UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13D-101)
Under the Securities Exchange Act of 1934*
NACCO Industries, Inc.
(Name of Issuer)
Class A Common Stock
(Title of Class of Securities)
629579 10 3
(CUSIP Number)
Alfred M. Rankin, Jr.
5875 Landerbrook Drive
Mayfield Heights, Ohio 44124-4017
(216) 449-9600
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
February 6, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13D-1 (b)(3) or (4), check the following
box /_/.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13D-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
CUSIP No. 629579 10 3 13D Page 2 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rankin Associates II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO /__/ ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
0
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
0
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
* /__/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
0%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 629579 10 3 13D Page 3 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rankin Management, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) O
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO /_/ ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Georgia
7 SOLE VOTING POWER
738,295
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
738,295
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
738,295
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
* /__/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
11.4%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 629579 10 3 13D Page 4 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Clara L. T. Rankin
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) O
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO /__/ ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
0
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 14,000
EACH REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
752,295
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
752,295
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES* /__/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
11.6%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 629579 10 3 13D Page 5 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Alfred M. Rankin, Jr.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) 0
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO /__/ ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
28,600
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 996,330
EACH REPORTING
PERSON WITH
9 SOLE DISPOSITIVE POWER
28,600
10 SHARED DISPOSITIVE POWER
996,330
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,024,930
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
* /__/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
15.8 %
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 629579 10 3 13D Page 6 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Thomas T. Rankin
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) 0
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO /__/ ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
0
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 849,624
EACH REPORTING
PERSON WITH
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
849,624
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
849,624
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES* /__/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13.1 %
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 629579 10 3 13D Page 7 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Claiborne R. Rankin
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) 0
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO /__/ ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
10,360
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 838,123
OWNED BY
EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
10,360
10 SHARED DISPOSITIVE POWER
838,123
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
848,483
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
* /__/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13.1 %
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 629579 10 3 13D Page 8 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Roger F. Rankin
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) 0
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO /__/ ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
0
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 859,975
OWNED BY
EACH REPORTING
PERSON WITH
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
859,975
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
859,975
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
* /__/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13.3 %
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 629579 10 3 13D Page 9 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bruce T. Rankin
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) 0
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO /__/ ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
0
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
0
10 SHARED DISPOSITIVE POWER
738,295
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
738,295
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
* /__/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
11.4 %
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP NO. 629579 10 3 Page 10 of 18 Pages
The undersigned Reporting Persons hereby file this Schedule 13D (this
"Schedule 13D") in connection with (a) the formation of Rankin Associates II,
L.P., a Delaware limited partnership (the "Partnership"), (b) the execution and
delivery of the Limited Partnership Agreement of Rankin Associates II, L.P. (the
"Partnership Agreement"), dated as of February 6, 1998, among Rankin Management,
Inc., a Georgia corporation and the general partner of the Partnership ("RMI"),
and the limited partners of the Partnership (collectively, the "Partners"), and
(c) the Partners' contribution, in the aggregate, of 738,295 shares of Class A
Common Stock of NACCO Industries, Inc. to the Partnership as initial capital
contributions in exchange for partnership interests in the Partnership (the
"Partnership Interests") proportionate to such contributions.
Item 1. Security and Issuer
This statement relates to Class A Common Stock ("Class A Common"), of
NACCO Industries, Inc. (the "Company"). The principal executive offices of the
Company are located at 5875 Landerbrook Drive, Mayfield Heights, Ohio
44124-4017.
Item 2. Identity and Background
(a)-(c) Pursuant to Rules 13D-1(f)(1)-(2) of Regulation 13D-G of the
General Rules and Regulations under the Securities Exchange Act of 1934 (the
"Act"), this Schedule 13D is filed on behalf of the Partnership and its Partners
as identified below (collectively, the "Reporting Persons"). The Partners may be
deemed as a group, pursuant to Rule 13D-5(b)(1), to have acquired beneficial
ownership of the 738,295 shares of Class A Common which was contributed to the
capital of the Partnership when the Partners executed and delivered the
Partnership Agreement.
Although the Reporting Persons are making this joint filing, except as
otherwise set forth in this filing, neither the fact of this filing nor anything
contained herein shall be deemed to be an admission by the Reporting Persons
that a group exists within the meaning of the Act.
The name, state of organization, principal business, address of the
principal business and the address of the principal office for each of the
Partnership and RMI, are as follows:
Rankin Associates II, L.P., is a Delaware limited partnership.
Its principal business is to hold under common management certain of the Class A
Common beneficially owned by the Reporting Persons. The address of its principal
business and its principal office is Suite 300, 5875 Landerbrook Drive, Mayfield
Heights, Ohio 44124-4017.
Rankin Management, Inc., is a Georgia corporation and the
general partner of the Partnership. The principal business of RMI is to act as a
general and managing partner of the Partnership and of CTR Family Associates,
L.P. The address of its principal business and its principal office is Suite
300, 5875 Landerbrook Drive, Mayfield Heights, Ohio 44124-4017. The
shareholders, executive officers and directors of RMI consist of Alfred M.
Rankin, Jr., Thomas T. Rankin, Claiborne R. Rankin and Roger F. Rankin, all of
whom are Reporting Persons.
<PAGE>
CUSIP NO. 629579 10 3 Page 11 of 18 Pages
The names, and, for purposes of this filing, the business address, and
present principal occupation or employment, and the name, principal business and
address of any corporation or other organization in which such employment is
conducted, for the Reporting Persons, other than RMI or the Partnership
(hereinafter, the "Reporting Individuals"), are as follows:
Clara L. T. Rankin. Mrs. Rankin's business address is 5875
Landerbrook Drive, Mayfield Heights, Ohio 44124-4017. She is not employed.
Alfred M. Rankin, Jr. Mr. Rankin's business address is 5875
Landerbrook Drive, Mayfield Heights, Ohio 44124-4017. He is Chairman, President
and Chief Executive Officer of the Company.
Thomas T. Rankin. Mr. Rankin's business address is 2100 West
Laburnam Avenue, Interstate Center, Suite 102, Richmond, Virginia 23227. He is
the owner of Cross-Country Marketing.
Claiborne R. Rankin. Mr. Rankin's business address is 5875
Landerbrook Drive, Mayfield Heights, Ohio 44124-4017. He is self-employed.
Roger F. Rankin. Mr. Rankin is employed as a Vice President
at Society Asset Management, Inc., a wholly owned subsidiary of KeyCorp, Inc.,
having a business address at 127 Public Square, Cleveland, Ohio 44115.
Bruce T. Rankin. Mr. Rankin's business address is 5875
Landerbrook Drive, Mayfield Heights, Ohio 44124-4017. He is not employed.
(d) None of the persons identified in this Item 2 has, during the last
five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) None of the persons identified in this Item 2 has, during the last
five years, been a party to any civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which such person was or is
subject to a judgment, decree, or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(f) All of the Reporting Individuals identified in this Item 2 are
citizens of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration
Except as otherwise provided in this Item 3, a substantial majority of
the Class A Common held by the Reporting Persons was acquired by such Reporting
Persons when The North American Coal Corporation, an Ohio corporation, was
reorganized as the Company in 1986, or subsequently
<PAGE>
CUSIP NO. 629579 10 3 Page 12 of 18 Pages
as recipients of gifts or bequests of Class A Common, as successor trustees for
trusts holding Class A Common. Additional shares of the Class A Common were
acquired over time on the open market.
RMI acquired its interest in the Class A Common when, in connection
with the formation of the Partnership, the four shareholders of RMI, Alfred M.
Rankin, Jr., Thomas T. Rankin, Claiborne R. Rankin and Roger F. Rankin, each
contributed 2,000 shares of Class A Common to RMI in exchange for the issuance
of 2,000 shares of the common stock of RMI.
The Partnership acquired the Class A Common held by the Partnership as
capital contributions from the Partners in connection with the formation of the
Partnership and the execution and delivery of the Partnership Agreement.
Item 4. Purpose of Transaction
The purpose of the formation of the Partnership, RMI and the Reporting
Individuals entering into and delivering the Partnership Agreement, and the
acquisition by the Partnership of the Class A Common is to (a) provide the
Reporting Individuals with a mechanism for consolidating the management of their
holdings of Class A Common in a manner that will allow coordinated family
management of such Class A Common, (b) to facilitate the estate planning
objectives of the Reporting Individuals, and (c) to provide a vehicle for
exchanging Class A Common for shares of Class B Common Stock of the Company in
the event that the Partnership is offered an opportunity to acquire such Class B
Common Stock.
Except as expressly set forth herein, the Reporting Persons do not have
any present plans or proposals which relate to or would result in: (a) the
acquisition by any person of additional securities of the Company or the
disposition of securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (c) a sale or transfer of a material amount
of assets of the Company or any of its subsidiaries; (d) any change in the
present Board of Directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the Board; (e) any material change in the present capitalization or
dividend policy of the Company; (f) any other material change in the Company's
business or corporate structure; (g) changes in the Company's charter, by-laws,
or other instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person; (h) causing a class of
common stock of the Company to be delisted from a national securities exchange
or to cease to be authorized to be quoted in an inter-dealer quotation system of
a registered national securities association; (i) a class of equity securities
of the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Act; or (j) any action similar to any of those
enumerated above.
<PAGE>
CUSIP NO. 629579 10 3 Page 13 of 18 Pages
Item 5. Interest in Securities of the Issuer
(a)-(b) Pursuant to the Act and regulations thereunder, the Reporting
Persons may be deemed as a group to have acquired beneficial ownership of
738,295 shares of the Class A Common, the aggregate number of shares of Class A
Common which are held by the Partnership, representing approximately 11.4% of
the outstanding Class A Common as of December 31, 1997.
Each of the Reporting Persons has, as of February 6, 1998, sole or
shared power to vote or to direct the vote and sole or shared power to dispose
or to direct the disposition of Class A Common as follows:
Rankin Associates II, L.P. Although the Partnership holds the
738,295 shares of Class A Common contributed by the Partners, it does not have
any power to vote or to dispose of shares of Class A Common. Voting control of
the Class A Common is held by RMI and the power to dispose of the Class A Common
is shared by RMI and the Partners, all as more fully described below.
Rankin Management, Inc. RMI has the sole power to vote the
738,295 shares of Class A Common held by the Partnership, and has shared power
to dispose of the 738,295 shares of Class A Common, which constitutes
approximately 11.4% of the outstanding Class A Common. RMI exercises such powers
by action of its board of directors which acts by majority vote. Currently the
RMI's board of directors consists of Alfred M. Rankin, Jr., Claiborne R. Rankin,
Roger F. Rankin and Thomas T. Rankin.
Clara L. T. Rankin. Mrs. Rankin shares the power to dispose of
738,295 shares of Class A Common with RMI and the other Reporting Individuals.
In addition, Mrs. Rankin has a reversionary interest in 14,000 shares of Class A
Common held by the an irrevocable trust created by the Agreement dated December
18, 1963, with National City Bank, a national banking association ("NCB"), as
trustee, for the benefit of Elizabeth E. Brown. Mrs. Rankin, as an advisor to
such trust, shares with NCB the power to vote and dispose of such 14,000 shares.
Collectively, the 752,295 shares of Class A Common with respect to which Mrs.
Rankin shares the power to dispose constitute approximately 11.6% of the
outstanding Class A Common. NCB is a national banking association with its
principal location at 1900 East 9th Street, Cleveland, Ohio 44113. To the
knowledge of the Reporting Persons, during the last five years, NCB has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), has not been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which NCB was or is
subject to a judgment, decree, or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
Alfred M. Rankin, Jr. Mr. Rankin (a) shares with NCB the
power to vote and dispose of 119,339 shares of Class A Common under the
Agreement dated August 30, 1967, creating a trust for the benefit of Mr. Rankin;
(b) shares with NCB the power
<PAGE>
CUSIP NO. 629579 10 3 Page 14 of 18 Pages
to vote and dispose of 48,000 shares of Class A Common pursuant to the Agreement
with Clara L. T. Rankin dated July 12, 1967, creating a trust for the benefit of
her grandchildren; (c) shares with NCB the power to vote and dispose of 25,608
shares of Class A Common held by the A.M. Rankin, Sr. Trust A for the benefit of
grandchildren; (d) shares with Helen Rankin Butler the power to vote and dispose
of 23,966 shares of Class A Common held in a trust for the benefit of Helen
Rankin Butler; (e) shares with Clara T. Rankin the power to vote and dispose of
23,966 shares of Class A Common held in trust for the benefit of Clara T.
Rankin; (f) shares the power to dispose of 738,295 shares of Class A Common with
RMI and the other Reporting Individuals; (g) has the sole power to dispose of
and vote 25,000 shares of Class A Common issuable upon the exercise of options
exercisable within 60 days of the date hereof; (h) has the sole power to dispose
of and vote an additional 3,600 shares of Class A Common; and (i) is deemed to
share with his spouse the power to vote and dispose of 17,156 shares of Class A
Common owned by his spouse (Victoire G. Rankin) because she resides with him.
Collectively, the 1,024,930 shares of Class A Common beneficially owned by Mr.
Rankin constitute approximately 15.8% of the outstanding Class A Common. The
business address of each of Clara T. Rankin and Victoire G. Rankin is 5875
Landerbrook Drive, Mayfield Heights, Ohio 44124-4017. Clara T. Rankin and
Victoire G. Rankin are not employed. The business address of Helen Rankin Butler
is Camp Aloha Hive, RR #1, Box 289, Fairlee, VT 05045. Mrs. Rankin Butler is
employed as the Director of Camp Aloha Hive. To the knowledge of the Reporting
Persons, during the last five years, Helen Rankin Butler, Clara T. Rankin or
Victoire G. Rankin have not (individually or collectively) been convicted in any
criminal proceeding (excluding traffic violations or similar misdemeanors), or
been a party to any civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which any of them was or is subject to a
judgment, decree, or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Thomas T. Rankin. Mr. Rankin (a) shares with NCB the power to
vote and to dispose of 85,371 shares of Class A Common under the Agreement dated
December 29, 1967, creating a trust for the benefit of Mr. Rankin; (b) shares as
Co-Trustee with his majority age son of a trust for the benefit of such son the
power to vote and to dispose of 10,684 shares of Class A Common; (c) is deemed
to share the power to vote and to dispose of 2,900 shares of Class A Common held
by his spouse, 2,900 shares of Class A Common held by a son, and 9,474 shares of
Class A Common held by another son, all of whom reside with Mr. Rankin; and (d)
shares with RMI and the other Reporting Individuals the power to dispose of
738,295 shares of Class A Common. Collectively, the 849,624 shares of Class A
Common beneficially owned by Mr. Rankin constitute approximately 13.1% of the
outstanding Class A Common.
Claiborne R. Rankin. Mr. Rankin (a) shares with NCB the power
to vote and to dispose of 83,732 shares of Class A Common under the Agreement
dated June 22, 1971, creating a trust for the benefit of Mr. Rankin; (b) has
sole power to vote and dispose of 6,160 shares of Class A Common as custodian
for his minor son; (c) has sole power to vote and dispose of 4,200 shares of
Class A Common as custodian for his minor daughter; (c) is deemed to share the
power to vote and to dispose of 8,380 shares of Class A Common held by his
spouse and 7,716 shares of Class A Common held in a trust for the benefit of a
daughter, both of whom reside with Mr. Rankin; and (d) shares with RMI and the
other Reporting Individuals the power to dispose of 738,295 shares of Class A
Common. Collectively, the 848,483 shares of Class A Common beneficially owned by
Mr. Rankin constitute approximately 13.1% of the outstanding Class A Common.
<PAGE>
CUSIP NO. 629579 10 3 Page 15 of 18 Pages
Roger F. Rankin. Mr. Rankin (a) shares with NCB the power to
vote and to dispose of 116,237 shares of Class A Common under the Agreement
dated September 11, 1973, creating a trust for the benefit of Mr. Rankin; (b) is
deemed to share the power to vote and to dispose of 2,400 shares of Class A
Common held by his spouse, 2,465 shares of Class A Common held by a daughter,
and 578 shares of Class A Common held by another daughter, all of whom reside
with Mr. Rankin; and (c) shares with RMI and the other Reporting Individuals the
power to dispose of 738,295 shares of Class A Common. Collectively, the 859,975
shares of Class A Common beneficially owned by Mr. Rankin constitute
approximately 13.3% of the outstanding Class A Common.
Bruce T. Rankin. Mr. Rankin shares with RMI and the other
Reporting Individuals the power to dispose of 738,295 shares of Class A Common,
which shares constitute approximately 11.4% of the outstanding Class A Common.
(c) On December 30, 1997, Claiborne R. Rankin contributed 49 shares of
Class A Common to several charities. On December 31, 1997, Roger F. Rankin made
gifts of 190 shares of Class A Common to a trust for the benefit of a daughter,
and 190 shares of Class A Common to a trust for the benefit of another daughter.
Except for the transactions referred to in the two immediately preceding
sentences and the contribution of Class A Common by the Reporting Persons to RMI
and the Partnership, there have been no transactions in Class A Common by any of
the persons named in response to Item 2 hereof during the 60 days prior to
February 16, 1998.
(d) No other person is known by the undersigned to have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Class A Common which is held by the Partnership.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer
(a) Under the terms of the Partnership Agreement, RMI has the sole
power to vote the Class A Common held by the Partnership. Further under such
terms, RMI exercises such power by a majority vote of its board of directors
which consists of Alfred M. Rankin, Jr., Claiborne R. Rankin, Roger F. Rankin
and Thomas T. Rankin.
(b) Under the terms of the Partnership Agreement, the Partnership may
not dispose of Class A Common without the consent of RMI and the approval of the
holders of more than 75% of all Partnership Interests. Under such terms, RMI
exercises such power of consent by a majority vote of its board of directors.
(c) The Shareholders' Agreement of Rankin Management, Inc. dated as of
November 14, 1996 (the "RMI Shareholder's Agreement"), the Articles of
Incorporation of RMI (the "Articles") and the Partnership Agreement restrict the
transfer of shares of common stock of RMI ("RMI Shares") and Partnership
Interests by RMI's shareholders and the Partners and provide such persons with a
right of first refusal to acquire RMI Shares or Partnership Interests which an
RMI
<PAGE>
CUSIP NO. 629579 10 3 Page 16 of 18 Pages
shareholder or a Partner desires to sell and a call right to compel the sale
of RMI Shares or Partnership Interests by RMI shareholders or the Partners who
are not members of a "Family Group," consisting of one of Clara L. T. Rankin's
sons, his spouse and their descendants. These transfer restrictions, rights of
first refusal and call options are more fully set forth in the RMI Shareholders'
Agreement, the Articles and the Partnership Agreement, copies of which are
attached hereto as Exhibits 2, 3, and 4, respectively, and incorporated herein
in their entirety.
(d) Except as set forth above in this Schedule 13D , the exhibits
hereto, and the Schedule 13D (and exhibits attached thereto) filed on November
25, 1996 by RMI, the Reporting Individuals, Victoire G. Rankin and CTR Family
Associates, L.P. with respect to the Class B Common Stock of the Company, as
amended on November 26, 1996 and as further amended on January 10, 1997 (which
Schedule 13D and exhibits are incorporated herein by this reference), none of
the persons named in response to Item 2 hereof have any contracts, arrangements,
understandings or relationships (legal or otherwise) with any person with
respect to any securities of the Company, including but not limited to transfer
or voting of any such securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be Filed As Exhibits
(Exhibit 1) Agreement pursuant to Rule 13d-1(f)(1)(iii), at page 18 of the
manually signed and sequentially paginated copy of this
Statement.
(Exhibit 2) Shareholders' Agreement of Rankin Management, Inc., dated
as of November 14, 1996.
(Exhibit 3) Articles of Incorporation of Rankin Management, Inc.
(Exhibit 4) Limited Partnership Agreement of Rankin Associates II, L.P.,
dated as of February 6, 1998.
(Exhibit 5) Schedule 13D (and exhibits attached thereto) filed on
November 25, 1996 by RMI, the Reporting Individuals, Victoire
G. Rankin and CTR Family Associates, L.P. with respect to the
Class B Common Stock of the Company, as amended on November
26, 1996 and as further amended on January 10, 1997 (which
Schedule 13D and exhibits are incorporated herein by this
reference).
[Signatures begin on next page.]
<PAGE>
CUSIP NO. 629579 10 3 Page 17 of 18 Pages
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement is true,
complete and correct.
Dated: February 16, 1996
Name: Rankin Associates II, L.P.
By: Rankin Management, Inc.,
its Managing Partner
By: /s/ Alfred M. Rankin, Jr.
Alfred M. Rankin, Jr., President
Name: Rankin Management, Inc.
By: /s/ Alfred M. Rankin, Jr.
Alfred M. Rankin, Jr., President
/s/ Alfred M. Rankin, Jr.
Name: Alfred M. Rankin, Jr.
Name: Rankin Management, Inc.
By: /s/ Alfred M. Rankin, Jr.
Alfred M. Rankin, Jr., President
Attorney-in-Fact for Clara L. T. Rankin*
Attorney-in-Fact for Thomas T. Rankin*
Attorney-in-Fact for Claiborne R. Rankin*
Attorney-in-Fact for Roger F. Rankin*
Attorney-in-Fact for Bruce T. Rankin*
* The power of attorney authorizing the above named individual to act on
behalf of each of the foregoing Reporting Persons is included in
Exhibit 2 at page 16 and in Exhibit 4 at pages 25 through 26.
CUSIP NO. 629579 10 3 Page 18 of 18 Pages
EXHIBIT 1
Pursuant to Rule 13d-1(f)(1)(iii) of Regulation 13D-G of the
General Rules and Regulations under the Securities and Exchange Act of 1934, the
undersigned agree that the statement to which this Exhibit is attached is filed
on behalf of each of the undersigned.
Dated: February 16, 1998
Name: Rankin Associates II, L.P.
By: Rankin Management, Inc.,
its Managing Partner
By: /s/ Alfred M. Rankin, Jr.
Alfred M. Rankin, Jr., President
Name: Rankin Management, Inc.
By: /s/ Alfred M. Rankin, Jr.
Alfred M. Rankin, Jr., President
/s/ Alfred M. Rankin, Jr.
Name: Alfred M. Rankin, Jr.
Name: Rankin Management, Inc.
By: /s/ Alfred M. Rankin, Jr.
Alfred M. Rankin, Jr., President
Attorney-in-Fact for Clara L. T. Rankin*
Attorney-in-Fact for Thomas T. Rankin*
Attorney-in-Fact for Claiborne R. Rankin*
Attorney-in-Fact for Roger F. Rankin*
Attorney-in-Fact for Bruce T. Rankin*
* The power of attorney authorizing the above named individual to act on
behalf of each of the foregoing Reporting Persons is included in
Exhibit 2 at page 16 and in Exhibit 4 at pages 25 through 26.
SHAREHOLDERS' AGREEMENT
of
RANKIN MANAGEMENT, INC.
