EX-10.5



 





Exhibit 10.5




THE KITCHEN COLLECTION, INC.

DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES

(AS AMENDED AND RESTATED EFFECTIVE AS OF DECEMBER 1, 2007)





 









 








THE KITCHEN COLLECTION, INC.

DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES




          The Kitchen Collection, Inc. (the “Company”) does hereby adopt this amendment and restatement
of The Kitchen Collection, Inc. Deferred Compensation Plan for Management Employees, effective as
of December 1, 2007.




ARTICLE I

PREFACE




     Section 1.1 Effective Date. The effective date of this restatement of the Plan is
December 1, 2007.



     Section 1.2 Purpose of the Plan. For periods prior to December 31, 2007, the purpose
of this Plan was to (a) allow certain Employees to continue to defer the receipt of certain frozen
long-term incentive compensation award payments, and (b) provide for certain Employees the
benefits they would have received under the Savings Plan but for the limitations imposed under Code
Sections 402(g), 401(a)(17), 401(k)(3), 401(m) and 415.



     Section 1.3 Governing Law. This Plan shall be regulated, construed and administered
under the laws of the State of Ohio, except when preempted by federal law.



     Section 1.4 Gender and Number. For purposes of interpreting the provisions of this
Plan, the masculine gender shall be deemed to include the feminine, the feminine gender shall be
deemed to include the masculine, and the singular shall include the plural unless otherwise clearly
required by the context.



     Section 1.5 Application of Code Section 409A.



          (a) As a result of the addition of the cash-out provisions to this Plan in accordance with the
Code Section 409A transitional rules, none of the Sub-Accounts are “grandfathered” under Code
Section 409A. Notwithstanding the foregoing, for administrative and recordkeeping purposes, the
following Sub-Accounts have been classified as the “Pre-2005 Sub-Accounts”: (i) the LTIP Deferral
Sub-Account; (ii) amounts credited to the Excess 401(k) Sub-Account for periods prior to January 1,
2005 (the “Pre-2005 Excess 401(k) Sub-Account”); (iii) amounts credited to the Excess Matching
Sub-Account for periods prior to January 1, 2005 (the “Pre-2005 Excess Matching Sub-Account”); and
(iv) amounts credited to the Excess Profit Sharing Sub-Account for Pre-2005 Plan Years (including
the amount that was credited in 2005 for the 2004 Plan Year) (the “Pre-2005 Excess Profit Sharing
Sub-Account”).




          (b) The following Sub-Accounts have been classified as the “Post-2004 Sub-Accounts”: (i)
amounts credited to the Excess 401(k) Sub-Account for periods on or after January 1, 2005 and on or
before December 31, 2007 (the “Post-2004 Excess 401(k) Sub-Account”); (ii) amounts credited to the Excess Matching Sub-Account for periods on or after
January 1, 2005 and on or before December 31, 2007 (the “Post-2004 Excess Matching Sub-Account”);
and (iii) amounts credited to the Excess Profit Sharing Sub-Account for the 2005 through 2007 Plan
Years (the “Post-2004 Excess Profit Sharing Sub-Account”).




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          (c) It is intended that the compensation arrangements under the Plan be in full compliance
with the requirements of Code Section 409A. The Plan shall be interpreted and administered in a
manner to give effect to such intent. Notwithstanding the foregoing, the Company does not
guarantee to Participants or Beneficiaries any particular tax result with respect to any amounts
deferred or any payments provided hereunder, including tax treatment under Code Section 409A.




     Section 1.6 Benefit Freeze/Plan Termination. All Excess Retirement Benefits under the
Plan (other than interest credits) shall be frozen as of December 31, 2007. The Plan shall
automatically terminate in 2009 after the last Participant receives the full payment of his
remaining Account balance hereunder.



ARTICLE II

DEFINITIONS




     Except as otherwise provided in this Plan, terms defined in the Savings Plan as they may be
amended from time to time shall have the same meanings when used herein, unless a different meaning
is clearly required by the context of this Plan. In addition, the following words and phrases
shall have the following respective meanings for purposes of this Plan.



     Section 2.1 Account shall mean the record maintained in accordance with Section 3.5 by
the Company as the sum of the Participant’s Excess Retirement Benefits hereunder. The
Participant’s Account shall be further divided into the Sub-Accounts described in Section 1.5
hereof.



     Section 2.2 Beneficiary shall mean the person or persons designated by the Participant
as his Beneficiary under this Plan, in accordance with the provisions of Article VII hereof.



     Section 2.3 Bonus shall mean any bonus under The Kitchen Collection, Inc. Annual
Incentive Compensation Plan that would be taken into account as Compensation under the Savings
Plan, which is earned with respect to services performed by a Participant during a Plan Year
(whether or not such Bonus is actually paid to the Participant during such Plan Year). An election
to defer a Bonus under this Plan must be made before the period in which the services are performed
which gives rise to such Bonus.



     Section 2.4 Change in Control shall mean the occurrence of an event described in
Appendix A hereto.



     Section 2.5 Company shall mean The Kitchen Collection, Inc. or any entity that
succeeds The Kitchen Collection, Inc. by merger, reorganization or otherwise. Effective January 1,
2008 (or such other date specified in the applicable certificate of merger), the Company shall be
known as The Kitchen Collection, LLC.



