revenue growth, gross margin, return on investment, increase in the fair market value of shares, share price (including, but not limited to, growth measures and total stockholder return), operating profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), inventory turns, financial return ratios, market share, earnings measures/ratios, economic value added, balance sheet measurements (such as receivable turnover), internal rate of return, customer satisfaction surveys or productivity, net income, operating profit or increase in operating profit, market share, increase in market share, sales value, sales value increase over time, economic value income, economic value increase over time or new project development. |
(j) | Qualified Performance-Based Award shall mean any Award or portion of an Award granted to a Covered Employee that is intended to satisfy the requirements for qualified performance-based compensation under Section 162(m). | |
(k) | Retire means a termination of employment that entitles the Participant to immediate commencement of his pension benefits under The Combined Defined Benefit Plan of NACCO Industries, Inc. and its Subsidiaries or, for Participants who are not members of such plan, a termination of employment after reaching age 55 with at least 10 years of service with the Company or a member of the Companys controlled group (as defined in Code Section 414). | |
(l) | Salary Points means the salary points assigned to a Participant by the Committee for the applicable Performance Period pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee. | |
(m) | Section 162(m) means Section 162(m) of the Internal Revenue Code of 1986, as amended, or any successor provision. | |
(n) | 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. | |
(o) | Target Award shall mean the designated salary midpoint that corresponds to a Participants Salary Points, multiplied by the short-term incentive compensation target percent for those Salary Points for the applicable Performance Period, as determined by the Committee. |
3. | Administration |
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4. | Eligibility |
5. | Awards |
(a) | 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 Companys achievement of Performance Objectives; provided, however, that with respect to any Qualified Performance-Based Award, the Committee shall approve the foregoing not later than the ninetieth day of the applicable Performance Period and prior to the completion of 25% of such Performance Period. | |
(b) | Prior to the end of the Payment Period, 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. Such approval shall be certified in writing by the Committee before any amount is paid under any Award with respect to that Performance Period. Notwithstanding the foregoing, the Committee shall have the power to (1) decrease the amount of any Award below the amount determined in accordance with Section 5(b)(i); and/or (2) increase the amount of any Award above the amount determined in accordance with Section 5(b)(i); provided, however, that (A) no such decrease may occur following a Change in Control and (B) no such increase, change or adjustment may be made that would cause any Qualified Performance-Based Award to be includable as applicable employee remuneration of such Participant, as such term is defined in Section 162(m) (i.e., to no longer qualify for the exception for qualified performance-based compensation under Code Section 162(m)). 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 fully paid during the Payment Period and shall be paid in cash. Awards shall be paid subject to all withholdings and deductions pursuant to Section 7. Notwithstanding any other provision of the Plan, the maximum amount paid to a Participant in a single calendar year as a |
E-3
result of Awards under this Plan shall not exceed $5,000,000 or such lesser amount specified in the Guidelines. |
(d) | At such time as the Committee approves a Target Award and formula for determining the amount of each Award, the Committee shall designate whether all or any portion of the Award is a Qualified Performance-Based Award. |
6. | Change in Control |
(a) | The following provisions shall apply notwithstanding any other provision of the Plan to the contrary. | |
(b) | Amount of Award for Year of Change In Control. In the event of a Change in Control during a Performance Period, the amount of the Award payable to a Participant who is employed on the date of the Change in Control (or who died, become permanently disabled or Retired during such Performance Period and prior to the Change in Control) for such Performance Period shall be equal to the Participants Target Award for such Performance Period, multiplied by a fraction, the numerator of which is the number of days during the Performance Period during which the Participant was employed by the Employer (or a controlled group member) prior to the Change in Control and the denominator of which is the number of days in the Performance Period. | |
(c) | Time of Payment. In the event of a Change in Control, the payment date of all outstanding Awards (including, without limitation, the pro-rata Target Award for the Performance Period 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. |
7. | Withholding Taxes |
8. | Amendment and Termination |
9. | Approval by Stockholders |
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 Employers, or shall in any way affect the right and power of the Employers to terminate the employment of any employee at any time with or without assigning a reason therefore to the same extent as the Employers 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. |
