EX-10.2



 





Exhibit 10.2




THE NACCO INDUSTRIES, INC.

UNFUNDED BENEFIT PLAN

(As Amended and Restated Effective as of December 1, 2007)





 









 








NACCO INDUSTRIES, INC.

UNFUNDED BENEFIT PLAN




          NACCO Industries, Inc. does hereby amend and restate the NACCO Industries, Inc. Unfunded
Benefit Plan on the terms and conditions described hereinafter, effective as of December 1, 2007.




Article I. PREFACE




     Section 1.01 Effective Date. The effective date of this restatement of the Plan is
December 1, 2007.



     Section 1.02 Purpose of the Plan. For periods prior to January 1, 2008, the purpose
of the Plan was to provide for certain Employees the benefits they would have received under the
Profit Sharing Plan but for (a) the dollar limitation on Compensation taken into account under the
Profit Sharing Plan as a result of Section 401(a)(17) of the Code, (b) the limitations imposed
under Section 415 of the Code, and (c) the limitations under Sections 402(g), 401(k)(3) and 401(m)
of the Code.



     Section 1.03 Governing Law. The Plan shall be regulated, construed and administered
under the laws of the State of Ohio, except when preempted by federal law.



     Section 1.04 Gender and Number. For purposes of interpreting the provisions of the
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 1.05 Code Section 409A.



          (a) As a result of the changes to the payment provisions of the Plan in accordance with 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) amounts allocated to a
Participant’s Excess 401(k) Sub-Account as of December 31, 2004 (the “Pre-2005 Excess 401(k)
Sub-Account”); (ii) amounts allocated to a Participant’s Excess Matching Sub-Account as of December
31, 2004 (the “Pre-2005 Excess Matching Sub-Account”) and (iii) amounts allocated 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 (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 (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.




 









 








          (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 Employer does not
guarantee to any Participant or Beneficiary any particular tax result with respect to any amounts
deferred or any payments provided hereunder, including tax treatment under Code Section 409A.




     Section 1.06 Benefit Freeze/Partial Plan Termination. All Excess Retirement Benefits
under the Plan shall be frozen as of December 31, 2007; provided, however, that earnings shall
continue to be credited on all Sub-Accounts after such date, as specified in the Plan. The portion
of the Plan that applies to Participants who are not Covered Employees shall automatically
terminate in 2008 when the last non-Covered Employee receives a payment of all of his Sub-Accounts
hereunder.



Article II. DEFINITIONS




     Except as otherwise provided in the Plan, terms defined in the Profit Sharing Plan as it 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 the Plan. In addition, the following words and
phrases shall have the following respective meanings for purposes of the Plan.



     Section 2.01 Account shall mean the record maintained by the Employer in accordance
with Section 4.01 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 1.05
hereof.



     Section 2.02 Beneficiary shall mean the person or persons designated by the
Participant as his Beneficiary under the Plan, in accordance with the provisions of Article VIII
hereof.



     Section 2.03 Bonus shall mean any bonus under any annual bonus plan that would be
taken into account as Compensation under the Profit Sharing 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 the Plan must be
made before the period in which the services are performed that gives rise to such Bonus.



     Section 2.04 Change in Control shall mean the occurrence of an event described in
Appendix A hereto; provided that such occurrence occurs on or after January 1, 2008 and meets the
requirements of Treasury Regulation Section 1.409A-3(i)(5).



     Section 2.05 Company shall mean NACCO Industries, Inc. or any entity that succeeds
NACCO Industries, Inc. by merger, reorganization or otherwise.



     Section 2.06 Compensation shall have the same meaning as under the Profit Sharing
Plan, except that Compensation shall be deemed to include (i) the amount of compensation deferred
by the Participant under the Plan and (ii) amounts in excess of the limitation imposed by Code
Section 401(a)(17). Notwithstanding the foregoing, the timing and crediting of Bonuses hereunder
shall be as specified in Section 3.02.



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     Section 2.07 Covered Employee shall mean the Chief Executive Officer of the Company as
of December 31, 2007.



     Section 2.08 Employer shall mean the Company and NACCO Services, LLC.



     Section 2.09 Excess Retirement Benefit or Benefit shall mean an Excess Profit Sharing
Benefit, Excess 401(k) Benefit or Excess Matching Benefit (as described in Article III) that is
payable to or with respect to a Participant under the Plan.



