Exhibit 10.17
THE NORTH AMERICAN COAL CORPORATION
DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES
(AS AMENDED AND RESTATED AS OF JANUARY 1, 2005)
NA Coal NQ/Def. Comp. Plan JOBS Act Restatement
THE NORTH AMERICAN COAL CORPORATION
DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES
The North American Coal Corporation (the "Company") does hereby adopt
this amendment and restatement of The North American Coal Corporation Deferred
Compensation Plan for Management Employees, 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 Savings Plan
but for the limitations imposed under Code Sections 402(g), 401(a)(17),
401(k)(3), 401(m) and 415.
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 Status of Plan. This document is classified as a single "plan" for
purposes of recordkeeping, the Code and the requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). For purposes of
the federal securities laws, however, this document shall be classified as two
separate "plans." One plan shall consist of the Accounts of those persons who
satisfy the requirements of an "accredited investor" or a "sophisticated
purchaser" under Rule 506 of the Securities Act of 1933 and the other plan shall
consist of the Accounts of all other Plan Participants.
Section 1.06 Application of the American Jobs Creation Act ("AJCA").
(a) The following Sub-Accounts (collectively, the "Pre-2005 Sub-Accounts")
(and all earnings thereon) are "grandfathered" under Code Section 409A
(as enacted by the 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) the VAP Deferral Sub-Account; (ii)
amounts credited to the Excess 401(k) Sub-Account for periods prior to
January 1, 2005 (the "Pre-2005 Excess 401(k) Sub-Account"); (iii)
amounts credited to the Excess Matching Sub-Account for periods prior
to January 1, 2005 (the "Pre-2005 Excess Matching Sub-Account"); and
(iv) amounts credited 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) (the
"Post-2004 Excess Profit Sharing Sub-Account"). 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 Savings
Plan as they 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 in accordance with Section
3.05 by the Employer 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 1.06 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 VII hereof.
Section 2.03 Benefits Committee shall mean the NACCO Industries, Inc. Benefits
Committee.
Section 2.04 Bonus shall mean any bonus under The North American Coal
Corporation Annual Incentive Compensation Plan that would be taken into account
as Compensation under the Savings 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 which gives rise to such Bonus.
Section 2.05 Company shall mean The North American Coal Corporation or any
entity that succeeds The North American Coal Corporation by merger
reorganization or otherwise.
Section 2.06 Compensation shall have the same meaning as under the Savings Plan,
except that Compensation shall be deemed to include (a) the amount of
compensation deferred by the Participant under this Plan, excluding VAP Deferral
Benefits and (b) amounts in excess of the limitation imposed by Code Section
401(a)(17). Notwithstanding the foregoing, the timing and crediting of Bonuses
hereunder shall be as specified in Section 3.01.
Section 2.07 Compensation Committee shall mean the Compensation Committee of the
Board of Directors of the Company.
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Section 2.08 Employer shall mean the Company and any other Controlled Group
Member that adopts this Plan pursuant to Section 8.07.
Section 2.09 Excess Retirement Benefit or Benefit shall mean a VAP Deferral
Benefit, an Excess Profit Sharing Benefit, an Excess 401(k) Benefit or an Excess
Matching Benefit (all as described in Article III) that is payable to or with
respect to a Participant under this Plan.
Section 2.10 Fixed Income Fund shall mean the Stable Asset Fund under the
Savings 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 2.11 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 Code Section
416(i) (without regard to paragraph (5) thereof) of an Employer, as long as the
stock of NACCO (or a related entity) 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 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 NACCO shall mean NACCO Industries, Inc.
Section 2.14 Participant.
(a) For purposes of Sections 3.01 and 3.02 of the Plan, the term
"Participant" means an Employee of an Employer (other than a San
Miguel Employee or a Florida Dragline Employee) who is a Participant
in the Savings Plan (i) who is unable to make all of the Before-Tax
Contributions that he has elected to make to the Savings Plan, or is
unable to receive the maximum amount of Matching Contributions under
the Savings Plan because of the limitations of Code Section 402(g),
401(a)(17), 401(k)(3), 401(m) or 415; (ii) who is in salary grade 14
or above; and (iii) whose total compensation from the Controlled Group
for the year in which a deferral election is required is at least
$115,000.
