Exhibit 10.13
THE NACCO INDUSTRIES, INC.
UNFUNDED BENEFIT PLAN
(AS AMENDED AND RESTATED AS OF JANUARY 1, 2005)
NACCO NQ/Unfunded Restatement
NACCO INDUSTRIES, INC.
UNFUNDED BENEFIT PLAN
NACCO Industries, Inc. (the "Company") does hereby amend and restate
the NACCO Industries, Inc. Unfunded Benefit Plan on the terms and conditions
described hereinafter, effective as of January 1, 2005.
ARTICLE I. INTRODUCTION
Section 1.01 Effective Date. The effective date of this restatement of the Plan
is January 1, 2005.
Section 1.02 Purpose of the Plan. The purpose of this Plan is to provide for
certain Employees the benefits they would have received under the Profit Sharing
Plan but for (a) the dollar limitation on Compensation taken into account under
the Profit Sharing Plan as a result of Section 401(a)(17) of the Code, (b) the
limitations imposed under Section 415 of the Code, and (c) the limitations under
Sections 402(g), 401(k)(3) and 401(m) of the Code.
Section 1.03 Governing Law. This Plan shall be regulated, construed and
administered under the laws of the State of Ohio, except when preempted by
federal law.
Section 1.04 Gender and Number. For purposes of interpreting the provisions of
this Plan, the masculine gender shall be deemed to include the feminine, the
feminine gender shall be deemed to include the masculine, and the singular shall
include the plural unless otherwise clearly required by the context.
Section 1.05 American Jobs Creation Act (AJCA).
(a) The following Sub-Accounts (collectively, the "Pre-2005 Sub-Accounts")
(and all earnings thereon) are "grandfathered" under Section 409A of
the Code, as enacted by AJCA) and, as such, will continue to be
governed by the law applicable to nonqualified deferred compensation
prior to the enactment of code Section 409A: (i) amounts allocated to
a Participant's Excess 401(k) Sub-Account as of December 31, 2004 (the
"Pre-2005 Excess 401(k) Sub-Account"); (ii) amounts allocated to a
Participant's Excess Matching Sub-Account as of December 31, 2004 (the
"Pre-2005 Excess Matching Sub-Account") and (iii) amounts allocated to
the Excess Profit Sharing Sub-Account for pre-2005 Plan Years
(including the amount that was credited in 2005 for the 2004 Plan
Year) (the "Pre-2005 Excess Profit Sharing Sub-Account").
(b) The following Sub-Accounts (collectively, the "Post-2004
Sub-Accounts") (and all earnings thereon) are subject to the
provisions of Code Section 409A, as enacted by the AJCA: (i) amounts
credited to the Excess 401(k) Sub-Account for periods on or after
January 1, 2005 (the "Post-2004 Excess 401(k) Sub-Account"); (ii)
amounts credited to the Excess Matching Sub-Account for periods on or
after January 1, 2005 (the "Post-2004 Excess Matching Sub-Account")
and (iii) amounts credited to the Excess Profit Sharing Sub-Account
for the 2005 Plan Year and beyond (beginning with amounts credited in
2006 for the 2005 Plan Year). It is intended that the provisions of
the Plan
that relate to the Post-2004 Sub-Accounts be administered in
accordance with the requirements of Code Section 409A so as to prevent
the inclusion in gross income of any amount credited to the
Participant's Post-2004 Sub-Accounts hereunder in a taxable year that
is prior to the taxable year or years in which such amounts would
otherwise actually be distributed or made available to the
Participants.
ARTICLE II. DEFINITIONS
Except as otherwise provided in this Plan, terms defined in the Profit
Sharing Plan as it may be amended from time to time shall have the same
meanings when used herein, unless a different meaning is clearly required
by the context of this Plan. In addition, the following words and phrases
shall have the following respective meanings for purposes of this Plan.
Section 2.01 Account shall mean the record maintained by the Employer in
accordance with Section 4.01 as the sum of the Participant's Excess Retirement
Benefits hereunder. The Participant's Account shall be further divided into the
Sub-Accounts described in Section 1.05 hereof.
Section 2.02 Beneficiary shall mean the person or persons designated by the
Participant as his Beneficiary under this Plan, in accordance with the
provisions of Article VIII hereof.
Section 2.03 Bonus shall mean any bonus under any annual bonus plan that would
be taken into account as Compensation under the Profit Sharing Plan, which is
earned with respect to services performed by a Participant during a Plan Year
(whether or not such Bonus is actually paid to the Participant during such Plan
Year). An election to defer a Bonus under this Plan must be made before the
period in which the services are performed that gives rise to such Bonus.
Section 2.04 Company shall mean NACCO Industries, Inc. or any entity that
succeeds NACCO Industries, Inc. by merger, reorganization or otherwise.
Section 2.05 Compensation shall have the same meaning as under the Profit
Sharing Plan, except that (a) Compensation shall be deemed to include (i) the
amount of compensation deferred by the Participant under this Plan and (ii)
amounts in excess of the limitation imposed by Code Section 401(a)(17) and (b)
Compensation shall be deemed to exclude cash compensation that is paid for
special perquisites, such as country club dues and company plane allowances.
Notwithstanding the foregoing, (1) cash allowances in lieu of general
perquisites that are paid to substantially all Participants shall be included in
the definition of Compensation hereunder and (2) the timing and crediting of
Bonuses hereunder shall be as specified in Section 3.02.
Section 2.06 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 (a) is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
months, or (b) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than
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twelve months, receiving income replacement benefits for a period of not less
than three months under an Employer-sponsored accident and health plan.
Section 2.07 Employer shall mean the Company and NACCO Services, LLC.