     Section 2.6 Compensation shall have the same meaning as under the Savings Plan, except
that Compensation shall be deemed to include (a) the amount of compensation deferred by the
Participant under this Plan and (b) amounts in excess of the limitation imposed by Code



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Section 401(a)(17). Notwithstanding the foregoing, the timing and crediting of Bonuses hereunder shall be
as specified in Section 3.1.




     Section 2.7 Excess Retirement Benefit or Benefit shall mean an LTIP Deferral Benefit,
an Excess 401(k) Benefit, an Excess Matching Benefit or an Excess Profit Sharing Benefit (all as
described in Article III) which is payable to or with respect to a Participant under this Plan.



     Section 2.8 Fixed Income Fund shall mean the Vanguard Retirement Savings Trust IV
investment fund under the Savings Plan or any equivalent fixed income fund thereunder which is
designated by the NACCO Industries, Inc. Retirement Funds Investment Committee as the successor
thereto.



     Section 2.9 Key Employee. Effective April 1, 2008, a Participant shall be classified
as a Key Employee if he meets the following requirements:




	 	•	 	The Participant, with respect to the Participant’s relationship with the
Company and the Controlled Group Members, met the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code (without regard to Section
416(i)(5)) and the Treasury Regulations issued thereunder at any time during
the 12-month period ending on the most recent Identification Date (defined
below) and his Termination of Employment occurs during the 12-month period
beginning on the most recent Effective Date (defined below). When applying
the provisions of Code Section 416(i) for this purpose: (i) the definition
of “compensation” (A) shall be the definition contained in Treasury
Regulation Section 1.415(c)-2(d)(4) (i.e., the wages and other compensation
for which the Employer is required to furnish the Employee with a Form W-2
under Code Sections 6041, 6051 and 6052, plus amounts deferred at the
election of the Employee under Code Sections 125, 132(f)(4) or 401(k)) and
(B) shall apply the rule of Treasury Regulation Section 1.415-2(g)(5)(ii)
which excludes compensation of non-resident alien employees and (ii) the
number of officers described in Code Section 416(i)(1)(A)(i) shall be 60
instead of 50.
	 
	 	•	 	The Identification Date for Key Employees is each December 31st
and the Effective Date is the following April 1st. As such, any
Employee who is classified as a Key Employee as of December 31st
of a particular Plan Year shall maintain such classification for the 12-month
period commencing on the following April 1st.
	 
	 	•	 	Notwithstanding the foregoing, a Participant shall not be classified as a
Key Employee unless the stock of NACCO Industries, Inc. (or a related entity)
is publicly traded on an established securities market or otherwise on the
date of the Participant’s Termination of Employment.





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     Section 2.10 Participant.



          (a) For purposes of Sections 3.1 through 3.3 of the Plan, the term Participant shall mean a
participant in the Savings Plan (i) who is unable to make all of the Salary Deferral Contributions
that he has elected to make to the Savings Plan, or unable to receive the maximum amount of
Matching Company Contributions under the Savings Plan, or unable to receive the maximum amount of
Profit Sharing Contributions under the Savings Plan because of the limitations imposed under
Section 402(g), 401(a)(17), 401(k)(3), 401(m) or 415 of the Code or as a result of his deferral of
Compensation under this Plan; (ii) whose total compensation from the Controlled Group for the year
in which the deferral election is required is at least $115,000; and (iii) who is designated as a
Participant in this Plan by the President of the Company.




          (b) The term “Participant” shall also include any other person who has an Account balance
hereunder or who was defined as a participant in a prior version of the Plan.




     Section 2.11 Plan shall mean The Kitchen Collection, Inc. Deferred Compensation Plan
for Management Employees, as herein set forth or as duly amended. . Effective January 1, 2008 (or
such other date specified in the applicable certificate of merger), the Plan shall be renamed as
The Kitchen Collection, LLC Deferred Compensation Plan for Management Employees.



     Section 2.12 Plan Administrator shall mean the Administrative Committee appointed
under the Savings Plan.



     Section 2.13 Plan Year shall mean the calendar year.



     Section 2.14 ROTCE. For 2007 and prior Plan Years, the term ROTCE shall mean the
Company’s  consolidated return on total capital employed, as determined by the Company
for purposes of granting awards under the Company’s long-term incentive compensation plan for a
particular Plan Year.



     Section 2.15 Savings Plan shall mean The Kitchen Collection, Inc. Retirement Savings
Plan (or any successor plan).



     Section 2.16 Termination of Employment shall mean, with respect to any Participant’s
relationship with the Company, a separation from service as defined in Code Section 409A (and the
regulations or other guidance issued thereunder).



     Section 2.17 Valuation Date shall mean the last business day of each Plan Year and any
other date chosen by the Plan Administrator.



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ARTICLE III

EXCESS RETIREMENT BENEFITS — CALCULATION OF AMOUNT




     Section 3.1 Basic and Additional Excess 401(k) Benefits.