     Section 2.10 Fixed Income Fund shall mean the Vanguard Retirement Savings Trust
investment fund under the Profit Sharing Plan or any equivalent fixed income fund thereunder that
is designated by the NACCO Industries, Inc. Retirement Funds Investment Committee as the successor
to the Stable Asset Fund.



     Section 2.11 401(k) Employee shall mean an Employee of an Employer who is a
Participant in the Profit Sharing Plan who is eligible to receive Before-Tax Contributions and
Matching Employer Contributions thereunder.



     Section 2.12 Key Employee. A Participant shall be classified as a Key Employee if he
meets the following requirements:



          (a) 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) thereof) 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)(1)(A)(i), (ii)
or (iii) for this purpose: (i) the definition of “compensation” shall (A) be as defined 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.




          (b) 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.




          (c) Notwithstanding the foregoing, a Participant shall not be classified as a Key Employee
unless the stock of the Company (or an affiliate thereof) 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 2.13 Participant.



          (a) For purposes of Section 3.01 of the Plan, the term “Participant” means an Employee who is
a Participant in the profit sharing portion of the Profit Sharing Plan (i) whose profit sharing
benefit for a Plan Year is limited by the application of Section 401(a)(17) or 415 of the Code or
as a result of his deferral of Compensation under the Plan and (ii) whose total annual compensation
from the Controlled Group for such Plan Year was at least $115,000.




          (b) For purposes of Sections 3.02 and 3.03 of the Plan, the term “Participant” means a 401(k)
Employee (i) who is unable to make all of the Before-Tax Contributions that he has elected to make
to the Profit Sharing Plan, or is unable to receive the maximum amount of Matching Employer
Contributions under the Profit Sharing Plan because of the limitations of Section 402(g),
401(a)(17), 401(k)(3) and 401(m) of the Code or as a result of his deferral of Compensation
hereunder , and (ii) whose total annual compensation from the Controlled Group for the Plan Year in
which a deferral election is required is at least $115,000.




          (c) 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 2.14 Plan shall mean the NACCO Industries, Inc. Unfunded Benefit Plan, as
herein set forth or as duly amended.



     Section 2.15 Plan Administrator shall mean the NACCO Industries, Inc. Benefits
Committee (the “Benefits Committee”).



     Section 2.16 Plan Year shall mean the calendar year.



     Section 2.17 Prior Plan shall mean the NACCO Materials Handling Group, Inc. Unfunded
Benefit Plan (for the period from January 1, 1995 through August 31, 2000) and The North American
Coal Corporation Deferred Compensation Plan for Management Employees (for the period prior to
January 1, 1995).



     Section 2.18 Profit Sharing Employee shall mean an Employee of an Employer who is a
participant in the Profit Sharing Plan and who is eligible for Profit Sharing Contributions.



     Section 2.19 Profit Sharing Plan shall mean the NACCO Materials Handling Group, Inc.
Profit Sharing Retirement Plan or any successor thereto.



     Section 2.20 ROTCE. For 2007 and prior Plan Years, ROTCE shall mean the Company’s
consolidated return on total capital employed for the applicable time period, as determined by the
Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) for
purposes of granting awards under the Company’s long-term incentive compensation plan for a
particular Plan Year.



     Section 2.21 ROTCE Table Rate. For 2008 and future Plan Years, ROTCE Table Rate shall
mean the earnings rate determined under the annual ROTCE Table that is adopted by the Compensation
Committee within the first 90 days of each Plan Year.



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     Section 2.22 Termination of Employment means, with respect to any Participant’s
relationship with the Company and the Controlled Group Members, a separation from service as
defined under Code Section 409A (and the regulations and other guidance issued thereunder).



     Section 2.23 Valuation Date shall mean the last day of each calendar month and/or any
other date chosen by the Plan Administrator.



Article III.

EXCESS RETIREMENT BENEFITS — CALCULATION OF AMOUNT




     Section 3.01 Excess Profit Sharing Benefits.