Section 2.08 Excess Retirement Benefit or Benefit shall mean an Excess Profit
Sharing Benefit, Excess 401(k) Benefit or Excess Matching Benefit (as described
in Article III) that is payable to or with respect to a Participant under this
Plan.
Section 2.09 Fixed Income Fund shall mean the Stable Asset Fund under the Profit
Sharing Plan or any equivalent fixed income fund thereunder which is designated
by the NACCO Industries, Inc. Retirement Funds Investment Committee as the
successor to the Stable Asset Fund.
Section 2.10 401(k) Employee shall mean an Employee of an Employer who is a
Participant in the Profit Sharing Plan who is eligible to receive Before-Tax
Contributions and Matching Employer Contributions thereunder.
Section 2.11 Insolvent. For purposes of this Plan, an Employer shall be
considered Insolvent at such time as it (a) is unable to pay its debts as they
mature, or (b) is subject to a pending voluntary or involuntary proceeding as a
debtor under the United States Bankruptcy Code.
Section 2.12 Key Employee shall mean a key employee, as defined in Section
416(i) of the Code (without regard to paragraph (5) thereof) of an Employer (as
long as the stock of the Company is publicly traded on an established securities
market or otherwise on the date of the Employee's Termination of Employment Key
Employees are identified on a Controlled Group-wide basis and include
non-resident alien Employees (whether or not such Employees are eligible to
participate in the Plan). The selected identification date for Key Employees is
December 31st. As such, any Employee who is classified by the Company as a Key
Employee as of December 31st of a particular Plan Year shall maintain such
classification for the 12-month period commencing on the following April 1st.
The Company shall have the sole and absolute discretion to classify Employees as
Key Employees hereunder. To the extent determined by the Company, such
classification may include up to 75 highly compensated Employees (including some
who do not meet the statutory requirements of a Key Employee) as long as such
determination is made in a consistent, reasonable and good faith manner.
Section 2.13 Participant.
(a) For purposes of Section 3.01 of the Plan, the term "Participant" means
an Employee who is a Participant in the profit sharing portion of the
Profit Sharing Plan (i) whose profit sharing benefit for a Plan Year
is limited by the application of Section 401(a)(17) or 415 of the Code
and (ii) whose total annual compensation from the Controlled Group for
such Plan Year was at least $115,000.
(b) For purposes of Sections 3.02 and 3.03 of the Plan, the term
"Participant" means a 401(k) Employee (i) who is unable to make all of
the Before-Tax Contributions that he has elected to make to the Profit
Sharing Plan, or is unable to receive the maximum amount of Matching
Employer Contributions under the Profit Sharing Plan because of the
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limitations of Section 402(g), 401(a)(17), 401(k)(3) and 401(m) of the
Code, and (ii) whose total annual compensation from the Controlled
Group for the Plan Year in which a deferral election is required is at
least $115,000.
(c) The term "Participant" shall also include any other person who has an
Account balance hereunder or who was defined as a participant in a
prior version of the Plan.
Section 2.14 Plan shall mean the NACCO Industries, Inc. Unfunded Benefit Plan,
as herein set forth or as duly amended.
Section 2.15 Plan Administrator shall mean the NACCO Industries, Inc. Benefits
Committee (the "Benefits Committee").
Section 2.16 Plan Year shall mean the calendar year.
Section 2.17 Prior Plan shall mean the NACCO Materials Handling Group, Inc.
Unfunded Benefit Plan (for the period from January 1, 1995 through August 31,
2000) and The North American Coal Corporation Deferred Compensation Plan for
Management Employees (for the period prior to January 1, 1995).
Section 2.18 Profit Sharing Employee shall mean an Employee of an Employer who
is a participant in the Profit Sharing Plan and who is eligible for Profit
Sharing Contributions.
Section 2.19 Profit Sharing Plan shall mean the NACCO Materials Handling Group,
Inc. Profit Sharing Retirement Plan or any successor thereto.
Section 2.20 ROTCE shall mean the Company's consolidated return on total capital
employed for the applicable time period, as determined by the Company for
purposes of the Company's Annual Incentive Compensation Plan as in effect for a
particular Plan Year.
Section 2.21 Termination of Employment means a separation of service as defined
under Code Section 409A (and the regulations and other guidance issued
thereunder).
Section 2.22 Unforeseeable Emergency shall mean an event that results in a
severe financial hardship to the Participant as a consequence of (a) an illness
or accident of the Participant, the Participant's spouse or a dependent within
the meaning of Code Section 152(a), (b) loss of the Participant's property due
to casualty or (c) other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.
Section 2.23 Valuation Date shall mean the last day of each Plan Year and any
other date chosen by the Plan Administrator.
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ARTICLE III.
EXCESS RETIREMENT BENEFITS
Section 3.01 Excess Profit Sharing Benefits.
(a) In General. Each Employer shall credit to a Sub-Account (the "Excess
Profit Sharing Sub-Account") established for each Participant who is
both an Employee of such Employer and a Profit Sharing Employee, an
amount equal to the excess, if any, of (i) the amount of the
Employer's Profit Sharing Contribution which would have been made to
the profit sharing portion of the Profit Sharing Plan on behalf of the
Participant if (1) such Plan did not contain the limitations imposed
under Sections 401(a)(17) and 415 of the Code and (2) the term
"Compensation" (as defined in Section 2.05 hereof) were used for
purposes of determining the amount of profit sharing contributions
under the Profit Sharing Plan, over (ii) the amount of the Employer's
Profit Sharing Contribution that is actually made to such Plan on
behalf of the Participant for such Plan Year (the "Excess Profit
Sharing Benefits").
(b) Minimum Benefit. Notwithstanding the foregoing, the Account balance of
a Participant who was a participant in the Prior Plan shall in no
event be less than the amount credited to such Participant's account
under the Prior Plan.