(b) For purposes of Section 3.04 of the Plan, the term "Participant" means
an Employee of an Employer (i) who is a Salaried Profit Sharing
Employee under the Savings Plan, (ii) whose Profit Sharing
Contribution under the Savings Plan is limited by the application of
Code Section 401(a)(17) or 415 or is reduced due to his deferral of
Compensation under this Plan, (iii) who is in salary grade 14 or
above, and (iv) whose total compensation from the Controlled Group for
the year in which an Excess Profit Sharing Benefit is required is at
least $115,000.
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(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 2.15 Plan shall mean The North American Coal Corporation Deferred
Compensation Plan for Management Employees, as herein set forth or as duly
amended.
Section 2.16 Plan Administrator shall mean the Administrative Committee
appointed under the Savings Plan.
Section 2.17 Plan Year shall mean the calendar year.
Section 2.18 ROTCE shall mean the consolidated return on total capital employed
for NACCO, as determined by NACCO, for purposes of the NACCO Industries, Inc.
Annual Incentive Compensation Plan as in effect for a particular Plan Year.
Section 2.19 Savings Plan shall mean The North American Coal Corporation
Retirement Savings Plan (or any successor plan).
Section 2.20 Termination of Employment shall mean a separation of service as
defined under Code Section 409A (and the regulations and other guidance issued
thereunder).
Section 2.21 Unforeseeable Emergency shall mean an event which 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 2.22 Valuation Date shall mean the last business day of each Plan Year
and any other date chosen by the Plan Administrator.
ARTICLE III.
EXCESS RETIREMENT BENEFITS
Section 3.01 Basic and Additional Excess 401(k) Benefits.
(a) Amount of Excess 401(k) Benefits. Each 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 Code Sections 402(g), 401(a)(17), 401(k)(3)and
415. All amounts deferred under this Section shall be referred to
herein collectively as the "Excess 401(k) Benefits." Notwithstanding
the foregoing, a Participant'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. As a result, Bonuses that are paid in 2005
shall not be taken into account for purposes of calculating Excess
401(k) Benefits hereunder.
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(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:
(i) 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
(ii) The Additional Excess 401(k) Benefits (if any) shall be
determined by multiplying such 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.
(iii) 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. The Basic and Additional Excess
401(k) Sub-Accounts shall be referred to collectively as the
"Excess 401(k) Sub-Account."
(c) Consequences of Deferral Election. Any direction by a Participant to
defer Compensation under Subsection (a) shall be effective with
respect to Compensation otherwise payable to the Participant during
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) Time of Payment Election. The initial deferral election made by a
Participant under this Plan shall also contain the Participant's
IRREVOCABLE election regarding the payment date of the Participant's
Pre-2005 and/or Post-2004 Excess 401(k) Sub-Account hereunder. A
Participant who does not timely and properly file such an election
form shall be deemed to have elected to receive such Benefits as soon
as practicable following the date on which he ceases to be an Employee
of the Controlled Group (for Pre-2005 Sub-Accounts) or incurs a
Termination of Employment (for Post-2004 Sub-Accounts). The
Participant may elect to commence payment of such Sub-Accounts on one
of the following dates:
(1) 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),
(2) the date on which he attains an age specified in the deferral
election form,
(3) the earlier of such dates, or
(4) the later of such dates (for Pre-2005 Sub-Accounts only).
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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 the form of
a lump sum payment at his Termination of Employment.
(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 the form of a lump
sum payment 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 Savings Plan has been involuntarily suspended because he has taken
a Hardship withdrawal shall automatically terminate. Such termination
shall be in effect for the remainder of the Plan Year in which he
receives such Hardship withdrawal (or, if later, the end of the Plan
Year that includes the end of his period of suspension from the
Savings Plan). As a result, the Participant shall be required to
reenroll in this Plan effective as of the next applicable January 1st.
Section 3.02 Excess Matching Benefits. A Participant shall have credited to his
Basic Excess Matching Sub-Account an amount equal to the Matching Contributions
attributable to his Basic Excess 401(k) Benefits that he is prevented from
receiving under the Savings Plan because of the limitations imposed under Code
Sections 402(g), 401(a)(17), 401(k)(3), 401(m) and 415 (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.