Dated as of November 14, 1996
<PAGE>
TABLE OF CONTENTS
Page
1. Definitions......................................................... 1
1.1 "Act"...................................................... 1
1.2 "Agreement"................................................ 1
1.3 "Board of Directors"....................................... 2
1.4 "Authorized Transferee".................................... 2
1.5 "Call Notice".............................................. 2
1.6 "Call Option".............................................. 2
1.7 "Charitable Organization".................................. 2
1.8 "Code"..................................................... 2
1.9 "Company".................................................. 2
1.10 "Election"................................................. 2
1.11 "Fair Market Value"........................................ 2
1.12 "Family Group"............................................. 2
1.13 "Family Member"............................................ 2
1.14 "Family Shareholder"....................................... 3
1.15 "Final Valuation".......................................... 3
1.16 "First Appraised Value".................................... 3
1.17 "Independent Appraiser".................................... 3
1.18 "Initial Appraiser"........................................ 3
1.19 "Initial Value"............................................ 3
1.20 "NACCO".................................................... 3
1.21 "NACCO Class A Shares"..................................... 3
1.22 "NACCO Class B Shares"..................................... 3
1.23 "NACCO Stockholders' Agreement"............................ 3
1.24 "NACCO Restated Certificate"............................... 3
1.25 "Objecting Party".......................................... 3
1.26 "Original Shareholder"..................................... 3
1.27 "Offered Shares"........................................... 4
1.28 "Option Shares"............................................ 4
1.29 "Original Holders"......................................... 4
1.30 "Outside Shareholder"...................................... 4
1.31 "Outstanding Remaining Shares"............................. 4
1.32 "Permitted Transferee"..................................... 4
1.33 "Person"................................................... 4
1.34 "Proportionate Part"....................................... 4
1.35 "Purchase Price"........................................... 4
(a) Initial Value..................................... 4
(b) Appraised Value................................... 4
(c) Mutually Agreed Upon Purchase Price............... 5
(d) Cooperation with Appraisers....................... 5
1.36 "Purchase Right"........................................... 5
1.37 "Qualified Fiduciary"...................................... 5
1.38 "Remaining Shares"......................................... 5
1.39 "Seller's Notice".......................................... 5
1.40 "Selling Shareholder"...................................... 5
1.41 "Shares"................................................... 5
1.42 "Shareholder".............................................. 5
1.43 "Starting Date"............................................ 6
1.44 "Transfer"................................................. 6
1.45 "Valuation Notice"......................................... 6
2. Management of the Company........................................... 6
2.2 Composition of Board of Directors.......................... 6
2.3 Election of Directors...................................... 6
2.4 Board Deadlock............................................. 6
3. Shareholder Relations............................................... 7
3.1 Shareholder Approval....................................... 7
3.2 Access to Business Information............................. 7
3.3 Pre-emptive Rights......................................... 7
4. Restrictions on Transfers of Shares................................. 7
4.1 Restriction on Transfers................................... 7
4.2 Unrestricted Transfers..................................... 8
4.3 Purchase Right............................................. 8
4.4 Call Options to Purchase Shares............................ 8
4.5 Allocation of Offered Shares and Option Shares............. 9
(a) Allocation to Original Holders of Offered Shares.. 10
(b) Allocation among Family Groups.................... 10
(c) Allocation to the Company......................... 11
(d) Allocation of Shares among Family Group Members... 11
5. General Restrictions/Covenants on Transfer.......................... 11
5.1 Securities Law Restrictions................................ 11
5.2 Legends.................................................... 12
5.3 Stock Transfer Record...................................... 12
6. Closing............................................................. 13
6.1 Terms of Sale.............................................. 13
6.2 Closing.................................................... 13
6.3 Legal Requirements......................................... 13
6.4 Removal of Shareholder From Personal Obligation............ 13
7. Agreements by the Company........................................... 13
8. Shareholder Covenants............................................... 14
8.1 Voting of Shares........................................... 14
8.2 No Contrary Action......................................... 14
8.3 Shareholder Status......................................... 14
9. Subchapter S Corporation Status..................................... 14
9.1 Maintenance of Election.................................... 14
9.2 Shareholder Actions to Preserve Election................... 14
9.3 Revocation of Election..................................... 15
9.4 Inadvertent Termination of Election........................ 15
9.5 Tax Distributions.......................................... 15
10. Termination......................................................... 15
10.1 Term....................................................... 15
10.2 Removal of Legends Upon Termination........................ 16
11. Power of Attorney................................................... 16
12. Arbitration......................................................... 16
13. General Provisions.................................................. 16
13.1 Waivers and Amendments..................................... 16
13.2 Successors and Assigns..................................... 17
13.3 Counterparts............................................... 17
13.4 Notices.................................................... 17
13.5 Entire Agreement........................................... 17
13.6 Governing Law.............................................. 17
13.7 Severability............................................... 17
13.8 No Third Party Beneficiaries............................... 17
13.9 Specific Performance....................................... 18
13.10 Titles and Headings........................................ 18
13.11 Conflicts.................................................. 18
<PAGE>
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "Agreement"), dated as of
November 14, 1996 is made by and among RANKIN MANAGEMENT, INC., a Georgia
corporation (the "Company"), and each of the Shareholders.
RECITALS
A. Each of the Original Shareholders holds 1000 Shares and collectively
with the other Original Shareholders hold all of the issued and
outstanding Shares.
B. The Company has elected, or will elect (the AElection@), to be taxed as
an S corporation pursuant to Section 1362 of the Code and all of the
Original Shareholders have duly consented, or will duly consent, to the
Election.
C. The parties to this Agreement desire to keep the Election in force
until it may be revoked or otherwise terminated pursuant to this
Agreement.
D. The parties to this Agreement desire to ensure that the Company will
make sufficient distributions to pay the individual income taxes
payable by the Shareholders with respect to the income of the Company
during the period that the Election is in effect.
E. The parties to this Agreement desire to ensure that each Family Group
shall continue to own its Proportionate Part of the Shares, as
increased or reduced pursuant to the terms of this Agreement.
F. The parties to this Agreement desire to provide for stability of the
ownership and operation of the Company and to promote continuity in the
Company's management and policies.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants hereinafter set forth, and other good and valuable
consideration had and received, the parties to this Agreement agree as follows:
1. Definitions. The following terms when used in this Agreement shall
have the meanings set forth below:
1.1 "Act" shall mean the Securities Act of 1933, as amended.
1.2 "Agreement" shall have mean this Agreement as it may be amended
from time to time.
1
<PAGE>
1.3 "Board of Directors" means the Board of Directors of the Company.
1.4 "Authorized Transferee" with respect to a Shareholder means the
Family Group of such Shareholder, the Original Shareholder of such Family Group,
and any Family Member of such Family Group who (a) is a Permitted Transferee,
(b) is a "Participating Stockholder" under Section 1.12 of the NACCO
Stockholders Agreement, and (c) has executed and delivered to the Company a
counterpart of this Agreement agreeing to be subject to the restrictions and
obligations of a Shareholder hereunder and to hold all Shares then owned or
later acquired by such Family Member in accordance with the terms of this
Agreement.
1.5 "Call Notice" shall have the meaning set forth in Section 1.44,
4.4(a).
1.6 "Call Option" shall have the meaning set forth in Section 4.4.
1.7 "Charitable Organization" means any organization contributions to
which are deductible for federal income, estate or gift tax purposes. A
Charitable Organization shall be an Outside Shareholder unless prior to the
Transfer of Shares to such Charitable Organization, the Board of Directors has
designated such Charitable Organization as eligible to be considered a Family
Member, in which event a Charitable Organization so designated shall, with
respect to the Shares transferred to it by any Shareholder, be considered a
Family Member of and a member of the Family Group of such Shareholder.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as amended.
References to specific sections of the Code shall be deemed to include
references to corresponding provisions of any succeeding internal revenue law of
the United States of America.
1.9 "Company" shall mean Rankin Management, Inc., a Georgia
corporation.
1.10 "Election" shall have the meaning set forth in Recital B to this
Agreement.
1.11 "Fair Market Value" means the price at which the subject Shares
would change hands between a willing buyer and a willing seller, neither being
under any compulsion to buy or sell and both being reasonably informed of the
relevant factors and in light of the circumstances and prospects surrounding the
business of the Company. A determination of the Fair Market Value of the subject
Shares shall take into consideration appropriate discounts for lack of
marketability and minority interest related to such Shares, but will not take
into consideration the affect of any liquidity provided by the provisions of
Section 4.3.
1.12 "Family Group" shall mean an Original Shareholder, and his Family
Members so long as such Original Shareholder or any such Family Members own any
Shares.
1.13 "Family Member" shall mean a spouse or surviving spouse of an
Original Shareholder, any descendant of an Original Shareholder, a spouse or
surviving spouse of any such descendant, or any Qualified Fiduciary.
Notwithstanding anything to the contrary contained herein:
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<PAGE>
(a) the surviving spouse of an Original Shareholder or of a
descendent of an Original Shareholder shall cease to be a Family Member upon the
remarriage of such person to other than an Original Shareholder or descendent of
an Original Shareholder; and
(b) the spouse of an Original Shareholder or of a descendent
of an Original Shareholder shall cease to be a Family Member upon legal
separation, divorce or dissolution of such spouse's marriage to said Original
Shareholder or descendent; and
(c) a Qualified Fiduciary shall cease to be a Family Member
from and after any event or lapse of time which causes such fiduciary to no
longer qualify as a Qualified Fiduciary as defined in Section 1.37.
1.14 "Family Shareholder" shall mean a Shareholder who is, and only so
long as such Shareholder is, an Original Shareholder or a Family Member.
1.15 "Final Valuation" shall have the meaning set forth in Section
1.35(b).
1.16 "First Appraised Value" shall have the meaning set forth in
Section 1.35(b).
1.17 "Independent Appraiser" shall have the meaning set forth in
Section 1.35(b).
1.18 "Initial Appraiser" shall have the meaning set forth in Section
1.35(b).
1.19 "Initial Value" shall have the meaning set forth in Section
1.35(a).
1.20 "NACCO" means NACCO Industries, Inc., a Delaware corporation.
1.21 "NACCO Class A Shares" means shares of Class A Common Stock,
par value $1.00 per share, of NACCO.
1.22 "NACCO Class B Shares" means shares of Class B Common Stock,
par value $1.00 per share, of NACCO.
1.23 "NACCO Stockholders' Agreement" means the Stockholders' Agreement
dated as of March 15, 1990 by and among the Participating Stockholders, NACCO
and Ameritrust Company National Association, a national banking association, as
depository, as amended from time to time.
1.24 "NACCO Restated Certificate" means the Restated Certificate of
Incorporation of NACCO, as amended from time to time.
1.25 "Objecting Party" shall have the meaning set forth in Section
1.35(a).
1.26 "Original Shareholder" shall mean each of Alfred M.Rankin, Jr.,
Claiborne R. Rankin, Roger F. Rankin and Thomas T. Rankin.
3
<PAGE>
1.27 "Offered Shares" shall have the meaning set forth in Section
4.3(a).
1.28 "Option Shares" shall have the meaning set forth in Section 4.4.
1.29 "Original Holders" shall have the meaning set forth in Section
4.5(a).
1.30 "Outside Shareholder" shall mean a Shareholder, other than Clara
T. Rankin, who is not then a member of a Family Group, including, without
limitation, a Shareholder who has ceased to be a Family Member pursuant to the
terms of Sections 1.13(a), 1.13(b) or 1.13(c).
1.31 "Outstanding Remaining Shares" shall have the meaning set forth in
Section 4.5(b)(iii).
1.32 "Permitted Transferee" means a "Permitted Transferee" as defined
under Article FOURTH, Section 4 of the NACCO Restated Certificate.
means any individual, estate, trust, corporation, partnership, limited
liability company, joint venture, unincorporated organization or other entity,
association or organization.
1.34 "Proportionate Part" means a fraction, the numerator of which is
the number of Shares held by a Family Group and the denominator of which is the
number of Shares held by all Family Groups.
1.35 "Purchase Price" shall mean the Fair Market Value of the Offered
Shares or Option Shares, as the case may be, determined as follows:
(a) Initial Value. The Board of Directors shall from time to
time determine a per share value for the Shares (the "Initial Value") based upon
such considerations as the Board of Directors, in its sole discretion,
determines to be relevant to such valuation. If a Selling Shareholder or Outside
Shareholder (for purposes of this Section 1.35, the "Objecting Party") does not
provide written objections to the Company concerning the Initial Value set forth
in the Valuation Notice within 10 days after the date of such Valuation Notice,
the Purchase Price shall be equal to the Initial Value.
(b) Appraised Value. If an Objecting Party objects in writing
to the Initial Valuation within 10 days after its receipt of the Valuation
Notice, the Objecting Party, within fourteen (14) days from the date of such
written objection, shall engage an appraiser (the "Initial Appraiser") to
determine within 30 days of such appointment the Fair Market Value of the Shares
(the "First Appraised Value"). The cost of the First Appraiser shall be borne by
the Objecting Party. If the First Appraised Value is at least eighty percent
(80%) of the Initial Value, then the Purchase Price shall be the average of the
Initial Value and the First Appraised Value. If the First Appraised Value is
less than eighty percent (80%) of the Initial Value, then the Company and the
Objecting Party shall, within fourteen (14) days from the date of the First
Appraised Value, mutually agree on an appraiser (the "Independent Appraiser").
The cost of the
4
<PAGE>
Independent Appraiser shall be borne equally by the Company and the Objecting
Party. The Independent Appraiser shall determine within 14 days after its
appointment the Fair Market Value of the Shares (the "Final Valuation"), but
such Final Valuation shall be not less than the smaller of the Initial Value and
the First Appraised Value nor greater than the larger of the Initial Value and
the First Appraised Value. The Purchase Price shall be equal to the Final
Valuation and shall be final and binding upon the parties to this Agreement for
purposes of the subject transaction.
(c) Mutually Agreed Upon Purchase Price. Notwithstanding the
procedure set forth above, the Company and an Objecting Party may, prior to or
at any time during the appraisal process, mutually agree on a single independent
appraiser to determine the Purchase Price, which determination shall be binding
on all of the parties, or may agree in writing upon a Purchase Price.
(d) Cooperation with Appraisers. The Company shall cooperate
in assisting the appraisers in determining the Purchase Price, including
providing reasonable access to the books and records of the Company and to such
other information as the appraisers reasonably request in connection with such
determination; provided, however, that nothing in this Agreement shall require
the Company to disclose privileged or proprietary information; and provided
further, that the Company may require such appraisers to enter into such
confidentiality and non-disclosure agreements as the Company reasonably believes
to be necessary to protect the interests of the Company and its Shareholders.
1.36 "Purchase Right" shall have the meaning set forth in Section 4.3.
1.37 "Qualified Fiduciary" means (a) the trustee of any trust
(including without limitation a voting trust) if and as long as the trust is
held for the benefit of one or more Permitted Transferees and no other Person,
or (b) the executor, administrator, guardian, personal representative or other
fiduciary of a deceased, incompetent, bankrupt or insolvent Permitted
Transferee; provided that any such trust must prohibit the transfer of Shares to
any Persons other than (x) the Person or Persons who established the trust, and
(y) Authorized Transferees of the Person or Persons who established such trust.
1.38 "Remaining Shares" shall have the meaning set forth in Section
4.5(b).
1.39 "Seller's Notice" shall have the meaning set forth in Section
4.3(a).
1.40 "Selling Shareholder" shall have meaning set forth in Section 4.3.
means shares of the Common Stock, par value $_____ per share, of the Company.
1.42 "Shareholder" shall mean each Original Shareholder, each
Authorized Transferee who acquires Shares and any other Person who becomes a
party to this Agreement as the result of a Transfer of Shares to such Person.
5
<PAGE>
1.43 "Starting Date" means, with respect to any Seller's Notice or Call
Notice, the date of the final determination of the Purchase Price relating to
such notice.
1.44 "Transfer" means any sale, assignment, pledge, hypothecation,
encumbrance, disposition, transfer (including, without limitation, a transfer by
will or intestate distribution), gift or attempt to create or grant a security
interest in Shares, whether voluntary, involuntary, by operation of law or
otherwise. Without limiting the rights of the Company and the Family Groups
under Section 4.4, the occurrence of an event discussed in Sections 1.13(a),
1.13(b), or 1.13(c), pursuant to which a Family Member ceases to be a Family
Member and is thereafter treated as an Outside Shareholder, shall not constitute
a "Transfer" giving rise to the exercise of Purchase Rights under Section 4.3.
1.45 "Valuation Notice" shall mean the notice given by the Company
pursuant to Sections 4.3(b) or 1.44, 4.4(a) and stating the Initial Value at
which a Purchase Right or a Call Option is to be exercised.
2. Management of the Company.
2.1 Company Action. The Company shall only take an action or exercise a
right or authority under this Agreement, the Articles of Incorporation of the
Company or the Bylaws of the Company, or in its capacity as a general or
managing partner of any partnership, with the approval of a majority of the
Directors of the Company.
2.2 Composition of Board of Directors. During the term of this
Agreement, the Board of Directors shall consist of at least one (1) individual
for each Family Group, or such greater number as shall be equally divisible by
the number of Family Groups.
2.3 Election of Directors. Each Original Shareholder, and after such
Original Shareholder's death his Family Members acting by the vote of a majority
of the Shares held by such Family Group, shall designate to the Board of
Directors such number of Directors as shall be equal to the quotient of (a) the
total number of Directors, divided by (b) the number of Family Groups. The
Shareholders shall vote their Shares in favor of all individuals designated to
the Board of Directors pursuant to this Section 2.3.
2.4 Board Deadlock. In the event that the Directors become deadlocked
or otherwise reach an impasse with respect to any aspect of the management or
operation of the Company or the Company's assets, the Directors, by majority
vote of the Directors then serving, shall select an unrelated third party to
resolve the deadlock or other impasse, and the resolution of such unrelated
third party shall be binding on the Directors and all of the Shareholders. To
this end, the Shareholders agree to elect as Directors, as the case may be, only
those individuals who are willing, if required, to implement the terms of this
subparagraph 2.4. If the Directors shall be unable to agree upon such an
unrelated third party to resolve a deadlock or impasse, any Director may
petition the Common Pleas Court of Cuyahoga County, Ohio to make such an
appointment.
6
<PAGE>
3. Shareholder Relations.
3.1 Shareholder Approval. Unless otherwise required by statute, the
affirmative vote of the Shareholders owning a majority of the Shares of each of
the Family Groups shall be required:
(a) to amend the Articles of Incorporation or Bylaws of
the Company;
(b) to amend this Agreement;
(c) for the Company to issue, reacquire or transfer any shares
of Common Stock, except that the Company may acquire Shares as permitted under
this agreement without further approval or action by the Shareholders;
(d) to consolidate or merge the Company; or
(e) to liquidate or sell substantially all of the assets of
the Company.
3.2 Access to Business Information. Each Shareholder shall have the
absolute right, without the necessity of stating any purpose, to examine and
copy during usual business hours all corporate records of the Company. In
addition, each Shareholder shall have the absolute right to discuss the business
activities of the Company with the Company's lawyers and accountants and to
engage (at such Shareholder's own expense) a lawyer or accountant to participate
or represent him in any such discussions.
3.3 Pre-emptive Rights. The Shareholders shall, upon the offering by
the Company for sale of shares of any class of stock of the Company, have the
right, during a reasonable period of time and on substantially the same terms
that such shares are being offered or sold, to purchase such shares in
proportion to their respective holdings of Shares.
4. Restrictions on Transfers of Shares
4.1 Restriction on Transfers. Except as otherwise provided in this
Agreement, no Shareholder shall, either during the Shareholder's lifetime or
upon the Shareholder's death, Transfer any of the Shares now owned or hereafter
acquired by such Shareholder. Without limiting the foregoing, a Shareholder
shall not transfer any of his, her or its Shares to any Person or in any manner
which would cause the Election to be terminated or revoked or which would be
contrary to the provisions of the NACCO Restated Certificate or the NACCO
Stockholders' Agreement. In the event of any purported or attempted Transfer of
Restricted Shares that does not comply with this Agreement, the purported
transferee or successor by operation of law shall not be deemed to be a
shareholder of the Company for any purpose and shall not be entitled to any of
the rights of a shareholder of the Company, including, without limitation, the
right to vote the Shares or to receive a certificate for Shares or any dividends
or other distributions on or with respect to Shares. Any purported or attempted
transfer of Shares made other than in accordance with the provisions of this
Agreement shall be void ab initio and the last holder of record who
7
<PAGE>
acquired such Shares in a manner not contrary to the provisions of this
Agreement shall be recognized as the holder of such Shares for all purposes and
the Shares shall continue to be treated as Shares for all purposes under this
Agreement, shall be deemed owned by such recognized holder for purposes of the
operation of this Agreement and shall continue to be subject to the terms of
this Agreement.
4.2 Unrestricted Transfers. Notwithstanding anything to the contrary
contained herein, each Original Shareholder or Authorized Transferee of such
Original Shareholder shall be entitled to Transfer all or any portion of his,
her or its Shares to any Authorized Transferee of such Original Shareholder,
without need to comply with the other provisions of this Agreement.
4.3 Purchase Right. At any time after the date hereof, the Company and
the Family Groups shall have a right of first refusal (the "Purchase Right") to
purchase, pursuant to the terms of this Section 4.3, from any Shareholder (for
purposes of this Section 4.3, a "Selling Shareholder") intending to Transfer,
other than as permitted in Section 4.2 of this Agreement, all or any portion of
his, her or its Shares (including any Shares acquired after the date hereof).
(a) A Selling Shareholder intending to Transfer all or any
portion of his, her or its Shares shall first deliver to the Company a written
notice (the "Seller's Notice") specifying (i) the number of Shares to be
transferred (the "Offered Shares"); and (ii) the identity of the proposed
transferee.
(b) Within 10 days after the Company's receipt of the Seller's
Notice, the Company shall deliver to the Selling Shareholder a Valuation Notice
setting forth the Initial Value and the Company and the Selling Shareholder
shall commence the process to determine the Purchase Price pursuant to Section
1.35 of this Agreement.
(c) Within 10 days after Starting Date, the Company shall
notify each Family Shareholder (other than the Selling Shareholder) of (i) the
Starting Date; (ii) the number of Offered Shares; and (iii) the Purchase Price.
The Company's notice shall include a copy of the Seller's Notice.
(d) Within 40 days after the Starting Date, each Shareholder
shall notify the Company of how many, if any, of the Offered Shares he or she
elects to purchase.
(e) Within 50 days after the Starting Date, the Company shall
provide written notice to the Selling Shareholder and to each other Shareholder
of (i) the number of Offered Share to be purchased by Family Shareholders and
the allocation of the Offered Shares among the Family Shareholders pursuant to
the terms of Section 4.5 of this Agreement; (ii) the number of Offered Shares to
be purchased by the Company; and (iii) the time, date and place of closing which
shall be no sooner than 90 days after the Starting Date and no later than 120
days after the Starting Date.
4.4 Call Options to Purchase Shares. At any time after the date hereof,
the Company and the Family Groups shall have the option (the "Call Option") to
purchase from any
8
<PAGE>
Shareholder who is then an Outside Shareholder all, but not less than all, of
the Shares (the "Option Shares") directly or indirectly owned by such Outside
Shareholder, and upon the exercise of a Call Option such Outside Shareholder
shall be obligated to sell to the purchasing Shareholders or the Company, as the
case may be, all (but not less than all) of his, her or its Option Shares. The
Call Option shall be exercised as follows:
(a) Within thirty (30) days after the determination by the
Board of Directors to exercise a Call Option with respect to an Outside
Shareholder, the Company shall provide written notice (the "Call Notice") of
such exercise to the Selling Outside Shareholder of (i) the exercise of the
Option; (ii) the number of Option Shares; and (iii) the Initial Value of the
Option Shares. Thereafter, the Company and the Outside Shareholder shall
determine the Purchase Price in accordance with Section 1.35.