Section 3.02 Basic and Additional Excess 401(k) Benefits.
(a) Amount of Excess 401(k) Benefits. Each 401(k) Employee who is a
Participant may, on or prior to each December 31st, by completing an
approved deferral election form, direct his Employer to reduce his
Compensation for the next Plan Year, by an amount equal to the
difference between (i) a specified percentage, in 1% increments, with
a maximum of 25%, of his Compensation for the Plan Year, and (ii) the
maximum Before-Tax Contributions actually permitted to be contributed
for him to the Profit Sharing Plan for such Plan Year by reason of the
application of the limitations under Sections 402(g), 401(a)(17) and
401(k)(3) of the Code. All amounts deferred under this Section shall
be referred to herein collectively as the "Excess 401(k) Benefits."
Notwithstanding the foregoing, a 401(k) Employee's direction to reduce
a Bonus earned during a particular Plan Year shall be made no later
than December 31st of the Plan Year preceding the Plan Year in which
the Bonus commences to be earned (subject to the AJCA transitional
rules for Bonuses that were paid in 2005.
(b) Classification of Excess 401(k) Benefits. The Excess 401(k) Benefits
for a particular Plan Year shall be calculated monthly and shall be
further divided into the "Basic Excess 401(k) Benefits" and the
"Additional Excess 401(k) Benefits" as follows:
1) The Basic Excess 401(k) Benefits shall be determined by
multiplying each Excess 401(k) Benefit by a fraction, the
numerator of which is the lesser of the percentage of
Compensation elected to be deferred in the deferral election form
for such Plan Year or 7% and the denominator of which is the
percentage of Compensation elected to be deferred; and
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2) The Additional Excess 401(k) Benefits (if any) shall be
determined by multiplying each Excess 401(k) Benefit by a
fraction, the numerator of which is the difference between (1)
the percentage of Compensation elected to be deferred in the
deferral election form for such Plan Year and (2) 7%, and the
denominator of which is the percentage of Compensation elected to
be deferred.
3) The Basic Excess 401(k) Benefits shall be credited to the Basic
Excess 401(k) Sub-Account under this Plan and the Additional
Excess 401(k) Benefits shall be credited to the Additional Excess
401(k) Sub-Account hereunder.
(c) Consequences of Deferral Elections. Any direction by a Participant to
defer Compensation under Subsection (a) shall be effective with
respect to Compensation otherwise payable to the Participant for the
Plan Year for which the deferral election form is effective and the
Participant shall not be eligible to receive such Compensation.
Instead such amounts shall be credited to the Participant's Excess
401(k) Sub-Account hereunder. Any such direction shall be irrevocable
with respect to Compensation earned for such Plan Year, but shall have
no effect on Compensation that is earned in subsequent Plan Years. A
new deferral election will be required for each Plan Year.
(d) Payment Date Election. The initial deferral election made by a
Participant under this Plan shall also contain the Participant's
IRREVOCABLE election regarding the time of the commencement of payment
of the Participant's Pre-2005 and/or Post-2004 Excess 401(k)
Sub-Account hereunder. The Participant may elect to commence payment
of such Sub-Accounts on one of the following dates:
i) the date on which he ceases to be an Employee of the Controlled
Group (or incurs a Termination of Employment for Post-2004
Sub-Accounts),
ii) January 1 of the year following the date on which he ceases to be
an Employee of the Controlled Group (or incurs a Termination of
Employment for Post-2004 Sub-Accounts),
iii) the date on which he attains an age specified in the deferral
form,
iv) January 1 of the year following the date on which he attains an
age specified in the deferral form,
v) the earlier of any two such dates, or
vi) the later of any two such dates (for Pre-2005 Sub-Accounts only).
A Participant may elect a different payment date (choosing among the dates
specified above) (i) for his Pre-2005 and Post-2004 Excess 401(k) Sub-Accounts
and (ii) for his Pre-2005 or Post-2004 Excess 401(k) Sub-Accounts in the event
that his employment is terminated due to a Disability. Such election must also
be made on the initial deferral election form. A Participant who does not timely
and properly file such an election form shall be deemed to have elected to
receive his Excess 401(k) Sub-Account on the date on which the Participant
ceases to be an
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Employee of the Controlled Group (for Pre-2005 Sub-Accounts) or incurs a
Termination of Employment (for Post-2004 Sub-Accounts).
(e) Post-Payment Date Deferrals. In the event that a Participant elects to
receive his Post-2004 Excess 401(k) Sub-Account at a specified age (or
the earlier of a specified age or Termination of Employment) and the
Participant continues to be employed past such date, any additional
amounts that are credited to his Post-2004 Excess 401(k) Sub-Account
shall automatically be paid to the Participant in a lump sum at his
Termination of Employment.
(f) Automatic Termination of Deferral Elections. The deferral election of
a Participant whose eligibility to make Before-Tax Contributions to
the Profit Sharing Plan has been involuntarily suspended because he
has taken a Hardship withdrawal from such plan shall automatically
terminate. Such termination shall be in effect for the remainder of
the Plan Year in which he received such Hardship withdrawal (or, if
later, the end of the Plan Year that includes the end of his period of
suspension from the Profit Sharing Plan). As a result, the Participant
shall be required to reenroll in this Plan effective as of the next
applicable January 1st.
Section 3.03 Excess Matching Benefits. A 401(k) Employee who is a Participant
shall have credited to his Basic Excess Matching Sub-Account an amount equal to
the Matching Employer Contributions attributable to the Basic Excess 401(k)
Benefits that he is prevented from receiving under the Profit Sharing Plan
because of the limitations of Code Sections 402(g), 401(a)(17), 401(k)(3) and
401(m) of the Code (the "Excess Matching Benefits"). Payment of the
Participant's Excess Matching Sub-Account shall be made at the same time and in
the same form as the payment of the Participant's corresponding Excess 401(k)
Sub-Account.