Section 3.03 VAP Deferral Benefits. The Accounts of certain Participants contain
amounts that were allocated to a VAP Deferral Sub-Account (the "VAP Deferral
Benefits") hereunder prior to December 31, 2004. Participants were required to
make an IRREVOCABLE election regarding the payment date for their VAP Deferral
Sub-Account at the time of the initial deferral election. A Participant who
failed to timely make such an election shall be deemed to have elected to
receive such payment on the date on which he ceases to be an Employee of the
Controlled Group.
Section 3.04 Excess Profit Sharing Benefits. Each Employer shall credit to a
Sub-Account (the "Excess Profit Sharing Sub-Account") established for each
Participant who is an Employee of such Employer, an amount equal to the excess,
if any, of (i) the amount of the Employer's Profit Sharing Contribution that
would have been made to the Savings Plan on behalf of the Participant for a Plan
Year if (1) such Plan did not contain the limitations imposed under Code
Sections 401(a)(17) and 415 and (2) the term "Compensation" (as defined in
Section 2.06 hereof) were used for purposes of determining the amount of Profit
Sharing Contributions under the Savings
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Plan, over (ii) the amount of the Employer's Profit Sharing Contribution that is
actually made to the Savings Plan on behalf of the Participant for such Plan
Year (the "Excess Profit Sharing Benefits").
Section 3.05 Participants' Accounts. Each Employer shall establish and maintain
on its books for each Participant who is an Employee of such Employer an Account
which shall contain the following entries:
(a) Credits to a Basic or Additional Excess 401(k) Sub-Account (as
applicable) for the Excess 401(k) Benefits described in Section 3.01,
which shall be credited to the Sub-Account when a Participant is
prevented from making a Before-Tax Contribution under the Savings
Plan;
(b) Credits to a Basic Excess Matching Sub-Account for the Basic Excess
Matching Benefits described in Section 3.02, which shall be credited
to the Sub-Account when a Participant is prevented from receiving
Matching Contributions under the Savings Plan;
(c) Credits to a VAP Deferral Sub-Account for the VAP Deferral Benefits
described in Section 3.03, which were credited to the Sub-Account at
the time such Benefits were deferred under this Plan;
(d) Credits to an Excess Profit Sharing Sub-Account for the Excess Profit
Sharing Benefits described in Section 3.04, which shall be credited to
the Sub-Account at the time the Profit Sharing Contributions are
otherwise credited to Participants' accounts under the Savings Plan;
(e) Credits to all Sub-Accounts for the earnings described in Article IV,
which shall continue until such Sub-Accounts have been distributed to
the Participant or his Beneficiary; and
(f) Debits for any distributions made from the Sub-Accounts and for any
amounts forfeited under Section 6.04(b).
(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.
Section 3.06 Statements. Participants shall be provided with statements of their
Account balances at least once each Plan Year.
ARTICLE IV.
EARNINGS
Section 4.01 Earnings on Basic 401(k), Basic Matching and Excess Profit Sharing
Sub-Accounts.
(a) Subject to Subsection (b) and Section 4.04, at the end of each
calendar month during a Plan Year, the Basic Excess 401(k)
Sub-Account, the Basic Excess Matching Sub-Account and the Excess
Profit Sharing Sub-Account of each Participant shall be credited with
an amount determined by multiplying such Participant's average
Sub-Account
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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 exceeds the rate credited
to the Participant's 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 NACCO. For any
subsequent month following such termination, the ROTCE calculation
shall not apply. The Fixed Income Fund calculation described in
Subsection (a)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 4.02 Earnings on Additional Excess 401(k) Sub-Accounts. Subject to
Section 4.04, at the end of each calendar month during a 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 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 4.03 Earnings on VAP Deferral Sub-Accounts. Subject to Section 4.04, at
the end of each calendar month during a Plan Year, the VAP Deferral 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 "10-Year
U.S. Treasury Yield" plus 2.0%. For purposes hereof, the 10-Year U.S. Treasury
Yield shall be the 10 year yield on U.S. Treasury issues as listed in the Bond
Market Data Bank for the last day of the preceding calendar quarter as printed
in the Wall Street Journal (or as published on the website for the Wall Street
Journal) . In the event that a yield is not listed for a maturity exactly 10
years from the calendar quarter end, the next preceding chronological treasury
bond issue yield shall be used.
Section 4.04 Changes in/Limitations on Earnings Assumptions.
(a) To the extent not prohibited by Code Section 409A, the Company (with
the approval or ratification of the Benefits Committee) or the
Compensation Committee may change (but not suspend) the earnings rate
credited on Accounts hereunder 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 which
exceeds 14%.
