NACCO INDUSTRIES, INC.
2009 ANNUAL INCENTIVE COMPENSATION PLAN
The purpose of the
NACCO Industries, Inc. 2009 Annual Incentive Compensation Plan (the
“Plan”) is to further the profits and growth of NACCO
Industries, Inc. (the “Company”) by enabling the
Company to attract and retain key employees of the Company by
offering annual incentive compensation to those key employees who
will be in a position to help the Company to meet its financial and
business objectives.
(a) “Award”
means cash paid to a Participant under the Plan for the Award Term
in an amount determined in accordance with Section 4. A
Participant’s Award shall be equal to the sum of his
Short-Term Award and his Long-Term Award, as further described in
Section 4.
(b) “Award
Term” means the period from January 1, 2009 through
December 31, 2009.
(c) “Short-Term
Base Amount” means for any Participant a dollar amount, which
shall be equal to the salary midpoint for the Salary Points
assigned to the Participant by the Committee for the Award Term
multiplied by a specified percentage of the short-term incentive
compensation target percent for those Salary Points. Attached
hereto as Exhibit A is a schedule listing the
Short-Term Base Amount for each Participant for the Award
Term.
(d) “Long-Term
Base Amount” means for any Participant a dollar amount, which
shall be equal to the salary midpoint for the Salary Points
assigned to the Participant by the Committee for the Award Term
multiplied by a specified percentage of the long-term incentive
compensation target percent for those Salary Points. Attached
hereto as Exhibit B is a schedule listing the Long-Term
Base Amount for each Participant for the Award Term. Where
applicable, the Short-Term Base Amount and the Long-Term Base
Amount shall be referred to herein collectively as the “Base
Amount(s).”
(e) “Committee”
means 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 3, so long as any such committee consists of not less
than two directors of the Company and so long as each member of the
Committee is not an employee of the Company or any of its
subsidiaries.
(f) “Participant”
means any person who is classified by the Company as a salaried
employee, who in the judgment of the Committee occupies a key
position in which his efforts may significantly contribute to the
profits or growth of the Company; provided, however, that
(i) the Committee may select any employee who is expected to
contribute, or who has contributed, significantly to the
Company’s profitability to participate in the Plan and
receive an Award hereunder; and (ii) following the end of the Award
Term the Committee may make one or more discretionary Awards to
employees of the Company who were not previously designated as
Participants. Directors of the Company who are also employees of
the Company are eligible to participate in the Plan. Employees of
the Company’s subsidiaries shall not be eligible to
participate in the Plan. The Committee shall have the power to add
Participants at any later date in the Award Term if individuals
subsequently become eligible to participate in the Plan. Each
Participant shall be notified that he is eligible to receive a
Short-Term Award and or a Long-Term Award for the Award Term and
the amount of his Base Amounts. If a Participant receives a change
in Salary Points, salary midpoint and/or short-term or long-term
incentive compensation target percent, such change and any
resulting change in his Base Amount(s) will be reflected on an
amended Exhibit A or Exhibit B , as
applicable. Unless otherwise determined by the Committee,
(A) a Participant must be both employed by
1
the Company and
a Participant on December 31 of the Award Term (or die, become
permanently disabled or Retire during an Award Term) in order to
receive an Award for such Award Term and (B) the amount of any
Award to a Participant who is not employed for the entire Award
Term shall be equal to a pro-rated amount based upon the number of
days the Participant was actually employed by the Company during
the Award Term. Exhibit A and Exhibit B list the
Participants eligible for an Award for the Award Term.
(g) “Payment
Period” means the period from January 1
st through March 15 th of
the calendar year following the end of the Award Term.
(h) “Salary
Points” means the salary points assigned to a Participant by
the Committee pursuant to the Hay salary point system, or any
successor salary point system adopted by the Committee.
(i) “Retire”
means a termination of employment that entitles the Participant to
immediate commencement of his pension benefits under the Combined
Defined Benefit Plan of NACCO Industries, Inc. and Its Subsidiaries
or, for Participants who are not members of such plan, a
termination of employment after reaching age 60 and completing at
least 15 years of service with the Company.