ARTICLE IV.
ACCOUNTS
Section 4.01 Participants' Accounts. Each Employer shall establish and maintain
on its books an Account for each Participant who is an Employee of the Employer
which shall contain the following entries:
(a) Credits to an Excess Profit Sharing Sub-Account for the Excess Profit
Sharing Benefits described in Section 3.01, which shall be credited to
the Sub-Account at the time the Profit Sharing Contributions are
otherwise credited to Participants' accounts under the Profit Sharing
Plan.
(b) Credits to a Basic or Additional Excess 401(k) Sub-Account for the
Basic and Additional Excess 401(k) Benefits described in Section 3.02,
which shall be credited to the Sub-Account when a 401(k) Employee is
prevented from making a Before-Tax Contribution under the Profit
Sharing Plan.
(c) Credits to a Basic Excess Matching Sub-Account for the Basic Excess
Matching Benefits described in Section 3.03, which amounts shall be
credited to the Sub-Account
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when a 401(k) Employee is prevented from receiving Matching Employer
Contributions under the Profit Sharing Plan.
(d) Credits to the appropriate Sub-Account of each Participant of the
amount of any and all liabilities of the Employer under the Prior Plan
that were transferred to this Plan.
(e) Credits to all Sub-Accounts for the earnings described in Article V,
which shall continue until the such Sub-Accounts have been distributed
to the Participant or his Beneficiary.
(f) Debits for any distributions made from the Sub-Accounts and any
amounts forfeited under Section 7.02(d).
(g) The Employers shall make the above-described credits and debits to the
Participant's Pre-2005 Sub-Accounts or the Post-2004 Sub-Accounts, as
applicable, in accordance with Code Section 409A.
ARTICLE V.
EARNINGS
Section 5.01 Earnings on Basic Sub-Accounts and Profit Sharing Sub-Accounts.
(a) Subject to Subsection (b) and Section 5.03, at the end of each
calendar month during a Plan Year, the Excess Profit Sharing
Sub-Account, Basic Excess 401(k) Sub-Account and Basic Excess Matching
Sub-Account of each Participant shall be credited with an amount
determined by multiplying such Participant's average Sub-Account
balance during such month by the blended rate earned during such month
by the Fixed Income Fund. Notwithstanding the foregoing, in the event
that the ROTCE determined for such Plan Year that is applicable to the
Participant exceeds the rate credited to the Sub-Accounts under the
preceding sentence, such Sub-Accounts shall retroactively be credited
with the difference between (i) the amount determined under the
preceding sentence, and (ii) the amount determined by multiplying the
Participant's average Sub-Account balance during each month of such
Plan Year by the ROTCE determined for such Plan Year, compounded
monthly.
(b) The ROTCE calculation described in Subsection (a) shall be made during
the month in which the Participant terminates employment and shall be
based on the year-to-date ROTCE for the month ending prior to the date
the Participant terminated employment, as calculated by the Company.
For any subsequent month following termination, such ROTCE calculation
shall not apply. The Fixed Income Fund calculation described above for
the month in which the Participant receives a distribution from his
Sub-Account shall be based on the blended rate earned during the
preceding month by the Fixed Income Fund.
Section 5.02 Earnings on Additional Excess 401(k) Sub-Account. Subject to
Section 5.03, at the end of each calendar month during the Plan Year, the
Additional Excess 401(k) Sub-Account of each Participant shall be credited with
an amount determined by multiplying such Participant's average Sub-Account
balance during such month by the blended rate earned during such month by the
Fixed Income Fund. The earnings calculation for the month in which the
Participant
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receives a distribution from his Sub-Account shall be based on the blended rate
earned during the preceding month by the Fixed Income Fund.
Section 5.03 Changes in/Limitations on Earnings Assumption.
(a) To the extent not prohibited by Code Section 409A, the Company (with
the approval or ratification of the Benefits Committee may change (but
not suspend) the earnings rate credited on Accounts under the Plan at
any time.
(b) Notwithstanding any provision of the Plan to the contrary, in no event
will earnings on Accounts for a Plan Year be credited at a rate that
exceeds 14%.
ARTICLE VI.
VESTING
Section 6.01 Vesting. A Participant shall always be 100% vested in all amounts
credited to his Account hereunder.
ARTICLE VII.
DISTRIBUTION OF BENEFITS TO PARTICIPANTS
Section 7.01 Excess Profit Sharing Benefits.
(a) Pre-2005 Excess Profit Sharing Sub-Account. The Pre-2005 Excess Profit
Sharing Sub-Account payable to a Participant shall be paid in the form
of a single lump sum payment on the date of his termination of
employment with the Controlled Group.
(b) Post-2004 Excess Profit Sharing Sub-Account. The Post-2004 Excess
Profit Sharing Sub-Account payable to a Participant shall be paid in
the form of a single lump sum payment on the later of (i) his
Termination of Employment or (ii) the date on which all amounts
allocable to the Participant's Post-2004 Excess Profit Sharing
Sub-Account for the year of such termination have been credited to
such Sub-Account.
Section 7.02 Excess 401(k) Sub-Account and Excess Matching Sub-Account.
(a) Timing. The Excess 401(k) Sub-Account and the Excess Matching
Sub-Account shall be paid (or commence to be paid) to the Participant
on the date elected (or deemed elected) in the Participant's initial
deferral election form (as provided in Section 3.02).