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ARTICLE V.
VESTING
Section 5.01 Vesting A Participant shall always be 100% vested in the amounts
credited to his Account hereunder.
ARTICLE VI.
TIME AND FORM OF PAYMENT TO PARTICIPANTS
Section 6.01 Excess Profit Sharing Benefits.
(a) Pre-2005 Excess Profit Sharing Sub-Accounts. Amounts allocated to a
Participant's Pre-2005 Excess Profit Sharing Sub-Account shall be paid
in the form of a lump sum payment at the same time as the Profit
Sharing Contributions are paid (or commence to be paid) under the
Savings Plan.
(b) Post-2004 Excess Profit Sharing Sub-Accounts. The Participant shall
elect the payment date for his entire Post-2004 Excess Profit Sharing
Sub-Account prior to December 31, 2004 (or when the Plan first becomes
applicable to him, if later). He may elect to receive payment of his
Post-2004 Excess Profit Sharing Sub-Account as soon as practicable
following (i) the date on which he incurs a Termination of Employment,
(ii) the date he attains a specified age or (iii) the earlier of such
dates. A Participant who does not timely and properly file such an
election shall be deemed to have elected to receive amounts allocated
to his Post-2004 Excess Profit Sharing Sub-Account as soon as
practicable following the date of his Termination of Employment. Once
made, the election (or deemed election) of the time of payment of the
Post-2004 Excess Profit Sharing Sub-Account shall be IRREVOCABLE.
Amounts allocated to a Participant's Post-2004 Excess Profit Sharing
Sub-Account shall automatically be paid in the form of a lump sum
payment. In the event that a Participant elects to receive his
Post-2004 Excess Profit Sharing 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 Profit Sharing Sub-Account
shall automatically be paid to the Participant in the form of a lump
sum payment at his Termination of Employment.
Section 6.02 VAP Deferral Sub-Account. A Participant's VAP Deferral Sub-Account
shall be paid (or commence to be paid) at the time originally elected by the
Participant under Section 3.03. VAP Deferral Benefits shall be subject to the
form of payment rules described in Section 6.03(b) below.
Section 6.03 Excess 401(k) and Excess Matching Sub-Accounts.
(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 3.01).
(b) Form of Payment of Pre-2005 Sub-Accounts. The Pre-2005 Excess 401(k)
and Matching Sub-Account (and the VAP Deferral Sub-Account) shall be
distributed to the Participant in the form of ten annual installments.
All installment payments under the Plan will be
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based on the value of the applicable Sub-Account on the Valuation Date
immediately preceding the date on which 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 will be paid
as soon as practicable after the designated payment date, with each
additional installment being paid in the month of January of each
succeeding year. All installment payments under the Plan will be
classified as a single payment for purposes of Code Section 409A.
Notwithstanding the foregoing, the Participant may elect to receive
the amount credited to his Pre-2005 Excess 401(k) and Excess Matching
Sub-Accounts (and/or his VAP Deferral Sub-Account) 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 time he had elected to commence
receiving payment of such Sub-Account. 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 time he had elected to commence receiving payment of such
Sub-Account. Any such lump sum payment shall be paid as soon as
practicable following the designated payment date.
(c) Form of Payment of Post-2004 Excess 401(k) and Matching Sub-Accounts.
Except for amounts described in Section 3.01(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 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 in Subsection (b), above. If the Participant does not make a
timely election regarding the form of payment, his Post-2004 Excess
401(k) Sub-Account shall be distributed in the form of a single lump
sum payment. Once made, the election (or deemed election) of a form of
payment under this Subsection (c) may only be changed in the limited
circumstances described 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) and Excess
Matching Sub-Accounts by filing a subsequent notice in writing, signed
by the Participant and filed with the Plan Administrator. Such
election will not be effective unless (i) it is made not less than
twelve months prior to the date that distribution would have been made
absent such election, (ii) the previously elected payment date is
automatically delayed for a period of five years (except for payments
made on account of death or disability), (iii) such election will not
take effect until at least twelve months after the date on which the
election is made and (iv) unless otherwise permitted under Code
Section 409A, the election does not accelerate the payment.
Section 6.04 Withdrawals.
(a) Unforseeable Emergency Distributions. Notwithstanding any provision of
the Plan to the contrary, 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
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Participant's 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 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 as soon as practicable after such
distribution request is approved and processed by the Plan
Administrator.