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(c) | Miscellaneous. Headings are given to the sections of this Plan solely as a convenience to facilitate reference. Such headings, numbering and paragraphing shall not in any case be deemed in any way material or relevant to the construction of this Plan or any provisions thereof. The use of the masculine gender shall also include within its meaning the feminine. The use of the singular shall also include within its meaning the plural, and vice versa. | |
(d) | American Jobs Creation Act. It is intended that this Plan be exempt from the requirements of Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation Act, and the Plan shall be interpreted and administered in a manner to give effect to such intent. | |
(e) | Limitation on Rights of Participants; No trust. No trust has been created by the Company for the payment of Awards granted under this Plan; nor have the Participants 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 Participants hereunder are unsecured creditors of the Company. | |
(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 from all liability with respect to such Award. |
11. | Effective Date |
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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); |
ii. | a majority of the Board of Directors of NACCO ceases to be comprised of Incumbent Directors; or |
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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. |
1. | Incumbent Directors means the individuals who, as of December 31, 2009, are Directors of NACCO and any individual becoming a Director subsequent to such date whose election, nomination for election by NACCOs 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 individuals 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 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 The North American Coal Corporation and its successors (NA Coal), any direct or indirect subsidiary of NA Coal and any entity that directly or indirectly controls NA Coal. |
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Admission Ticket | ||||||||||
Electronic Voting Instructions You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose
one of the two voting
methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Central Time, on May 11, 2010. |
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Vote by
Internet Log on to the Internet and go to www.investorvote.com/NC Follow the steps outlined on the secured website. |
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Vote by
telephone Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone. There is NO CHARGE to you for the call. |
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Using a black
ink pen, mark your votes with an X as shown in this
example. Please do not write outside the designated areas. |
x | Follow the instructions provided by the recorded message. |
Annual Meeting Proxy Card |
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A Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2 7. |
1. |
Election of Directors: | 01 - Owsley Brown II | 02 - Dennis W. LaBarre | 03 - Richard de J. Osborne | + | |||||
04 - Alfred M. Rankin, Jr. | 05 - Michael E. Shannon | 06 - Britton T. Taplin | ||||||||
07 - David F. Taplin | 08 - John F. Turben | 09 - Eugene Wong |
o | Mark here to vote FOR all nominees | |||||||||||||||||||||||||||||||||||||||||
o | Mark here to WITHHOLD vote from all nominees | |||||||||||||||||||||||||||||||||||||||||
01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | ||||||||||||||||||||||||||||||||||
o | Mark here to vote FOR ALL EXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. |
o | o | o | o | o | o | o | o | o |
For | Against | Abstain | For | Against | Abstain | |||||||||||||||
2. |
Proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code and Section 303A.08 of the New York Stock Exchanges listing standards, the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (Amended and Restated Effective February 1, 2010). | o | o | o | 3. | Proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code, the NACCO Materials Handling Group Inc. Long-Term Incentive Compensation Plan (Effective January 1, 2010). | o | o | o | |||||||||||
4. |
Proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code, the Hamilton Beach Brands, Inc. Long-Term Incentive Compensation Plan (Effective January 1, 2010). | o | o | o | 5. | Proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code, the NACCO Industries, Inc. Annual Incentive Compensation Plan (Effective January 1, 2010). | o | o | o | |||||||||||
6. |
Proposal to approve, for purposes of Section 162(m) of the Internal Revenue Code, The North American Coal Corporation Annual Incentive Compensation Plan (Effective January 1, 2010). | o | o | o | 7. | Proposal to confirm the appointment of the independent registered public accounting firm of the Company for the current fiscal year. | o | o | o |
Proxy NACCO Industries, Inc.
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+ | |
B Non-Voting
Items |
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Change of Address
Please print your new address below.
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Comments Please print your comments below.
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Meeting Attendance |
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Mark the box to the right if you plan to attend the Annual Meeting. |
o |
Date (mm/dd/yyyy) Please print date below. | Signature 1 Please keep signature within the box. | Signature 2 Please keep signature within the box. | ||
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n | IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. | + |