Exhibit 10.7
NACCO MATERIALS HANDLING GROUP, INC.
SENIOR EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN
(AS AMENDED AND RESTATED AS OF JANUARY 1, 2005)
1. Effective Date
The Effective Date of this amendment and restatement of the NACCO Materials
Handling Group, Inc. Senior Executive Long-Term Incentive Compensation Plan (the
"Plan") is January 1, 2005.
2. Purpose of the Plan
The purpose of this Plan is to further the long-term profits and growth of
NACCO Materials Handling Group, Inc. (the "Company") by enabling the Company and
its Subsidiaries (collectively, the "Employers") to attract and retain key
executive employees by offering long-term incentive compensation to those key
executive employees who will be in a position to make significant contributions
to such profits and growth. This incentive is in addition to annual compensation
and is intended to reflect growth in the value of the Company's stockholders'
equity.
3. Application of American Jobs Creation Act ("AJCA")
(a) Awards with Grant Dates of January 1, 2004 or earlier (the "Pre-2005
Awards") 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.
(b) Awards with Grant Dates of January 1, 2005 or later (the "Post-2004
Awards") are subject to the provisions of Code Section 409A, as
enacted by the AJCA. It is intended that the provisions of the Plan
that relate to the Post-2004 Awards be administered in accordance with
the requirements of Code Section 409A, so as to prevent the inclusion
in gross income of any Post-2004 Awards hereunder in a taxable year
that is prior to the taxable year or years in which such Awards would
otherwise be actually paid or made available to the Participant.
4. Definitions
(a) "Award" shall mean an award of Book Value Units granted to a
Participant under this Plan for an Award Term in an amount determined
pursuant to a formula which is established by the Committee not later
than the 90th calendar day of the Award Term.
NMHG LITP/Senior 2005 Restatement
The Participant's Awards shall be further divided into the Pre-2005
Awards and the Post-2004 Awards in accordance with the terms of
Section 3 hereof.
(b) "Award Units" shall mean Book Value Units which are issued pursuant
to, and with such restrictions as are imposed by, the terms of this
Plan.
(c) "Award Unit Price" as to any Book Value Unit shall mean the Book Value
on the Quarter Date coincident with or immediately preceding the Grant
Date of the Award.
(d) "Award Term" shall mean the period of one or more years on which an
Award is based.
(e) "Beneficiary" shall mean the person(s) designated in writing (on a
form acceptable to the Committee) to receive the payment of all Awards
hereunder in the event of the death of a Participant. In the absence
of such a designation and at anytime when there is no existing
Beneficiary hereunder, Participant's Beneficiary shall be his
surviving legal spouse or, if none, his estate.
(f) "Book Value" as to any Book Value Unit shall mean an amount determined
by the Committee or, if no amount is set by the Committee, as of any
date (i) the stockholders' equity (as determined in accordance with
generally accepted accounting principles, applied on a consistent
basis) allocable to the Common Stock of the Company, as set forth on
the consolidated balance sheet of the Company and its Subsidiaries as
of the Quarter Date coincident with or immediately preceding such
date, divided by (ii) the number of Notional Shares existing as of
such Quarter Date; provided, however, that Book Value and/or the
number of Notional Shares may be adjusted to such an extent as may be
determined by the Committee to preserve the benefit of the arrangement
for holders of Book Value Units and the Company, if in the opinion of
the Committee, after consultation with the Company's independent
public accountants, changes in the Company's accounting policies,
acquisitions or other unusual or extraordinary items have materially
affected the stockholders' equity allocable to the Notional Shares.
(g) "Book Value Unit" or "Unit" shall mean a right granted pursuant to the
terms and conditions set forth in Section 7.
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(h) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(i) "Committee" shall mean the Compensation Committee of the Company's
Board of Directors or any other committee appointed by the Company's
Board of Directors to administer this Plan in accordance with Section
5.
(j) "Disability" or "Disabled." A Participant shall be deemed to have a
"Disability" or be "Disabled" if the Participant is determined to be
totally disabled by the Social Security Administration or if the
Participant (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, or (ii)
is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than 3 months
under an Employer sponsored accident and health plan.
(k) "Grant Date" shall mean the effective date of an Award, as determined
under Section 7(b)(ii) of the Plan.
(l) "Guidelines" shall mean the guidelines that are approved by the
Committee for each Award Term for the administration of the Awards
granted under the Plan. To the extent that there is any inconsistency
between the Guidelines and the Plan, the Guidelines shall control.