(b) Withdrawals Subject to a 10% Penalty. Notwithstanding any other
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 from his Pre-2005 Additional Excess 401(k)
Sub-Account and/or his VAP Deferral Sub-Account and (ii) a Participant
who has ceased to be an Employee of the Controlled Group may also
elect in writing to receive a withdrawal from his Pre-2005 Basic
Excess 401(k) Sub-Account and/or his Pre-2005 Basic Excess Matching
Sub-Account. Withdrawals under this Subsection shall be equal to the
entire amount credited to any such Sub-Account, less 10%. Such 10%
reduction shall be treated as a forfeiture hereunder and shall
immediately be subtracted from the applicable Sub-Account, never to be
restored. Such forfeitures shall inure to the benefit of the Employers
and shall be used to pay Excess Retirement Benefits under the Plan
and/or to pay the administrative expenses of the Plan.
Section 6.05 Other Payment Rules and Restrictions.
(a) Payments From Post-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
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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 $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 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 (e) 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 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 8.05) or (ii) a conflict of
interest or the payment of FICA taxes (as specified in Subsection (g)
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 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 of 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
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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 exceed the
amount required to be included as income as a result of the failure to
comply with Code Section 409A.
Section 6.06 Liability for Payment/Expenses. The Employer by which the
Participant was last employed prior to his payment commencement date under the
Plan shall pay all Excess Retirement Benefits hereunder 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 Excess Retirement Benefits
payable to or on behalf of a Participant are based on the Participant's
employment with more than one Employer, the liability for such Benefits shall be
shared by all such Employers (by reimbursement to the Employer making such
payment) as may be agreed to among them in good faith (taking into consideration
the Participant's service and Compensation paid by each such Employer) and as
will permit the deduction (for purposes of federal 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 Employers, as directed by the
Company.
ARTICLE VII.
BENEFICIARIES
Section 7.01 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 and received by the Plan Administrator
prior to the Participant's death. Separate Beneficiary designations may be made
for (i) the Excess 401(k) and Matching Benefits, (ii) the VAP Deferral Benefits
and (iii) 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 the estate of the last to die of the Participant and his
Beneficiaries. 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. 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 by the Plan Administrator prior to the death of the Participant.
Section 7.02 Distributions to Beneficiaries. The Excess Retirement Benefit
payable to a Participant's Beneficiary under this Plan shall be equal to the
balance in the applicable Sub-Account on the date of the distribution of the
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.
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ARTICLE VIII.
MISCELLANEOUS
Section 8.01 Liability of Employers. Nothing in this Plan shall constitute the
creation of a trust or other fiduciary relationship between an Employer and any
Participant, Beneficiary or any other person.
Section 8.02 Limitation on Rights of Participants and Beneficiaries - No Lien.
The 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 an Employer prior to the time
that such assets are paid to the Participant or Beneficiary as provided herein.
Each Participant and Beneficiary shall have the status of a general unsecured
creditor of his Employer.
Section 8.03 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 the Employers solely at the will of the Employers subject to
discharge at any time, with or without cause.
Section 8.04 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 8.05 Anti-Assignment/Early Payment in the Event of a QDRO.
(a) Subject to Subsection (b), 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 the foregoing, the Plan Administrator shall honor a
qualified domestic relations order ("QDRO") from a state domestic
relations court which 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 8.06 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 8.07 Adoption by Other Employers. Any member of the Controlled Group
that is an Employer under the Savings Plan may adopt this Plan with the consent
of the Benefits
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Committee by executing an instrument evidencing its adoption of this Plan on the
order of its Board of Directors (or the applicable committee of such Board of
Directors) (or its delegate) and filing a copy thereof with the Company. Such
adoption may be subject to such terms and conditions as the Benefits Committee
requires or approves.
Section 8.08 Effect on other Benefits. Benefits payable to or with respect to a
Participant under the Savings Plan or any other Employer-sponsored (qualified or
nonqualified) plan, if any, are in addition to those provided under this Plan.
ARTICLE IX.
ADMINISTRATION OF PLAN
Section 9.01 Administration. The Plan shall be administered by the Plan
Administrator. The Plan Administrator shall have the 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 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 person is a
Participant, and (ii) to determine if a person is entitled to Excess Retirement
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
9.03 and 9.04 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 Excess Retirement
Benefits, to a named administrator or administrators. Pursuant to this
delegation power, the Company has appointed the Administrative Committee under
the Savings Plan (as it exists from time to time) as the Plan Administrator of
this Plan.