(b) Form of Payment.
a) Pre-2005 Excess 401(k) and Matching Sub-Accounts. The Pre-2005
Excess 401(k) and Matching Sub-Accounts will be distributed to
the Participant in the form of ten annual installments. All
installment payments under the Plan will be based on the combined
value of the Sub-Accounts on the Valuation Date immediately
preceding the date such installment is to be paid, with each
installment being a fraction of such value in which the numerator
is one and the denominator is the total number of remaining
installments to be paid. The first installment payment will be
paid as soon
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as practicable after the designated payment date, with each
additional installment being paid in the month of January of each
succeeding calendar year. Installment payments under the Plan
will be classified as a single payment for purposes of Section
409A of the Code. Notwithstanding the foregoing, the Participant
may elect to receive the amount credited to his Pre-2005 Excess
401(k) and Excess Matching Sub-Accounts in the form of a single
lump sum payment or in annual installments for a period of less
than 10 years by filing a notice in writing, signed by the
Participant and filed with the Plan Administrator while the
Participant is alive and at least one year prior to the
designated payment date. (A single form of payment must be
elected for both such Sub-Accounts.) Any such election of the
form of benefit may be changed at any time and from time to time,
without the consent of any other person, by filing a later
election in writing that is signed by the Participant and filed
with the Plan Administrator while the Participant is alive and at
least one year prior to the designated payment date. Any such
lump sum payment shall be paid as soon as practicable following
the designated payment date.
b) Post-2004 Excess 401(k) and Excess Matching Sub-Accounts. Except
for amounts described in Section 3.02(e), the Participant shall
elect a form of payment for his Post-2004 Excess 401(k)
Sub-Account (which shall automatically apply to his Post-2004
Excess Matching Sub-Account) prior to December 31, 2004 (or in
his initial deferral election form that is filed when the Plan
first becomes applicable to him, if later). He may elect to
receive such Sub-Account in the form of a lump sum payment or in
the form of annual installment payments (for 10 or fewer years),
with the installment payments (if any) being calculated in
accordance with the rules specified above. If the Participant
does not make a timely election regarding the form of payment,
his Post-2004 Excess 401(k) Sub-Account and Post-2004 Excess
Matching Sub-Account shall be distributed in the form of a single
lump sum payment. Once made, the election (or deemed election) of
the form of payment shall be irrevocable except as specified in
the following sentences. Notwithstanding the foregoing, a
Participant may change his form of payment election (or deemed
election) for his Post-2004 Excess 401(k) Sub-Account and
Post-2004 Excess Matching Sub-Account by filing a subsequent
notice in writing, signed by the Participant and filed with the
Plan Administrator. However, such election will not be effective
unless (A) it is made not less than twelve months prior to the
date that distribution would have been made absent such election,
(B) the previously elected payment date is automatically delayed
for a period of five years (except for payments made on account
of death or Disability), (C) such election will not take effect
until at least twelve months after the date on which the election
is made and (D) unless otherwise permitted under Code Section
409A, the election does not accelerate the payment.
(c) Unforeseeable Emergency Distributions. Notwithstanding the foregoing,
the Plan Administrator may at any time, upon written request of the
Participant, cause to be paid to such Participant an amount equal to
all or any part of the Participant's Excess 401(k)Sub-Account and/or
Excess Matching Sub-Account if the Plan Administrator determines, in
its absolute discretion based on such reasonable evidence that it
shall require, that such a payment or payments is necessary for the
purpose of alleviating the
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consequences of an Unforeseeable Emergency occurring with respect to
the Participant. Payments made on account of an Unforeseeable
Emergency shall be permitted only to the extent the amount does not
exceed the amount reasonably necessary to satisfy the emergency need
(plus an amount necessary to pay taxes or penalties reasonably
anticipated as a result of the distribution) and may not be made to
the extent such Unforeseeable Emergency is or may be relieved through
reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant's assets (to the extent such
liquidation would not itself cause severe financial hardship).
Unforeseeable Emergency distributions shall be paid to the Participant
in the form of a lump sum payment after such distribution request is
approved and processed by the Plan Administrator.
(d) Withdrawals Subject to 10% Penalty. Notwithstanding any provision of
the Plan to the contrary, (i) a Participant who is an Employee may, at
any time (and from time to time) elect in writing to receive a
withdrawal of 100% of his Pre-2005 Additional Excess 401(k)
Sub-Account and (ii) Participants who have ceased to be Employees of
the Controlled Group may also elect to receive a withdrawal of 100% of
their Pre-2005 Basic Excess 401(k) Sub-Account and/or 100% of their
Pre-2005 Basic Excess Matching Sub-Account. Withdrawals under this
Subsection (d) shall be equal to entire value of the Sub-Account as of
the Valuation Date preceding the payment date, less 10%, and shall be
paid to the Participant in the form of a lump sum payment after such
withdrawal request is approved and processed by the Plan
Administrator. Such 10% reduction shall be treated as a forfeiture
hereunder and shall immediately be subtracted from the applicable
Sub-Account, never to be restored.
Section 7.03 Other Payment Rules and Restrictions.
(a) Payments From 2004 Sub-Accounts Violating Contractual Requirements.
Notwithstanding any provision of the Plan to the contrary, the payment
of all or any portion of the amounts payable hereunder from a
Participant's Post-2004 Sub-Accounts will be deferred to the extent
that the Employer reasonably anticipates that the making of such
payment would violate a term of a loan agreement or other similar
contract to which the Employer is a party and the violation will cause
material harm to the Employer. 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, or
such violation will not cause material harm to the Employer.
(b) Payments Violating Applicable Law. Notwithstanding any provision of
the Plan to the contrary, the payment of all or any portion of the
amounts payable hereunder will be deferred to the extent that the
Employer reasonably anticipates that the making of such payment would
violate Federal securities laws or other applicable law (provided that
the making of a payment that would cause income taxes or penalties
under the Code shall not be treated as a violation of applicable law).
