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Exhibit 10 (lxiv)
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NACCO MATERIALS HANDLING GROUP, INC.
SENIOR EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN
(EFFECTIVE AS OF JANUARY 1, 2000)
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1. PURPOSE OF THE PLAN
The purpose of this January 1, 2000 Senior Executive Long Term
Incentive Compensation Plan (the "Plan") is to further the long-term profits and
growth of NACCO Materials Handling Group, Inc. (the "Company") by enabling the
Company and its Subsidiaries to attract and retain key executive employees by
offering long-term incentive compensation to those key executive employees who
will be in a position to make significant contributions to such profits and
growth. This incentive is in addition to annual compensation and is intended to
reflect growth in the value of the Company's stockholders' equity.
2. DEFINITIONS
(a) "Award" shall mean an award of Book Value Units granted to a
Participant under this Plan for an Award Term in an amount determined pursuant
to a formula which is established by the Committee not later than the 90th
calendar day of the Award Term. Notwithstanding the foregoing, for the Award
Term beginning on January 1, 2000, such formula shall be established by the
Committee prior to or as soon as practicable following the adoption of the Plan.
(b) "Award Units" shall mean Book Value Units which are issued pursuant
to, and with such restrictions as are imposed by, the terms of this Plan.
(c) "Award Unit Price" as to any Book Value Unit shall mean the Book
Value on the Quarter Date coincident with or immediately preceding the Grant
Date of the Award.
(d) "Award Term" shall mean the period of one or more years on which an
Award is based.
(e) "Beneficiary" shall mean the person(s) designated in writing (on a
form acceptable to the Committee) to receive the payment of all or part of an
Award hereunder in the event of the death of a Participant. In the absence of
such a designation and at anytime when there is no existing Beneficiary
hereunder, Participant's Beneficiary shall be his surviving Spouse or, if none,
his estate.
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(f) "Book Value" as to any Book Value Unit shall mean an amount
determined by the Committee or, if no amount is set by the Committee, as of any
date (i) the stockholders' equity (as determined in accordance with generally
accepted accounting principles, applied on a consistent basis) allocable to the
Common Stock of the Company, as set forth on the consolidated balance sheet of
the Company and its Subsidiaries as of the Quarter Date coincident with or
immediately preceding such date, divided by (ii) the number of Notional Shares
existing as of such Quarter Date; provided, however, that Book Value and/or the
number of Notional Shares may be adjusted to such an extent as may be determined
by the Committee to preserve the benefit of the arrangement for holders of Book
Value Units and the Company, if in the opinion of the Committee, after
consultation with the Company's independent public accountants, changes in the
Company's accounting policies, acquisitions or other unusual or extraordinary
items have materially affected the stockholders' equity allocable to the
Notional Shares.
(g) "Book Value Unit" or "Unit" shall mean a right granted pursuant to
the terms and conditions set forth in Section 5.
(h) "Committee" shall mean the Nominating, Organization and
Compensation Committee of the Company's Board of Directors or any other
committee appointed by the Company's Board of Directors to administer this Plan
in accordance with Section 3.
(i) "Grant Date" shall mean the effective date of an Award, as
determined under Section 5(b)(ii) of the Plan.
(j) "Guidelines" shall mean the guidelines that are approved by the
Committee for each Award Term for the administration of the Awards granted under
the Plan. To the extent that there is any inconsistency between the Guidelines
and the Plan, the Guidelines shall control.
(k) "Hay Salary Grade" shall mean the salary grade or points assigned
to a Participant by the Company pursuant to the Hay Salary System, or any
successor salary system subsequently adopted by the Company.
(l) "Notional Shares" shall mean the number of assumed shares of Common
Stock of the Company as determined by the Committee from time to time in order
to implement the purposes of the Plan, and shall equal 20 million shares on the
effective date described in Section 10 hereof.
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(m) "Participant" shall mean any person who meets the eligibility
criteria set forth in Section 4 and who is granted an Award under the Plan.
(n) "Quarter Date" shall mean the last business day of each calendar
quarter.
(o) "Retirement" or "Retire" shall mean the (i) termination of a U.S.
Participant's employment with the Company and the Subsidiaries after the
Participant has reached age 60 and completed at least 15 years of service, or
(ii) termination of a non-U.S. Participant's employment with the Company and the
Subsidiaries which qualifies as a retirement under local practices and
procedures and/or which qualifies the non-U.S. Participant for foreign
retirement benefits.