          (a) Amount of Excess 401(k) Benefits. Each Participant may, prior to each December
31st, by completing an approved deferral election form, direct the Company to reduce his
Compensation for the next Plan Year, by the difference between (i) a certain percentage, in 1%
increments, with a maximum of 25%, of his Compensation for the Plan Year, and (ii) the maximum
Salary Deferral Contributions actually permitted to be contributed for him to the Savings Plan by
reason of the application of the limitations under Sections 402(g), 401(a)(17), 401(k)(3) and 415
of the Code (which amounts shall be referred to as the “Excess 401(k) Benefits”). Notwithstanding
the foregoing, a Participant’s direction to reduce a Bonus earned during a particular Plan Year
shall be made no later than December 31st of the Plan Year preceding the Plan Year in
which the Bonus commences to be earned. The last Excess 401(k) Benefits that are credited to the
Excess 401(k) Sub-Account shall be for the 2007 Plan Year; provided, however, that the bonus that
was earned in 2007 and will be paid in 2008 shall not be credited to the Excess 401(k) Sub-Account
hereunder, but shall be credited to an account under the Company’s Excess Retirement Plan that
becomes effective January 1, 2008.




          (b) Classification of Excess 401(k) Benefits. The Excess 401(k) Benefits for a
particular Plan Year shall be calculated monthly and shall be further divided into the “Basic
Excess 401(k) Benefits” and the “Additional Excess 401(k) Benefits” as follows:





	 	(i)	 	The Basic Excess 401(k) Benefits shall be determined by
multiplying each Excess 401(k) Benefit by a fraction, the numerator of which is
the lesser of the percentage of Compensation elected to be deferred in the
deferral election form for such Plan Year or 7% and the denominator of which is
the percentage of Compensation elected to be deferred; and
	 
	 	(ii)	 	The Additional Excess 401(k) Benefits (if any) shall be
determined by multiplying such Excess 401(k) Benefit by a fraction, the
numerator of which is the excess (if any) of (1) the percentage of
Compensation elected to be deferred in the deferral election form for such Plan
Year over (2) 7%, and the denominator of which is the percentage of
Compensation elected to be deferred.




The Basic Excess 401(k) Benefits shall be credited to the Basic Excess 401(k) Sub-Account under
this Plan and the Additional Excess 401(k) Benefits shall be credited to the Additional Excess
401(k) Sub-Account hereunder. The Basic and Additional Excess 401(k) Sub-Accounts shall be
referred to collectively as the “Excess 401(k) Sub-Account.”




          (c)  Consequences of Deferral Election. Any direction by a Participant to defer
Compensation under Subsection (a) shall be effective with respect to Compensation otherwise
payable to the Participant for the Plan Year for which the deferral election form is
effective, and the Participant shall not be eligible to receive such Compensation. Instead, such
amounts shall be credited to the Participant’s Basic and Additional Excess 401(k) Sub-Accounts (as
applicable)



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hereunder. Any such direction shall be irrevocable with respect to Compensation earned
for such Plan Year, but shall have no effect on Compensation that is earned in subsequent Plan
Years. A new deferral election will be required for each Plan Year; provided, however, that no
new deferral elections shall be permitted under this Plan for Plan Years beginning on or after
January 1, 2008.




     Section 3.2 Excess Matching Benefits. A Participant shall have credited to his
Excess Matching Sub-Account an amount equal to the Matching Company Contributions attributable to
his Basic Excess 401(k) Benefits that he is prevented from receiving under the Savings Plan because
of the limitations imposed under Code Sections 402(g), 401(a)(17), 401(k)(3), 401(m) and 415 of the
Code ( the “Excess Matching Benefits”). The last Excess Matching Benefits that are credited to the
Excess Matching Sub-Account shall be those that are credited to the Sub-Account as of December 31,
2007.



     Section 3.3 Excess Profit Sharing Benefits. At the time described in Section 3.5(d),
a Participant shall have credited to his Excess Profit Sharing Sub-Account an amount equal to the
excess, of any, of (i) the Profit Sharing Contribution which would have been made to the Savings
Plan if such Plan did not contain the limitations imposed under Code Sections 401(a)(17) and 415
and the term “Compensation” (as defined in Section 2.6 of this Plan) were used for purposes of
determining the amount of Profit Sharing Contributions under the Savings Plan, over (ii) the amount
of Profit Sharing Contributions which are actually made to the Savings Plan on behalf of the
Participant for such Plan Year (the “Excess Profit Sharing Benefits”). The last Excess Profit
Sharing Benefits that are credited to the Excess Profit Sharing Sub-Account shall be for the 2007
Plan Year.



     Section 3.4 Frozen LTIP Deferral Benefits. The Accounts of certain Participants
contain amounts that are allocated to the “LTIP Deferral Sub-Account” (the “LTIP Deferral
Benefits”), that were frozen as of September 30, 2007.



     Section 3.5 Participant’s Accounts. The Company shall establish and maintain on its
books an Account for each Participant which shall contain the following entries:



          (a) Credits to a Basic Excess 401(k) Sub-Account for the Basic Excess 401(k) Benefits
described in Section 3.1(b)(i), which shall be credited to the Sub-Account when a Participant is
prevented from making a Salary Deferral Contribution under the Savings Plan.




          (b) Credits to an Excess Matching Sub-Account for the Excess Matching Benefits described in
Section 3.2, which shall be credited to the Sub-Account when a Participant is prevented from
receiving Matching Company Contributions under the Savings Plan.




