UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 22, 2006
NACCO INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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| 1-9172
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34-1505819 |
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| (Commission File Number)
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(IRS Employer Identification Number) |
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| 5875 Landerbrook Drive, Cleveland, OH
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44124-4017 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
(440) 449-9600
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On March 22, 2006, NACCO Industries, Inc.’s (“NACCO”) wholly owned subsidiary, NACCO Materials
Handling Group, Inc. (“NMHG”), entered into a term loan agreement (the “Term Loan Agreement”) with
the financial institutions party thereto, Citicorp North America, Inc., as Administrative Agent,
and Citigroup Global Markets Inc., as Sole Lead Arranger, Sole Bookrunner and Syndication Agent,
that provides for term loans up to an aggregate principal amount of $225 million. The proceeds of
the loans under the Term Loan Agreement, together with available cash, are intended to be used to
redeem in full NMHG Holding Co.’s (the “Company”) outstanding 10% Senior Notes due 2009 (the
“Senior Notes”), which have an aggregate principal amount of $250 million. The Senior Notes are
redeemable at the Company’s option on and after May 15, 2006 in accordance with the terms and
conditions of the Indenture, dated May 9, 2002, between the Company and U.S. Bank National
Association, as trustee. The loans under the Term Loan Agreement are available to be drawn on any
day between May 15, 2006 and May 31, 2006. If the Company has not drawn the proceeds of the term
loans between those dates, the commitments under the Term Loan Agreement will terminate. The term
loans will amortize in an amount equal to 1% per year for the first six years, with the remaining
balance to be paid in four equal installments in the seventh year. The aggregate amount of term
loans must be repaid in full on or before March 21, 2013. Prior to the final maturity date, the
term loans will be subject to mandatory prepayments from the proceeds of the issuance of certain
indebtedness and certain asset sales.
The obligations of NMHG under the Term Loan Agreement are guaranteed by the Company and each
of its domestic subsidiaries other than NMHG. The obligations of NMHG and the guarantors under the
Term Loan Agreement are secured by a first lien on all of the machinery, equipment and real
property owned by NMHG and each guarantor and a second lien on all of the collateral securing the
obligations of the Company under its revolving credit facility. The lenders under the Term Loan
Agreement and the lenders under the Company’s revolving credit facility have entered into an
intercreditor arrangement governing the rights of each of them with respect to the collateral
securing their respective obligations.
During the draw period, NMHG is required to pay a commitment fee of 0.25% per annum on the
undrawn term loan commitment. Once drawn, the term loans will bear interest at a floating rate
which, at NMHG’s option, will be either the London interbank offered rate plus a margin of 2.00% or
the floating rate as set forth in the Term Loan Agreement plus a margin of 1.00%. If NMHG’s
leverage ratio, as calculated in accordance with the Term Loan Agreement, is reduced to 1.50 to
1.00, the margins on the London interbank offered rate and the floating rate will be reduced to
1.75% and 0.75%, respectively.
The Term Loan Agreement contains restrictive covenants substantially similar to those set
forth in the Company’s revolving credit facility which, among other things, limits the amount of
dividends that may be declared and paid to NACCO. The Term Loan Agreement also requires the
Company to meet certain financial tests, including, but not limited to, maximum capital
expenditures, maximum leverage ratio and minimum fixed charge coverage ratio tests.
The Term Loan Agreement contains customary events of default for facilities of this type,
including failure to pay principal or interest, breach of covenants, breach of representations and
warranties, cross-default to other debt, insolvency, judgment default, ERISA events, material
adverse change and change of control. Upon the occurrence and continuance of an event of default,
the lenders have the right to accelerate repayment of the term loans and exercise their remedies
with respect to the collateral.