(m) "Hay Salary Grade" shall mean the salary grade or points assigned to a
Participant by the Company pursuant to the Hay Salary System, or any
successor salary system subsequently adopted by the Company.
(n) "Key Employee" 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 NACCO Industries, Inc. (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
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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.
(o) "Maturity Date" shall mean the date established by the Committee with
respect to a Post-2004 Award, as determined under Section 10(a) of the
Plan.
(p) "Notional Shares" shall mean the number of assumed shares of Common
Stock of the Company as determined by the Committee from time to time
in order to implement the purposes of the Plan. The number of Notional
Shares under the Plan (including the Plan as in effect prior to the
Effective Date) shall equal 20 million shares.
(q) "Participant" shall mean any person who meets the eligibility criteria
set forth in Section 6 and who is granted an Award under the Plan.
(r) "Quarter Date" shall mean the last business day of each calendar
quarter.
(s) "Retirement" or "Retire" shall mean the (i) termination of a U.S.
Participant's employment with the Employers after the Participant has
reached age 60 and completed at least 15 years of service, or (ii)
termination of a non-U.S. Participant's employment with the Employers
which qualifies as a retirement under local practices and procedures
and/or which qualifies the non-U.S. Participant for foreign retirement
benefits.
(t) "Subsidiary" shall mean any corporation, partnership or other entity,
the majority of the outstanding voting securities of which is owned,
directly or indirectly, by the Company.
(u) "Target Award" shall mean the dollar value of the Award to be paid to
a Participant under the Plan assuming that the performance targets are
met.
(v) "Termination of Employment" shall mean a separation of service as
defined in Code Section 409A (and the regulations and guidance issued
thereunder).
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(w) "Unforeseeable Emergency" shall mean an event which results in a
severe financial hardship to the Participant as a consequence of (i)
an illness or accident of the Participant, the Participant's spouse or
a dependent within the meaning of Code Section 152(a), (ii) loss of
the Participant's property due to casualty or (iii) other similar
extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant.
5. Administration
(a) This Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the action of members of the
Committee present at any meeting at which a quorum is present, or acts
unanimously approved in writing, shall be the act of the Committee.
All acts and decisions of the Committee with respect to any questions
arising in connection with the administration and interpretation of
this Plan, including the severability of any or all of the provisions
hereof, shall be conclusive, final and binding upon the Employers and
all present and former Participants, all other employees of the
Employers, and their respective descendants, successors and assigns.
No member of the Committee shall be liable for any such act or
decision made in good faith.
(b) The Committee shall have complete authority to interpret all
provisions of this Plan, to prescribe the form of any instrument
evidencing any Award granted under this Plan, to adopt, amend and
rescind general and special rules and regulations for its
administration (including, without limitation, the Guidelines and any
such rules or regulations deemed necessary or appropriate in
connection with the requirements of Code Section 409A to the extent
applicable), and to make all other determinations necessary or
advisable for the administration of this Plan.
6. Eligibility
Any person who is classified by an Employer as a salaried employee of an
Employer (including any Subsidiary acquired after adoption of this Plan)
generally at a Hay Salary Grade of 25 or above (or a compensation level
equivalent thereto), who in the judgment of the Committee occupies an officer or
other key executive position in which his efforts may significantly contribute
to the profits or growth of an Employer, may be awarded Book Value Units.
Notwithstanding the foregoing, the following persons shall not be eligible to
participate in the Plan: (a) directors of an Employer who are not classified as
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salaried employees of an Employer, (b) leased employees (as such term is defined
in Code Section 414 and (c) salaried employees of an Employer who are
participants in the NACCO Materials Handling Group, Inc. Long-Term Incentive
Compensation Plan for a particular Award Term shall not be eligible to
participate in this Plan and receive an Award hereunder for the same Award Term.
A person who satisfies the requirements of this Section 6 shall become a
Participant in the Plan when granted an Award hereunder.
7. Granting of Awards
The Committee may, from time to time and upon such conditions as it may
determine, authorize the granting of Awards to Participants, which shall be not
inconsistent with, and shall be subject to all of the requirements of, the
following provisions:
(a) Not later than the ninetieth day of each calendar year, the Committee
shall approve (i) a Target Award to be granted to each Participant for
such year and (ii) a formula for determining the amount of each Award,
which formula is based upon the Company's return on total capital
employed for the applicable Award Term.