          (a) In General. Each Employer shall credit to a Sub-Account (the “Excess Profit
Sharing Sub-Account”) established for each Participant who is both an Employee of such Employer and
a Profit Sharing Employee, an amount equal to the excess, if any, of (i) the amount of the
Employer’s Profit Sharing Contribution which would have been made to the profit sharing portion of
the Profit Sharing Plan on behalf of the Participant if (1) such Plan did not contain the
limitations imposed under Sections 401(a)(17) and 415 of the Code and (2) the term “Compensation”
(as defined in Section 2.06 hereof) were used for purposes of determining the amount of profit
sharing contributions under the Profit Sharing Plan, over (ii) the amount of the Employer’s
Profit Sharing Contribution that is actually made to such 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.




          (b) Minimum Benefit. Notwithstanding the foregoing, the Account balance of a
Participant who was a participant in the Prior Plan shall in no event be less than the amount
credited to such Participant’s account under the Prior Plan.




     Section 3.02 Basic and Additional Excess 401(k) Benefits.



          (a) Amount of Excess 401(k) Benefits. Each 401(k) Employee who is a Participant may,
on or prior to each December 31st, by completing an approved deferral election form,
direct his Employer to reduce his Compensation for the next Plan Year, by an amount equal to the
difference between (i) a specified percentage, in 1% increments, with a maximum of 25%, of his
Compensation for the Plan Year, and (ii) the maximum Before-Tax Contributions actually permitted to
be contributed for him to the Profit Sharing Plan for such Plan Year by reason of the application
of the limitations under Sections 402(g), 401(a)(17) and 401(k)(3) of the Code. All amounts
deferred under this Section shall be referred to herein collectively as the “Excess 401(k)
Benefits.” The last Excess 401(k) Benefits that are credited to the Excess 401(k) Sub-Accounts
hereunder shall be as of December 31, 2007. Notwithstanding the foregoing, (1) a 401(k) Employee’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 and (2) the Bonus that was earned in 2007 and will be paid in 2008 shall not be credited
to the Excess 401(k) Sub-Accounts hereunder, but shall be credited to a sub-account established
under the Company’s Excess Retirement Plan that becomes effective January 1, 2008.




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          (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:





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





          (c) Consequences of Deferral Elections. 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 Excess 401(k) Sub-Account 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 that no new deferral elections shall be permitted under the Plan for Plan
Years beginning on or after January 1, 2008.




     Section 3.03 Excess Matching Benefits. A 401(k) Employee who is a Participant shall
have credited to his Basic Excess Matching Sub-Account an amount equal to the Matching Employer
Contributions attributable to the Basic Excess 401(k) Benefits that he is prevented from receiving
under the Profit Sharing Plan because of the limitations of Code Sections 402(g), 401(a)(17),
401(k)(3) and 401(m) of the Code or as a result of his deferral of Compensation hereunder (the
“Excess Matching Benefits”). The last Excess Matching Benefits that are credited to the Basic
Excess Matching Sub-Account shall be those that are credited for the 2007 Plan Year.



Article IV.

ACCOUNTS




     Section 4.01 Participants’ Accounts. Each Employer shall establish and maintain on
its books an Account for each Participant who is an Employee of the Employer which shall contain
the following entries:



          (a) Credits to an Excess Profit Sharing Sub-Account for the Excess Profit Sharing Benefits
described in Section 3.01, which shall be credited to the Sub-Account at the time the




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Profit Sharing Contributions are otherwise credited to Participants’ accounts under the Profit
Sharing Plan.




          (b) Credits to a Basic or Additional Excess 401(k) Sub-Account for the Basic and Additional
Excess 401(k) Benefits described in Section 3.02, which shall be credited to the Sub-Account when a
401(k) Employee is prevented from making a Before-Tax Contribution under the Profit Sharing Plan.




          (c) Credits to a Basic Excess Matching Sub-Account for the Basic Excess Matching Benefits
described in Section 3.03, which amounts shall be credited to the Sub-Account when a 401(k)
Employee is prevented from receiving Matching Employer Contributions under the Profit Sharing Plan.




          (d) Credits to the appropriate Sub-Account of each Participant of the amount of any and all
liabilities of the Employer under the Prior Plan that were transferred to the Plan.




          (e) Credits to all Sub-Accounts for the earnings described in Article V and the uplift
described in Article VI (as applied to Covered Employees).




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




          (g) The Employers 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 V.

EARNINGS




     Section 5.01 Earnings on Basic Sub-Accounts and Profit Sharing Sub-Accounts for 2007 and
Prior Plan Years.