(b) Within ten (10) days after the Starting Date, the Company
shall provide notice of such exercise to each Shareholder who is then a member
of a Family Group (a "Family Shareholder") of (i) the exercise of the Option;
(ii) the number of Option Shares; (iii) the Purchase Price of the Option Shares;
and (iv) the Starting Date.
(c) Within 40 days after the Starting Date, each Family
Shareholder shall notify the Company of how many, if any, of the Option Shares
he, she or it elects to purchase.
(d) Within 50 days after the Starting Date, the Company shall
provide written notice to the selling Outside Shareholder and to each Family
Shareholder of (i) the allocation of the Option Shares among the Family
Shareholders pursuant to the terms of Section 4.5 of this Agreement; (ii) the
number of Option Shares to be purchased by the Company; and (iii) the time, date
and place of closing which shall be no sooner than 90 days after the Starting
Date and no later than 120 days after the Starting Date.
(e) If the Company and the Family Shareholders do not together
elect to purchase all of the Option Shares then the Outside Shareholder shall
not be obligated to sell any of the Option Shares; provided, however, that the
Company and the Family Shareholders shall continue to have the right to exercise
a Call Option with respect to such Option Shares at anytime thereafter.
(f) The Option Shares shall be allocated among the Company and
the Family Groups, and within each Family Group among its members, in the manner
provided in Section 4.5.
4.5 Allocation of Offered Shares and Option Shares. Offered Shares and
Option Shares shall be allocated among the Company and the Family Shareholders
pursuant to the terms of this Section 4.5. At the Closing, the Company and such
Family Shareholders, as the case may be, shall be obligated to purchase the
Offered Shares or Option Shares so allocated pursuant to the terms and
provisions of this Agreement. Notwithstanding anything to the contrary contained
herein, no Shareholder shall be entitled to receive, or be obligated to
purchase, more Shares than
9
<PAGE>
such Shareholder has elected to purchase pursuant to Section 4.3(d) or 4.4(c),
as the case may be. All Offered Shares or Option Shares shall be allocated as
follows:
(a) Allocation to Original Holders of Offered Shares. The
Shares to be allocated shall first be allocated to the members of the Family
Group (the "Original Holders") in which the Selling Shareholder is a Family
Member who have elected to purchase any portion of such Shares, or if the
Selling Shareholder is an Outside Shareholder, from which the Selling
Shareholder, or his, her or its predecessors in interest, acquired such Shares.
Such Shares shall be allocated in accordance with Section 4.5(d).
(b) Allocation among Family Groups. Any Offered Shares or
Option Shares not allocated pursuant to Section 4.5(a) (the "Remaining Shares")
shall be allocated among the Family Groups (other than the Original Holders)
which have Shareholders electing to purchase Offered Shares or Option Shares as
follows:
(i) If a Family Group has collectively elected
to purchase a number of Offered Shares or
Option Shares which is less than or equal to
its Proportionate Part of the Remaining
Shares, then such Family Group shall be
allocated the number of Shares that its
members have elected to purchase.
(ii) If a Family Group has collectively elected
to purchase a number of Offered Shares or
Option Shares which is greater than its
Proportionate Part of the Remaining Shares,
then such Family Group shall, in the first
instance, be allocated its Proportionate
Part of the Remaining Shares.
(iii) If additional Remaining Shares remain to be
allocated after the application of
subsections (i) and (ii) above (the
"Outstanding Remaining Shares"), then each
Family Group which has collectively elected
to purchase a number of Offered Shares or
Option Shares which exceeds its
Proportionate Part shall be allocated an
additional number of the Remaining Shares
equal to the lesser of:
(A) The number of Offered Shares or
Option Shares which such Family
Group elected to purchase but which
were not allocated to it by reason
of subsection (ii) above, or
(B) That portion of the Outstanding
Remaining Shares represented by a
fraction the numerator of which is
the number of Shares held by such
Family Group (prior to such
allocation), and the denominator of
which is the number of Shares held
by all Family Groups which have
elected to purchase a number of
Offered Shares or Option Shares in
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<PAGE>
excess of the number of those
Offered Shares or Option Shares
previously allocated to them under
this Section 4.5.
(iv) Any Shares remaining to be allocated after
the application of subsections (i), (ii) and
(iii) above, shall be allocated in
accordance with the procedures described in
subsection (iii) above until either (A) all
of the Offered Shares or Option Shares which
Family Shareholders, as the case may be,
have elected to purchase have been
allocated, or (B) there remains only one
Family Group which has not been allocated
all of the Shares it has elected to
purchase, in which event all of the then
unallocated Offered Shares or Option Shares
shall be allocated to such Family Group up
to the amount that such Family Group elected
to purchase.
(c) Allocation to the Company. The Company shall purchase any
Offered Shares not allocated to a Family Group. The Company may, but shall not
be obligated to, purchase any Option Shares not allocated to a Family Group.
(d) Allocation of Shares among Family Group Members. Offered
Shares or Option Shares allocated to a Family Group pursuant to Sections 4.5(a)
or 4.5(b) shall be allocated among the Family Shareholders of such Family Group,
as follows:
(i) First, to the Original Shareholder of such
Family Group in an amount equal to the
number of Offered Shares or Option Shares
such Original Shareholder elects to
Purchase; and
(ii) Second, to each Shareholder of such Family
Group, other than the Original Shareholder,
electing to purchase Offered Shares or
Option Shares in an amount determined by
multiplying (A) the number of Shares
allocated to such Family Group and not
purchased by the Original Shareholder, by
(B) a fraction, the numerator of which is
the number of Shares subscribed for by such
Shareholder, and the denominator of which is
the aggregate number of Shares subscribed
for by all Shareholders of a Family Group,
other than the Original Shareholder.
5. General Restrictions/Covenants on Transfers.
5.1 Securities Law Restrictions. Notwithstanding any other provision of
this Agreement, but subject to express written waiver by the Company in the
exercise of its good faith and reasonable judgment, no Shareholder shall
Transfer any Shares without the registration of the Transfer of such Shares
under the Act or until the Company shall have received such legal opinions or
other assurances that such Transfer is exempt from the registration requirements
under the Act and applicable state securities laws as the Company in its good
faith and reasonable discretion deems appropriate in light of the facts and
circumstances relating to such
11
<PAGE>
proposed Transfer, together with such representations, warranties and
indemnifications from the transferor and the transferee as the Company in its
good faith and reasonable discretion deems appropriate to confirm the accuracy
of the facts and circumstances that are the basis for any such opinion or other
assurances and to protect the Company and the other Shareholders from any
liability resulting from any such Transfer.
5.2 Legends. All certificates representing Shares now or hereafter
owned by the Shareholders shall bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ISSUED
AND SOLD WITHOUT REGISTRATION UNDER THE FEDERAL SECURITIES ACT
OF 1933, AS AMENDED ("FEDERAL ACT"), OR THE SECURITIES LAWS OF
ANY STATE, IN RELIANCE UPON CERTAIN EXEMPTIVE PROVISIONS OF
SAID ACTS, INCLUDING PARAGRAPH (13) OF THE CODE SECTION 10-5-9
OF THE GEORGIA SECURITIES ACT OF 1973 (THE "GEORGIA ACT").
NEITHER THIS SECURITY NOR ANY PORTION HEREOF OR INTEREST
HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS THE SAME IS REGISTERED UNDER SAID
FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND THE COMPANY
SHALL HAVE RECEIVED, AT THE EXPENSE OF THE HOLDER HEREOF,
EVIDENCE OF SUCH EXEMPTION REASONABLY SATISFACTORY TO THE
COMPANY (WHICH MAY INCLUDE, AMONG OTHER THINGS, AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY).
In addition, all certificates represent Shares now or hereafter owned by the
Original Shareholders shall bear the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER CONTAINED IN THAT CERTAIN
SHAREHOLDERS' AGREEMENT DATED AS OF NOVEMBER 14, 1996, AS
AMENDED FROM TIME TO TIME, TO WHICH THE COMPANY AND EACH OF
ITS SHAREHOLDERS IS A PARTY. A COPY OF WHICH IS ON FILE IN THE
PRINCIPAL OFFICE OF THE COMPANY, AND THE PROVISION OF WHICH
ARE INCORPORATED HEREIN BY REFERENCE. A COPY OF SUCH AGREEMENT
WILL BE PROVIDED TO THE HOLDER OF THIS CERTIFICATE UPON
WRITTEN REQUEST DELIVERED TO THE COMPANY.
All certificates evidencing Shares hereafter issued to a Shareholder for any
reason or purpose shall, when issued, bear similar legends.
5.3 Stock Transfer Record. The Company shall maintain a stock transfer
book in which shall be recorded the name and address of each Shareholder. No
Transfer or issuance of
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<PAGE>
any Shares shall be effective or valid unless, and until, recorded in such stock
transfer book. The Company shall not record any Transfer or issuance of Shares
in such stock transfer book unless the Transfer or issuance is in strict
compliance with all of the provisions of this Agreement.
6. Closing.
6.1 Terms of Sale. The Purchase Price for all Shares purchased pursuant
to Section 4.3 or Section 4.4 of this Agreement shall be paid at the Closing in
immediately available United States Funds.
6.2 Closing
(a) The closing of the purchase and sale of any Shares
pursuant to this Agreement shall occur at the time, date and place specified by
the Company in its written notice pursuant to Sections 4.3(e)(iii) or
4.4(d)(iii), as the case may be.
(b) At closing, the endorsed certificate or certificates
evidencing the Shares to be sold, together with executed "stock power" transfer
instruments, separate from such certificate(s), shall be respectively delivered
by the seller to each purchaser against payment of such purchasers' portion of
the Purchase Price. Such delivery shall constitute warranties by the seller
thereof that such seller has full authority to deliver such certificate(s) and
that the stock evidenced thereby is free and clear of all liens, encumbrances or
other outstanding interests of any nature, other than those created pursuant to
the terms of this Agreement.
6.3 Legal Requirements. The purchase and sale of any Shares pursuant to
this Agreement shall be subject to compliance with all applicable state and
federal securities laws, and each Shareholder agrees without additional
consideration to do all necessary things reasonably requested by the Company in
connection therewith, the reasonable expenses of such to be paid by the selling
Shareholder(s).
6.4 Removal of Shareholder From Personal Obligation. Upon the purchase
of all of Shareholder's Shares by the Company of the Shareholders pursuant to
this Agreement, the Company and the other Shareholders shall put forth their
reasonable efforts to insulate the selling Shareholder from any personal
liability arising from any personal guarantee made by such selling Shareholder
with respect to any obligation of the Company other than one with respect to, or
incurred in connection with, the purchase of Shares. At the settlement of the
purchase of the Selling Shareholder's Shares, the Company and the other
Shareholders shall, to the extent permitted by law, deliver a written document
completely and absolutely indemnifying and holding the Selling Shareholder, or
his, her or its estate, harmless from becoming so liable or from paying money.
However, the foregoing shall not be interpreted as obligating the Company or any
Shareholder to make any prepayment of outstanding loans which the Selling
Shareholder personally guaranteed.
7. Agreements by the Company. The Company, for and on behalf of itself and its
successors and assigns, agrees that (a) it shall not issue, transfer or reissue
any Shares or other
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<PAGE>
securities of the Company in violation of the provisions of this Agreement; and
(b) all certificates representing Shares shall bear an endorsement in
substantially the form specified in Section 5.2 of this Agreement.
8. Shareholder Covenants. Each Shareholder covenants to and agrees that:
8.1 Voting of Shares. Each Shareholder shall vote any and all Shares or
other voting securities of the Company which he, she or it owns or has the right
or power to vote to cause the Company to provide the Shareholders with the
rights and benefits contemplated by this Agreement, the Articles and the By-laws
of the Company, and to comply with and perform fully each of its obligations,
commitments, covenants, and agreements contained in this Agreement, the Articles
or the By-laws of the Company, and shall take any and all action as a
shareholder or Director of the Company as may be necessary to cause the Company
to provide such rights and benefits and to comply with such obligations,
commitments, covenants, and agreements.
8.2 No Contrary Action. No Shareholder shall take any action as an
officer, Director, or shareholder of the Company which would prevent such
Shareholder or the Company from providing the Shareholders with the rights and
benefits contemplated by this Agreement, the Articles or the By-laws of the
Company or which would otherwise cause such Shareholder or the Company to breach
its obligations, commitments, covenants and agreements contained in this
Agreement, the Articles or the By-laws of the Company.
8.3 Shareholder Status. Each Shareholder shall remain eligible to be a
Shareholder under Section 1361 of the Code and shall not Transfer or sell his,
her or its shares to any third party who would not be eligible to be a
Shareholder under Section 1361 of the Code.
9. Subchapter S Corporation Status.
9.1 Maintenance of Election. Notwithstanding anything to the contrary
contained herein, neither the Company nor any Shareholder shall take any action,
make any Transfer of Shares or fail to take any action which shall result in the
termination of the Election. If any such Transfer, act or failure to act shall
occur, the Company or Shareholder, as the case may be, shall immediately take
such remedial steps as may be necessary to prevent termination of the Election.
In the event that the Election is terminated because of any Shareholder's act or
failure to act, then such Shareholder shall indemnify the Company and the other
Shareholders for any loss or liability incurred on account of such termination,
including, without limitation, any federal and state income taxes directly
attributable to such termination, taking into account all losses, if any, of
past, present, and future tax benefits accruing from such termination.
9.2 Shareholder Actions to Preserve Election. Each Shareholder hereby
agrees to execute, at the Company's written request, any and all such documents
as may be necessary to preserve the Election in accordance with state and
federal laws.
9.3 Revocation of Election. Notwithstanding anything to the contrary
contained herein, the Election may be revoked by the unanimous action of the
Board of Directors.
14
<PAGE>
9.4 Inadvertent Termination of Election. If the Company's status as an
S corporation is terminated inadvertently and the Company wishes to obtain a
ruling under Section 1362(f) of the Code, each Shareholder agrees to make any
adjustments required pursuant to Section 1362(f)(4) of the Code and approved by
the Company's Board of Directors. A Shareholder's obligation to make such
adjustments shall continue after the Shareholder has ceased to own Shares of the
Company and after this Agreement has terminated.
9.5 Tax Distributions. As long as the Company is an S corporation, and
subject to any limitations on distributions imposed by governing state law, the
Company shall make pro rata distributions of money, based on ownership of
Shares, to pay the federal and state income taxes on the income (net of any tax
benefits produced for the Shareholders by the Company's losses, deductions, and
credits) that passes through from the Company to the Shareholders under the
applicable provisions of the Code and state law. The total amount required to be
distributed shall be determined by conclusively presuming that all taxable
income passed through to each Shareholder shall be taxed at the maximum federal
rate (without regard to exemptions or phaseouts of lower tax rates) and the
maximum State of Georgia rate at which income of any individual can be taxed in
the calendar year that includes the last day of the Company's taxable year. It
shall further be conclusively presumed that the Shareholder can deduct the State
of Georgia tax for federal income tax purposes, and the calculations shall be
made using the net effective State of Georgia rate. Distributions under this
Section 9.5 shall be made not later than April 15 of each year. To the extent
that the Shareholders shall be required to make estimated tax payments prior to
April 15, the Company shall make cash distributions corresponding to the
estimated tax payments not later than the due dates for such estimated tax
payments. No provision of this Agreement shall cause the total dividend paid
with respect to any outstanding Share to differ from the amounts paid with
respect to any other outstanding Share. No provision of this section 9.5 shall
be construed to limit the ability of the Company to declare and pay additional
dividends to the Shareholders out of the assets of the Company legally available
for such payment at such time or times as the Board of Directors may determine.
10. Termination.
10.1 The term of this Agreement shall commence as of the date first
above written and shall terminate upon the first to occur of the following
events:
(a) the mutual written agreement of the Shareholders owning a
majority of the Shares of each of the Family Groups to terminate this Agreement;
(b) the merger of the Company into another corporation or the
sale, exchange or disposition of all or substantially all of the Company's
assets; or
(c) when there remains only one (1) Shareholder who is a party
hereto.
10.2 Upon termination of this Agreement, the certificates representing
the Shares shall be released from the terms of this Agreement, and such
certificates may be reissued free of the legend specified in Section 5.2 of this
Agreement.
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<PAGE>
11. Power of Attorney. Each of the undersigned Shareholders hereby
constitutes and appoints the Company and as the true and lawful attorney or
attorneys-in-fact, with full power of substitution and resubstitution, for the
undersigned and in the name, place and stead of the undersigned, in any
capacities to execute any and all statements under Section 13 or Section 16 of
the Securities Exchange Act of 1934, as amended, of beneficial ownership of
NACCO Class B Shares, subject to the NACCO Stockholders' Agreement, as amended
from time to time, including all statements on Schedule 13D and all amendments
thereto, all joint filing agreements pursuant to Rule 13d-l(f)(iii) under such
Act in connection with such statements, all initial statements of beneficial
ownership on Form 3 and any and all other documents to be filed with the
Securities and Exchange Commission, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, and, granting to said attorney or attorneys-in-fact,
and each of them, full power and authority to do so and to perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as the undersigned might or could
do in person, hereby ratifying and confirming all that said attorney or
attorneys-in-fact or any of them or their substitutes or resubstitutes, may
lawfully do or cause to be done by virtue of this Section 11. The grant of this
power of attorney shall not be affected by any disability of an undersigned
Shareholder. If applicable law requires additional or substituted language in
order to validate the power of attorney intended to be granted by this Section
11, each Shareholder agrees to execute and deliver such additional instruments
and to take such further acts as may be necessary to validate such power of
attorney.
12. Arbitration. Any dispute arising in connection with this Agreement
shall be an Arbitrable Dispute and shall be finally settled by arbitration under
the then applicable Commercial Arbitration Rules of the American Arbitration
Association, by one or more arbitrators agreed upon by the parties or, in the
absence of such an agreement, appointed in accordance with such Rules. The
arbitration proceedings shall be held in Cleveland, Ohio. Judgment upon the
award rendered may be entered in any court having jurisdiction and application
may be made to such court for judicial acceptance of such award and an order of
enforcement as the case may be. The Shareholders hereby agree that the rendering
of an award by the arbitrator or arbitrators shall be a condition precedent to
the initiation of any legal proceedings with respect to any Arbitrable Dispute.
13. General Provisions
13.1 Waivers and Amendments. This Agreement may be amended or modified
in whole or in part only by the mutual written agreement of the Shareholders
owning not less than two-thirds (2/3) of the Shares of each of the Family Groups
and any such amendment shall be binding upon all of the Shareholders. The
obligations and rights of any party hereunder may be waived (either generally or
in a particular instance and either retroactively or prospectively) by the
unanimous written action of the Board of Directors or with the written consent
of the party claimed to have given the waiver; provided, however, that any
waiver of any violation of, breach of, or default under any provision of this
Agreement or any other agreement provided for herein shall not be construed as,
or constitute, a continuing waiver of such provision, or a waiver of any
16
<PAGE>
other violation of, breach of or default under any other provision of this
Agreement or any other agreement provided for herein.
13.2 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the company, its successors and permitted assigns,
and shall be binding upon and inure to the benefit of the other parties hereto
and their respective heirs, successors and permitted assigns.
13.3 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
13.4 Notices. Any notice, request or other communication required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given when received if personally delivered or after being sent by
telecopy, with confirmed answer back, or within 1 business day of being sent by
established overnight courier, to (a) the Company at its principal business
address or (b) to any Shareholder at his, her or its address as shown from time
to time on the books and records of the Company. The Company shall provide each
Shareholder with a list of all such addresses promptly upon request.
13.5 Entire Agreement. This Agreement, together with the other
agreements referred to herein, embodies the entire agreement among the parties
in relation to its subject matter, and no representations, warranties,
covenants, understandings or agreements or otherwise, in relation thereto, exist
between any of the parties.
13.6 Governing Law. This Agreement shall in all respects be governed by
and construed in accordance with the internal substantive laws of the State of
Georgia without giving effect to the principles of conflicts of law thereof.
13.7 Severability. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant and/or
provision hereof. In the event that any provision of this Agreement shall
finally be determined to be unlawful, all such provisions shall be deemed
severed from this Agreement, but every other provision of this Agreement shall
remain in full force and effect, and in substitution for any such provision held
unlawful, there shall be substituted a provision of similar import reflecting
the original intent of the parties hereto to the extent permissible under law.
13.8 No Third Party Beneficiaries. It is hereby agreed that the parties
hereto (or their personal representatives) shall have the sole right to enforce
the performance of the provisions of this Agreement and the sole right to
receive any and all amounts payable by the parties hereto pursuant to this
Agreement, and that no other person shall be entitled to, or shall have any
claim, right, title or interest to or in any such amounts by virtue of this
Agreement. This Agreement is personal to the parties hereto, and is not intended
for the
17
<PAGE>
benefit of, and is not intended to be relied upon by, any other person
and no such person shall be entitled to the benefit of or to enforce this
Agreement.
13.9 Specific Performance. The parties hereto agree that upon a breach
of any other provisions of this Agreement a remedy at law would not be adequate,
and that the parties hereto are entitled to injunctive relief and specific
performance, and any other legal or equitable remedies, as remedies for the
enforcement of this Agreement.
13.10 Titles and Headings. Titles and headings to sections, subsections
and lesser sections herein are inserted for the convenience of reference only
and are not intended to be a part of or to effect the meaning or interpretations
of this Agreement.
13.11 Conflicts. To the extent possible, this Agreement, the Articles
of Incorporation of the Company, and the Bylaws of the Company shall be
construed so as to be consistent. Where such Articles of Incorporation or Bylaws
are inconsistent with this Agreement, this Agreement shall control.
IN WITNESS WHEREOF, the Company and the Shareholders have executed this
Shareholders' Agreement as of the day and year first above written.
RANKIN MANAGEMENT, INC.
By: /s/ Alfred M. Rankin, Jr.
Name: Alfred M. Rankin, Jr.
Title: President
(Corporate Seal)
18
<PAGE>
{Shareholder Signature Page for Shareholders Agreement of
Rankin Management, Inc. dated as of November 14, 1996}
NATIONAL CITY BANK, as Trustee
under the Agreement dated August
30, 1967, as supplemented,
amended and restated, with Alfred
M. Rankin, Jr. creating a trust
for the benefit of such
individual
Witness /s/ Nancy B. Sternad By: /s/ Leigh H. Carter
Witness /s/ Colleen M. Horan and /s/ Dolores J. Maichle
Witness /s/ Nancy B. Sternad
Witness /s/ Colleen M. Horan
Address: 1900 East Ninth St.
Cleveland, OH 44114
STATE OF OHIO )
) SS:
CITY OF CLEVELAND )
Before me, a Notary Public in and for said State and County,
personally appeared the National City Bank, not individually but as trustee, by
Leigh H. Carter and Dolores J. Maichle , respectively, who acknowledged that
they did sign the foregoing instrument on behalf of said trustee by authority of
its board of directors, and that the same is the free act and deed of said
trustee and their free act and deed as such officers.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal at Cleveland , Ohio , this 15th day of November, 1996.