(b) Effective no later than April of the calendar year following the Award
Term, the Committee shall approve (i) a preliminary calculation of the
amount of each Award based upon the application of the formula (as in
effect at the calculation date) and actual performance to the Target
Awards previously determined in accordance with Section 7(a); and (ii)
a final calculation of the amount of each Award to be granted to each
Participant for the Award Term (with the specified "Grant Date" of
such Award being January 1st of the calendar year following the Award
Term). The Committee shall have the power to increase or decrease the
amount of any Award above or below the amount determined in accordance
with Section 7(b)(i); provided, however, no Award, including any Award
equal to the Target Award, shall be payable under the Plan to any
Participant except as determined by the Committee.
(c) Calculations of Target Awards shall initially be based on the
Participant's Hay Salary Grade as of January 1 of the first year of
the Award Term. However, Target Awards may be changed during or after
an Award Term under the following circumstances (as determined by the
Chief Executive Officer of the Company with the consent of the
Committee (in their sole and absolute discretion)): (i) if a
Participant receives a change
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in Hay Salary Grade, salary midpoint and/or long-term incentive
compensation target percentage, such change may be reflected in a
pro-rata Target Award, (ii) employees hired into or promoted into a
position eligible to participate in the Plan (as specified in Section
6 above) during an Award Term will, if designated as a Plan
Participant by the Chief Executive Officer of the Company with the
consent of the Committee, be assigned a pro-rated Target Award based
on their length of service during an Award Term and (iii) the
Committee may increase or decrease the amount of the Target Award at
any time, in its sole and absolute discretion. In order to be eligible
to receive an Award for an Award Term, the Participant must be
employed by an Employer and must be a Participant on December 31 of
the last year of an Award Term. Notwithstanding the foregoing, if a
Participant dies, becomes Disabled or Retires during the Award Term,
the Participant may be entitled to a pro-rata portion of the Award for
such Award Term, based on the number of days the Participant was
actually employed by the Employers during the Award Term; provided
that such pro-rata Award is not duplicative of any prior Awards
granted hereunder.
(d) Each Award shall be granted in the form of Book Value Units. The
number of Book Value Units to be issued to a Participant shall be
determined by dividing the amount of the Award by the Award Unit
Price. Notwithstanding any other provision of the Plan, the maximum
cash value of the Awards granted to a Participant under this Plan in a
single year shall not exceed $2,250,000.
(e) Multiple Awards may be granted to a Participant; provided, however,
that no two Awards to a Participant may have identical performance
periods.
8. Vesting
All Book Value Units granted pursuant to an Award hereunder shall be
immediately 100% vested as of the Grant Date.
9. Payment of Pre-2005 Awards
(a) Payment Restrictions. Each Pre-2005 Award shall provide that the Book
Value Units granted therein shall be subject to a payment restriction
in the manner and to the extent prescribed by the Committee for a
period of five years from the Grant Date, or such other shorter or
longer period as may be specified in the Guidelines for the Award
Term.
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Notwithstanding the foregoing, such payment restrictions shall
automatically lapse upon death (whether before or after termination of
employment) or termination of employment by reason of permanent
disability (as determined by the Committee) or Retirement.
(b) Payment Date/Value. Unless a Participant makes a deferral election
under Subsection (c) of this Section, as soon as practicable following
the lapse of a payment restriction applicable to a Pre-2005 Award
pursuant to Subsection (a) of this Section, the Employer or former
Employer of the Participant shall deliver to the Participant (or, if
applicable, his Beneficiary), a check in full payment of the Book
Value Units granted pursuant to such Award. The value of such Book
Value Units shall be based on the Book Value as of the Quarter Date
coincident with or immediately preceding the date on which the payment
restriction lapses; provided, however, that for Participants who
terminated employment for reasons other than permanent disability or
Retirement prior to the date on which the payment restriction lapses,
the value of such Book Value Units shall be based on the Book Value as
of the Quarter Date coincident with or immediately preceding the date
of termination.
(c) Deferral Option. Prior to the date described in Subsection (b),
subject to the rules and procedures specified in the Guidelines, a
Participant may make an irrevocable election to defer receipt of 100%
of a Pre-2005 Award granted to him for a particular Award Term for a
period not to exceed ten (10) years from the Grant Date of such
Pre-2005 Award. A separate deferral election may be made with respect
to each Pre-2005 Award granted under the Plan. The Pre-2005 Awards
that are subject to such a deferral election shall continue to be
subject to the terms and conditions of this Plan and shall continue to
be valued in accordance with the terms of the Plan until the date of
payment (or further deferral, as described in the following sentence).