Section 9.02 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 to the provisions of Sections 9.03 and 9.04 hereof, be final and binding
on all persons.
Section 9.03 Claims and Appeals Procedures.
(a) The Plan Administrator shall determine the rights of any person to any
Excess Retirement Benefits hereunder. Any person who believes that he
has not received the Excess Retirement Benefits to which he is
entitled under the Plan must file a claim in writing with the Plan
Administrator specifying the basis for his claim and the facts upon
which he relies in making such a claim. Such a claim must be signed by
the claimant or his duly authorized representative (the "Claimant").
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(b) Whenever the Plan Administrator denies (in whole or in part) a claim
for benefits under the Plan, the Plan Administrator shall transmit a
written notice of such decision to the Claimant, 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). Such notice
shall be written in a manner calculated to be understood by the
Claimant and shall state (i) the specific reasons for the denial; (ii)
specific reference to pertinent Plan provisions on which the denial is
based; (iii) 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 (iv) an explanation
of the Plan's 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.
(c) Within 60 days after receipt of denial of a claim, the Claimant must
file with the Plan Administrator a written request for a review of
such claim. If such an appeal is not filed 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, a named fiduciary designated by
the Plan Administrator 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 named fiduciary
shall have the same power to interpret the Plan and make findings of
fact thereunder as is given to the Plan Administrator under Section
9.01 above. The named fiduciary 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 (i) shall be written in a manner calculated
to be understood by the Claimant, (ii) shall state the specific
reasons for the decision and the specific Plan provisions on which the
decision was based and (iii) shall, to the extent permitted by
applicable 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 9.04 Revocability of Plan Administrator/ Employer Action. Any action
taken by the Plan Administrator or an Employer with respect to the rights or
benefits under the Plan of any person shall be revocable by the Plan
Administrator or the Employer as to payments not yet made to such person. In
addition, the acceptance of any Excess Retirement Benefits under the Plan
constitutes acceptance of and agreement to the Plan Administrator's or the
Employer's making any appropriate adjustments in future payments to they payee
(or to recover from such person) any excess payment or underpayment previously
made to him.
Section 9.05 Amendment. The Company (with the approval or ratification of the
Benefits Committee) may at any time (without the consent of an Employer)
authorize the amendment of any or all of the provisions of this Plan, except
that (a) no such amendment may adversely affect
16
any Participant's Excess Retirement 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 on the order of the Benefits Committee. 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 9.06 Termination.
(a) The Board of Directors of the Company (or the Compensation Committee),
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 adversely affect any Participant's Excess
Retirement 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 on the order of the Board (or Compensation Committee,
as applicable). Subject to the foregoing provisions of this
Subsection, 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
is executed.
(b) Notwithstanding anything in the Plan to the contrary, to the extent
permitted under Code Section 409A, in the event of a termination of
the Plan, the Company, in its sole and absolute discretion (but with
the consent of the Benefits Committee or the Compensation Committee),
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 Accounts hereunder be immediately
distributed in the form of a lump sum payment.
(c) Any Employer (other than the Company) that adopts the Plan may elect
to withdraw from the Plan and such withdrawal shall constitute a
termination of the Plan as to such Employer; provided, however, that
such terminating Employer shall continue to be an Employer for the
purposes hereof as to Participants or Beneficiaries to whom it owes
obligations hereunder. Such withdrawal and termination shall be
expressed in an instrument executed by the terminating Employer on
authority of its Board of Directors (or the applicable Committee
thereof) and filed with the Company, and shall become effective as of
the date designated in such instrument or, if no such date is
specified, on the date of its execution. Notwithstanding any other
provision of the Plan, if an Employer (other than the Company) ceases
to be a member of the Controlled Group, to the extent permitted by
Code Section 409A, the Plan shall automatically terminate with respect
to such Employer and all amounts credited to the Accounts of Employees
of such Employer shall be immediately payable in the form of a lump
sum payment.
17
Executed, this 8th day of February, 2006.
THE NORTH AMERICAN COAL CORPORATION
By: /s/ Charles A. Bittenbender
------------------------------------
Title: Assistant Secretary
---------------------------------
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