/s/ Michael A. Primrose
[Notarial Seal] Notary Public
19
<PAGE>
NATIONAL CITY BANK, as Trustee
under the Agreement dated
December 29, 1967, as
supplemented, amended and
restated, with Thomas T. Rankin,
creating a trust for the benefit
of such individual
Witness /s/ Nancy B. Sternad By: /s/ Leigh H. Carter
Witness /s/ Colleen M. Horan and /s/ Dolores J. Maichle
Witness /s/ Nancy B. Sternad
Witness /s/ Colleen M. Horan
Address: 1900 East Ninth St.
Cleveland, OH 44114
STATE OF OHIO )
) SS:
CITY OF CLEVELAND )
Before me, a Notary Public in and for said State and County,
personally appeared the National City Bank, not individually but as trustee, by
Leigh H. Carter and Dolores J. Maichle , its Vice President and Vice President ,
respectively, who acknowledged that they did sign the foregoing instrument on
behalf of said trustee by authority of its board of directors, and that the same
is the free act and deed of said trustee and their free act and deed as such
officers.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal at Cleveland , Ohio , this 15th day of November, 1996.
/s/ Michael A. Primrose
[Notarial Seal] Notary Public
20
<PAGE>
NATIONAL CITY BANK, as Trustee
under the Agreement dated June
22, 1971, as supplemented,
amended and restated, with
Claiborne R. Rankin, creating a
trust for the benefit of such
individual
Witness /s/ Nancy B. Sternad By: /s/ Leigh H. Carter
Witness /s/ Colleen M. Horan and /s/ Dolores J. Maichle
Witness /s/ Nancy B. Sternad
Witness /s/ Colleen M. Horan
Date: November 15, 1996
Address: 1900 East Ninth St.
Cleveland, OH 44114
STATE OF OHIO )
) SS:
CITY OF CLEVELAND )
Before me, a Notary Public in and for said State and County,
personally appeared the National City Bank, not individually but as trustee, by
Leigh H. Carter and Dolores J. Maichle , its Vice President and Vice President ,
respectively, who acknowledged that they did sign the foregoing instrument on
behalf of said trustee by authority of its board of directors, and that the same
is the free act and deed of said trustee and their free act and deed as such
officers.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal at Cleveland , Ohio , this 15th day of November, 1996.
/s/ Michael A. Primrose
[Notarial Seal] Notary Public
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NATIONAL CITY BANK, as Trustee
under the Agreement dated
September 11, 1973, as
supplemented, amended and
restated, with Roger F. Rankin,
creating a trust for the benefit
of such individual
Witness /s/ Nancy B. Sternad By: /s/ Leigh B. Carter
Witness /s/ Colleen M. Horan and /s/ Dolores J. Maichle
Witness /s/ Nancy B. Sternad
Witness /s/ Colleen M. Horan
Date: November 15, 1996
Address: 1900 East Ninth St.
Cleveland, OH 44114
STATE OF OHIO )
) SS:
CITY OF CLEVELAND )
Before me, a Notary Public in and for said State and County,
personally appeared the National City Bank, not individually but as trustee, by
Leigh H. Carter and Dolores J. Maichle , its Vice President and Vice President ,
respectively, who acknowledged that they did sign the foregoing instrument on
behalf of said trustee by authority of its board of directors, and that the same
is the free act and deed of said trustee and their free act and deed as such
officers.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal at Cleveland , Ohio , this 15th day of November, 1996.
/s/ Michael A. Primrose
[Notarial Seal] Notary Public
22
Exhibit 3
ARTICLES OF INCORPORATION
OF
RANKIN MANAGEMENT, INC.
The undersigned, Alfred M. Rankin, Jr., desiring to form a corporation for
profit (the "Corporation") under the provisions of the Georgia Business
Corporation Code, does hereby certify that:
ARTICLE I: NAME
The name of the Corporation shall be Rankin Management, Inc.
ARTICLE II: PERIOD OF DURATION
The Corporation shall have perpetual duration.
ARTICLE III: PURPOSES
The Corporation is organized as a corporation for profit pursuant to the
Georgia Business Corporation Code and for any lawful purpose or purposes not
specifically prohibited to corporations under the applicable laws of the State
of Georgia, and shall be authorized in connection therewith to carry on any
lawful business.
ARTICLE IV: REGISTERED OFFICE AND AGENT
The initial registered agent of the Corporation shall be Corporation
Service Company. The address of the initial registered office and the initial
registered agent of the Corporation shall be 100 Peachtree Street, Atlanta,
Fulton County, Georgia 30303. The initial address of the principal office of the
Corporation is Suite 300, 5875 Landerbrook Drive, Mayfield Heights, Ohio
44124-4017.
ARTICLE V: AUTHORIZED SHARES / TERMS / TRANSFER RESTRICTIONS
The number of shares which the Corporation is authorized to have
outstanding is 21,000 shares, consisting of 20,000 shares of Class A Common
Stock (the "Class A Stock"), without par value, and 1,000 shares of Class B
Common Stock (the "Class B Stock"), without par value (the Class A Shares and
Class B Shares are collectively referred to as the "Common Stock").
The express terms of the shares of Common Stock are as follows:
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EXPRESS TERMS OF THE COMMON STOCK
(A) Issuance of New Shares. The Corporation shall not issue shares of
Common Stock without the consent of a majority of the holders of the
Class A Stock.
(B) Pre-Emptive Rights. Holders shall, upon the offering by the
Corporation for sale of shares of any class of stock of the
Corporation, have the right, during a reasonable period of time and
on substantially the same terms that such shares are being offered
or sold, to purchase such shares in proportion to their respective
holdings of Common Stock.
(C) Transferability
(1) Definitions. The following terms when used in these Articles
shall have the meanings set forth below:
(a) "Act" shall mean the Securities Act of 1933, as amended.
(b) "Authorized Transferee" with respect to a Shareholder
means the Family Group of such Shareholder, the
Original Shareholder of such Family Group, and any
Family Member of such Family Group who (i) is a
Permitted Transferee, and (ii) is a "Participating
Stockholder" under Section 1.12 of the NACCO
Stockholders Agreement.
(c) "Charitable Organization" means any organization
contributions to which are deductible for federal
income, estate or gift tax purposes. A Charitable
Organization is an Outside Shareholder unless prior to
the Transfer of Shares to such Charitable Organization,
the Board of Directors of the Corporation designates
such Charitable Organization as a Family Member, in
which event a Charitable Organization so designated
shall, with respect to the Shares transferred to it by
any Shareholder, be considered a Family Member of and a
member of the Family Group of such Shareholder.
(d) "Fair Market Value" means the price at which the
subject Shares would change hands between a willing
buyer and a willing seller, neither being under any
compulsion to buy or sell and both being reasonably
informed of the relevant factors and in light of the
circumstances and prospects surrounding the business of
the Corporation. A determination of the Fair Market
Value of the subject Shares shall take into
consideration appropriate discounts for lack of
marketability and minority interest related to such
Shares, but will not take into consideration the affect
of any liquidity provided by the provisions of Article
V(D)(5)(c).
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<PAGE>
(e) "Family Group" shall mean an Original Shareholder, and
his Family Members so long as such Original Shareholder
or any such Family Members own any Shares.
(f) "Family Member" shall mean a spouse or surviving spouse
of an Original Shareholder, any descendant of an
Original Shareholder, a spouse or surviving spouse of
any such descendant, or any Qualified Fiduciary or any
Charitable Organization designated as a Family Member
by the Board of Directors of the Corporation.
Notwithstanding anything to the contrary contained
herein:
(i) the surviving spouse of an Original Shareholder
or of a descendent of an Original Shareholder
shall cease to be a Family Member upon the
remarriage of such person to other than an
Original Shareholder or descendent of an Original
Shareholder; and
(ii) the spouse of an Original Shareholder or of a
descendent of an Original Shareholder shall cease
to be a Family Member upon legal separation,
divorce or dissolution of such spouse's marriage
to said Original Shareholder or descendent; and
(iii) a Qualified Fiduciary shall cease to be a Family
Member from and after any event or lapse of time
which causes such fiduciary to no longer qualify
as a Qualified Fiduciary as defined in Article
V(C)(1)(q).
(g) "Family Shareholder" shall mean a Shareholder who is,
and only so long as such Shareholder is, an Original
shareholder or a Family Member.
(h) "NACCO Stockholders' Agreement" means the Stockholders'
Agreement dated as of March 15, 1990 by and among the
Participating Stockholders, NACCO and Ameritrust
Corporation National Association, a national banking
association, as depository, as amended from time to
time.
(i) "NACCO Restated Certificate" means the Restated
Certificate of Incorporation of NACCO, as amended from
time to time.
(j) "Objecting Party" shall have the meaning set forth in
Article V(C)(1)(p)(i).
(k) "Original Shareholder" shall mean the Shareholders of
the Corporation whose subscriptions for Class A Stock
are accepted by the Incorporator of the Corporation.
(l) "Outside Shareholder" shall mean a Shareholder who is
not then a member of a Family Group, including, without
limitation, a Shareholder who has
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<PAGE>
ceasedto be a Family Member pursuant to the terms of
Articles V(C)(1)(f)(i), V(C)(1)(f)(ii) or
V(C)(1)(f)(iii), except that, the parent of an Original
Shareholder shall not be an "Outside Shareholder" for
purposes of the exercise of the Call Option.
(m) "Permitted Transferee" means a "Permitted Transferee"
as defined under Article FOURTH, Section 4 of the NACCO
Restated Certificate.
(n) "Person" means any individual, estate, trust,
corporation, partnership, limited liability company,
joint venture, unincorporated organization or other
entity, association or organization.
(o) "Proportionate Part" means a fraction, the numerator of
which is the number of Shares held by a Family Group
and the denominator of which is the number of Shares
held by all Family Groups.
(p) "Purchase Price" shall mean the Fair Market Value of
the Offered Shares or Option Shares, as the case may
be, determined as follows:
(i) Initial Value. The Board of Directors of the
Corporation shall from time to time determine a
per share value for the Shares (the "Initial
Value") based upon such considerations as the
Board of Directors of the Corporation, in its
sole discretion, determines to be relevant to
such valuation. If a Selling Shareholder or
Outside Shareholder (for purposes of this Article
V(C)(1)(p), the "Objecting Party") does not
provide written objections to Corporation
concerning the Initial Value set forth in the
Valuation Notice within 10 days after the date of
such Valuation Notice, the Purchase Price shall
be equal to the Initial Value.
(ii) Appraised Value. If an Objecting Party objects in
writing to the Initial Valuation within 10 days
after its receipt of the Valuation Notice, the
Objecting Party, within fourteen (14) days from
the date of such written objection, shall engage
an appraiser (the "Initial Appraiser") to
determine within 30 days of such appointment the
Fair Market Value of the Shares (the "First
Appraised Value"). The cost of the First
Appraiser shall be borne by the Objecting Party.
If the First Appraised Value is at least eighty
percent (80%) of the Initial Value but less than
one hundred twenty percent (120%) of the Initial
Value, then the Purchase Price shall be the
average of the Initial Value and the First
Appraised Value. If the First Appraised Value is
less than eighty percent (80%) of the Initial
Value or more than one hundred twenty percent
(120%) of the Initial Value, then the Corporation
and the Objecting Party shall, within fourteen
(14) days from the date of the First Appraised
Value, mutually agree on an appraiser (the
"Independent Appraiser"). The cost of the
Independent Appraiser shall be
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<PAGE>
borne equally by the Corporation and the
Objecting Party. The Independent Appraiser shall
determine within 14 days after its appointment
the Fair Market Value of the Shares (the "Final
Valuation"), but such Final Valuation shall be
not less than the smaller of the Initial Value
and the First Appraised Value nor greater than
the larger of the Initial Value and the First
Appraised Value. The Purchase Price shall be
equal to the Final Valuation and shall be final
and binding for purposes of the subject
transaction.
(iii) Mutually Agreed Upon Purchase Price.
Notwithstanding the procedure set forth above,
the Corporation and an Objecting Party may, prior
to or at any time during the appraisal process,
mutually agree on a single independent appraiser
to determine the Purchase Price, which
determination shall be binding on all of the
parties, or may agree in writing upon a Purchase
Price.
(iv) Cooperation with Appraisers. The Corporation
shall cooperate in assisting the appraisers in
determining the Purchase Price, including
providing reasonable access to the books and
records of the Corporation and to such other
information as the appraisers reasonably request
in connection with such determination; provided,
however, that nothing herein shall require the
Corporation to disclose privileged or proprietary
information; and provided further, that the
Corporation may require such appraisers to enter
into such confidentiality and non-disclosure
agreements as the Corporation reasonably believes
to be necessary to protect the interests of the
Corporation and its Shareholders.
(q) "Qualified Fiduciary" means (i) the trustee of any
trust (including without limitation a voting trust) if
and as long as the trust is held for the benefit of one
or more Permitted Transferees and no other Person, or
(ii) the executor, administrator, guardian, personal
representative or other fiduciary of a deceased,
incompetent, bankrupt or insolvent Permitted
Transferee; provided that any such trust must prohibit
the transfer of Shares to any Persons other than (x)
the Person or Persons who established the trust, and
(y) Authorized Transferees of the Person or Persons who
established such trust.
(r) "Shares" means shares of the Common Stock.
(s) "Shareholder" shall mean each Original Shareholder,
each Authorized Transferee who acquires Shares and any
other Person who acquires Shares as the result of a
Transfer of Shares to such Person.
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<PAGE>
(t) "Starting Date" means, with respect to any Seller's
Notice or Call Notice, the date of the final
determination of the Purchase Price relating to such
notice.
(u) "Transfer" means any sale, assignment, pledge,
hypothecation, encumbrance, disposition, transfer
(including, without limitation, a transfer by will or
intestate distribution), gift or attempt to create or
grant a security interest in Shares, whether voluntary,
involuntary, by operation of law or otherwise. Without
limiting the rights of the Corporation and the Family
Groups under Article V(D)(4), the occurrence of an
event discussed in Articles V(C)(1)(f)(i),
V(C)(1)(f)(ii), or V(C)(1)(f)(iii), pursuant to which a
Family Member ceases to be a Family Member and is
thereafter treated as an Outside Shareholder, shall not
constitute a "Transfer" giving rise to the exercise of
Purchase Rights under Article V(D)(3).
(v) "Valuation Notice" shall mean the notice given by the
Corporation pursuant to Articles V(D)(3)(b) or
V(C)(1)(u), V(D)(4)(a) and stating the Initial Value at
which a Purchase Right or a Call Option is to be
exercised.
(D) Restrictions on Transfers of Shares
(1) Restriction on Transfers. Except as otherwise provided
herein, no Shareholder shall, either during the Shareholder's
lifetime or upon the Shareholder's death, Transfer any of the
Shares now owned or hereafter acquired by such Shareholder.
Without limiting the foregoing, a Shareholder shall not
transfer any of his, her or its Shares to any Person or in
any manner which would cause the Corporation's election to be
treated as an S Corporation under the Internal Revenue Code
of 1986, as amended, to be terminated or revoked or which
would be contrary to the provisions of the NACCO Restated
Certificate or the NACCO Stockholders' Agreement. In the
event of any purported or attempted Transfer of Restricted
Shares that does not comply with these Articles, the
purported transferee or successor by operation of law shall
not be deemed to be a stockholder of the Corporation for any
purpose and shall not be entitled to any of the rights of a
stockholder of the Corporation, including, without
limitation, the right to vote the Shares or to receive a
certificate for Shares or any dividends or other
distributions on or with respect to Shares. Any purported or
attempted transfer of Shares made other than in accordance
with these Articles shall be void ab initio and the last
holder of record who acquired such Shares in a manner not
contrary to the provisions of these Articles shall be
recognized as the holder of such Shares for all purposes and
such Shares shall be deemed owned by such recognized holder.
(2) Unrestricted Transfers. Notwithstanding anything to the
contrary contained herein, each Original Shareholder or
Authorized Transferee of such Original Shareholder shall be
entitled to Transfer all or any portion of his, her or its
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<PAGE>
Shares to any Authorized Transferee of such Original
Shareholder, without need to comply with the other provisions
of these Articles.
(3) Purchase Right. At any time after the date hereof, the
Corporation and the Family Groups shall have a right of first
refusal (the "Purchase Right") to purchase, pursuant to the
terms of this Article V(D)(3), from any Shareholder (for
purposes of this Article V(D)(3), a "Selling Shareholder")
intending to Transfer, other than as permitted in Article
V(D)(2), all or any portion of his, her or its Shares
(including any Shares acquired after the date hereof).
(a) A Selling Shareholder intending to Transfer all or any
portion of his, her or its Shares shall first deliver
to the Corporation a written notice (the "Seller's
Notice") specifying (i) the number of Shares to be
transferred (the "Offered Shares"); and (ii) the
identity of the proposed transferee.
(b) Within 10 days after the Corporation's receipt of the
Seller's Notice, the Corporation shall deliver to the
Selling Shareholder a Valuation Notice setting forth
the Initial Value and the Corporation and the Selling
Shareholder shall commence the process to determine the
Purchase Price pursuant to Article V(C)(1)(p).
(c) Within 10 days after Starting Date, the Corporation
shall notify each Family Shareholder (other than the
Selling Shareholder) of (i) the Starting Date; (ii) the
number of Offered Shares; and (iii) the Purchase Price.
The Corporation's notice shall include a copy of the
Seller's Notice.
(d) Within 40 days after the Starting Date, each
Shareholder shall notify the Corporation of how many,
if any, of the Offered Shares he or she elects to
purchase.
(e) Within 50 days after the Starting Date, the Corporation
shall provide written notice to the Selling Shareholder
and to each other Shareholder of (i) the number of
Offered Share to be purchased by Family Shareholders
and the allocation of the Offered Shares among the
Family Shareholders pursuant to the terms of Article
V(D)(5); (ii) the number of Offered Shares to be
purchased by the Corporation; and (iii) the time, date
and place of closing which shall be no sooner than 90
days after the Starting Date and no later than 120 days
after the Starting Date.
(4) Call Options to Purchase Shares. At any time after the date
hereof, the Corporation and the Family Groups shall have the
option (the "Call Option") to purchase from any Shareholder
who is then an Outside Shareholder all, but not less than
all, of the Shares (the "Option Shares") directly or
indirectly owned by such Outside Shareholder, and upon the
exercise of a Call Option such Outside Shareholder shall be
obligated to sell to the purchasing Shareholders or the
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<PAGE>
Corporation, as the case may be, all (but not less than all)
of his, her or its Option Shares. The Call Option shall be
exercised as follows:
(a) Within thirty (30) days after the determination by the
Board of Directors of the Corporation to exercise a
Call Option with respect to an Outside Shareholder, the
Corporation shall provide written notice (the "Call
Notice") of such exercise to the Selling Outside
Shareholder of (i) the exercise of the Option; (ii) the
number of Option Shares; and (iii) the Initial Value of
the Option Shares. Thereafter, the Corporation and the
Outside Shareholder shall determine the Purchase Price
in accordance with Article V(C)(1)(p).
(b) Within ten (10) days after the Starting Date, the
Corporation shall provide notice of such exercise to
each Shareholder who is then a member of a Family Group
(a "Family Shareholder") of (i) the exercise of the
Option; (ii) the number of Option Shares; (iii) the
Purchase Price of the Option Shares; and (iv) the
Starting Date.
(c) Within 40 days after the Starting Date, each Family
Shareholder shall notify the Corporation of how many,
if any, of the Option Shares he, she or it elects to
purchase.
(d) Within 50 days after the Starting Date, the Corporation
shall provide written notice to the selling Outside
Shareholder and to each Family Shareholder of (i) the
allocation of the Option Shares among the Family
Shareholders pursuant to the terms of Article V(D)(5);
(ii) the number of Option Shares to be purchased by the
Corporation; and (iii) the time, date and place of
closing which shall be no sooner than 90 days after the
Starting Date and no later than 120 days after the
Starting Date.
(e) If the Corporation and the Family Shareholders do not
together elect to purchase all of the Option Shares
then the Outside Shareholder shall not be obligated to
sell any of the Option Shares; provided, however, that
the Corporation and the Family Shareholders shall
continue to have the right to exercise a Call Option
with respect to such Option Shares at anytime
thereafter.
(f) The Option Shares shall be allocated among the
Corporation and the Family Groups, and within each
Family Group among its members, in the manner provided
in Article V(D)(5).
(5) Allocation of Offered Shares and Option Shares. Offered
Shares and Option Shares shall be allocated among the
Corporation and the Family Shareholders pursuant to the terms
of this Article V(D)(5). At the Closing, the Corporation and
such Family Shareholders, as the case may be, shall be
obligated to purchase the Offered
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<PAGE>
Shares or Option Shares so allocated pursuant to the terms
and provisions of these Articles. Notwithstanding anything to
the contrary contained herein, no Shareholder shall be
entitled to receive, or be obligated to purchase, more Shares
than such Shareholder has elected to purchase pursuant to
Article V(D)(3)(d) or V(D)(4)(c), as the case may be. All
Offered Shares or Option Shares shall be allocated as
follows:
(a) Allocation to Original Holders of Offered Shares. The
Shares to be allocated shall first be allocated to the
members of the Family Group (the "Original Holders") in
which the Selling Shareholder is a Family Member who
have elected to purchase any portion of such Shares, or
if the Selling Shareholder is an Outside Shareholder,
from which the Selling Shareholder, or his, her or its
predecessors in interest, acquired such Shares. Such
Shares shall be allocated in accordance with Article
V(D)(5)(b).
(b) Allocation among Family Groups. Any Offered Shares or
Option Shares not allocated pursuant to Article
V(D)(5)(a) (the "Remaining Shares") shall be allocated
among the Family Groups (other than the Original
Holders) which have Shareholders electing to purchase
Offered Shares or Option Shares as follows:
(i) If a Family Group has collectively elected to
purchase a number of Offered Shares or Option
Shares which is less than or equal to its
Proportionate Part of the Remaining Shares, then
such Family Group shall be allocated the number
of Shares that its members have elected to
purchase.
(ii) If a Family Group has collectively elected to
purchase a number of Offered Shares or Option
Shares which is greater than its Proportionate
Part of the Remaining Shares, then such Family
Group shall, in the first instance, be allocated
its Proportionate Part of the Remaining Shares.
(iii) If additional Remaining Shares remain to be
allocated after the application of subsections a.
and b. above (the "Outstanding Remaining
Shares"), then each Family Group which has
collectively elected to purchase a number of
Offered Shares or Option Shares which exceeds its
Proportionate Part shall be allocated an
additional number of the Remaining Shares equal
to the lesser of:
A) The number of Offered Shares or Option
Shares which such Family Group elected to
purchase but which were not allocated to it
by reason of subsection (ii) above, or
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<PAGE>
B) That portion of the Outstanding Remaining
Shares represented by a fraction the
numerator of which is the number of Shares
held by such Family Group (prior to such
allocation), and the denominator of which
is the number of Shares held by all Family
Groups which have elected to purchase a
number of Offered Shares or Option Shares
in excess of the number of those Offered
Shares or Option Shares previously
allocated to them under this Article
V(D)(5).
(iv) Any Shares remaining to be allocated after the
application of subsections (i), (ii) and (iii)
above, shall be allocated in accordance with the
procedures described in subsection (iii) above
until either A) all of the Offered Shares or
Option Shares which Family Shareholders, as the
case may be, have elected to purchase have been
allocated, or B) there remains only one Family
Group which has not been allocated all of the
Shares it has elected to purchase, in which event
all of the then unallocated Offered Shares or
Option Shares shall be allocated to such Family
Group up to the amount that such Family Group
elected to purchase.