In addition, a Participant who has made an irrevocable election to
defer the receipt of a Pre-2005 Award until exactly ten (10) years
from the Grant Date of such Award shall be permitted (subject to the
rules and procedures contained in the Guidelines) to make another
irrevocable election to further defer the receipt of such deferred
Pre-2005 Award under and into the NACCO Materials Handling Group, Inc.
Unfunded Benefit Plan (the "Unfunded Plan"). Deferred Pre-2005 Awards
payable to an active employee under this Plan shall be paid to the
Participant as soon as practicable following the payment date
previously elected by the Participant and
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shall be based on the Book Value as of the Quarter Date coincident
with or immediately preceding such payment date. Deferred Pre-2005
Awards which are further deferred into the Unfunded Plan shall be
credited to the Unfunded Plan as soon as practicable following the
10th anniversary of the Grant Date of such Pre-2005 Award and shall be
based on the Book Value as of the Quarter Date coincident with or
immediately preceding such anniversary date. Notwithstanding the
foregoing, any deferral election hereunder shall automatically
terminate (and shall be of no further effect) upon a Participant's
termination of employment with the Employers for any reason (including
death or disability) and payment of all such deferred Pre-2005 Awards
shall be made as soon as practicable following the date of the
Participant's termination of employment, based on the Book Value as of
the Quarter Date coincident with or immediately preceding such
termination date; provided, however, that any Pre-2005 Awards that are
subject to a deferral election at the time of a Participant's
Retirement shall automatically be deferred under and into the Unfunded
Plan as of the date of the Participant's Retirement, with the value of
the Book Value Units being based on the Book Value as of the Quarter
Date coincident with or immediately preceding such Retirement date if
(and only if) the Participant has a currently-effective payment
election relating to Pre-2005 Awards under the Unfunded Plan and is
then eligible to participate in the Unfunded Plan.
10. Payment of Post-2004 Awards
(a) Maturity Date.
(i) In the Guidelines adopted for each Award Term, the Committee
shall establish a Maturity Date for the Book Value Units granted
in each Post-2004 Award for such Award Term which shall generally
be the fifth anniversary of the Grant Date of such Post-2004
Award (or such other date specified in the Guidelines); provided,
however, that once established, the Maturity Date of an Award as
specified in the Guidelines may not thereafter be changed.
(ii) Notwithstanding the foregoing, (A) in the event a Participant
dies prior to the Maturity Date, the Maturity Date of all of the
Participant's outstanding Post-2004 Awards shall be the date of
such Participant's death (whether before or after Termination of
Employment) and (B) in the event a Participant incurs a
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Termination of Employment as a result of becoming Disabled or
Retirement prior to the Maturity Date (and prior to making a
deferral election described in Subsection (c) below), the
Maturity Date of all of the Participant's Post-2004 Awards shall
be the date of his Disability or Retirement; provided, however,
that if a Participant who incurs a Termination of Employment on
account of Retirement is a Key Employee, the Participant's
Maturity Date shall be the six month anniversary of the date of
his Termination of Employment (or, if earlier, the date of the
Participant's death).
(b) Payment Date, Form of Payment and Value.
(i) Payment Date and Form. Unless a Participant timely makes a
deferral election under Subsection (c) of this Section, the
Participant's Employer or former Employer shall deliver to the
Participant (or, if applicable, his Beneficiary), a check in full
payment of the Book Value Units granted pursuant to each
Post-2004 Award as soon as practicable following the Maturity
Date of such Award.
(ii) Value. For Participants who are employed on the Maturity Date,
the value of the Book Value Units shall be based on the Book
Value as of the Quarter Date on or immediately preceding the
Maturity Date. For Participants who incur a Termination of
Employment for reasons other than Disability or Retirement, the
value of the Book Value Units shall be based on the Book Value as
of the Quarter Date coincident with or immediately preceding the
date of Termination (despite the fact that such amounts are not
paid until the Maturity Date). For Participants who die or incur
a Termination of Employment due to Disability or Retirement, the
value of such Book Value Units shall be based on the Book Value
as of the Quarter Date coincident with or immediately preceding
the Maturity Date; provided, however, that if a Participant who
incurs a Termination of Employment on account of Retirement is a
Key Employee whose payment is delayed for 6 months, the value of
the Book Value Units shall be based on the Book Value as of the
Quarter Date coincident with or immediately preceding the payment
date.