          (a) Except as otherwise provided in the Plan, at the end of each calendar month during a Plan
Year, the Excess Profit Sharing Sub-Account, Basic Excess 401(k) Sub-Account and Basic Excess
Matching Sub-Account of each Participant shall be credited with an amount determined by multiplying
such Participant’s weighted average daily 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 that is applicable to the Participant exceeds the rate
credited to the Sub-Accounts under the preceding sentence, such 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 the Participant’s average Sub-Account balance during each
month of such Plan Year by the ROTCE determined for such Plan Year, compounded monthly.




          (b) The ROTCE calculation described in Subsection (a) 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 following termination, such ROTCE calculation shall not apply. The Fixed
Income Fund calculation described above for the month in




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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.




     Section 5.02 Earnings on Additional Excess 401(k) Sub-Account For 2007 and Prior Plan
Years. Subject to Section 5.03, at the end of each calendar month during the Plan Year, the
Additional Excess 401(k) Sub-Account of each Participant shall be credited with an amount
determined by multiplying such Participant’s weighted average daily Sub-Account balance during such
month by the blended rate earned during such month by the Fixed Income Fund. The earnings
calculation 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



     Section 5.03 Earnings for 2008 and Subsequent Plan Years.



          (a) Sub-Accounts of non-Covered Employees. Except as otherwise described in the Plan,
at the end of each calendar month during 2008, the Sub-Accounts of each Participant who is a
non-Covered Employee shall be credited with an amount determined by multiplying such Participant’s
weighted average daily Sub-Account balance during such month by the blended rate earning during
such month by the Fixed Income Fund. Notwithstanding the foregoing, no earnings shall be credited
for the month in which the Participant receives the distribution of his Sub-Accounts.




          (b) Sub-Accounts of Covered Employee. Except as otherwise described in the Plan, at
the end of each calendar month during Plan Years commencing on or after January 1, 2008, the
Sub-Accounts of the Participant who is a Covered Employee shall be credited with an amount
determined by multiplying such Participant’s average Sub-Account balances during such month by the
blended rate earning during such month by the Fixed Income Fund. Notwithstanding the foregoing:





     (i) No earnings shall be credited for the month in which the Participant receives the
distribution of the principle amount of his Sub-Accounts.




     (ii) In the event that the ROTCE Table Rate determined for such Plan Year exceeds the
Fixed Income Fund rate credited to the Sub-Accounts, the Basic Excess 401(k) Sub-Account and
Excess Matching Sub-Account of such Participant shall retroactively be credited with the
difference between (1) the Fixed Income Fund rate and (2) the amount determined by
multiplying the average balance of such Sub-Accounts during each month of such Plan Year by
the ROTCE Table Rate determined for such Plan Year, compounded monthly. In the event of a
Participant’s Termination of Employment during a Plan Year, the ROTCE Table Rate calculation
described in the preceding sentence shall be made during the month in which the Participant
incurs a Termination of Employment and shall be based on the year-to-date ROTCE Table Rate
for the month ending prior to the date of Termination, as calculated by the Company.



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     Section 5.04 Changes in/Limitations on Earnings Assumption.



          (a) The Company (with the approval or ratification of the Compensation Committee) may change
(but not suspend) the earnings rate credited on Accounts under the Plan 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 that exceeds 14%.




Article VI.

VESTING




     Section 6.01 Vesting. A Participant shall always be 100% vested in all amounts
credited to his Account hereunder.



Article VII.

DISTRIBUTION OF BENEFITS TO PARTICIPANTS




     Section 7.01 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 the close of business on December 31, 2007 and shall
automatically be cancelled at immediately thereafter.




          (b) Payment Rules for non-Covered Employees. All Sub-Account balances of all
Participants who are not Covered Employees shall automatically be paid to the Participant (or
Beneficiary, if applicable) in the form of a single lump sum payment during the period from January
1, 2008 through April 30, 2008.




          (c) Payment Rules for Covered Employee.