(c) Allocation to the Corporation. The Corporation shall
purchase any Offered Shares not allocated to a Family
Group. The Corporation may, but shall not be obligated
to, purchase any Option Shares not allocated to a
Family Group.
(d) Allocation of Shares among Family Group Members.
Offered Shares or Option Shares allocated to a Family
Group shall be allocated among the Family Shareholders
of such Family Group, as follows:
(i) First, to the Original Shareholder of such Family
Group in an amount equal to the number of Offered
Shares or Option Shares such Original Shareholder
elects to Purchase; and
(ii) Second, to each Shareholder of such Family Group,
other than the Original Shareholder, electing to
purchase Offered Shares or Option Shares in an
amount determined by multiplying A) the number of
Shares allocated to such Family Group and not
purchased by the Original Shareholder, by B) a
fraction, the numerator of which is the number of
Shares subscribed for by such Shareholder, and
the denominator of which is the aggregate number
of Shares subscribed for by all Shareholders of a
Family Group, other than the Original
Shareholder.
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<PAGE>
(E) General Restrictions/Covenants on Transfers.
(1) Securities Law Restrictions. Notwithstanding any other
provision of these Articles, but subject to express written
waiver by the Corporation in the exercise of its good faith
and reasonable judgment, no Shareholder shall Transfer any
Shares without the registration of the Transfer of such
Shares under the Act or until the Corporation shall have
received such legal opinions or other assurances that such
Transfer is exempt from the registration requirements under
the Act and applicable state securities laws as the
Corporation in its good faith and reasonable discretion deems
appropriate in light of the facts and circumstances relating
to such proposed Transfer, together with such
representations, warranties and indemnifications from the
transferor and the transferee as the Corporation in its good
faith and reasonable discretion deems appropriate to confirm
the accuracy of the facts and circumstances that are the
basis for any such opinion or other assurances and to protect
the Corporation and the other Shareholders from any liability
resulting from any such Transfer.
(2) Legends. All certificates representing Shares now or
hereafter issued by the Corporation shall bear appropriate
legends indicating the existence of the restrictions on
Transfer imposed by these Articles
(F) Closing.
(1) Terms of Sale. The Purchase Price for all Common Stock
purchased pursuant to Article V(D)(3) or Article V(D)(4)
shall be paid at the Closing in immediately available United
States Funds.
(2) Closing.
(a) The closing of the purchase and sale of any Common
Stock pursuant to these Articles shall occur at the
time, date and place specified by the Corporation in
its written notice pursuant to Articles V(D)(3)(e)(iii)
or V(D)(4)(d)(iii), as the case may be.
(b) At closing, the endorsed certificate or certificates
evidencing the Common Stock to be sold, together with
executed "stock power" transfer instruments, separate
from such certificate(s), shall be respectively
delivered by the seller to each purchaser against
payment of such purchasers' portion of the Purchase
Price. Such delivery shall constitute warranties by the
seller thereof that such seller has full authority to
deliver such certificate(s) and that the stock
evidenced thereby is free and clear of all liens,
encumbrances or other outstanding interests of any
nature, other than those created pursuant to the terms
of these Articles.
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<PAGE>
(3) Legal Requirements. The purchase and sale of any Common Stock
pursuant to these Articles shall be subject to compliance
with all applicable state and federal securities laws, and
each Shareholder agrees without additional consideration to
do all necessary things reasonably requested by the
Corporation in connection therewith, the reasonable expenses
of such to be paid by the selling Shareholder(s).
(G) Voting Rights
(1) Class A Stock. The Class A Stock, except to the extent
provided for herein, shall have the entire voting power in
regard to the stock of the Corporation. Each share of Class A
Stock shall be entitled to one vote.
(2) Class B Stock. The Class B Stock shall not have any voting
power in regard to the stock of the Corporation, except that
each share of Class B Stock shall be entitled to one vote
with respect to the following matters or circumstances:
(a) Amendments to these Articles of Incorporation or the
By-laws of the Corporation;
(b) As required by the Georgia Business Corporation Law; and
(c) As otherwise expressly provided by these Articles.
(H) Dividend and Liquidation Rights. Except as required by law, the record
holders of Class A Stock and Class B Stock shall share, on an equal basis based
upon such record holders' holdings of Common Stock, in all dividends declared by
the Corporation and all assets of the Corporation distributed upon liquidation.
ARTICLE VI: PREEMPTIVE RIGHTS
None of the holders of shares of any class of stock of the Corporation
shall be entitled as a matter of right to purchase, subscribe for or otherwise
acquire any new or additional shares of stock of the Corporation of any class
now or hereafter authorized, or any options or warrants to purchase, subscribe
for or otherwise acquire any such new or additional shares of stock of the
Corporation of any class now or hereafter authorized, or any shares, evidences
of indebtedness, or any other securities convertible into or carrying options or
warrants to purchase, subscribe for or otherwise acquire any new or additional
shares.
ARTICLE VII: STATED CAPITAL
The Corporation will commence business without any allocation to stated
capital.
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ARTICLE VIII: CAPITAL SURPLUS
The Corporation shall have the authority to be exercised by its Board of
Directors of the Corporation, from time to time, to distribute to its
shareholders out of the capital surplus of the Corporation a portion of its
assets, in cash or property, and to purchase its own shares out of unreserved
and unrestricted capital surplus available therefore, subject to the provisions
of the Georgia Business Corporation Code.
ARTICLE IX: SHAREHOLDER ACTION BY WRITTEN CONSENT
To the extent allowed by law, any action that is required to be, or may
be, taken at a meeting of the shareholders of the Corporation may be taken
without a meeting if written consent, setting forth the action, shall be signed
by persons who would be entitled to vote at a meeting those shares having voting
power to cast not less than the minimum number (or numbers, in the case of
voting by classes) of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote were present and voted.
Notice shall be given within ten days of the taking of corporate action without
a meeting by less than unanimous written consent to those shareholders on the
record date whose shares were not represented on the written consent.
ARTICLE X: LIMITATION OF DIRECTOR LIABILITY / INDEMNIFICATION
(A) Limitation of Director Liability. A director of the Corporation shall
not be personally liable to the Corporation or its shareholders for monetary
damages for breach of duty of care or other duty as a director, except for
liability (1) for any appropriation, in violation of his duties, of any business
opportunity of the Corporation, (2) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3) of the
types set forth in Section 14-2-832 of the Georgia Business Corporation Code, or
(4) for any transaction from which the director derived an improper personal
benefit. The provisions of this article shall not apply with respect to acts or
omissions occurring prior to the effective date of this article.
(B) Modification of Article X by Shareholders. Any repeal or modification
of the provisions of this article by the shareholders of the Corporation shall
be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation with respect to any act or
omission occurring prior to the effective date of such repeal or modification.
(C) Changes in Law Regarding Director Liability
(1) If the Georgia Business Corporation Code hereafter is amended
to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of
the Corporation, in addition to the limitation on personal
liability provided herein, shall be limited to the fullest
extent permitted by the amended Georgia Business Corporation
Code.
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(2) If any provision of this article (including any provision
within a single sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable,
the remaining provisions are severable and shall remain
enforceable to the fullest extent permitted by law.
ARTICLE XI: AMENDMENT
These Articles may be amended only with the affirmative vote of the
holders of not less than ninety percent (90%) of each class of Common Stock.
ARTICLE XII: CHANGES IN LAW
Any and every statute of the State of Georgia hereafter enacted, whereby
the rights, powers or privileges of corporations or of the shareholders of
corporations organized under the laws of the State of Georgia are increased of
diminished or in any away affected, or whereby effect is given to the action
taken by any number, less than all, of the shareholders of any such corporation
shall apply to the Corporation and shall be binding not only upon the
Corporation but upon every shareholder of the Corporation to the same extent as
if such statute had been in force at the date of filing these Articles of
Incorporation of the Corporation in the office of the Secretary of State of the
State of Georgia.
ARTICLE XIII: INCORPORATOR
The name and address of the incorporator is as follows:
Alfred M. Rankin, Jr.
5875 Landerbrook Drive
Mayfield Heights, Ohio 44124-4017
Executed as of the 14th day of November, 1996.
/s/ Alfred M. Rankin, Jr.
Alfred M. Rankin, Jr., incorporator
14
Exhibit 4
LIMITED PARTNERSHIP AGREEMENT
of
RANKIN ASSOCIATES II, L.P.
THE INTERESTS OF THIS PARTNERSHIP HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE TRANSFERRED OR ASSIGNED
IN VIOLATION OF THE PROVISIONS THEREOF.
IN ADDITION, TRANSFERS OF THE INTERESTS OF
THIS PARTNERSHIP ARE RESTRICTED AS PROVIDED
IN THIS AGREEMENT.
Dated as of February 6, 1998
Prepared by:
JONES, DAY, REAVIS & POGUE
<PAGE>
TABLE OF CONTENTS
Page
1. DEFINITIONS..........................................................1
1.1 "Act".......................................................1
1.2 "Agreement".................................................1
1.3 "Applicable NACCO Class A Closing Price Average"............1
1.4 "Arbitrable Dispute"........................................1
1.5 "Authorized Transferee".....................................1
1.6 "Call Notice"...............................................1
1.7 "Call Option"...............................................1
1.8 "Capital Account"...........................................1
1.9 "Capital Contributions".....................................2
1.10 "Certificate"...............................................2
1.11 "Charitable Organization"...................................2
1.12 "Code"......................................................2
1.13 "Entity"....................................................2
1.14 "Fair Market Value".........................................2
1.15 "Family Holder".............................................2
1.16 "Family Group"..............................................2
1.17 "Family Member".............................................2
1.18 "Final Appraiser"...........................................3
1.19 "Final Valuation"...........................................3
1.20 "First Appraised Value".....................................3
1.21 "First Appraiser"...........................................3
1.22 "General Partnership Interest"..............................3
1.23 "General Partner(s)"........................................3
1.24 "Independent Appraiser".....................................3
1.25 "Independent Valuation".....................................3
1.26 "Initial Limited Partners"..................................3
1.27 "Initial Value".............................................4
1.28 "Limited Partner"...........................................4
1.29 "Limited Partnership Interest"..............................4
1.30 "Managing Partner"..........................................4
1.31 "NACCO".....................................................4
1.32 "NACCO Class A Shares"......................................4
1.33 "NACCO Class B Shares"......................................4
1.34 "NACCO Stockholders' Agreement".............................4
1.35 "NACCO Restated Certificate"................................4
1.36 "Net Operating Cash Flow"...................................4
1.37 "Net Income" or "Net Loss"..................................4
1.38 "Objecting Party"...........................................5
1.39 "Offered Interests".........................................5
1.40 "Option Interests"..........................................5
1.41 "Original Holders"..........................................5
1.42 "Outside Partner"...........................................5
1.43 "Outstanding Remaining Interests"...........................5
1.44 "Partner(s)"................................................5
1.45 "Partner Appraised Value"...................................5
1.46 "Partnership"...............................................5
1.47 "Partnership Interest"......................................5
1.48 "Partnership Percentage"....................................5
1.49 "Partnership Property"......................................7
1.50 "Person"....................................................7
1.51 "Proportionate Part"........................................7
1.52 "Purchase Price"............................................7
(a) Initial Value......................................7
(b) Appraised Value....................................7
(c) Mutually Agreed Upon Purchase Price................8
(d) Cooperation with Appraisers........................8
1.53 "Purchase Right"............................................8
1.54 "Qualified Fiduciary".......................................8
1.55 "Remaining Interests".......................................8
1.56 "Seller's Notice"...........................................8
1.57 "Selling Partner"...........................................8
1.58 "Starting Date".............................................9
1.59 "Transfer"..................................................9
1.60 "Valuation Notice"..........................................9
2. FORMATION, NAME, PURPOSES, POWERS AND TERM...........................9
2.1 Formation...................................................9
2.2 Name and Principal Place of Business........................9
2.3 Purposes and Powers.........................................9
2.4 Term.......................................................11
2.5 Registered Agent...........................................11
3. REPRESENTATIONS AND WARRANTIES......................................11
3.1 Validity of Agreement......................................11
3.2 No Violation of Material Instruments.......................11
4. CAPITAL.............................................................11
4.1 Initial Contributions......................................11
4.2 Additional Contributions...................................12
4.3 Capital Accounts...........................................12
4.4 Allocation of Net Income and Net Loss......................13
4.5 Distributions..............................................13
4.6 No Right to Return of Capital..............................14
5. MANAGEMENT..........................................................14
5.1 Management of Partnership Business.........................14
5.2 Management of Partnership Property Consisting of
NACCO Stock..............................................15
5.3 Election of Managing Partner...............................15
5.4 Compensation of Managing Partner...........................16
5.5 Tax Matters................................................16
5.6 Limitation of Liability....................................17
5.7 Right to Indemnification...................................17
6. BOOKS, AUDITS AND FISCAL MATTERS....................................18
6.1 Partnership Books..........................................18
6.2 Fiscal Year................................................18
7. TRANSFER OF PARTNERSHIP INTERESTS...................................18
7.1 Securities Laws............................................18
7.2 Restriction on Transfers...................................18
7.3 Unrestricted Transfers.....................................19
7.4 Purchase Right.............................................19
7.5 Call Options to Purchase Partnership Interests.............20
7.6 Allocation of Offered Interests / Option Interests.........21
(a) Allocation to Original Holders of
Offered Interests...............................21
(b) Allocation among Family Groups....................21
(c) Allocation to the Partnership.....................22
(d) Allocation of Partnership Interests among Family
Group Members...................................22
7.7 Terms of Sale..............................................22
7.8 Closing....................................................23
7.9 Legal Requirements.........................................24
8. CODE SECTION 754 ELECTION...........................................24
9. DISSOLUTION.........................................................24
9.1 Dissolution and Termination................................24
9.2 Continuation of Business...................................25
10. POWER OF ATTORNEY...................................................25
10.1 Grant of Power.............................................25
10.2 Irrevocable Nature.........................................25
10.3 Further Assurances - Power of Attorney.....................26
10.4 Transfer of Partnership Interests..........................26
11. GENERAL PROVISIONS..................................................26
11.1 Obtaining Partner Approvals of Partnership Actions.........26
11.2 Arbitration................................................26
11.3 Notices....................................................26
11.4 Waiver of Right to Partition...............................27
11.5 Binding Effect.............................................27
11.6 Headings...................................................27
11.7 Entire Agreement...........................................27
11.8 Governing Law..............................................27
11.9 Counterparts...............................................27
11.10 Pronouns...................................................27
11.11 Remedies Cumulative........................................27
11.12 Further Assurances.........................................27
11.13 Severability...............................................27
<PAGE>
RANKIN ASSOCIATES II, L.P.
LIMITED PARTNERSHIP AGREEMENT
THIS LIMITED PARTNERSHIP AGREEMENT is made and entered into as
of the 6th day of February, 1998, by and among RANKIN MANAGEMENT, INC., a
Georgia corporation, as General Partner, and the Persons set forth on Schedule
A, as amended from time to time, as Limited Partners. In consideration of the
mutual promises, covenants and agreements set forth herein, the Partners hereby
agree as follows:
1. DEFINITIONS. The following terms used in this Agreement shall, unless
otherwise expressly provided herein or the context indicates otherwise, have the
meanings set forth below.
1.1 "Act" means the Delaware Revised Uniform Limited Partnership Act as
set forth in Del. Code Ann. Tit. 6 " 17-101 to 17-1111, as the same is presently
in effect and may be hereafter amended.
1.2 "Agreement" means this Limited Partnership Agreement, as it may be
amended from time to time.
1.3 "Applicable NACCO Class A Closing Price Average" shall mean the
average of the closing prices of the NACCO Class A Shares on the New York Stock
Exchange (or on the principal national securities exchange or automated
quotation system of national securities dealers on which the NACCO Class A
Shares may then be traded) on the five trading dates preceding the relevant
Starting Date as reported in The Wall Street Journal (or, if such periodical is
not then published, the most comparable periodical then being published).
1.4 "Arbitrable Dispute" means any dispute arising in connection with
this Agreement.
1.5 "Authorized Transferee" shall mean any Family Member of a Family
Group who (a) is a "Permitted Transferee" under Article FOURTH, Section 4 of the
NACCO Restated Certificate, (b) is a "Participating Stockholder" under Section
1.12 of the NACCO Stockholders Agreement, and (c) has executed and delivered to
the Partnership a counterpart of this Agreement agreeing to be subject to the
restrictions and obligations of a Partner hereunder and to hold all Partnership
Interests then owned or later acquired by such Family Member in accordance with
the terms of this Agreement.
1.6 "Call Notice" shall have the meaning set forth in Section 7.5(a).
1.7 "Call Option" shall have the meaning set forth in Section 7.5.
1.8 "Capital Account" means, with respect to any Partner, the Capital
Account established for such Partner pursuant to Section 4.3.
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1.9 "Capital Contributions" means, for each Partner, the amount of
cash, promissory notes and the value of any property (other than cash), as
determined by agreement of the Partners, by independent appraisal, or as
otherwise provided in this Agreement, contributed from time to time to the
Partnership by a Partner.
1.10 "Certificate" means the Certificate of Limited Partnership of the
Partnership in substantially the form required by the Act, to be executed
together with this Agreement and filed pursuant to the Act.
1.11 "Charitable Organization" means any organization contributions to
which are deductible for federal income, estate or gift tax purposes. A
Charitable Organization shall be an Outside Partner unless prior to the Transfer
of Shares to such Charitable Organization, the Managing Partner has designated
such Charitable Organization as eligible to be considered a Family Member, in
which event a Charitable Organization so designated shall, with respect to the
Partnership Interests transferred to it by any Partner, be considered a Family
Member of and a member of the Family Group of such Partner.
1.12 "Code" means the Internal Revenue Code of 1986, as amended.
References to specific sections of the Code shall be deemed to include
references to corresponding provisions of any succeeding internal revenue law of
the United States of America.
1.13 "Entity" means any general partnership, limited partnership,
corporation, limited liability company, joint venture, estate, trust, business
trust or association.
1.14 "Fair Market Value" means the price at which the property being
valued would change hands between a willing buyer and a willing seller, neither
being under any compulsion to buy or sell and both being reasonably informed of
the relevant factors and in light of the circumstances and prospects surrounding
the business of the Partnership. A determination of the Fair Market Value of
Partnership Interests shall take into consideration appropriate discounts for
lack of marketability and minority interest related to such Partnership
Interests, but will not take into consideration the affect of any liquidity
provided by the provisions of Section 7.4. A determination of the Fair Market
Value of Partnership Property shall not take into consideration any NACCO Class
A Shares or NACCO Class B Shares not owned by the Partnership.
1.15 "Family Holder" shall mean a Partner who is, and only so long as
such Partner is, an Initial Limited Partner or a Family Member.
1.16 "Family Group" shall mean an Initial Limited Partner and his
Family Members so long as such Initial Limited Partner or any such Family
Members own any Partnership Interests.
1.17 "Family Member" shall mean the spouse or surviving spouse of an
Initial Limited Partner, any descendant of an Initial Limited Partner, a spouse
or surviving spouse of any such descendant, or any Qualified Fiduciary.
Notwithstanding anything to the contrary contained herein:
2
<PAGE>
(a) the surviving spouse of an Initial Limited Partner or of a
descendent of an Initial Limited Partner shall cease to be a Family Member upon
the remarriage of such person to other than an Initial Limited Partner or
descendent of an Initial Limited Partner; and
(b) the spouse of an Initial Limited Partner or of a
descendent of an Initial Limited Partner shall cease to be a Family Member upon
legal separation, divorce or dissolution of such spouse's marriage to said
Initial Limited Partner or descendent; and
(c) a Qualified Fiduciary shall cease to be a Family Member
from and after any event or lapse of time which causes such fiduciary to no
longer qualify as a Qualified Fiduciary as defined in Section 1.54.
1.18 "Final Appraiser" shall have the meaning set forth in Section
1.52(b).
1.19 "Final Valuation" shall have the meaning set forth in Section
1.52(b).
1.20 "First Appraised Value" shall have the meaning set forth in
Section 1.52(b).
1.21 "First Appraiser" shall have the meaning set forth in Section
1.52(b).
1.22 "General Partnership Interest" means any Partnership Interest
which is directly traceable to and is derived from a capital contribution to the
Partnership for an interest in the Partnership as a General Partner. The holder
of a General Partnership Interest shall have all of the rights and obligations
of a General Partner under this Agreement to the extent such Person's
Partnership Interests constitute General Partnership Interests.
1.23 "General Partner(s)" means RANKIN MANAGEMENT, INC. (to the extent
that it holds a General Partnership Interest), and any successor in interest to
the business and assets of RANKIN MANAGEMENT, INC., and any additional General
Partners admitted pursuant to the terms of this Agreement and their successors
and assigns as permitted by this Agreement. Any successor or assign of a General
Partner's Partnership Interest who is admitted as a Partner pursuant to this
Agreement shall become a General Partner to the extent that such successor or
assign holds General Partnership Interests. A Partner may own both Limited
Partnership Interests and General Partnership Interests. A Partner's acquisition
of a General Partnership Interest shall not convert such Partner's Limited
Partnership Interests into General Partnership Interests. A Partner's
acquisition of a Limited Partnership Interest shall not convert such Partner's
General Partnership Interests into Limited Partnership Interests.
1.24 "Independent Appraiser" shall have the meaning set forth in
Section 1.48.
1.25 "Independent Valuation" shall have the meaning set forth in
Section 1.48.
1.26 "Initial Limited Partners" means Alfred M. Rankin, Jr., Bruce T.
Rankin, Claiborne R. Rankin, Roger F. Rankin and Thomas T. Rankin.
3
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1.27 "Initial Value" shall have the meaning set forth in Section
1.52(a).
1.28 "Limited Partner" means any of the Initial Limited Partners, any
additional Limited Partners admitted pursuant to the terms of this Agreement,
and their successors and assigns to the extent they hold Limited Partnership
Interests.
1.29 "Limited Partnership Interest" means any Partnership Interest
which is directly traceable to and is derived from a capital contribution to the
Partnership for an interest in the Partnership as a Limited Partner. The holder
of a Limited Partnership Interest shall have all of the rights and obligations
of a Limited Partner under this Agreement to the extent such Person's
Partnership Interests constitute Limited Partnership Interests.
1.30 "Managing Partner" means the Person or Persons Elected Managing
Partner pursuant to Section 5.3 hereof, or any Person or Persons substituted
therefor or succeeding thereto.
1.31 "NACCO" means NACCO Industries, Inc., a Delaware corporation.
1.32 "NACCO Class A Shares" means shares of Class A Common Stock, par
value $1.00 per share, of
NACCO.
1.33 "NACCO Class B Shares" means shares of Class B Common Stock, par
value $1.00 per share, of NACCO.
1.34 "NACCO Stockholders' Agreement" means the Stockholders' Agreement
dated as of March 15, 1990 by and among the Participating Stockholders, NACCO
and Ameritrust Company National Association, a national banking association, as
depository, as amended from time to time.
1.35 "NACCO Restated Certificate" means the Restated Certificate of
Incorporation of NACCO, as amended from time to time.
1.36 "Net Operating Cash Flow" means the net cash flow to the
Partnership resulting from ownership and operation of the Partnership Property,
plus any other items of income received in cash by the Partnership less (i) all
debts and expenses paid in the operation of the Partnership, (ii) less any
reserves which the Managing Partner deems reasonably necessary for the operation
of the Partnership, and (iii) less all proceeds which are (A) received by the
Partnership from the Transfer of Partnership Property, and (B) used to purchase
other Partnership Property.