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(c) Deferral Option. A Participant who is a citizen or resident of the
United States may make an irrevocable election to defer receipt of
100% of a Post-2004 Award granted to him for a particular Award Term.
A separate deferral election may be made with respect to each
Post-2004 Award granted under the Plan. Such a deferral election must
be made, in writing, on a form approved by the Committee and (i) will
not be valid unless the election is made at least 12 months prior to
the Maturity Date of the Award and (ii) will not be given effect until
at least 12 months after the date on which such election is made. If a
valid and timely deferral election is made with respect to a Post-2004
Award, the payment of such Award will automatically be deferred until
the 10th anniversary of the Grant Date of such Award. The Post-2004
Awards that are subject to such a deferral election shall continue to
be valued in accordance with the terms of the Plan until the date of
payment. Post-2004 Awards that are deferred until the 10th anniversary
of the Grant Date shall be paid as soon as practicable thereafter in
the form of a single, lump-sum payment and shall be based on the Book
Value as of the Quarter Date coincident with or immediately preceding
such date. Notwithstanding the foregoing, any deferral election under
this Subsection (c) shall automatically terminate (and shall be of no
further effect) upon a Participant's death or Termination of
Employment due to Disability and payment of all such deferred Awards
shall be made as soon as practicable following the date of such death
or Termination of Employment due to Disability, based on the Book
Value as of the Quarter Date coincident with or immediately preceding
such date.
(d) Notwithstanding the foregoing, the Committee 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
Post-2004 Awards, if the Committee determines, 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 and 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
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the Participant's assets (to the extent such liquidation would not
itself cause severe financial hardship).
11. Amendment, Termination and Adjustments
(a) The Committee, in its sole and absolute discretion, may alter or amend
this Plan from time to time; provided, however, that no such amendment
shall, without the consent of a Participant, affect the amount of any
outstanding Award or any Award Units of such Participant.
(b) The Committee, in its sole and absolute discretion, may terminate this
Plan in its entirety at any time; provided that, except as provided in
this Subsection (b), no such termination shall, without the consent of
a Participant, affect the amount of any outstanding Award or any Award
Units of such Participant. Except as otherwise provided in an
amendment to the Plan, all Target Awards and Awards granted prior to
any termination of this Plan shall continue to be subject to the terms
of this Plan. Notwithstanding the foregoing, upon a complete
termination of the Plan, the Committee, in its sole and absolute
discretion, shall have the right to change the time of distribution of
Participants' Award Units under the Plan, including requiring that all
such Award Units be immediately distributed in the form of lump sum
cash payments (but only to the extent such change is permitted by Code
Section 409A).
(c) Any amendment or termination of the Plan shall be in the form of a
written instrument executed by an officer of the Company on the order
of the Committee. Such amendment or termination shall become effective
as of the date specified in the instrument or, if no such date is
specified, on the date of its execution.
(d) The Committee may make or provide for an adjustment in the total
number of Award Units to be issued under this Plan as the Committee in
its sole discretion, exercised in good faith, may determine is
equitably required to reflect (i) any stock dividend, stock split,
combination of shares, recapitalization or any other change in the
capital structure of the Company, (ii) any merger, consolidation,
spin-off, split-off, spin-out, split-up, reorganization, partial or
complete liquidation or other distribution of assets, issuance of
rights or warrants to purchase securities, or (iii) any other
corporate transaction or event having an effect similar to any of the
foregoing.
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12. General Provisions
(a) No Right of Employment. Neither the adoption or operation of this
Plan, nor any document describing or referring to this Plan, or any
part thereof, shall confer upon any employee any right to continue in
the employ of an Employer, or shall in any way affect the right and
power of an Employer to terminate the employment of any employee at
any time with or without assigning a reason therefor to the same
extent as the Employer might have done if this Plan had not been
adopted.
(b) Governing Law. The provisions of this Plan shall be governed by and
construed in accordance with the laws of the State of North Carolina,
except when preempted by federal law.
(c) Expenses. Expenses of administering the Plan shall be paid by the
Employers, as directed by the Company.
(d) Assignability. No Award granted to a Participant under this Plan shall
be transferable by him for any reason whatsoever; provided, however,
that upon the death of a Participant (whether before or after
termination), the proceeds of an Award shall be paid to the
Beneficiary as soon as practicable thereafter.