          (c) Credits to an Additional Excess 401(k) Sub-Account for the Additional Excess 401(k)
Benefits described in Section 3.1(b)(ii), which shall be credited to the Sub-Account when a
Participant is prevented from making a Salary Deferral Contribution under the Savings Plan.



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          (d) Credits to an Excess Profit Sharing Sub-Account for the Excess Profit Sharing Benefits
described in Section 3.3, which shall be credited to the Sub-Account at the time the Profit Sharing
Contributions are otherwise credited to the Participant’s account under the Savings Plan.




          (e) Credits to the LTIP Deferral Sub-Account for the LTIP Deferral Benefits described in
Section 3.4, which were credited to the Sub-Account at the time specified in the prior versions of
the Plan.




          (f) Credits to all Sub-Accounts for the earnings described in Article IV, which shall continue
until such Sub-Accounts have been distributed to the Participant or his Beneficiary.




          (g) Debits for any distributions made from the Sub-Accounts.




          (h) The Company shall make the above-described credits and debits to the Participant’s
Pre-2005 Sub-Accounts or the Post-2004 Sub-Accounts, as applicable, in accordance with Code Section
409A.




ARTICLE IV

EARNINGS




     Section 4.1 Earnings for Periods Before January 1, 2008.



          (a) Basic 401(k) and Matching Sub-Accounts and Excess Profit Sharing Sub-Account.
Except as otherwise described in the Plan, for periods before January 1, 2008, at the end of each
calendar month during a Plan Year, the Basic Excess 401(k) Sub-Account, Excess Matching
Sub-Account and Excess Profit Sharing Sub-Account of each Participant shall be credited with
earnings in an amount determined by multiplying such Participant’s average Sub-Account balance
during such month by the blended rate earned during such month by the Fixed Income Fund.
Notwithstanding the foregoing, in the event that the ROTCE determined for such Plan Year exceeds
the rate credited to the Participant’s Sub-Accounts under the preceding sentence, the Participant’s
Sub-Accounts shall retroactively be credited with the difference between (i) the amount determined
under the preceding sentence, and (ii) the amount determined by multiplying such Participant’s
average Sub-Account balance during each month of such Plan Year by the ROTCE determined for such
Plan Year, compounded monthly. This ROTCE calculation shall be made during the month in which the
Participant terminates employment and shall be based on the year-to-date ROTCE for the month ending prior to the date the
Participant terminated employment, as calculated by the Company. For any subsequent month, such
ROTCE calculation shall not apply. The Fixed Income Fund calculation described above for the month
in which the Participant receives a distribution from his Sub-Account shall be based on the blended
rate earned during the preceding month by the Fixed Income Fund.





 (b) Additional 401(k) Sub-Account. Except as other wise described in the
Plan, for periods prior to January 1, 2008, at the end of each calendar month during a Plan
Year, the Additional Excess 401(k) Sub-Account of each Participant shall be credited with



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earnings in an amount determined by multiplying such Participant’s average Sub-Account
balance during such month by the blended rate earned by the Fixed Income Fund. The earnings
calculation for the month in which the Participant receives a distribution from his
Sub-Account will be based on the blended rate earned during the preceding month by the Fixed
Income Fund.




(c) LTIP Deferral Sub-Account. Except as otherwise described in the Plan, for
periods prior to January 1, 2008, at the end of each calendar month during a Plan Year, the
LTIP Deferral Sub-Account of each Participant shall be credited with an amount determined by
multiplying such Participant’s average Sub-Account balance during such month by the “10-Year
U.S. Treasury Yield” plus 2.0%. For purposes hereof, the 10-Year U.S. Treasury Yield shall
be the 10 year yield on US Treasury issues as listed in the Bond Market Data Bank for the
last day of the preceding calendar quarter as printed in the Wall Street Journal (or as
published on the Website for the Wall Street Journal). In the event that a yield is not
listed for a maturity exactly 10 years from the calendar quarter end, the next preceding
chronological treasury bond issue yield shall be used.



     Section 4.2 Earnings for Periods on or After January 1, 2008. Except as otherwise
described in the Plan, for periods on or after January 1, 2008, at the end of each calendar month
during a Plan Year, all Sub-Accounts of all Participants shall be credited with an amount
determined by multiplying such Participant’s average Sub-Account balance during such month by the
blended rate earned during the prior month by the Fixed Income Fund. No earnings shall be credited
for the month in which the Participant receives a distribution from his Sub-Account.



     Section 4.3 Changes in/Limitations on Earnings Assumptions.



          (a) The Company (with the approval or ratification of the NACCO Industries, Inc. Benefits
Committee (the “Benefits Committee”)) may change the earnings rate credited on Accounts hereunder
at any time.




          (b) Notwithstanding any provision of the Plan to the contrary, in no event will earnings on
Accounts for a Plan Year be credited at a rate which exceeds 14%.




ARTICLE V

VESTING




     Section 5.1 Vesting. All Participants shall be immediately 100% vested in all amounts
credited to their Account hereunder.



ARTICLE VI

 DISTRIBUTION OF BENEFITS TO PARTICIPANTS




     Section 6.1 Time and Form of Payment.