1.37 "Net Income" or "Net Loss" means the net income or net loss (as
appropriate) of the Partnership for a particular calendar year or interim period
of less than twelve (12) complete months, as determined in accordance with
accounting principles consistently applied on a cash basis (unless applicable
laws shall require use of the accrual method). Such determination shall include,
without limitation, depreciation, amortization, accelerated cost recovery, and
other
4
<PAGE>
deductions or credits against tax allowed by the Code. Net Income or Net Loss is
a financial accounting concept and, to the extent of changes in value following
any in kind Capital Contribution, is also intended to be a tax accounting
concept (to the maximum extent that financial and tax accounting concepts may
overlap). The determination of Net Income or Net Loss shall not take into
account special allocations required by Section 704(c) of the Code with respect
to any in kind Capital Contribution.
1.38 "Objecting Party" shall have the meaning set forth in Section
1.52(a).
1.39 "Offered Interests" shall have the meaning set forth in Section
7.4(a).
1.40 "Option Interests" shall have the meaning set forth in Section
7.5.
1.41 "Original Holders" shall have the meaning set forth in Section
7.6(a).
1.42 "Outside Partner" means a Partner, other than Clara T. Rankin, who
is not then a member of a Family Group, including, without limitation, a Partner
who has ceased to be a Family Member pursuant to the terms of Sections 1.17(a),
1.17(b) or 1.17(c).
1.43 "Outstanding Remaining Interests" shall have the meaning set forth
in Section 7.6(b)(iii).
1.44 "Partner(s)" means any General Partners and any Limited Partners.
1.45 "Partner Appraised Value" shall have the meaning set forth in
Section 1.48.
1.46 "Partnership" means RANKIN ASSOCIATES II, L.P., a limited
partnership organized pursuant to this Agreement under the provisions of the Act
and the laws of the State of Delaware and any successor partnership continuing
the business of RANKIN ASSOCIATES II, L.P. pursuant to Section 9.
1.47 "Partnership Interest" means the percentage ownership share of
each Partner in the capital of the Partnership, whether as a Limited Partner or
as a General Partner, which percentage at any particular time shall be deemed to
equal the percentage which such Partner's Capital Account balance (if positive)
bears to the sum of all positive Capital Account balances of the Partners at
such time. In the event that a Partner's Capital Account balance is zero or is a
negative number, such Partner's Percentage Interest shall be deemed to be zero.
1.48 "Partnership Percentage" means the percentage share of each
Partner in the Net Income or Net Loss of the Partnership. The Partners' initial
Partnership Percentages shall be proportionate to the Partners' initial Capital
Contributions to the Partnership. Thereafter, such Partnership Percentages shall
be adjusted only to reflect a disproportionate Capital Contribution by one or
more Partners or a disproportionate distribution to one or more Partners, with
disproportion being determined in accordance with Sections 4.2 and 4.5. Such
adjustments shall be made based upon the Partnership Percentages determined as
set forth below (whether such
5
<PAGE>
determination is made by the Managing Partner in determining the Partnership
Valuation, an objecting Partner in determining the Partner Appraised Value, or
an Independent Appraiser in determining the Independent Valuation):
(a) First, the Fair Market Value of the Partnership Property
immediately before the disproportionate Capital Contribution or
distribution will be determined;
(b) Second, the difference between the aggregate value of the
Partnership Property and the total of the Partnership debt will be
allocated among the Partners in proportion to the Partnership
Percentages in effect immediately before the disproportionate Capital
Contribution or distribution;
(c) Third, each Partner's Capital Contribution at the time of
the disproportionate Capital Contribution will be added to, and each
Partner's distribution at the time of the disproportionate distribution
will be subtracted from, that Partner's allocable share of the net
value of the Partnership Property immediately before the
disproportionate Capital Contribution or distribution; and
(d) Finally, each Partner's sum or difference determined under
(c), above, will be expressed as a percentage of the aggregate sums or
differences of all Partners determined under (c), above.
The Managing Partner, based upon such considerations as the
Managing Partner, in its sole discretion, determines to be relevant to such
valuation, shall determine the Fair Market Value of the Partnership Property and
the resulting Partnership Percentages pursuant to the fourth sentence of this
Section (such valuation and resulting Partnership Percentages being hereafter
referred to as the "Partnership Valuation"). If a Partner objects in writing to
the Partnership Valuation, such Partner may, at its sole cost and expense and
within fourteen (14) days from the date of such written objection, engage an
appraiser to determine within 30 days of such appointment the Fair Market Value
of the Partnership Property and the resulting Partnership Percentages in
accordance with the fourth sentence of this Section (the "Partner Appraised
Value"). If the Partner Appraised Value is at least eighty percent (80%) of the
Initial Value and less than or equal to one hundred twenty percent (120%) of the
Initial Value, then the Partnership Percentages shall be based upon the average
of the Partnership Valuation and the Partner Appraised Value. If the Partner
Appraised Value is less than eighty percent (80%) of the Initial Value or more
than one hundred twenty percent (120%) of the Initial Value, then the Managing
Partner and the Partner(s) objecting to the Partnership Valuation shall, within
fourteen (14) days from the date of the Partner Appraised Value, mutually agree
on an appraiser (the "Independent Appraiser"). The cost of the Independent
Appraiser shall be borne equally by the Partnership and the Partner(s) objecting
to the Partnership Valuation. The Independent Appraiser shall determine within
14 days after its appointment the Fair Market Value of the Partnership Property
and the resulting Partnership Percentages pursuant to the fourth sentence of
this Section (such valuation and resulting Partnership Percentages being
hereafter referred to as the "Independent Valuation"), but such Independent
Valuation shall be not less than the smaller of the Partnership Valuation and
the
6
<PAGE>
Partner Appraised Value nor greater than the larger of the Partnership Valuation
and the Partner Appraised Value. The Independent Valuation as so determined
shall be binding upon the Partnership and each of the Partners. The Partnership
shall cooperate in assisting the appraisers in conducting the foregoing
appraisals, including providing reasonable access to the books and records of
the Partnership and to such other information as the appraisers reasonably
request in connection with such determinations; provided, however, that nothing
in this Agreement shall require the Partnership to disclose privileged or
proprietary information; and provided further, that the Partnership may require
such appraisers to enter into such confidentiality and non-disclosure agreements
as the Managing Partner reasonably believes to be necessary to protect the
interests of the Partnership and its Partners. The Managing Partner may by a
majority vote of its Board of Directors establish a disproportionate monthly or
other periodic draws during the calendar year but any such disproportionate
draws shall not be regarded as disproportionate distributions if compensating
distributions, determined with or without interest in the discretion of the
Managing Partner, are made by the end of March of the following calendar year so
that the periodic draws and compensating distributions in the aggregate are
proportionate. A successor or assign of a Partner shall succeed to that portion
of the predecessor Partner's Partnership Percentage which is assigned or
otherwise transferred to that successor or assign in accordance with the
provisions of Section 7.
1.49 "Partnership Property" means any property, real, personal or
mixed, or any interest therein or appurtenant thereto which may be owned or
acquired by the Partnership.
means any individual, estate, trust, corporation, partnership, limited
liability company, joint venture, unincorporated organization or other entity,
association or organization.
1.51 "Proportionate Part" means, with respect to any Partner or Family
Group, the Partnership Percentage of such Partner or the aggregate Partnership
Percentage of such Family Group.
1.52 "Purchase Price" shall mean the Fair Market Value of the Offered
Interests or Option Interests, as the case may be, determined as follows:
(a) Initial Value. The Managing Partner shall from time to
time determine a value for the Partnership Interests (the "Initial Value") based
upon such considerations as the Managing Partner, in its sole discretion,
determines to be relevant to such valuation. If a Selling Partner or Outside
Partner (for purposes of this Section 1.52, the "Objecting Party") does not
provide written objections to Partnership concerning the Initial Value set forth
in the Valuation Notice within 10 days after the date of such Valuation Notice,
the Purchase Price shall be equal to the Initial Value.
(b) Appraised Value. If an Objecting Party objects in writing
to the Initial Valuation within 10 days after its receipt of the Valuation
Notice, the Objecting Party, within fourteen (14) days from the date of such
written objection, shall engage an appraiser (the "First Appraiser") to
determine within 30 days of such appointment the Fair Market Value of the Shares
(the "First Appraised Value"). The cost of the First Appraiser shall be borne by
the
7
<PAGE>
Objecting Party. If the First Appraised Value is at least eighty percent (80%)
of the Initial Value and less than or equal to one hundred twenty percent (120%)
of the Initial Value, then the Purchase Price shall be the average of the
Partnership Valuation and the Partner Appraised Value. If the First Appraised
Value is less than eighty percent (80%) of the Initial Value or more than one
hundred twenty percent (120%) of the Initial Value, then the Partnership and the
Objecting Party shall, within fourteen (14) days from the date of the First
Appraised Value, mutually agree on an appraiser (the "Final Appraiser"). The
cost of the Final Appraiser shall be borne equally by the Partnership and the
Objecting Party. The Final Appraiser shall determine within 14 days after its
appointment the Fair Market Value of the Shares (the "Final Valuation"), but
such Final Valuation shall be not less than the smaller of the Initial Value and
the First Appraised Value nor greater than the larger of the Initial Value and
the First Appraised Value. The Purchase Price shall be equal to the Final
Valuation and shall be final and binding upon the parties to this Agreement for
purposes of the subject transaction.
(c) Mutually Agreed Upon Purchase Price. Notwithstanding the
procedure set forth above, the Partnership and an Objecting Party may, prior to
or at any time during the appraisal process, mutually agree on a single
independent appraiser to determine the Purchase Price, which determination shall
be binding on all of the parties, or may agree in writing upon a Purchase Price.
(d) Cooperation with Appraisers. The Partnership shall
cooperate in assisting the appraisers in determining the Purchase Price,
including providing reasonable access to the books and records of the
Partnership and to such other information as the appraisers reasonably request
in connection with such determination; provided, however, that nothing in this
Agreement shall require the Partnership to disclose privileged or proprietary
information; and provided further, that the Partnership may require such
appraisers to enter into such confidentiality and non-disclosure agreements as
the Managing Partner reasonably believes to be necessary to protect the
interests of the Partnership and its Partners.
1.53 "Purchase Right" shall have the meaning set forth in Section 7.4.
1.54 "Qualified Fiduciary" means (a) the trustee of any trust
(including without limitation a voting trust) if and as long as the trust is
held for the benefit of one or more Authorized Transferees and no other Person,
or (b) the executor, administrator, guardian, personal representative or other
fiduciary of a deceased, incompetent, bankrupt or insolvent Authorized
Transferee; provided that any such trust must prohibit the transfer of
Partnership Interests to any Persons other than (x) the Person or Persons who
established the trust, and (y) Authorized Transferees of the Person or Persons
who established such trust.
1.55 "Remaining Interests" shall have the meaning set forth in Section
7.6(b).
1.56 "Seller's Notice" shall have the meaning set forth in Section
7.4(a).
1.57 "Selling Partner" shall have the meaning set forth in Section 7.4.
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1.58 "Starting Date" means, with respect to any Seller's Notice or Call
Notice, the date of the final determination of the Purchase Price relating to
such notice.
1.59 "Transfer" means any sale, assignment, pledge, hypothecation,
encumbrance, disposition, transfer (including, without limitation, a transfer by
will or intestate distribution), gift or attempt to create or grant a security
interest in Partnership Interests, whether voluntary, involuntary, by operation
of law or otherwise. Notwithstanding anything to the contrary contained in this
Agreement, the occurrence of an event discussed in Sections 1.17(a), 1.17(b), or
1.17(c), pursuant to which a Family Member ceases to be a Family Member and is
thereafter treated as an Outside Partner, shall not constitute a "Transfer" for
purposes of triggering the exercise of Purchase Rights under Section 7.4 of this
Agreement.
1.60 "Valuation Notice" shall mean the notice given by the Partnership
pursuant to Sections 7.4(b) or 7.5(a) and stating the Initial Value at which a
Purchase Right or a Call Option is to be exercised.
2. FORMATION, NAME, PURPOSES, POWERS AND TERM
2.1 Formation. The Partners hereby enter into and form the Partnership
on and subject to the terms and conditions of this Agreement, as a limited
partnership organized pursuant to the provisions of the Act and the laws of the
State of Delaware. The Partners shall execute and record a Certificate for the
Partnership as contemplated by the Act. Each Partner's Partnership Interest
shall be personal property for all purposes.
All real and other Partnership Property owned by the
Partnership shall be deemed owned by the Partnership as an Entity, and no
Partner, individually, shall have a direct ownership interest in such
Partnership Property.
2.2 Name and Principal Place of Business. The Partnership shall do
business under the name "RANKIN ASSOCIATES II, L.P." The principal place of
business of the Partnership shall be Rankin Management, Inc., 5875 Landerbrook
Drive, Suite 300, Mayfield Heights, Ohio 44124-4017, or such other place as the
General Partners may from time to time determine. The General Partners shall
execute any assumed or fictitious name certificate(s) required by law in
connection with the formation of the Partnership and shall file same in the
appropriate public records.
2.3 Purposes and Powers.
(a) The character of business and purpose of the Partnership
is to invest, acquire, sell, hold, own, develop, improve, maintain, mortgage,
manage, lease and operate the Partnership Property and to conduct all other
business related or incident thereto. In particular, the Partnership is
initially designed as a vehicle for consolidating the management of the
Partnership Property, providing for the succession of management, and enhancing
total returns from the Partnership Property.
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(b) In furtherance of the above-stated purposes and subject to
any restrictions contained in this Agreement (including, but not limited to,
Section 5.1), the Managing Partner, acting on behalf of the Partnership, shall
have the power to:
(i) Enter into a contract for purchase or sale of any
of the Partnership Property.
(ii)Execute all documents or instruments of any kind
appropriate for carrying out the purposes of the Partnership, including, without
limitation, investment management, management, purchase, debt, and security
agreements.
(iii) Open and maintain one or more depository
accounts, including money market accounts and margin accounts, in the name of
the Partnership.
(iv) Employ such personnel and obtain such management
services and/or such investment management, legal, accounting, and other
professional services and advice as the Partners deem advisable in the course of
the Partnership's operations under this Agreement, including the services of any
party who, directly or beneficially, is a Partner or a spouse or descendant of a
Partner, and pay reasonable fees for such services.
(v) Pay all real estate and ad valorem taxes and
other governmental charges levied or assessed against the Partnership Property,
and all other taxes (other than income taxes of the Partners except to the
extent that the Partnership may be obligated to withhold therefor) directly
relating to the Partnership's operations under this Agreement.
(vi) Borrow money from banks and other lending
institutions or from other third parties or from any of the Partners for
Partnership purposes and pledge or otherwise grant security interests in the
Partnership Property for the repayment of such loans.
(vii) Take any of the Partnership Property subject to
a loan or assume a loan secured by any of the Partnership Property irrespective
of whether such outstanding loan is from a lending institution or other third
party or from one or more of the Partners.
(viii) Perform any and all other acts or activities
customary, incidental, necessary or convenient to the purposes and powers
enumerated herein.
(c) Nothing in this Agreement shall, or shall be deemed to,
restrict in any way the freedom of any Partner (directly or through an
affiliate) to conduct any other business or activity whatsoever (including,
without limitation, the acquisition, development, leasing, sale, operation and
management of other real property), without any accountability to the
Partnership or any other Partner, even if such business or activity competes
with the business of the Partnership, it being understood by each Partner that
the other Partners or affiliates thereof may be interested, directly or
indirectly, in various other businesses and undertakings not included in the
Partnership.
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2.4 Term. The term of the Partnership shall commence as of the date of
this Agreement and shall continue until the date which is thirty (30) years from
the date hereof, unless extended by amendment to this Agreement or sooner
terminated as herein provided.
2.5 Registered Agent. The name of the Partnership's initial agent for
service of process on the Partnership in the State of Delaware shall be
Corporation Service Company, and the address of the initial registered office
and the initial registered agent shall be The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County
of New Castle. As required by the Act, the Partnership shall at all times
maintain in the State of Delaware an office and an agent for service of process
selected by the General Partners in accordance with any relevant provisions of
the Act.
3. REPRESENTATIONS AND WARRANTIES. Each Partner, in order to induce the other
Partners to enter into this Agreement, hereby represents and warrants to the
other Partners that:
3.1 Validity of Agreement. This Agreement, and each and every other
agreement, document and instrument provided for herein and to which such Partner
is or shall be a party, when executed and delivered, shall constitute the valid
and binding obligation of such Partner, enforceable against such Partner in
accordance with its terms, except as enforceability may be limited by (a)
bankruptcy or similar laws from time to time in effect affecting the enforcement
of creditors' rights generally or (b) the availability of equitable remedies
generally.
3.2 No Violation of Material Instruments. The execution and delivery of
this Agreement by such Partner does not, and the consummation of the
transactions contemplated hereby shall not:
(a) violate or constitute an occurrence of default (which
violation or default either singularly or in the aggregate would be considered
material) under any provision of, or conflict with, or result in acceleration of
any obligation under, or give rise to a right by any party to terminate its
obligations under any material agreement, instrument, order, judgment, decree or
other arrangement to which such Partner is a party or by which he is bound or
his assets affected; or
(b) require any consent, approval, filing or notice under any
provision of law, or violate any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to such Partner.
4. CAPITAL
4.1 Initial Contributions. As of the date hereof, the Partners have
contributed various properties to the Partnership as their respective initial
Capital Contributions. The initial Partnership Interests and Partnership
Percentages shall be proportional to the Fair Market Values of the Partners'
respective Capital Contributions, without regard to whether such Capital
Contributions are for an interest as a General Partner, Limited Partner, or
both. The properties initially contributed to the Partnership by the respective
Partners, the Fair Market Values of such
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Capital Contributions, as mutually agreed upon by the Partners, and the
specification of the extent to which such Capital Contributions are for an
interest as a General Partner or a Limited Partner are set forth in Schedule A
attached hereto. The Partners acknowledge that they, their advisers, or both are
familiar with the properties contributed to the Partnership, have considerable
knowledge and experience regarding the valuation of those properties and similar
properties, and have in good faith determined the Fair Market Values of such
properties, as set forth in Schedule A.
4.2 Additional Contributions. In addition to the Capital Contributions
made by the Partners pursuant to Section 4.1 hereof, and subject to the
limitations on any requirement that a Partner make additional Capital
Contributions (as hereinafter provided in the second paragraph of this Section
4.2), the Partners may, from time to time, make such additional Capital
Contributions as may be necessary or desirable in the discretion of the Managing
Partner; provided, however, that any property contributed to the Partnership
under this Section 4.2 shall be transferred subject to any and all existing
liabilities encumbering such contributed property, and the Partnership shall
take and hold the contributed property subject to such existing liabilities but
shall not assume such liabilities unless Partners owning more than fifty percent
(50%) of the Partnership Interests consent in writing to any such assumption. In
the event the net values of the additional Capital Contributions shall be
disproportionate to the Partners' Partnership Percentages immediately before the
additional Capital Contributions, then the Partnership Percentages shall be
adjusted as provided in Section 1.48 to reflect the disproportionate additional
Capital Contributions.
Under no circumstances shall a Limited Partner be personally
liable for any of the debts or obligations of the Partnership by reason of such
Person's status as a Limited Partner. No Limited Partner shall be required, by
reason of such Person's status as a Limited Partner, to contribute any capital
to the Partnership except as provided in Section 4.1.
4.3 Capital Accounts.
(a) An individual Capital Account shall be established and
maintained for each Partner in accordance with the requirements of the Code and
any regulations thereunder, and shall be credited with the Capital
Contributions(s) of such Partner and that portion of Net Income allocable to
such Partner, and shall be debited with that portion of any Net Loss allocable
to such Partner and all distributions made by the Partnership to such Partner.
If the Partner is both a General Partner and a Limited Partner, subaccounts
shall be maintained to reflect the Person's interest as a General Partner and as
a Limited Partner.
(b) No interest shall be payable to any Partner on any
positive balance in such Partner's Capital Account.
(c) No Partner shall have the right to withdraw from his
Capital Account or to otherwise receive any Partnership funds or Partnership
Property except as provided by this Agreement. Each Partner expressly waives any
right to partition the Partnership Property which he or she may otherwise have,
as provided in Section 11.4.
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(d) A Partner shall be required to eliminate in any fashion
approved in good faith by the Managing Partner any deficit balance which may
arise in that Partner's Capital Account, at the time the Partnership is
dissolved or at any other time, provided, however, that no Limited Partner shall
be required, by reason of such Person's status as a Limited Partner, to
contribute any capital to the Partnership except as provided in Section 4.1. If
a Limited Partner unexpectedly receives an adjustment, allocation or
distribution described in (4), (5) or (6) of Section 1.704-1(b)(2)(ii)(d) of the
regulations issued under Section 704(b) of the Code (or any successor thereto),
gross income of the Partnership or gain from a sale of assets shall be allocated
to such Limited Partner or Limited Partners in an amount sufficient to eliminate
any deficit balance in such Limited Partner's capital account caused by such
adjustment, allocation or distribution as quickly as possible to the extent such
deficit balance exceeds the amount such Limited Partner is deemed obligated to
restore to the Partnership pursuant to the Section 704(b) regulations. It is the
intent of the Partners that any allocation pursuant to this Section 4.3
constitutes a "qualified income offset" under Treasury regulation Section
1.704-1(b)(2)(ii)(d).
4.4 Allocation of Net Income and Net Loss. Net Income or Net Loss of
the Partnership shall be determined as of the end of each calendar year and as
of the end of any interim period extending through the day immediately preceding
any disproportionate Capital Contribution or distribution or succession or
assignment. If a calendar year includes an interim period, the determination of
Net Income or Net Loss for the period extending through the last day of the
calendar year shall include only that period of less than twelve (12) months
occurring from the day immediately following the last day of the latest interim
period during the calendar year and extending through the last day of the
calendar year. For all purposes, including income tax purposes, Net Income, if
any, of the Partnership for each calendar year or interim period shall be
allocated among the Partners in proportion to their Partnership Percentages for
the calendar year or interim period. In the event of a Net Loss for a particular
calendar year or interim period, then, for such calendar year or interim period,
the Net Loss for such calendar year or interim period shall be allocated among
the Partners in proportion to their respective Partnership Percentages for the
calendar year or interim period.
4.5 Distributions.
(a) The Partnership must distribute annually among the
Partners an amount equal to the greater of (i) Net Operating Cash Flow of the
Partnership, or (ii) an amount corresponding to the income tax liabilities of
the Partners resulting from the allocation of Net Income (as shall be determined
in good faith by the Managing Partner by assuming that all Partners are in the
highest marginal federal income tax bracket and by using the income tax rates
for the state of residence of the Partner with the highest state income tax
rates). The Partnership shall make such distributions from time to time during
each year as the Managing Partner determines, provided that the Partnership must
distribute quarterly at least fifteen days in advance of the dates on which
estimated tax payments are due at least an amount corresponding to the income
tax liabilities of the Partners resulting from the allocation of Net Income (as
determined as provided in the preceding sentence).