The deferred amount shall become payable at the earliest date at which
the Employer reasonably anticipates that making the payment will not
cause such violation.
(c) Small Sub-Accounts. Notwithstanding any provision of the Plan to the
contrary, (i) in the event that the sum of a Participant's Pre-2005
Sub-Account balances do not exceed
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$10,000 on the date of the Participant's termination of employment
with the Controlled Group, such Sub-Accounts shall automatically be
paid to him in a single lump sum payment on the date of his
termination of employment with the Controlled Group and (ii) in the
event that the sum of a Participant's Post-2004 Sub-Account balances
(plus any other amounts that are required to be aggregated therewith
under Code Section 409A) do not exceed $10,000 on the date of the
Participant's Termination of Employment, such Sub-Accounts shall
automatically be paid to him in a single lump sum payment at the
latest of (A) the date of his Termination of Employment, (B) the date
on which all amounts allocable to the Participant's Account for the
year of such termination have been credited to such Sub-Accounts (but
in no event later than March 15th of the year following his
Termination of Employment) or (C) the end of the 6-month period
described in Subsection (f) below for Key Employees.
(d) Insolvency. 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 Employer is Insolvent at the time
such payment is due to be made or if the payment would jeopardize the
solvency of the Employer; provided that the payment shall be made
during the first calendar year in which the funds of the Employer are
sufficient to make the payment without jeopardizing the solvency of
the Employer.
(e) Key Employees. Notwithstanding any provision of the Plan to the
contrary, distributions of Post-2004 Sub-Accounts to Key Employees
made on account of a Termination of Employment for reasons other than
Disability may not be made before the date that is six months after
such Termination of Employment (or, if earlier, the date of death)
except for payments made on account of (i) a QDRO (as specified in
Section 9.05) or (ii) a conflict of interest or the payment of FICA
taxes (as specified in Subsection (h) below). Any Benefits that are
otherwise payable to the Key Employee during the 6-month period
following his Termination of Employment shall be accumulated and paid
in a lump sum make-up payment as soon as practicable following the end
of such 6-month period.
(f) Time of Payment/Processing. All payments under the Plan shall be made
on, or as soon as practicable after, the specified payment date (and,
in any event, no later than December 31 of the year that includes the
specified payment date or, if later, by the 15th day of the third
calendar month following the specified payment date). Notwithstanding
the foregoing, if the calculation of the amount payable from the
Post-2004 Sub-Accounts is not administratively practicable due to
events beyond the control of the Employer and the Participant, the
payment shall be made during the first calendar year in which the
payment is administratively practicable.
(g) Acceleration of Payments. Notwithstanding any provision of the Plan to
the contrary, payments from Post-2004 Sub-Accounts hereunder may be
accelerated (i) to the extent necessary to comply with a certificate
of divestiture (as defined in Code Section 1043(b)(2)) or (ii) to the
extent necessary to pay the FICA taxes imposed on Benefits hereunder
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
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exceed the amount required to be included as income as a result of the
failure to comply with Code Section 409A.
ARTICLE VIII.
BENEFICIARIES
Section 8.01 Beneficiary Designations. A designation of a Beneficiary hereunder
may be made only by an instrument (in form acceptable to the Plan Administrator)
signed by the Participant and filed with the Plan Administrator prior to the
Participant's death. Separate Beneficiary designations may be made for (i) the
Excess 401(k) and Matching Benefits and (ii) the Excess Profit Sharing Benefits.
In the absence of such a designation and at any other time when there is no
existing Beneficiary designated hereunder, the Beneficiary of a Participant for
his Excess Retirement Benefits shall be his beneficiary under the Profit Sharing
Plan. A person designated by a Participant as his Beneficiary who or which
ceases to exist shall not be entitled to any part of any payment thereafter to
be made to the Participant's Beneficiary unless the Participant's designation
specifically provided to the contrary. If two or more persons designated as a
Participant's Beneficiary are in existence with respect to a single Sub-Account,
the amount of any payment to the Beneficiary under this Plan shall be divided
equally among such persons unless the Participant's designation specifically
provides for a different allocation.
Section 8.02 Change in Beneficiary. A Participant may, at any time and from time
to time, change a Beneficiary designation hereunder without the consent of any
existing Beneficiary or any other person. A change in Beneficiary hereunder may
be made regardless of whether such a change is also made under the Profit
Sharing Plan. Any change in Beneficiary shall be made by giving written notice
thereof to the Plan Administrator and any change shall be effective only if
received prior to the death of the Participant.
Section 8.03 Distributions to Beneficiaries. Excess Retirement Benefits payable
to a Participant's Beneficiary shall be equal to the balance in the applicable
Sub-Account of such Participant on the Valuation Date preceding the date of the
distribution of the Sub-Account to the Beneficiary. Excess Retirement Benefits
payable to a Beneficiary shall be paid in the form of a lump sum payment made as
soon as practicable following the death of the Participant.
ARTICLE IX.
MISCELLANEOUS
Section 9.01 Expenses. Expenses of administering the Plan shall be paid by the
Employers, as directed by the Company.
Section 9.02 Limitation on Rights of Participants and Beneficiaries - No Lien.
This Plan is designed to be an unfunded, nonqualified plan. Nothing contained
herein shall be deemed to create a trust or lien in favor of any Participant or
Beneficiary on any assets of an Employer. The Employers shall have no obligation
to purchase any assets that do not remain subject to the claims of the creditors
of the Employers for use in connection with the Plan. No Participant or
Beneficiary or any other person shall have any preferred claim on, or any
beneficial ownership interest in, any assets of the Employers prior to the time
that such assets are paid to the
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Participant or Beneficiary as provided herein. Each Participant and Beneficiary
shall have the status of a general unsecured creditor of his Employer.