          (a) Prior Elections. All elections regarding the time and form of payment of all
Excess Retirement Benefits under prior Plan documents, including elections made by terminated
Participants, shall continue in effect through December 31, 2007 and shall be cancelled as of the
close of business on that date.




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          (b) Payment Rules for President.




          (i) The amounts allocated to the Account of the Participant who is the President of the
Company on December 31, 2007 shall automatically be paid in the form of two installment payments,
with the first installment payment being paid during the period from January 1, 2008 through April
30, 2008 and the second installment payment being paid during the period from January 1, 2009
through March 15, 2009. All installment payments under the Plan shall be based on the value of the
applicable Sub-Account on the Valuation Date immediately preceding the date such installment is to
be paid, with each installment being a fraction of such value in which the numerator is one and the
denominator is the total number of remaining installments to be paid. Installment payments under
the Plan will be classified as a single payment for purposes of Section 409A of the Code.




     (ii) Notwithstanding the foregoing, in the event of a Change in Control, all amounts
allocated to the Account of the Participant described in Clause (i) above shall be paid in the form
of a lump sum payment during the period that is thirty days prior to, or within two (2) business
days after, the date of the Change in Control, as determined by the Plan Administrator.



     (c) Payment Rules for All other Participants. The amounts allocated to the Accounts
of all other Participants shall automatically be paid in a single lump sum payment during the
period from January 1, 2008 through April 30, 2008.



     Section 6.2 Other Payment Rules and Restrictions.




	(a)	 	Payments Violating Applicable Law.  Notwithstanding any provision of the Plan
to the contrary, the payment of all or any portion of the amounts payable hereunder will be
deferred to the extent that the Company reasonably anticipates that the making of such
payment would violate Federal securities laws or other applicable law (provided that the
making of a payment that would cause income taxes or penalties under the Code shall not be
treated as a violation of applicable law). The deferred amount shall become payable at the
earliest date at which the Company reasonably anticipates that making the payment will not
cause such violation.
	 
	(b)	 	Delayed Payments Due to Solvency Issues. Notwithstanding any provision of the
Plan to the contrary, the Company shall not be required to make any payment hereunder to
any Participant or Beneficiary if the making of the payment would jeopardize the ability
of the Company to continue as a going concern; provided that any missed payment is made
during the first calendar year in which the funds of the Company are sufficient to make the
payment without jeopardizing the going concern status of the Company.
	 
	(c)	 	Key Employees. Notwithstanding any provision of the Plan to the contrary,
distributions to Key Employees made on account of a Termination of Employment may not be
made before the 1st day of the seventh month following such Termination of
Employment (or, if earlier, the date of death) except for payments made on account of (i) a
QDRO (as specified in Section 8.5) or (ii) a conflict of interest or the payment of FICA taxes (as
specified in Subsection (e) below). Any amounts that are otherwise payable to the Key
Employee during the 6-month period following his Termination of Employment shall be





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	 	 	accumulated and paid in a lump sum make-up payment within 10 days following the
1st day of the 7th month following Termination of Employment.
	 
	(d)	 	Time of Payment/Processing. Except as described in Sections 6.1(b)(ii) or
Section 6.2(c), all payments under the Plan shall be made on, or within 90 days of, the
specified payment date.
	 
	(e)	 	Acceleration of Payments. Notwithstanding any provision of the Plan to the
contrary, to the extent permitted under Code Section 409A and the Treasury Regulations
issued thereunder, payments of Sub-Accounts hereunder may be accelerated (i) to the extent
necessary to comply with federal, state, local or foreign ethics or conflicts of interest
laws or agreements or (ii) to the extent necessary to pay the FICA taxes imposed on
benefits hereunder under Code Section 3101, and the income withholding taxes related
thereto. Payments may also be accelerated if the Plan (or a portion thereof) fails to
satisfy the requirements of Code Section 409A; provided that the amount of such payment may
not exceed the amount required to be included as income as a result of the failure to
comply with Code Section 409A
	 
	(f)	 	Withholding/Taxes. The Company shall withhold from any Excess Retirement
Benefits hereunder any amounts required to be withheld there from on account of any income,
employment or similar taxes by any governmental agency.





ARTICLE VII

BENEFICIARIES




     Section 7.1 Beneficiary Designations. A designation of a Beneficiary hereunder may be
made only by an instrument (in form acceptable to the Plan Administrator) signed by the Participant
and filed with the Plan Administrator prior to the Participant’s death. Separate Beneficiary
designations may be made for each Sub-Account under the Plan; provided that a single Beneficiary
must be designated for both the Excess 401(k) Sub-Account and the Excess Matching Sub-Account. In
the absence of such a designation and at any other time when there is no existing Beneficiary
designated hereunder, the Beneficiary of a Participant for his Excess Retirement Benefits shall be
his Beneficiary under the Savings Plan. A person designated by a Participant as his Beneficiary
who or which ceases to exist shall not be entitled to any part of any payment thereafter to be made
to the Participant’s Beneficiary unless the Participant’s designation specifically provided to the
contrary. If two or more persons designated as a Participant’s Beneficiary are in existence with
respect to a single Sub-Account, the amount of any payment to the Beneficiary under this Plan shall
be divided equally among such persons unless the Participant’s designation specifically provided to
the contrary. Any change in Beneficiary shall be made by giving written notice thereof to the Plan
Administrator and any change shall be effective only if received by the Plan Administrator prior to the death of the
Participant.