(p) "Subsidiary" shall mean any (i) corporation, partnership or other
entity, the majority of the outstanding voting securities of which is owned,
directly or indirectly, by the Company or (ii) NMHG Distribution Co. and its
subsidiaries.
(q) "Target Award" shall mean the dollar value of the Award to be paid
to a Participant under the Plan assuming that the performance targets are met.
3. ADMINISTRATION
This Plan shall be administered by the Committee. The Committee shall
have complete authority to interpret all provisions of this Plan consistent with
law, to prescribe the form of any instrument evidencing any Award granted under
this Plan, to adopt, amend and rescind general and special rules and regulations
for its administration (including, without limitation, the Guidelines), and to
make all other determinations necessary or advisable for the administration of
this Plan. 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 its Subsidiaries, 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.
4. ELIGIBILITY
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Any person who is classified by the Company or a Subsidiary as a
salaried employee of the Company or any Subsidiary (including any Subsidiary
acquired after adoption of this Plan) generally at a Hay Salary Grade of 25 or
above (or a compensation level equivalent thereto), who in the judgment of the
Committee occupies an officer or other key executive position in which his
efforts may significantly contribute to the profits or growth of the Company or
a Subsidiary, may be awarded Book Value Units. Notwithstanding the foregoing,
the following persons shall not be eligible to participate in the Plan: (a)
directors of the Company or any Subsidiary who are not classified as salaried
employees of the Company or any Subsidiary, (b) leased employees (as such term
is defined in Section 414 of the Internal Revenue Code (the "Code") and (c)
salaried employees of the Company or a Subsidiary who are participants in the
NACCO Materials Handling Group, Inc. Long Term Incentive Compensation Plan. A
person who satisfies the requirements of this Section 4 shall become a
Participant in the Plan when granted an Award hereunder.
5. GRANTING OF AWARDS
The Committee may, from time to time and upon such conditions as it may
determine, authorize the granting of Awards to Participants, which shall be not
inconsistent with, and shall be subject to all of the requirements of, the
following provisions:
(a) Not later than the ninetieth day of each calendar year (or as soon
as practicable after the date of the adoption of the Plan, if later), the
Committee shall approve (i) a Target Award to be granted to each Participant for
such year and (ii) a formula for determining the amount of each Award, which
formula is based upon the Company's return on equity for the applicable Award
Term.
(b) Effective during April of the calendar year following the Award
Term, the Committee shall approve:
(i) a preliminary calculation of the amount of each Award based
upon the application of the formula 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 granted
to each Participant for the Award Term, which amount shall be not greater than
the amount determined in accordance with Section 5(b)(i) (the "Grant Date" of
such Award being January 1st of the calendar year following the Award Term). The
Committee shall have the power to decrease, but not to increase, the amount of
any Award below the amount determined in accordance with Section 5(b)(i);
provided, however, no Award,
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including any Award equal to the Target Award, shall be payable under the Plan
to any Participant except as determined by the Committee. For purposes of this
calculation, Awards shall be based on the Participant's Hay Salary Grade as of
January 1 of the Award Term.
(c) In order to be eligible to receive an Award for an Award Term, the
Participant must be employed during the entire Award Term or must have died,
become disabled or Retired during the Award Term, in which case the Participant
shall be entitled to a pro-rata portion of the Award for such Award Term.
(d) Each Award shall be granted in the form of Book Value Units. The
number of Book Value Units to be issued to a Participant shall be determined by
dividing the amount of the Award by the Award Unit Price. Notwithstanding any
other provision of the Plan, the maximum cash value of the Awards granted to a
Participant under this Plan in a single year shall not exceed $2,250,000.
(e) Multiple Awards may be granted to a Participant; provided, however,
that no two Awards to a Participant may have identical performance periods
6. VESTING; PAYMENT OF AWARDS
(a) VESTING. All Book Value Units granted pursuant to an Award
hereunder shall be immediately 100% vested as of the Grant Date.