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(b) All distributions shall be made in proportion to the
Partners' Partnership Percentages except (i) when the Managing Partner by
majority vote of its Board of Directors approves the disproportionate
distribution, or (ii) with respect to any payment of NACCO Class A Shares or
NACCO Class B Shares by the Partnership pursuant to Section 7.7(a). The Managing
Partner is encouraged to consider disproportionate distributions to defray the
income tax liabilities resulting from special allocations under Section 704(c)
of the Code, but such disproportionate distributions shall not be required.
Subject to Section 4.5(a), the Managing Partner is expressly authorized to make
monthly or other periodic draws with respect to one or more, but not necessarily
all, of the Partners, on the condition that compensating distributions,
determined with or without interest in the discretion of the Managing Partner,
shall be made to the other Partners on or before the end of March of the
following calendar year so that the total draws and compensating distributions
shall be proportionate. For all purposes of this Agreement, except as provided
in the immediately preceding sentence, a distribution among the Partners which
is not in proportion to Partnership Percentages shall be regarded as
disproportionate. In the event that a disproportionate distribution occurs, the
Managing Partner shall appropriately adjust the Capital Accounts of the Partners
to reflect such disproportionate distribution. This adjustment of Capital
Accounts, and thus Partnership Interests, shall be in addition to the adjustment
in Partnership Percentages.
4.6 No Right to Return of Capital. Except as otherwise expressly
provided in this Agreement, the Partners shall not have the right to demand the
return of all or any portion of their respective Capital Contributions or to
demand or receive property other than cash in return for their respective
Capital Contributions.
5. MANAGEMENT.
5.1 Management of Partnership Business. The Managing Partner shall be
responsible for managing and conducting the ordinary and usual business and
affairs of the Partnership, and by the vote of a majority of the Board of
Directors of the Managing Partner shall make all management decisions on behalf
of the Partnership, including, without limitation (except as expressly provided
elsewhere in this Agreement):
(a) the voting of any stock, partnership interest, or interest
in a limited liability company with respect to which the Partnership owns more
than five percent (5%) of the total voting power;
(b) the borrowing of any funds for or by the Partnership in
excess of $200,000 (whether secured or unsecured), the collateralization of any
such borrowing with any Partnership Property, or the prepayment of any such
borrowing;
(c) the approval of Partnership budgets;
(d) the approval of any contracts between the Partnership and
any Partner or any shareholder, beneficiary, spouse, descendant, or spouse or
descendant of a shareholder or beneficiary of one of the Partners;
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(e) the retention or termination of an investment manager;
(f) except as provided in Section 7 or elsewhere in this
Agreement, the admission of new Partners to the Partnership;
(g) the exercise by the Partnership of the Call Option
pursuant to Section 7.5; and
(h) the election to subject the Partnership to the unified
audit rules of " 6221-6234 of the Code, as provided in Section 5.5.
5.2 Management of Partnership Property Consisting of NACCO Stock.
(a) The Managing Partner by the approval of a majority of its
Board of Directors shall direct the voting of the NACCO Class A Stock and NACCO
Class B Stock held by the Partnership and may authorize the Partnership to enter
into a voting arrangement with respect to any or all of such NACCO Class A Stock
and NACCO Class B Stock.
(b) The Partnership will not Transfer any shares of NACCO
Class B Stock without the consent of a majority of the Board of Directors of the
Managing Partner and the consent of Partners owning more than 75% of all
Partnership Interests.
(c) The Partnership will not Transfer any shares of NACCO
Class A Stock, other than to acquire NACCO Class B Stock, without the consent of
a majority of the Board of Directors of the Managing Partner and the consent of
Partners owning more than 75% of all Partnership Interests.
5.3 Election of Managing Partner. RANKIN MANAGEMENT, INC. is hereby
designated as the initial Managing Partner. If RANKIN MANAGEMENT, INC. or any
successor ceases to serve as a Managing Partner, such General Partner(s) or
officer(s) of a General Partner selected by Partners owning not less than ninety
percent (90%) of the Partnership Interests shall serve as successor Managing
Partner or Co-Managing Partners (referred to herein collectively in the singular
as "Managing Partner" unless the context indicates to the contrary). Such
General Partner(s) or officer(s) of a General Partner who are thus selected as
Managing Partner or Co-Managing Partners may expressly be one or more
Co-Managing Partners who continue to serve after another Co-Managing Partner
ceases to serve.
If an individual Managing Partner or Co-Managing Partner is
determined by his or her principal attending physician to be incapable of
handling his or her duties as Managing Partner or Co-Managing Partner, such
incapacitated Managing Partner or Co-Managing Partner shall be deemed to have
resigned for the period of his or her incapacity, but such individual shall be
restored as Managing Partner or Co-Managing Partner in lieu of his or her
successor (or that Person's successor), if any, in the event his or her
principal attending physician later determines that the incapacitated Managing
Partner or Co-Managing Partner has recovered sufficiently to resume the duties
of Managing Partner or Co-Managing Partner. Any determination by the
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Managing Partner's or Co-Managing Partner's principal attending physician shall
be conclusive, and the principal attending physician shall be held harmless by
the Partnership from any liability resulting from any good faith determination
of incapacity or recovery. Any determination hereunder by the principal
attending physician shall be in recordable form.
Any Managing Partner or Co-Managing Partner may be removed and
replaced only by and with the consent of Partners owning not less than ninety
percent (90%) of all Partnership Interests.
So long as more than one Managing Partner shall be serving,
the vote of a majority of those then serving shall control. The Managing Partner
or any Co-Managing Partner may sign on behalf of the Partnership, and any third
party may conclusively rely upon the signature of the Managing Partner or any
Co-Managing Partner as being binding upon the Partnership. Any person dealing in
good faith with the Partnership may conclusively rely upon any writing signed by
one or more Persons certifying (a) that such Person or Persons are the Managing
Partner, a Co-Managing Partner, or the Co-Managing Partners then serving and (b)
that such Person or Persons are acting in accordance with the terms of this
Agreement. The Co-Managing Partner working regularly in the Partnership's
principal place of business shall be responsible for informing any other
Co-Managing Partner(s) of any matters requiring the Managing Partner's approval,
and the Managing Partner shall keep the other Partners informed on a timely
basis as to all significant matters of concern to the Partnership.
5.4 Compensation of Managing Partner. The Managing Partner or
Co-Managing Partners shall not be entitled to any compensation for performance
of duties under this Agreement as Managing Partner or Co-Managing Partners. The
Partnership shall reimburse the Managing Partner or any Co-Managing Partner at
cost for reasonable out-of-pocket expenses incurred in the performance of duties
under this Agreement.
5.5 Tax Matters. The Managing Partner may elect, pursuant to '
6231(a)(1)(B)(ii) of the Code, to subject the Partnership to the unified audit
rules of " 6221-6234 of the Code. If such election is made, the Managing Partner
(or one of the Co-Managing Partners selected by vote of the Co-Managing Partners
then serving in accordance with Section 5.3 if more than one Managing Partner
shall then be serving) will be the Partnership's "tax matters partner," as that
term is defined in Section 6231(a)(7) of the Code, and shall receive notice of
the commencement of any administrative proceeding at the Partnership level with
respect to any Partnership item or items, and shall receive notice of any final
Partnership administrative adjustment resulting from any such proceeding, in
each case within the meaning of Sections 6223 and 6231 of the Code. The
Partnership's tax matters partner shall supply such information to the Internal
Revenue Service as may be necessary to enable the Internal Revenue Service to
provide the Partners with such notices as are required under the Code. The
Partnership's tax matters partner shall also keep each Partner informed of any
administrative or judicial proceeding relative to any adjustment or proposed
adjustment at the Partnership level of Partnership items. Without the prior
written approval of Partners owning more than fifty percent (50%) of the
Partnership Interests, the tax matters partner shall not (a) enter into any
settlement agreement with the Internal Revenue Service which purports to bind
persons other than the tax matters partner, (b) file a petition as
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contemplated by Sections 6226(a) or 6228 of the Code, (c) intervene in any
action as contemplated by Section 6226(b) of the Code, (d) file any request as
contemplated by Section 6227(b) of the Code, or (e) enter into an agreement
extending the period of limitation as contemplated by Section 6229(b)(1)(B) of
the Code.
5.6 Limitation of Liability. No Partner, direct or indirect shareholder
of a Partner, or director, officer, or employee of the Partnership or a Partner
shall be liable to the Partnership or any of its Partners for any loss, damage,
liability or expense suffered by the Partnership or its Partners on account of
any action taken or omitted to be taken by such Person on behalf of, or at the
request of, the Partnership, or in connection with the organization of the
Partnership, provided such Person discharges such Person's duties in good faith,
exercising the same degree of care and skill that a prudent person would have
exercised under the circumstances in the conduct of such prudent person's own
affairs, and in a manner such Person reasonably believes to be in the best
interest of the Partnership. A Person's liability hereunder shall be limited
only for those actions taken or omitted to be taken by such Person in connection
with the organization of the Partnership or the management of the business and
affairs of the Partnership. The provisions of this Section are not intended to
limit the liability of any person in any other connection, including, but not
limited to, any obligations of such Person undertaken in this Partnership
Agreement or any contract with the Partnership.
5.7 Right to Indemnification. The Partnership shall indemnify each
Person who has been or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or appellate (regardless of whether such
action, suit or proceeding is by or in the right of the Partnership or by third
parties), by reason of the fact that such Person is or was a Partner, direct or
indirect shareholder of a Partner, director, officer, or employee of the
Partnership or a Partner, or organizer of the Partnership, against all
liabilities and expenses, including, without limitation, judgments, amounts paid
in settlement, attorneys' fees, ERISA excise taxes or penalties, fines and other
expenses, actually and reasonably incurred by such Person in connection with
such action, suit or proceeding (including, without limitation, the
investigation, defense, settlement or appeal of such action, suit or
proceeding); provided, however, that the Partnership shall not be required to
indemnify or advance expenses to any person from or on account of such Person's
conduct that is finally adjudged to have been knowingly fraudulent, deliberately
dishonest, grossly negligent, or willful misconduct; provided, further, that the
Partnership shall not be required to indemnify or advance expenses to any Person
in connection with an action, suit or proceeding initiated by such Person unless
the initiation of such action, suit or proceeding was authorized in advance by
the Partnership; and provided, finally, that a Person shall be indemnified
hereunder only for those actions taken or omitted to be taken by such Person in
connection with the discharge of such Person's obligations for the organization
of the Partnership or the management of the business and affairs of the
Partnership and that the provisions of this Section 5.7 are not intended to
extend indemnification to any Partner or other Person for any obligations of
such Partner or other Person undertaken in this Partnership Agreement. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or under a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that such
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Person's conduct was finally adjudged to have been knowingly fraudulent,
deliberately dishonest, grossly negligent, or willful misconduct.
6. BOOKS, AUDITS AND FISCAL MATTERS.
6.1 Partnership Books. The Managing Partner shall maintain full and
complete books and records for the Partnership at its principal office, and each
Partner and his, her, or its designated representatives shall at all times have
reasonable access to, and may inspect and copy any of, such books and records.
6.2 Fiscal Year. The fiscal year of the Partnership shall be the
calendar year.
7. TRANSFER OF PARTNERSHIP INTERESTS.
7.1 Securities Laws. Each Partner acknowledges that its Partnership
Interest was offered and is being sold in reliance upon the representation,
hereby affirmed, that such Partnership Interest is being purchased for
investment for such Partner's own account or in his or its fiduciary capacity
for a fiduciary account, as appropriate, and not with a view to, or for resale
in connection with, the distribution of such Partnership Interest or any
interest therein. Each Partner also acknowledges that such Partner's Partnership
Interest has not been registered under the Securities Act of 1933 or any state
securities laws. Notwithstanding any other provision in this Agreement, but
subject to express written waiver by the Managing Partner in the exercise of its
reasonable judgment, no portion of or interest in any Partnership Interest may
be offered for sale or be the subject of a Transfer without the registration of
the Partnership Interest under the Securities Act and applicable state
securities laws, unless the Partnership shall have received such assurances
satisfactory to the Managing Partner that such Transfer does not violate the
Securities Act, any state securities laws or any other law applicable to the
Partnership, including, without limitation, such legal opinions which it in its
good faith and reasonable discretion deems appropriate in light of the facts and
circumstances relating to such proposed Transfer, together with such
representations, warranties and indemnifications from the transferor and the
transferee as the Managing Partner in its good faith and reasonable discretion
deems appropriate to confirm the accuracy of the facts and circumstances that
are the basis for any such opinion or other assurances and to protect the
Partnership and the other Partners from any liability resulting from any such
Transfer. Such opinions, representations, warranties and indemnities may
include, without limitation, assurance that the transaction is exempt from any
registration or qualification provisions arising under applicable Federal and
state securities laws and would not require the registration or qualification of
the Partnership Interest under any such laws.
7.2 Restriction on Transfers. Except as otherwise provided in this
Agreement, no Partner shall, either during the Partner's lifetime or upon the
Partner's death, Transfer any of the Partnership Interests now owned or
hereafter acquired by such Partner. Moreover, no Partner shall Transfer or
attempt to Transfer any Partnership Interest if such Transfer or attempted
Transfer is contrary to the provisions of the NACCO Restated Certificate or the
NACCO Stockholders' Agreement. In the event of any purported or attempted
Transfer of Partnership Interests that does not comply with this Agreement, the
purported transferee or successor by
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operation of law shall not be deemed to be a Partner of the Partnership for any
purpose and shall not be entitled to any of the rights of a Partner of the
Partnership, including, without limitation, the right to vote the Partnership
Interests or to receive a certificate for Partnership Interests or any
distributions of any kind on or with respect to Partnership Interests. Any
purported or attempted transfer of Partnership Interests made other than in
accordance with the provisions of this Agreement shall be void ab initio and the
last holder of record who acquired such Partnership Interests in a manner not
contrary to the provisions of this Agreement shall be recognized as the holder
of such Partnership Interests for all purposes and the Partnership Interests
shall continue to be treated as Partnership Interests for all purposes under
this Agreement, shall be deemed owned by such recognized holder for purposes of
the operation of this Agreement and shall continue to be subject to the terms of
this Agreement.
7.3 Unrestricted Transfers. Notwithstanding anything to the contrary
contained herein, each Partner or Authorized Transferee of such Partner shall be
entitled to Transfer all or any portion of his, her or its Partnership Interests
to any Authorized Transferee of such Partner, provided that such Partner has
first obtained the written consent of the Managing Partner, which consent may be
withheld for any reason or for no reason at all, without need to comply with the
other provisions of this Agreement.
7.4 Purchase Right. At any time after the date hereof, the Partnership
and the Family Groups shall have a right of first refusal (the "Purchase Right")
to purchase, pursuant to the terms of this Section 7.4, from any Partner (for
purposes of this Section 7.4, a "Selling Partner") intending to Transfer, other
than as permitted in Section 7.3 of this Agreement, all or any portion of his,
her or its Partnership Interests (including any Partnership Interests acquired
after the date hereof).
(a) A Selling Partner intending to Transfer all or any portion
of his, her or its Partnership Interests shall first deliver to the Partnership
a written notice (the "Seller's Notice") specifying (i) the Partnership
Interests to be transferred (the "Offered Interests"); and (ii) the identity of
the proposed transferee.
(b) Within 10 days after the Partnership's receipt of the
Seller's Notice, the Managing Partner shall deliver to the Selling Partner a
Valuation Notice setting forth the Initial Value and the Managing Partner and
the Selling Partner shall commence the process to determine the Purchase Price
pursuant to Section 1.52 of this Agreement.
(c) Within 10 days after the Starting Date, the Partnership
shall notify each Family Holder (other than the Selling Partner) of (i) the
Starting Date; (ii) the number of Offered Interests; and (iii) the Purchase
Price. The Partnership's notice shall include a copy of the Seller's Notice.
(d) Within 40 days after the Starting Date, each Partner shall
notify the Partnership of how many, if any, of the Offered Interests he or she
elects to purchase.
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<PAGE>
(e) Within 50 days after the Starting Date, the Partnership
shall provide written notice to the Selling Partner and to each other Partner of
(i) the number of Offered Interests to be purchased by Family Holders and the
allocation of the Offered Interests among the Family Holders pursuant to the
terms of Section 7.6 of this Agreement; (ii) the number of Offered Interests to
be purchased by the Partnership; and (iii) the time, date and place of Closing
which shall be no sooner than 90 days after the Starting Date and no later than
120 days after the Starting Date.
7.5 Call Options to Purchase Partnership Interests. At any time after
the date hereof, the Partnership and the Family Groups shall have the option
(the "Call Option") to purchase from any Partner who is then an Outside Partner
all, but not less than all, of the Partnership Interests (the "Option
Interests") directly or indirectly owned by such Outside Partner, and upon the
exercise of a Call Option such Outside Partner shall be obligated to sell to the
purchasing Partners or the Partnership, as the case may be, all (but not less
than all) of his, her or its Option Interests. The Call Option shall be
exercised as follows:
(a) Within thirty (30) days after the determination by the
Partnership to exercise a Call Option with respect to an Outside Partner, the
Partnership shall provide written notice (the "Call Notice") of such exercise to
the Selling Outside Partner of (i) the exercise of the Option; (ii) the number
of Option Interests; and (iii) the Initial Value of the Option Interests.
Thereafter, the Partnership and the Outside Partner shall determine the Purchase
Price in accordance with Section 1.52.
(b) Within ten (10) days after the Starting Date, the
Partnership shall provide notice of such exercise to each Family Holder of (i)
the exercise of the Option; (ii) the number of Option Interests; (iii) the
Purchase Price of the Option Interests; and (iv) the Starting Date.
(c) Within 40 days after the Starting Date, each Family Holder
shall notify the Partnership of how many, if any, of the Option Interests he,
she or it elects to purchase.
(d) Within 50 days after the Starting Date, the Partnership
shall provide written notice to the selling Outside Partner and to each Family
Holder of (i) the allocation of the Option Interests among the Family Holders
pursuant to the terms of Section 7.6 of this Agreement; (ii) the number of
Option Interests to be purchased by the Partnership; and (iii) the time, date
and place of Closing which shall be no sooner than 90 days after the Starting
Date and no later than 120 days after the Starting Date.
(e) If the Partnership and the Family Holders do not together
elect to purchase all of the Option Interests then the Outside Partner shall not
be obligated to sell any of the Option Interests; provided, however, that the
Partnership and the Family Holders shall continue to have the right to exercise
a Call Option with respect to such Option Interests at anytime thereafter.
(f) The Option Interests shall be allocated among the
Partnership and the Family Groups, and within each Family Group among its
members, in the manner provided in Section 7.6.
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7.6 Allocation of Offered Interests / Option Interests. Offered
Interests and Option Interests shall be allocated among the Partnership and the
Family Holders pursuant to the terms of this Section 7.6. At the Closing, the
Partnership and such Family Holders, as the case may be, shall be obligated to
purchase the Offered Interests or Option Interests so allocated pursuant to the
terms and provisions of this Agreement. Notwithstanding anything to the contrary
contained herein, no Partner shall be entitled to receive, or be obligated to
purchase, more Partnership Interests than such Partner has elected to purchase
pursuant to Section 7.4(d) or 7.5(c), as the case may be. All Offered Interests
or Option Interests shall be allocated as follows:
(a) Allocation to Original Holders of Offered Interests. Any
Offered Interests or Options Interests shall first be allocated to members of
the Family Group (the "Original Holders") (i) in which the Selling Partner is
the Initial Limited Partner or a Family Member, or (ii) if the Selling Partner
is an Outside Partner, from which the Selling Partner, or his, her or its
predecessors in interest, acquired such Offered Interests or Option Interests,
to the extent such Original Holders have elected to purchase the Offered
Interests or Option Interests. Such Partnership Interests shall be allocated in
accordance with Section 7.6(d).
(b) Allocation among Family Groups. Any Offered Interests or
Option Interests not allocated pursuant to Section 7.6(a) (the "Remaining
Interests") shall be allocated among the Family Groups (other than the Original
Holders) which have Partners electing to purchase Offered Interests or Option
Interests as follows:
(i) If a Family Group has collectively elected
to purchase a number of Offered Interests or
Option Interests which is less than or equal
to its Proportionate Part of the Remaining
Interests, then such Family Group shall be
allocated the number of Partnership
Interests that its members have elected to
purchase.
(ii) If a Family Group has collectively elected
to purchase a number of Offered Interests or
Option Interests which is greater than its
Proportionate Part of the Remaining
Interests, then such Family Group shall, in
the first instance, be allocated its
Proportionate Part of the Remaining
Interests.
(iii) If additional Remaining Interests remain to
be allocated after the application of
subsections (i) and (ii) above (the
"Outstanding Remaining Interests"), then
each Family Group which has collectively
elected to purchase a number of Offered
Interests or Option Interests which exceeds
its Proportionate Part shall be allocated an
additional number of the Remaining Interests
equal to the lesser of:
(A) The number of Offered Interests or
Option Interests which such Family
Group elected to purchase but which
were not allocated to it by reason
of subsection (ii) above, or
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<PAGE>
(B) That portion of the Outstanding
Remaining Interests represented by a
fraction the numerator of which is
the number of Partnership Interests
held by such Family Group (prior to
such allocation), and the
denominator of which is the number
of Partnership Interests held by all
Family Groups which have elected to
purchase a number of Offered
Interests or Option Interests in
excess of the number of those
Offered Interests or Option
Interests previously allocated to
them under this Section 7.6.
(iv) Any Partnership Interests remaining to be
allocated after the application of
subsections (i), (ii) and (iii) above, shall
be allocated in accordance with the
procedures described in subsection (iii)
above until either (A) all of the Offered
Interests or Option Interests which Family
Holders, as the case may be, have elected to
purchase have been allocated, or (B) there
remains only one Family Group which has not
been allocated all of the Partnership
Interests it has elected to purchase, in
which event all of the then unallocated
Offered Interests or Option Interests shall
be allocated to such Family Group up to the
amount that such Family Group elected to
purchase.
(c) Allocation to the Partnership. The Partnership may, but
shall not be obligated to, purchase any Option Interests not allocated to a
Family Group.
(d) Allocation of Partnership Interests among Family Group
Members. Offered Interests or Option Interests allocated to a Family Group
pursuant to Sections 7.6(a) or 7.6(b) shall be allocated among the Family
Holders of such Family Group, as follows:
(i) First, to the Initial Limited Partner of
such Family Group in an amount equal to the
number of Offered Interests or Option
Interests such Initial Limited Partner
elects to Purchase; and
(ii) Second, to each Partner of such Family
Group, other than the Initial Limited
Partner, electing to purchase Offered
Interests or Option Interests in an amount
determined by multiplying (A) the number of
Partnership Interests allocated to such
Family Group and not purchased by the
Initial Limited Partner, by (B) a fraction,
the numerator of which is the number of
Partnership Interests subscribed for by such
Partner, and the denominator of which is the
aggregate number of Partnership Interests
subscribed for by all Partners of a Family
Group, other than the Initial Limited
Partner.