     Section 7.2 Distributions to Beneficiaries. Excess Retirement Benefits payable to a
Participant’s Beneficiary shall be equal to the balance in the applicable Sub-Account on the
Valuation Date preceding the date of the distribution of the Sub-Account to the Beneficiary. All
Excess Retirement Benefits that are credited to the Account of a Participant as of his date of



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death shall be payable to the Participant’s Beneficiary in accordance with the rules described in
Article VI.



ARTICLE VIII

MISCELLANEOUS




     Section 8.1 Liability of Company. Nothing in this Plan shall constitute the creation
of a trust or other fiduciary relationship between the Company and any Participant, Beneficiary or
any other person.



     Section 8.2 Limitation on Rights of Participants and Beneficiaries — No Lien. The
Plan is designed to be an unfunded, nonqualified plan. Nothing contained herein shall be deemed to
create a trust or lien in favor of any Participant or Beneficiary on any assets of the Company.
The Company shall have no obligation to purchase any assets that do not remain subject to the
claims of the creditors of the Company for use in connection with the Plan. No Participant or
Beneficiary or any other person shall have any preferred claim on, or any beneficial ownership
interest in, any assets of the Company prior to the time that such assets are paid to the
Participant or Beneficiary as provided herein. Each Participant and Beneficiary shall have the
status of a general unsecured creditor of the Company.



     Section 8.3 No Guarantee of Employment. Nothing in this Plan shall be construed as
guaranteeing future employment to Participants. A Participant continues to be an Employee of the
Company solely at the will of the Company subject to discharge at any time, with or without cause.



     Section 8.4 Payment to Guardian. If a Benefit payable hereunder is payable to a
minor, to a person declared incompetent or to a person incapable of handling the disposition of his
property, the Plan Administrator may direct payment of such Benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent or person. The
Plan Administrator may require such proof of incompetency, minority, incapacity or guardianship as
it may deem appropriate prior to distribution of the Benefit. Such distribution shall completely
discharge the Company from all liability with respect to such Benefit.



     Section 8.5 Assignment. No right or interest under this Plan of any Participant or
Beneficiary shall be assignable or transferable in any manner or be subject to alienation,
anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or
subject to the debts or liabilities of the Participant or Beneficiary. Notwithstanding the
foregoing, the Plan Administrator shall honor a qualified domestic relations order (“QDRO”)
from a state domestic relations court which requires the payment of part of all or a Participant’s
or Beneficiary’s Account under this Plan to an “alternate payee” as defined in Code Section
414(p).



     Section 8.6 Severability. If any provision of this Plan or the application thereof to
any circumstance(s) or person(s) is held to be invalid by a court of competent jurisdiction, the
remainder of the Plan and the application of such provision to other circumstances or persons shall
not be affected thereby.



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     Section 8.7 Effect on Other Benefits. Benefits payable to or with respect to a
Participant under the Savings Plan or any other Company-sponsored (qualified or nonqualified) plan,
if any, are in addition to those provided under this Plan.



     Section 8.8 Liability for Payment/Expenses. The Company shall be liable for the
payment of the Excess Retirement Benefits that are payable hereunder. Expenses of administering
the Plan shall be paid by the Company.



ARTICLE IX

ADMINISTRATION OF PLAN




     Section 9.1 Administration. (a) In general. The Plan shall be administered
by the Plan Administrator. The Plan Administrator shall have sole and absolute discretion to
interpret where necessary all provisions of the Plan (including, without limitation, by supplying
omissions from, correcting deficiencies in, or resolving inconsistencies or ambiguities in, the
language of the Plan), to make factual findings with respect to any issue arising under the Plan,
to determine the rights and status under the Plan of Participants, or other persons, to resolve
questions (including factual questions) or disputes arising under the Plan and to make any
determinations with respect to the benefits payable under the Plan and the persons entitled thereto
as may be necessary for the purposes of the Plan. Without limiting the generality of the
foregoing, the Plan Administrator is hereby granted the authority (i) to determine whether a
particular employee is a Participant, and (ii) to determine if a person is entitled to Excess
Retirement Benefits hereunder and, if so, the amount and duration of such Benefits. The Plan
Administrator’s determination of the rights of any person hereunder shall be final and binding on
all persons, subject only to the claims procedures outlined in Section 9.3 hereof.



          (b) Delegation of Duties. The Plan Administrator may delegate any of its
administrative duties, including, without limitation, duties with respect to the processing,
review, investigation, approval and payment of Excess Retirement Benefits, to a named administrator
or administrators.




     Section 9.2 Regulations. The Plan Administrator may promulgate any rules and
regulations it deems necessary in order to carry out the purposes of the Plan or to interpret the
provisions of the Plan; provided, however, that no rule, regulation or interpretation shall be
contrary to the provisions of the Plan. The rules, regulations and interpretations made by
the Plan Administrator shall, subject only to the claims procedure outlined in Section 9.3 hereof,
be final and binding on all persons.