(b) PAYMENT RESTRICTIONS. Each Award shall provide that the Book Value
Units granted therein shall be subject to a payment restriction in the manner
and to the extent prescribed by the Committee for a period of five years from
the Grant Date, or such other shorter or longer period as may be determined by
the Committee from time to time. Notwithstanding the foregoing, such payment
restrictions shall automatically lapse upon a termination of employment by
reason of death, permanent disability or Retirement. In addition, in the case of
other special circumstances of a Participant who holds Award Units as to which
the payment restrictions have not lapsed, or in case of a termination of the
Plan pursuant to Section 8, the Committee may, in its sole discretion,
accelerate the time at which such payment restrictions will lapse.
(c) PAYMENT DATE/VALUE. Subject to Subsection 6(e) hereof, and unless a
Participant makes a deferral election under Subsection (d) of this Section, as
soon as practicable following the lapse of a payment restriction applicable to
an Award pursuant to Section 6(b), the employer or former employer of
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the Participant shall deliver to the Participant (or, if applicable, his
Beneficiary), a check in full payment of the Book Value Units granted pursuant
to such Award. For participants who terminated employment (for reasons other
than death, permanent disability or Retirement), the value of such Book Value
Units shall be based on the Book Value as of the Quarter Date coincident with or
immediately preceding the date of termination. For Participants who terminated
employment due to death, permanent disability or Retirement, the value of such
Book Value Units shall be based on the Book Value as of the Quarter Date
coincident with or immediately preceding the date on which the payment
restriction lapses. 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.
(d) DEFERRAL OPTION. Prior to the date described in Subsection (c), to
the extent determined by the Committee in its sole and absolute discretion (and
subject to the rules and procedures specified in the Guidelines), a Participant
may make an irrevocable election to defer receipt of 100% of the Award granted
to him for a particular Award Term for a period not to exceed ten (10) years
from the Grant Date of such Award. A separate deferral election may be made with
respect to each Award granted under the Plan. The Awards which are subject to
such a deferral election shall continue to be subject to the terms and
conditions of this Plan and shall continue to be valued in accordance with the
terms of the Plan until the date of payment (or further deferral, as described
in the following sentence). In addition, a Participant who has made an
irrevocable election to defer the receipt of an Award until exactly ten (10)
years from the Grant Date of such Award shall be permitted (subject to the
Committee's sole and absolute discretion and the rules and procedures contained
in the Guidelines) to make another irrevocable election to further defer the
receipt of such deferred Award under and into the NACCO Materials Handling
Group, Inc. Unfunded Benefit Plan (the "Unfunded Plan"). Deferred Awards payable
to an active employee under this Plan shall be paid to the Participant as soon
as practicable following the payment date previously elected by the Participant
and shall be based on the Book Value as of the Quarter Date coincident with or
immediately preceding such payment date. Deferred Awards which are further
deferred into the Unfunded Plan shall be credited to the Unfunded Plan as soon
as practicable following the 10th anniversary of the Grant Date of such Award
and shall be based on the Book Value as of the Quarter Date coincident with or
immediately preceding such anniversary date. Notwithstanding the foregoing, any
deferral election hereunder shall automatically terminate (and shall be of no
further effect) upon a Participant's termination of employment with the Company
and the Subsidiaries for any reason (including death or disability) and payment
of all such deferred Awards shall be made as soon as
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practicable following the date of the Participant's termination of employment,
based on the Book Value as of the Quarter Date coincident with or immediately
preceding such termination date; provided, however, that any Awards which are
subject to a deferral election at the time of a Participant's Retirement shall
automatically be deferred under and into the Unfunded Plan as of the date of the
Participant's Retirement, with the value of the Book Value Units being based on
the Book Value as of the Quarter Date coincident with or immediately preceding
such Retirement date if (and only if) the Participant has a currently-effective
payment election relating to Awards under the Unfunded Plan and is then eligible
to participate in the Unfunded Plan.
(e) CODE SECTION 162(m) PAYMENT RESTRICTION. Notwithstanding any
provision of the Plan to the contrary, payment of all or any portion of an Award
will be deferred to the extent that the amount of such Award, when added to any
other compensation received or to be received by a Participant who is, or is
determined by the Committee to be likely to become, a "covered employee" (under
Section 162(m) of the Code), would not be deductible by the Company or a
Subsidiary by reason of Section 162(m) of the Code. The amount to be deferred
will equal the amount that otherwise would not be deductible by the Company or
the Subsidiary by reason of Section 162(m) of the Code, but in no event greater
than the total amount payable hereunder. The deferred amount shall become
payable on December 31 of the first succeeding calendar year in which such
amount, when added to all other compensation received or to be received by the
Participant in such calendar year, would not be non-deductible by the Company or
a Subsidiary by reason of Section 162(m) of the Code. The Committee, in its sole
and absolute discretion, shall have the authority to waive this payment
restriction (in whole or in part) upon the written request of a Participant.