7.7 Terms of Sale. The Purchase Price for all Partnership Interests
purchased pursuant to Section 7.4 or Section 7.5 of this Agreement shall be paid
at the Closing, as follows:
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(a) If the purchaser is the Partnership, the Partnership, at
its election, may pay its portion of the Purchase Price in NACCO Class B Shares,
NACCO Class A Shares, immediately available United States Funds, or any
combination of such consideration as follows:
(i) to the extent that the Partnership elects to
pay the Purchase Price be paid in NACCO
Class B Shares, the Partnership shall pay to
the Selling Partner, such number of NACCO
Class B Shares as shall be equal to the
quotient of (A) the portion of the Purchase
Price payable in NACCO Class B Shares,
divided by (B) the Applicable NACCO Class A
Closing Price Average; and
(ii) to the extent that the Partnership elects to
pay the Purchase Price be paid in NACCO
Class A Shares, the Partnership shall pay to
the Selling Partner such number of NACCO
Class A Shares as shall be equal to the
quotient of (A) the portion of the Purchase
Price payable in NACCO Class A Shares,
divided by (B) the Applicable NACCO Class A
Closing Price Average (If necessary the
Partnership may convert NACCO Class B Shares
to NACCO Class A Shares and to pay such
Purchase Price); and
(iii) immediately available United States Funds
equal to that portion of the Purchase Price
not payable in NACCO Class B Shares or NACCO
Class A Shares.
(b) If the purchaser is a Partner, such Partner may pay its
portion of the Purchase Price in NACCO Class A Shares, immediately available
United States Funds, or any combination of such consideration as follows:
(i) to the extent that the Partner elects to pay
the Purchase Price in NACCO Class A Shares,
such Partner shall pay to the Selling
Partner such number of NACCO Class A Shares
as shall be equal to the quotient of (A) the
portion of the Purchase Price payable in
NACCO Class A Shares, divided by (B) the
Applicable NACCO Class A Closing Price
Average; and
(ii) immediately available United States Funds
equal to that portion of the Purchase Price
not payable in NACCO Class A Shares.
7.8 Closing
(a) The Closing of the purchase and sale of any Partnership
Interests pursuant to this Agreement shall occur at the time, date and place
specified by the Partnership in its written notice pursuant to Sections
7.4(e)(iii) or 7.5(d)(iii), as the case may be.
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<PAGE>
(b) At Closing, transfer instruments shall be respectively
delivered by the seller to each purchaser against payment of such purchaser's
portion of the Purchase Price. Such delivery shall constitute warranties by the
seller thereof that such seller has full authority to transfer the Partnership
Interests to such purchaser and that such purchaser is acquiring the Partnership
Interests free and clear of all liens, encumbrances or other outstanding
interests of any nature, other than those created pursuant to the terms of this
Agreement.
7.9 Legal Requirements. The purchase and sale of any Partnership
Interests pursuant to this Agreement shall be subject to compliance with all
applicable state and federal securities laws, and each Partner agrees without
additional consideration to do all necessary things reasonably requested by the
Partnership in connection therewith, the reasonable expenses of such to be paid
by the selling Partner(s).
8. CODE SECTION 754 ELECTION. Upon the written request of Partners owning more
than fifty percent (50%) of all Partnership Interests, the Partnership shall
file an election under Code Section 754 to adjust the tax basis of the
Partnership Property, with respect to any distribution of Partnership Property
to a Partner or a transfer of a Partnership Interest, in accordance with Code
Sections 734(b) and 743(b). The Partners acknowledge that once a Code Section
754 election shall be validly filed by the Partnership, it shall remain in
effect indefinitely thereafter unless the Internal Revenue Service approves the
revocation of such election.
9. DISSOLUTION.
9.1 Dissolution and Termination. The Partnership shall continue for the
term described in Section 2.4 hereof, unless earlier dissolved (a) with the
consent of the Managing Partner and Partners owning more than ninety percent
(90%) of all Partnership Interests, or (b) upon the bankruptcy of a General
Partner unless the continuation of the Partnership is agreed to in writing by
all other General Partners, if any, or by Partners holding more than fifty
percent (50%) of all Capital Accounts and all Partnership Percentages (exclusive
of the Capital Accounts and Partnership Percentages of the bankrupt General
Partner), or (c) with the consent of the Managing Partner, upon the Transfer of
substantially all of the shares of NACCO Class A Shares and NACCO Class B Shares
held by the Partnership. In the event that the Partnership is dissolved, the
assets of the Partnership shall be liquidated as promptly as is consistent with
obtaining the Fair Market Value thereof, and the proceeds therefrom, together
with any assets distributed in kind, shall be distributed first to creditors to
satisfy all debts and liabilities of the Partnership other than loans or
advances made by the Partners to the Partnership, then to the establishment of
reserves deemed reasonably necessary to satisfy contingent or unforeseen
liabilities or obligations of the Partnership, then to the repayment of any
loans or advances made by the Partners to the Partnership, with the balance, if
any, to be distributed in accordance with the balances in each Partner's Capital
Account at that time. Solely for the purposes of determining the balances of the
Partners' Capital Accounts at that time, any Partnership Property that is
distributed in kind shall be treated as though such Partnership Property were
sold for its Fair Market Value as of the date of distribution, as determined by
an independent appraiser. Upon completion of the foregoing, the Partnership
shall be terminated.
24
<PAGE>
9.2 Continuation of Business. Except as provided in Section 9.1,
neither the disposition of any Partnership Interest pursuant to Section 7 hereof
nor the death, insanity, incapacity, or bankruptcy of a Partner shall cause the
dissolution or termination of the Partnership or have any effect upon the
continuance of the Partnership business. No Partner shall have a right to
withdraw from the Partnership or to abandon any Partnership Interest except as
expressly provided herein.
10. POWER OF ATTORNEY.
10.1 Grant of Power. Each Partner by his, her or its signature below
irrevocably makes, constitutes and appoints the Managing Partner, and each of
them, his, her or its true and lawful attorney in his, her or its name, place
and stead in any capacities, with the power from time to time to substitute or
resubstitute one or more others as such attorney, and to make, execute, swear
to, acknowledge, verify, deliver, file, record and publish any and all
documents, certificates or other instruments which may be required or deemed
desirable by the Managing Partner to (a) effectuate the provisions of any part
of this Agreement or any amendments to this Agreement, (b) enable the
Partnership to conduct its business, (c) comply with any applicable law in
connection with the Partnership's conduct of its business, (d) retain
professional services, including accounting and legal counsel, for the
Partnership (including, without limitation, the waiver on behalf of the
Partnership and each Partner of any conflict arising from such professional's
representation of another client on matters in which the interests of the
Partnership, any Partner or any affiliate of the Partnership or any Partner may
be adverse to such other client), or (e) to execute any and all statements under
Section 13 or Section 16 of the Securities Exchange Act of 1934, as amended, of
beneficial ownership of NACCO Class A Shares and/or NACCO Class B Shares,
subject to the NACCO Stockholders' Agreement, as amended from time to time,
including all statements on Schedule 13D and all amendments thereto, all joint
filing agreements pursuant to Rule 13d-l(f)(iii) under such Act in connection
with such statements, all initial statements of beneficial ownership on Form 3
and any and all other documents to be filed with the Securities and Exchange
Commission, and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange Commission.
Each Partner grants to said attorney or attorneys-in-fact, and each of them,
full power and authority to do so and to perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorney or attorneys-in-fact or any of
them or their substitutes or resubstitutes, may lawfully do or cause to be done
by virtue of this Section 10.
10.2 Irrevocable Nature. It is expressly intended by each Partner that
the foregoing power of attorney is a special power of attorney coupled with an
interest in favor of each of those appointed as attorney-in-fact on his, her or
its behalf, and as such shall be irrevocable and shall survive such Partner's
death, incompetence (including an adjudication of insanity) or, in the case of a
Limited Partner which is not a natural person, its merger, dissolution or other
termination of existence.
25
<PAGE>
10.3 Further Assurances - Power of Attorney. If applicable law requires
additional or substituted language in order to validate the power of attorney
intended to be granted by this Section 10, each Shareholder agrees to execute
and deliver such additional instruments and to take such further acts as may be
necessary to validate such power of attorney.
10.4 Transfer of Partnership Interests. The foregoing power of attorney
shall survive the delivery of an instrument of transfer by any Partner of the
whole or any portion of or interest in his, her or its Partnership Interest,
except that where a transferee of such Partnership Interest has been approved as
a successor Partner and the transferee shall thereupon cease being a Partner
(all in accordance with this Agreement), then the power of attorney of the
transferor Partner shall survive the delivery of such instrument of transfer for
the sole purpose of enabling the attorneys-in-fact for such transferor Partner
(or any of them) to execute, swear to, acknowledge and file any and all
instruments necessary to effectuate such transfer and succession.
11. GENERAL PROVISIONS.
11.1 Obtaining Partner Approvals of Partnership Actions. The requisite
approval of the General Partners or Partners, whichever is appropriate, may take
the form of the approval of an outline of the general terms of the transaction,
and the negotiation of detailed terms may be delegated to the Managing Partner
or to any one or more specified Partners, or the approval may be in the form of
a blanket delegation of authority to the Managing Partner or to any one or more
specified Partners to act on behalf of the Partnership in regard to a particular
transaction that is being considered.
11.2 Arbitration. Any dispute arising in connection with this Agreement
shall be an Arbitrable Dispute and shall be finally settled by arbitration under
the then applicable Commercial Arbitration Rules of the American Arbitration
Association, by one or more arbitrators agreed upon by the parties or, in the
absence of such an agreement, appointed in accordance with such Rules. The
arbitration proceedings shall be held in Cleveland, Ohio. Judgment upon the
award rendered may be entered in any court having jurisdiction and application
may be made to such court for judicial acceptance of such award and an order of
enforcement as the case may be. The Partners hereby agree that the rendering of
an award by the arbitrator or arbitrators shall be a condition precedent to the
initiation of any legal proceedings with respect to any Arbitrable Dispute.
11.3 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given when the
same are (a) delivered in person, or (b) delivered by express or overnight mail
or by certified or registered mail, postage prepaid, to the Partners at the
addresses set forth in Schedule B attached hereto, and to the Partnership at the
address of its principal office, or at such other address as the Partners may
from time to time determine. A delivery receipt shall be conclusive evidence
that the respective mailing has in fact been delivered and the date thereof. Any
Partner may change his or her address for notices by designating a new address
by notice given to the other Partners and the Partnership in accordance with
this Section 11.3.
26
<PAGE>
11.4 Waiver of Right to Partition. The Partners, by execution of this
Agreement, waive their respective rights to partition of the Partnership
Property.
11.5 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted successors and
assigns.
11.6 Headings. The section headings in this Agreement are inserted
solely as a matter of convenience and for reference, and are not a substantive
part of this Agreement.
11.7 Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
any parties hereto regarding the transactions contemplated hereby and the
subject matter hereof. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by an agreement in
writing signed by the party against whom or which the enforcement of such
change, waiver, discharge or termination is sought. Notwithstanding the
immediately preceding sentence, the Managing Partner may, without the consent of
any other party, amend Schedule A and Schedule B as necessary to reflect the
addition of any new Partners, any additional capital contributions by existing
Partners, or any gifts or other transfers of Interests permitted under the terms
of this Agreement.
11.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
11.9 Counterparts. This Agreement and any documents executed in
connection herewith may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
11.10 Pronouns. All pronouns used herein shall be deemed to refer to
the masculine, feminine or neuter gender as the context requires.
11.11 Remedies Cumulative. All rights and remedies granted to the
Partnership or to any Partner hereunder shall be cumulative with, and not in
derogation of or exclusive of, any rights and remedies which may be available by
operation of law or otherwise.
11.12 Further Assurances. Each of the parties hereto agrees to execute
and deliver such instruments, and to take such other actions, as shall be
necessary or appropriate in connection with the consummation of the transactions
contemplated hereby or the operation of the Partnership.
11.13 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to any other Person or circumstance shall not be affected
thereby and shall be enforced to the fullest extent permitted by law.
27
<PAGE>
IN WITNESS WHEREOF, the Partners have hereunto set their hands and
seals as of the day and year first above written.
GENERAL PARTNER:
RANKIN MANAGEMENT, INC.
By: /s/ Alfred M. Rankin, Jr.
Witness Name: Alfred M. Rankin, Jr.
Title: President
Witness
/s/ Carmen D. Ayala and /s/ Roger F. Rankin
Witness Name: Roger F. Rankin
Title: Secretary
/s/ Bobbi Lee Buyers
Witness
28
<PAGE>
{Limited Partner Signature page for Limited Partnership Agreement
for Rankin Associates II, L.P.}
NATIONAL CITY BANK, as Trustee
under the Agreement dated September
11, 1973, as supplemented, amended
and restated, with Roger F. Rankin,
creating a trust for the benefit of
such individual
Witness /s/ Tracey L. Kastelic By: /s/ Leigh H. Carter, VP
Name: Leigh H. Carter
Title: Vice President
Witness /s/ Mark P. Malloy
Witness /s/ Tracey L. Kastelic and /s/ Stephanie G. Lowe, AVP
Name: Stephanie G. Lowe
Title: Assistant Vice President
Witness /s/ Mark P. Malloy Address: 1900 East Ninth Street
Cleveland, OH 44114
29
<PAGE>
NATIONAL CITY BANK, as Trustee
under the Agreement dated December
29, 1967, as supplemented, amended
and restated, with Thomas T.
Rankin, creating a trust for the
benefit of such individual
Witness /s/ Tracey S. Kastelic By: /s/ Leigh H. Carter, VP
Name: Leigh H. Carter
Title: Vice President
Witness /s/ Mark P. Malloy
Witness /s/ Tracey S. Kastelic and /s/ Stephanie G. Lowe, AVP
Name: Stephanie G. Lowe
Title: Assistant Vice President
Witness /s/ Mark P. Malloy
THOMAS T. RANKIN, as Trustee under
the Agreement dated December 29,
1967, as supplemented, amended and
restated, with Thomas T. Rankin,
creating a trust for the benefit of
such individual
Witness /s/ Thomas T. Rankin
Thomas T. Rankin
Witness Address: 1900 East Ninth Street
Cleveland, OH 44114
30
<PAGE>
NATIONAL CITY BANK, as Trustee
under the Agreement dated June 22,
1971, as supplemented, amended and
restated, with Claiborne R. Rankin,
creating a trust for the benefit of
such individual
Witness /s/ Tracey L. Kastelic By: /s/ Leigh H. Carter, VP
Name: Leigh H. Carter
Title: Vice President
Witness /s/ Mark P. Malloy
Witness /s/ Tracey L. Kastelic and /s/ Stephanie G. Lowe, AVP
Name: Stephanie G. Lowe
Title: Assistant Vice President
Witness /s/ Mark P. Malloy Address: 1900 East Ninth Street
Cleveland, OH 44114
31
<PAGE>
NATIONAL CITY BANK, as Trustee
under the Agreement dated July 12,
1967, as supplemented, amended and
restated, with Clara T. Rankin,
creating a trust for the benefit of
such individual
Witness /s/ Tracey L. Kastelic By: /s/ Leigh H. Carter, VP
Name: Leigh H. Carter
Title: Vice President
Witness /s/ Mark P. Malloy
Witness /s/ Tracey L. Kastelic and /s/ Stephanie G. Lowe, AVP
Name: Stephanie G. Lowe
Title: Assistant Vice President
Witness /s/ Mark P. Malloy
ALFRED M. RANKIN, JR., as Trustee
under the Agreement dated July 12,
1967, as supplemented, amended and
restated, with Clara T. Rankin,
creating a trust for the benefit of
such individual
Witness /s/ Alfred M. Rankin, Jr.
Alfred M. Rankin, Jr.
Witness Address: 1900 East Ninth Street
Cleveland, OH 44114
32
<PAGE>
NATIONAL CITY BANK, as Trustee
under the Agreement dated August
30, 1967, as supplemented, amended
and restated, with Alfred M.
Rankin, Jr. creating a trust for
the benefit of such individual
Witness /s/ Tracey L. Kastelic By: /s/ Leigh H. Carter, VP
Name: Leigh H. Carter
Title: Vice President
Witness /s/ Mark P. Malloy
Witness /s/ Tracey L. Kastelic and /s/ Stephanie G. Lowe, AVP
Name: Stephanie G. Lowe
Title: Assistant Vice President
Witness /s/ Mark P. Malloy Address: 1900 East Ninth Street
Cleveland, OH 44114
33
<PAGE>
NATIONAL CITY BANK, as Trustee
under the Agreement dated August
12, 1974, as supplemented, amended
and restated, with Bruce T. Rankin
creating a trust for the benefit of
such individual
Witness /s/ Tracey L. Kastelic By:/s/ Leigh H. Carter, VP
Name: Leigh H. Carter
Title: Vice President
Witness /s/ Mark P. Malloy
Witness /s/ Tracey L. Kastelic and /s/ Stephanie G. Lowe, AVP
Name: Stephanie G. Lowe
Title: Assistant Vice President
Witness /s/ Mark P. Malloy Address: 1900 East Ninth Street
Cleveland, OH 44114
34
<PAGE>
SCHEDULE A
(Original Subscriptions)
PARTNERS / CAPITAL CONTRIBUTIONS
Name CLASS A SHARES CONTRIBUTED Interest
GENERAL PARTNER(S)
Rankin Management, Inc.
(1) Rankin Management Lot 1 2,000 Shares 0.27089442567
(2) Rankin Management Lot 2 2,000 Shares 0.27089442567
(3) Rankin Management Lot 3 2,000 Shares 0.27089442567
(4) Rankin Management Lot 4 2,000 Shares 0.27089442567
Total for Rankin Management, Inc.: 8,000 Class A Shares 1.08357770268%
LIMITED PARTNERS
Clara Taplin Rankin
(1) Clara T. Rankin Lot 1 8,600 Shares 1.164846030381
(2) Clara T. Rankin Lot 2 10,040 Shares 1.359890016863
(3) Clara T. Rankin Lot 3 2,000 Shares 0.27089442567
(4) Clara T. Rankin Lot 4 945 Shares 0.1279976161291
(5) Clara T. Rankin Lot 5 22,880 Shares 3.099032229664
(6) Clara T. Rankin Lot 6 120 Shares 0.0162536655402
(7) Clara T. Rankin Lot 7 22,880 Shares 3.099032229664
(8) Clara T. Rankin Lot 8 11,520 Shares 1.560351891859
(9) Clara T. Rankin Lot 9 35,500 Shares 4.808376055642
(10) Clara T. Rankin Lot 10 23,800 Shares 3.223643665472
(11) Clara T. Rankin Lot 11 323,021 Shares 43.75229413717
(12) Clara T. Rankin Lot 12 33,307 Shares 4.511340317895
(13) Clara T. Rankin Lot 13 10,000 Shares 1.35447212835
(14) Clara T. Rankin Lot 14 56,750 Shares 7.686629328385
Total for Clara Taplin Rankin 561,363 Class A Shares 76.03505373868%
Bruce T. Rankin
(1) B.T. Rankin Lot 1 640 Shares 0.08668621621439
(2) B.T. Rankin Lot 2 800 Shares 0.108357770268
(3) B.T. Rankin Lot 3 140 Shares 0.0189626097969
(4) B.T. Rankin Lot 4 1,200 Shares 0.162536655402
(5) B.T. Rankin Lot 5 2,400 Shares 0.3250733108039
(6) B.T. Rankin Lot 6 1,800 Shares 0.243804983103
(7) B.T. Rankin Lot 7 600 Shares 0.08126832770099
(8) B.T. Rankin Lot 8 1,200 Shares 0.162536655402
(9) B.T. Rankin Lot 9 2,600 Shares 0.3521627533709
(10) B.T. Rankin Lot 10 2,660 Shares 0.360289586141
(11) B.T. Rankin Lot 11 360 Shares 0.04876099662059
(12) B.T. Rankin Lot 12 3,360 Shares 0.4551026351255
(13) B.T. Rankin Lot 13 2,000 Shares 0.27089442567
(14) B.T. Rankin Lot 14 1,600 Shares 0.216715540536
(15) B.T. Rankin Lot 15 200 Shares 0.027089442567
(16) B.T. Rankin Lot 16 2,000 Shares 0.27089442567
(17) B.T. Rankin Lot 17 1,140 Shares 0.1544098226319
(18) B.T. Rankin Lot 18 1,600 Shares 0.216715540536
(19) B.T. Rankin Lot 19 2,600 Shares 0.3521627533709
(20) B.T. Rankin Lot 20 326 Shares 0.0441557913842
(21) B.T. Rankin Lot 21 1,000 Shares 0.135447212835
(22) B.T. Rankin Lot 22 8,400 Shares 1.137756587814
(23) B.T. Rankin Lot 23 500 Shares 0.06772360641749
(24) B.T. Rankin Lot 24 1,140 Shares 0.1544098226319
(25) B.T. Rankin Lot 25 24,000 Shares 3.250733108039
(26) B.T. Rankin Lot 26 200 Shares 0.027089442567
(27) B.T. Rankin Lot 27 1,100 Shares 0.1489919341185
(28) B.T. Rankin Lot 28 15,700 Shares 2.126521241509
(29) B.T. Rankin Lot 29 270 Shares 0.03657074746544
(30) B.T. Rankin Lot 30 8,800 Shares 1.191935472948
(31) B.T. Rankin Lot 31 24,000 Shares 3.250733108039
(32) B.T. Rankin Lot 32 415 Shares 0.05621059332652
(33) B.T. Rankin Lot 33 380 Shares 0.05146994087729
(34) B.T. Rankin Lot 34 375 Shares 0.05079270481312
(35) B.T. Rankin Lot 35 8,200 Shares 1.110667145247
(36) B.T. Rankin Lot 36 200 Shares 0.027089442567
(37) B.T. Rankin Lot 37 200 Shares 0.027089442567
(38) B.T. Rankin Lot 38 15 Shares 0.002031708192525
(39) B.T. Rankin Lot 39 83 Shares 0.0112421186653
(40) B.T. Rankin Lot 40 107 Shares 0.01449285177334
(41) B.T. Rankin Lot 41 3,000 Shares 0.4063416385049
(42) B.T. Rankin Lot 42 1,370.4 Shares 0.1856168604691
(43) B.T. Rankin Lot 43 8,200 Shares 1.110667145247
(44) B.T. Rankin Lot 44 50.6 Shares 0.00685362896945
Total for Bruce T. Rankin: 136,932 Class A Shares 18.54705774792%
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Alfred M. Rankin, Jr. Lot 1 8,000 Class A Shares 1.08357770268%
Claiborne R. Rankin Lot 1 8,000 Class A Shares 1.08357770268%
Roger F. Rankin Lot 1 8,000 Class A Shares 1.08357770268%
Thomas T. Rankin
(1) Thomas T. Rankin Lot 1 2,000 Shares 0.27089442567
(2) Thomas T. Rankin Lot 2 6,000 Shares 0.8126832770099
Total for Thomas T. Rankin: 8,000 Class A Shares 1.08357770268%
TOTALS 738,295 Class A Shares 100%
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SCHEDULE B
PARTNER ADDRESSES
Street Address/
Name P.O. Box City State Zip Code
GENERAL PARTNER(S)
Rankin Management, Inc. Suite 300 Mayfield Heights OH 44124-4017
5875 Landerbrook Drive
LIMITED PARTNERS
Clara Taplin Rankin 3151 River Road Chagrin Falls OH 44022
Alfred M. Rankin, Jr. 5875 Landerbrook Drive Mayfield Heights OH 44124-4017
Bruce T. Rankin Suite 300 Mayfield Heights OH 44124-4017
5875 Landerbrook Drive
Claiborne R. Rankin 36779 Cedar Road Gates Mills OH 44040
Roger F. Rankin P.O. Box 550 Gates Mills OH 44040
1449 Carpenter Road
Thomas T. Rankin 214 Banbury Road Richmond VA 23221