     Section 9.3 Claims Procedures. The Plan Administrator shall determine the rights of
any person to any Excess Retirement Benefits hereunder. Any person who believes that he has not
received the Excess Retirement Benefits to which he is entitled under the Plan may file a claim in
writing with the Plan Administrator. The Plan Administrator shall, no later than 90 days after the
receipt of a claim (plus an additional period of 90 days if required for processing, provided that
notice of the extension of time is given to the claimant within the first 90 day period), either
allow or deny the claim in writing.



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          A denial of a claim by the Plan Administrator, wholly or partially, shall be written in a
manner calculated to be understood by the claimant and shall include:





	 	(a)	 	the specific reasons for the denial;
	 
	 	(b)	 	specific reference to pertinent Plan provisions on which the
denial is based;
	 
	 	(c)	 	a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
	 
	 	(d)	 	an explanation of the claim review procedure and the time
limits applicable thereto (including a statement of the claimant’s right to
bring a civil action under Section 502(a) of ERISA following an adverse benefit
determination on review).





          A claimant whose claim is denied (or his duly authorized representative) may within 60 days
after receipt of denial of a claim file with the Plan Administrator a written request for a review
of such claim. If the claimant does not file a request for review of his claim within such 60-day
period, the claimant shall be deemed to have acquiesced in the original decision of the Plan
Administrator on his claim. If such an appeal is so filed within such 60 day period, the
Compensation Committee (or its delegate) shall conduct a full and fair review of such claim.
During such review, the claimant shall be given the opportunity to review documents that are
pertinent to his claim and to submit issues and comments in writing. For this purpose, the
Compensation Committee (or its delegate) shall have the same power to interpret the Plan and make
findings of fact thereunder as is given to the Plan Administrator under Section 9.1(a) above.




          The Compensation Committee (or its delegate) shall mail or deliver to the claimant a written
decision on the matter based on the facts and the pertinent provisions of the Plan within 60 days
after the receipt of the request for review (unless special circumstances
require an extension of up to 60 additional days, in which case written notice of such
extension shall be given to the claimant prior to the commencement of such extension). Such
decision shall be written in a manner calculated to be understood by the claimant, shall state the
specific reasons for the decision and the specific Plan provisions on which the decision was based
and shall, to the extent permitted by law, be final and binding on all interested persons. In
addition, the notice of adverse determination shall also include statements that the claimant is
entitled to receive, upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant to the claimant’s claim for benefits and a
statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA.




     Section 9.4 Revocability of Action. Any action taken by the Plan Administrator or the
Compensation Committee with respect to the rights or benefits under the Plan of any person shall
be revocable as to payments not yet made to such person. In addition, the acceptance of any
Excess Retirement Benefits under the Plan constitutes acceptance of and agreement to the



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Plan making any appropriate adjustments in future payments to any person (or to recover from such
person) any excess payment or underpayment previously made to him.




     Section 9.5 Amendment. The Company (with the approval or ratification of the Benefits
Committee) may at any time amend any or all of the provisions of this Plan, except that, without
the prior written consent of the affected Participant, no such amendment may (a) reduce the amount
of any Participant’s vested Benefit as of the date of such amendment, (b) except as described in
Section 4.2, suspend the crediting of earnings on the balance of a Participant’s Account, until the
entire balance of such Account has been distributed or (c) alter the time of payment provisions
described in Article VI of the Plan, except for changes that accelerate the time of payments or are
required to bring such provisions into compliance with the requirements of Code Section 409A. Any
amendment shall be in the form of a written instrument executed by an officer of the Company.
Subject to the foregoing provisions of this Section, such amendment shall become effective as of
the date specified in such instrument or, if no such date is specified, on the date of its
execution.



     Section 9.6 Termination.



          (a) The Company has taken action to terminate the Plan. For all Participants other than the
President of the Company, the Plan is terminated effective December 31, 2007. For the President of
the Company, the Plan shall be terminated immediately after he receives a final distribution from
his Account.




          (b) In addition, notwithstanding anything in the Plan to the contrary, to the extent permitted
under Code Section 409A, in the event of a termination of the Plan (or any portion thereof), the
Company, in its sole and absolute discretion, shall have the right to change the time and form of
distribution of Participants’ Excess Retirement Benefits, including requiring that all amounts
credited to a Participant’s Account hereunder be immediately distributed in the form of a lump sum
payment.




     Executed this 14th day of December, 2007.



	 	 	 	 	 
	 	THE KITCHEN COLLECTION, INC.

 	 
	 	By:  	/s/ Charles A. Bittenbender
 	 
	 	 	Title: Assistant Secretary 	 
	 	 	 	 



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Appendix A. Change in Control. 