7. ASSIGNABILITY
No Award granted to a Participant under this Plan shall be transferable
by him for any reason whatsoever; provided, however, that upon the death of a
Participant the right to the proceeds of an Award may be transferred to a
Beneficiary.
8. AMENDMENT, TERMINATION AND ADJUSTMENTS
(a) The Committee, in its sole and absolute discretion, may alter or
amend this Plan from time to time; provided, however, that no such amendment
shall, without the consent of a Participant, affect the amount of any
outstanding Award or any Award Units of such Participant.
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(b) The Committee, in its sole and absolute discretion, may terminate
this Plan in its entirety at any time; provided that, except as provided in this
Subsection, no such termination shall, without the consent of a Participant,
affect the amount of any outstanding Award or any Award Units of such
Participant. Except as otherwise provided in an amendment to the Plan, all
Target Awards and Awards granted prior to any termination of this Plan shall
continue to be subject to the terms of this Plan. Notwithstanding the foregoing,
upon a complete termination of the Plan, the Committee, in its sole and absolute
discretion, shall have the right to change the time of distribution of
Participants' Award Units under the Plan, including requiring that all such
Award Units be immediately distributed in the form of lump sum cash payments.
(c) Any amendment or termination of the Plan shall be in the form of a
written instrument executed by an officer of the Company on the order of the
Committee. Such amendment or termination shall become effective as of the date
specified in the instrument or, if no such date is specified, on the date of its
execution.
(d) The Committee may make or provide for an adjustment in the total
number of Award Units to be issued under this Plan as the Committee in its sole
discretion, exercised in good faith, may determine is equitably required to
reflect (i) any stock dividend, stock split, combination of shares,
recapitalization or any other change in the capital structure of the Company,
(ii) any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities, or (iii) any other
corporate transaction or event having an effect similar to any of the foregoing.
9. 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 any Subsidiary, or shall in any way affect the right and power of
the Company or any Subsidiary to terminate the employment of any employee at any
time with or without assigning a reason therefor to the same extent as the
Company or any Subsidiary might have done if this Plan had not been adopted.
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(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) LIABILITY FOR PAYMENT/EXPENSES. The employer by which the
Participant was last employed prior to the payment date of a particular Award
shall be liable for the payment of such Award to or on behalf of such
Participant, but such employer's liability shall be limited to its proportionate
share of such amount, as hereinafter provided. If the Award(s) payable to or on
behalf of a Participant are based on the Participant's employment with more than
one employer, the liability for such Awards shall be shared by all such
employers (by reimbursement to the employer making such payment(s)) as
determined by the Company (taking into consideration the Participant's service
and compensation paid by each such employer) and as will permit the deduction
(for purposes of federal or foreign income tax) by each such employer of its
portion of the payments made and to be made hereunder. Expenses of administering
the Plan shall be paid by the Company and the Subsidiaries, as directed by the
Company.
(d) LIMITATION ON RIGHTS OF PARTICIPANTS; NO TRUST. No trust has been
created by the Company or any Subsidiary for the payment of Book Value Units
granted under this Plan; nor have the grantees of Book Value Units been granted
any lien on any assets of the Company or any Subsidiary to secure payment of
such benefits. This Plan represents only an unfunded, unsecured promise to pay
by the Company and the Subsidiaries, and the grantees hereunder are unsecured
creditors of the Company and the Subsidiaries.
(e) PAYMENT TO GUARDIAN. If an Award is payable to a minor, to a person
declared incompetent or to a person incapable of handling the disposition of his
property, the Committee may direct payment of such Award to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or person. The Committee may require such proof of incompetency, minority,
incapacity or guardianship as it may deem appropriate prior to the distribution
of such Award. Such distribution shall completely discharge the Company and the
Subsidiaries from all liability with respect to such Award.
(f) 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.
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10. EFFECTIVE DATE
The effective date of this Plan is as of January 1, 2000.
NACCO MATERIALS HANDLING GROUP, INC.
By: /s/ Reginald R. Eklund
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Title: President and CEO
Date: October 5, 2000
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