Section 9.03 No Guarantee of Employment. Nothing in this Plan shall be construed
as guaranteeing future employment to Participants. A Participant continues to be
an Employee of an Employer solely at the will of the Employer subject to
discharge at any time, with or without cause.
Section 9.04 Payment to Guardian. If a Benefit payable hereunder is payable to a
minor, to a person declared incompetent or to a person incapable of handling the
disposition of his property, the Plan Administrator may direct payment of such
Benefit to the guardian, legal representative or person having the care and
custody of such minor, incompetent or person. The Plan Administrator may require
such proof of incompetency, minority, incapacity or guardianship as it may deem
appropriate prior to distribution of the benefit. Such distribution shall
completely discharge the Employers from all liability with respect to such
Benefit.
Section 9.05 Anti-Assignment/Early Payment in the Event of a QDRO.
(a) No right or interest under this Plan of any Participant or Beneficiary
shall be assignable or transferable in any manner 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.
(b) Notwithstanding any provision of the Plan to the contrary, the Plan
Administrator shall honor a "qualified domestic relations order"
(QDRO) from a state domestic relations court that requires the payment
of all or a part of a Participant's or Beneficiary's Account under
this Plan to an "alternate payee" as defined in Code Section 414(p).
Section 9.06 Severability. If any provision of this Plan or the application
thereof to any circumstance(s) or person(s) is held to be invalid by a court of
competent jurisdiction, the remainder of the Plan and the application of such
provision to other circumstances or persons shall not be affected thereby.
Section 9.07 Effect on other Benefits. Benefits payable to or with respect to a
Participant under the Profit Sharing Plan or any other Employer sponsored
(qualified or nonqualified) plan, if any, are in addition to those provided
under this Plan.
ARTICLE X.
ADMINISTRATION OF PLAN
Section 10.01 Administration. The Plan shall be administered by the Plan
Administrator. The Plan Administrator shall have discretion to interpret where
necessary all provisions of the Plan (including, without limitation, by
supplying omissions from, correcting deficiencies in, or resolving
inconsistencies or ambiguities in, the language of the Plan), to make factual
findings with respect to any issue arising under the Plan, to determine the
rights and status under the Plan of Participants or other persons, to resolve
questions (including factual questions) or disputes
14
arising under the Plan and to make any determinations with respect to the
benefits payable under the Plan and the persons entitled thereto as may be
necessary for the purposes of the Plan. Without limiting the generality of the
foregoing, the Plan Administrator is hereby granted the authority (i) to
determine whether a particular employee is a Participant, and (ii) to determine
if a person is entitled to Benefits hereunder and, if so, the amount and
duration of such Benefits. The Plan Administrator's determination of the rights
of any person hereunder shall be final and binding on all persons, subject only
to the provisions of Sections 10.03 and 10.04 hereof. The Plan Administrator may
delegate any of its administrative duties, including, without limitation, duties
with respect to the processing, review, investigation, approval and payment of
Benefits, to a named administrator or administrators.
Section 10.02 Regulations. The Plan Administrator shall promulgate any rules and
regulations it deems necessary in order to carry out the purposes of the Plan or
to interpret the provisions of the Plan; provided, however, that no rule,
regulation or interpretation shall be contrary to the provisions of the Plan.
The rules, regulations and interpretations made by the Plan Administrator shall,
subject only to the provisions of Sections 10.03 and 10.04 hereof, be final and
binding on all persons.
Section 10.03 Claims Procedures. The Plan Administrator shall determine the
rights of a person to any Benefits hereunder. Any person who believes that he
has not received the Benefits to which he is entitled under the Plan may file a
claim in writing with the Plan Administrator. The Plan Administrator shall, no
later than 90 days after the receipt of a claim (plus an additional period of 90
days if required for processing, provided that notice of the extension of time
is given to the claimant within the first 90 day period), either allow or deny
the claim in writing. A denial of a claim by the Plan Administrator, wholly or
partially, shall be written in a manner calculated to be understood by the
claimant and shall include: (a) the specific reasons for the denial; (b)
specific reference to pertinent Plan provisions on which the denial is based;
(c) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and (d) an explanation of the claim review procedure
and the time limits applicable thereto (including a statement of the claimant's
right to bring a civil action under Section 502(a)of ERISA following an adverse
benefit determination on review). A claimant whose claim is denied (or his duly
authorized representative) who wants to contest that decision must file with the
Plan Administrator a written request for a review of such claim within 60 days
after receipt of denial of a claim. If the claimant does not file a request for
review of his claim within such 60-day period, the claimant shall be deemed to
have acquiesced in the original decision of the Plan Administrator on his claim.
If such an appeal is so filed within such 60 day period, the Compensation
Committee of the Board of Directors of the Company (or its delegate) shall
conduct a full and fair review of such claim. During such review, the claimant
shall be given the opportunity to review documents that are pertinent to his
claim and to submit issues and comments in writing. For this purpose, the
Compensation Committee (or its delegate) shall have the same power to interpret
the Plan and make findings of fact thereunder as is given to the Plan
Administrator under Section 10.01 above. The Compensation Committee (or its
delegate) shall mail or deliver to the claimant a written decision on the matter
based on the facts and the pertinent provisions of the Plan within 60 days after
the receipt of the request for review (unless special circumstances require an
extension of up to 60 additional days, in which case written notice of such
extension shall be given to the claimant prior to the commencement of such
extension). Such decision shall be
15
written in a manner calculated to be understood by the claimant, shall state the
specific reasons for the decision and the specific Plan provisions on which the
decision was based and shall, to the extent permitted by law, be final and
binding on all interested persons. In addition, the notice of adverse
determination shall also include statements that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant to the claimant's claim
for benefits and a statement of the claimant's right to bring a civil action
under Section 502(a) of ERISA.