(e) Taxes. There shall be deducted from each payment under the Plan the
amount of any tax required by any governmental authority to be
withheld and paid over to such governmental authority for the account
of the person entitled to such payment.
(f) Limitation on Rights of Participants; No Trust.
(i) No trust has been created by the Employers for the payment of
Book Value Units granted under this Plan; nor have the grantees
of Book Value Units been granted any lien on any assets of the
Employers to secure payment of such benefits. This Plan
represents only an unfunded, unsecured promise to pay by the
Employer or former Employer of the Participant, and the
Participants and Beneficiaries are merely unsecured creditors of
the Participant's Employer or former Employer.
(ii) Notwithstanding any other provision of the Plan to the contrary
(but except as provided in Section 13 hereof), no Employer shall
be required to make any
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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 funds of the Employer are sufficient
to make the payment without jeopardizing the solvency of the
Employer. For purposes of the Plan, an Employer shall be
considered Insolvent at such time as it (1) is unable to pay its
debts as they mature or (2) is subject to a pending voluntary or
involuntary proceeding as a debtor under the United States
Bankruptcy Code (or similar foreign law).
(g) Payment to Guardian. If an Award is payable to a minor, to a person
declared incompetent or to a person incapable of handling the
disposition of his property, the Committee may direct payment of such
Award to the guardian, legal representative or person having the care
and custody of such minor, incompetent or person. The Committee may
require such proof of incompetency, minority, incapacity or
guardianship as it may deem appropriate prior to the distribution of
such Award. Such distribution shall completely discharge the Employers
from all liability with respect to such Award.
(h) Miscellaneous.
(i) Headings are given to the sections of this Plan solely as a
convenience to facilitate reference. Such headings, numbering and
paragraphing shall not in any case be deemed in any way material
or relevant to the construction of this Plan or any provisions
thereof.
(ii) The use of the masculine gender shall also include within its
meaning the feminine. The use of the singular shall also include
within its meaning the plural, and vice versa.
(iii) 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,
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if the calculation of the amount payable for the Post-2004 Awards
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.
(iv) Acceleration of Payments. Notwithstanding any provision of the
Plan to the contrary, payments of Post-2004 Awards 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 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.
13. Liability of Employers, Transfers and Guarantees.
(a) In general. The provisions of this Section 13 shall apply
notwithstanding any other provision of the Plan to the contrary.
(b) Liability for Payment/Transfers of Employment.
(i) Subject to the provisions of clause (ii) of this Section, the
Employers shall each be liable for the payment of the Awards
which are payable hereunder to or on behalf of the Participants
who are (or were) its employees.
(ii) Notwithstanding the foregoing, if the Awards hereunder which are
payable to or on behalf of a Participant are based on the
Participant's employment with more than one Employer, the
following provisions shall apply:
(1) Each Award shall be granted by the Employer for whom the
Participant was performing services during the Award Term.
In the event that a Participant performed services for more
than one Employer during the Award Term, the Award shall be
divided so that the Participant shall receive a pro-rata
number of Book Value Units from each Employer, based on the
Participant's service with, and compensation from, each
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such Employer (as determined by the Committee in its sole
and absolute discretion).
(2) Notwithstanding the provisions of clause (1), (A) each
Employer shall be solely liable for the payment of the
Awards it granted to its employees or former employees; (B)
if a Participant has been employed by more than one
Employer, the Employer who employs the Participant at the
time of the payment of the Award shall pay the entire amount
of such Award; (C) each Employer (unless it is Insolvent)
shall reimburse the paying Employer for its allocable share
of the Participant's Award; (D) if any responsible Employer
is Insolvent at the time of payment, the last Employer shall
not be required to make a distribution to the Participant
with respect to amounts which are allocable to service with
that Employer (until the time specified in Section
12(f)(ii)); and (E) each Employer shall (to the extent
permitted by applicable law) receive an income tax deduction
for the Employer's allocable share of the payment of the
Participant's Award.
(c) Notwithstanding the foregoing, in the event that NMHG Oregon, LLC
(known as NMHG Oregon, Inc. prior to the close of business on December
31, 2005) is unable or refuses to satisfy its obligations hereunder
with respect to the payment of Awards to or on behalf of its
employees, the Company (unless it is Insolvent) shall guarantee and be
responsible for the payment thereof.
NACCO MATERIALS HANDLING GROUP, INC.
By: /s/ Charles A. Bittenbender
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Title: Assistant Secretary
---------------------------------
Date: February 8, 2006
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