Change in Control. The term “Change in Control” shall mean the occurrence of any of the
events listed in I or II, below; provided that such occurrence occurs on or after January 1,
2008 and meets the requirements of Treasury Regulation Section 1.409A-3(i)(5) (or any
successor or replacement thereto) with respect to a Participant:




	 	I. i.	 	Any “Person” (as such term is used in Sections 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), other than one or more Permitted Holders (as defined below), is or
becomes the “beneficial owner”(as defined in Rules 13d-3 and 13d-5 of the
Exchange Act), directly or indirectly, of more than 50% of the combined voting
power of the then outstanding voting securities of a Related Company (as
defined below) entitled to vote generally in the election of directors (the
“Outstanding Voting Securities”), other than any direct or indirect
acquisition, including but not limited to an acquisition by purchase,
distribution or otherwise, of voting securities by any Person pursuant to an
Excluded Business Combination (as defined below); or
	 
	 	  ii.	 	The consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of
the assets of any Related Company or the acquisition of assets of another
corporation, or other transaction involving a Related Company (“Business
Combination”) excluding, however, such a Business Combination pursuant to
which either of the following apply (such a Business Combination, an
“Excluded Business Combination”) (A) a Business Combination involving
Housewares Holding Co. (or any successor thereto) that relates solely to
the business or assets of Hamilton Beach, Inc. (or any successor thereto)
or (B) a Business Combination pursuant to which the individuals and
entities who beneficially owned, directly or indirectly, more than 50% of
the combined voting power of any Related Company immediately prior to such
Business Combination beneficially own, directly or indirectly, more than
50% of the combined voting power of the then Outstanding Voting Securities
of the entity resulting from such Business Combination (including, without
limitation, an entity that as a result of such transaction owns any Related
Company or all or substantially all of the assets of any Related Company,
either directly or through one or more subsidiaries).
	 
	 	II.   	 	i. Any “Person” (as such term is used in Sections
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), other than one or more Permitted Holders, is or becomes the
“beneficial owner”(as defined in Rules 13d-3 and 13d-5 of the Exchange Act),
directly or indirectly, of more than 50% of the combined voting power of the
then Outstanding Voting Securities of NACCO Industries, Inc. (“NACCO”), other
than any direct or indirect acquisition, including but not limited to an acquisition by
purchase, distribution or otherwise, of voting securities:





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	 	(A)	 	directly from NACCO that is approved by a majority
of the Incumbent Directors (as defined below); or
	 
	 	(B)	 	by any Person pursuant to an Excluded NACCO
Business Combination (as defined below);






provided, that if at least a majority of the individuals who constitute
Incumbent Directors determine in good faith that a Person has become the
“beneficial owner"(as defined in Rules 13d-3 and 13d-5 of the Exchange Act)
of more than 50% of the combined voting power of the Outstanding Voting
Securities of NACCO inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares so that such Person is the
“beneficial owner"(as defined in Rules 13d-3 and 13d-5 of the Exchange Act)
of 50% or less of the combined voting power of the Outstanding Voting
Securities of NACCO, then no Change in Control shall have occurred as a
result of such Person’s acquisition; or




	 	ii.	 	a majority of the Board of Directors of NACCO ceases to
be comprised of Incumbent Directors; or
	 
	 	iii.	 	the consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of
the assets of NACCO or the acquisition of assets of another corporation, or
other transaction involving NACCO (“NACCO Business Combination”) excluding,
however, such a Business Combination pursuant to which both of the
following apply (such a Business Combination, an “Excluded NACCO Business
Combination”):






	 	(A)	 	the individuals and entities who beneficially
owned, directly or indirectly, NACCO immediately prior to such NACCO
Business Combination beneficially own, directly or indirectly, more
than 50% of the combined voting power of the then Outstanding Voting
Securities of the entity resulting from such NACCO Business Combination
(including, without limitation, an entity that as a result of such
transaction owns NACCO or all or substantially all of the assets of
NACCO, either directly or through one or more subsidiaries); and
	 
	 	(B)	 	at the time of the execution of the initial
agreement, or of the action of the Board of Directors of NACCO,
providing for such NACCO Business Combination, at least a majority of
the members of the Board of Directors of NACCO were Incumbent Directors.






	 	III.	 	Definitions. The following terms as used herein shall be
defined as follow:






	 	1.	 	“Incumbent Directors” means the individuals
who, as of December 31, 2007, are Directors of NACCO and any individual
becoming a Director subsequent to such date whose election, nomination for
election by NACCO’s stockholders, or appointment, was approved by a vote of
at least a majority of the then Incumbent Directors (either by a specific
vote or by approval of the proxy statement of NACCO in which such person is
named as a nominee for director, without objection to such nomination);
provided, however, that an individual shall not be an
Incumbent Director if such individual’s election or appointment to the
Board





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	 	 	 	of Directors of NACCO occurs as a result of an actual or threatened
election contest (as described in Rule 14a-12(c) of the Exchange Act) with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person
other than the Board of Directors of NACCO.






	 	2.	 	“Permitted Holders” shall mean, collectively,
(i) the parties to the Stockholders’ Agreement, dated as of March 15, 1990,
as amended from time to time, by and among National City Bank, (Cleveland,
Ohio), as depository, the Participating Stockholders (as defined therein)
and NACCO; provided, however, that for purposes of this definition only,
the definition of Participating Stockholders contained in the Stockholders’
Agreement shall be such definition in effect of the date of the Change in
Control, (ii) any direct or indirect subsidiary of NACCO and (iii) any
employee benefit plan (or related trust) sponsored or maintained by NACCO
or any direct or indirect subsidiary of NACCO.
	 
	 	3.	 	“Related Company” means The Kitchen
Collection, Inc. and its successors (“KCI”), any direct or indirect
subsidiary of KCI and any entity that directly or indirectly controls KCI.






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