Section 10.04 Revocability of Prior Action. Any action taken by the Plan
Administrator, the Compensation Committee or an Employer with respect to the
rights or benefits under the Plan of any person shall be revocable as to
payments not yet made to such person. In addition, the acceptance of any
Benefits under the Plan constitutes acceptance of and agreement to the Plan
Administrator's, Compensation Committee's or the Employer's making any
appropriate adjustments in future payments to any person (or to recover from
such person) any excess payment or underpayment previously made to him or on his
behalf.
Section 10.05 Amendment. The Company (with the approval or ratification of the
Benefits Committee) may at any time amend any or all of the provisions of this
Plan, except that (a) no such amendment may reduce the amount of any
Participant's vested Benefit as of the date of such amendment, and (b) no such
amendment may suspend the crediting of earnings on the balance of a
Participant's Account, until the entire balance of such Account has been
distributed, in either case, without the prior written consent of the affected
Participant. Any amendment shall be in the form of a written instrument executed
by an officer of the Company. Subject to the foregoing provisions of this
Section, such amendment shall become effective as of the date specified in such
instrument or, if no such date is specified, on the date of its execution.
Section 10.06 Termination.
(a) The Company, in its sole discretion, may terminate this Plan at any
time and for any reason whatsoever, except that, subject to Subsection
(b) hereof, (i) no such termination may reduce the amount of any
Participant's vested Benefit as of the date of such termination and
(ii) no such termination may suspend the crediting of earnings on the
balance of a Participant's Account, until the entire balance of such
Account has been distributed, in either case, without the prior
written consent of the affected Participant. Any such termination
shall be expressed in the form of a written instrument executed by an
officer of the Company with the approval or ratification of the
Compensation Committee. Subject to the foregoing provisions of this
Section, such termination shall become effective as of the date
specified in such instrument or, if no such date is specified, on the
date of its execution. Written notice of any termination shall be
given to the Participants as soon as practicable after the instrument.
(b) Notwithstanding anything in the Plan to the contrary, to the extent
permitted by Code Section 409A, in the event of a termination of the
Plan (or any portion thereof), the Company, in its sole and absolute
discretion, shall have the right to change the time and form of
distribution of Participants' Excess Retirement Benefits including
requiring that all amounts credited to Participant's Account hereunder
be immediately distributed in the form of lump sum payments.
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ARTICLE XI.
ADOPTION BY OTHER EMPLOYERS/TRANSFERS OF EMPLOYMENT
Section 11.01 Adoption of Plan by other Employers/Withdrawal.
(a) Any Controlled Group Member may adopt the Plan with the written
consent of the Company (with the approval or ratification of the
Benefits Committee). Any such adopting employer must (i) execute an
instrument evidencing such adoption and (ii) file a copy of such
Instrument with the Plan Administrator. Such adoption may be subject
to such terms and conditions as the Company requires or approves. By
this adoption of the Plan, Employers other than the Company shall be
deemed to authorize the Company to take any actions within the
authority of the Company under the terms of the Plan.
(b) Notwithstanding the foregoing, in the case of any Employer that adopts
the Plan and thereafter ceases to exist, ceases to be a Controlled
Group Member or withdraws or is eliminated from the Plan, it shall not
thereafter be considered an Employer hereunder provided, however, that
(i) such terminating Employer shall continue to be an Employer for the
purposes hereof as to Participants or Beneficiaries to whom it owes
obligations hereunder, and (ii) such termination shall be subject to
the limitations and other conditions described in Section 10.06,
treating the Employer as if it were the Company.
(c) Any Employer that adopts this Plan may elect separately to withdraw
from the Plan and such withdrawal shall constitute a termination of
the Plan as to it; provided, however, that (i) such terminating
Employer shall continue to be an Employer for the purposes hereof as
to Participants or Beneficiaries to whom it owes obligations
hereunder, and (ii) such termination shall be subject to the
limitations and other conditions described in Section 10.06, treating
the Employer as if it were the Company.
Section 11.02 Liability for Payment/Transfers of Employment.
(a) Subject to the provisions of Subsection (b) hereof, each Employer
shall be liable for the payment of the Excess Retirement Benefits that
are payable hereunder to or on behalf of its Employees.
(b) Notwithstanding the foregoing, if an Excess Retirement Benefit payable
to or on behalf of a Participant is based on the Participant's
employment with more than one Employer the following provisions shall
apply:
(i) Upon a transfer of employment, the Participant's Sub-Accounts
shall be transferred from the prior Employer to the new Employer
and Excess Retirement Benefits (and earnings) shall continue to
be credited to the Sub-Accounts following the transfer (to the
extent otherwise required under the terms of the Plan). The last
Employer of the Participant shall be responsible for paying the
entire amount that is allocated to the Participant's Sub Accounts
hereunder; and
17
(ii) Notwithstanding the provisions of clause (i), (1) each Employer
shall be solely liable for the payment of the amounts credited to
a Participant's Account which were earned by the Participant
while he was employed by that Employer; (2) each Employer (unless
it is Insolvent) shall reimburse the last Employer for its
allocable share of the Participant's distribution; (3) 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 that are allocable to
service with that Employer (until the time specified in Section
7.03(d)); and (4) each Employer shall (to the extent permitted by
applicable law) receive an income tax deduction for the
Employer's allocable share of the Participant's distribution.
EXECUTED, this 8th day of February, 2006.
NACCO INDUSTRIES, INC.
By: /s/ Charles A. Bittenbender
------------------------------------
Title: Vice President, General Counsel
and Secretary
---------------------------------
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