          (i) Except as otherwise specified in Sections 7.01(c)(ii) or 7.02, all amounts allocated to
the Covered Employee’s Sub-Accounts shall be paid to the Covered Employee (or his Beneficiary, if
applicable) in accordance with the following rules: (i) his Account balance as of December 31, 2007
(after adjustment for the ROTCE earnings for 2007) shall automatically be paid in the form of a
single lump sum payment on the date of his Termination of Employment and (ii) the earnings that are
credited to his Account for each Plan Year commencing on or after January 1, 2008, increased by
15%, shall automatically be paid in the form of annual lump sum payments during the period from
January 1st through March 15th of the immediately following Plan Year.
Notwithstanding the foregoing, during the Plan Year in which the Participant receives the payment
of his frozen Account balance pursuant to clause (i) of the preceding sentence, he shall also
receive payment of the pro-rata earnings for such Plan Year (calculated through the last day of the
month prior to the payment date) and the corresponding 15% uplift at the same time that he receives
payment of such frozen Account balance.




          (ii) Notwithstanding the foregoing, in the event of a Change in Control, all remaining amounts
allocated to the Account of the Participant (including pro-rata earnings for




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the Plan Year in which the Change in Control occurs) 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 Compensation Committee.




     Section 7.02 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 Employer 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
Employer 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, an Employer 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
Employer to continue as a going concern; provided that any missed payment is made during the first
calendar year in which the funds of the Employer are sufficient to make the payment without
jeopardizing the going concern status of the Employer.




          (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 7th month following Termination of Employment (or,
if earlier, the date of death) except for payments made on account of (i) a QDRO (as specified in
Section 9.05) or (ii) a conflict of interest or the payment of FICA taxes (as specified in
Subsection (e) below). Any Benefits that are otherwise payable to the Key Employee during the
6-month period following his Termination of Employment shall be accumulated and paid in a lump sum
make-up payment within 10 days following the end of such 6-month period.




          (d) Time of Payment/Processing. Except as described in Sections 7.01(c)(ii) or
7.02(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 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.




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          (f) Withholding Taxes. To the extent required by applicable law, the Employer shall
withhold from the Excess Retirement Benefits hereunder any income, employment or other taxes
required to be withheld there from by any government or government agency.




Article VIII.

BENEFICIARIES




     Section 8.01 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 (i) the Excess 401(k) and Matching Benefits and (ii) the
Excess Profit Sharing Benefits. 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 Profit Sharing 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 the Plan shall be divided equally among such persons unless
the Participant’s designation specifically provides for a different allocation.



     Section 8.02 Change in Beneficiary. A Participant may, at any time and from time to
time, change a Beneficiary designation hereunder without the consent of any existing Beneficiary or
any other person. A change in Beneficiary hereunder may be made regardless of whether such a
change is also made under the Profit Sharing Plan. 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 prior to the death of the Participant.



     Section 8.03 Distributions to Beneficiaries. Excess Retirement Benefits payable to a
Participant’s Beneficiary shall be equal to the balance in the applicable Sub-Account of such
Participant on the Valuation Date preceding the date of the distribution of the Sub-Account to the
Beneficiary. Excess Retirement Benefits payable to a Beneficiary shall be paid in the form of a
lump sum payment on the date such benefits would otherwise have been paid to the Participant under
Article VII.



Article IX.

MISCELLANEOUS




     Section 9.01 Expenses. Expenses of administering the Plan shall be paid by the
Employers, as directed by the Company.



     Section 9.02 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 an Employer.
The Employers shall have no obligation to purchase any assets that do not remain subject to the
claims of the creditors of the Employers for use in connection with the Plan. No Participant or
Beneficiary or any other person shall have any preferred claim on, or any



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beneficial ownership interest in, any assets of the Employers 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 his Employer.




     Section 9.03 No Guarantee of Employment. Nothing in the Plan shall be construed as
guaranteeing future employment to Participants. A Participant continues to be an Employee of an
Employer solely at the will of the Employer subject to discharge at any time, with or without
cause.



     Section 9.04 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 Employers from all liability with respect to such Benefit.



     Section 9.05 Anti-Assignment/Early Payment in the Event of a QDRO.



          (a) No right or interest under the 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.




          (b) Notwithstanding any provision of the Plan to the contrary, the Plan Administrator shall
honor a “qualified domestic relations order” (QDRO) from a state domestic relations court that
requires the payment of all or a part of a Participant’s or Beneficiary’s Account under the Plan
to an “alternate payee” as defined in Code Section 414(p).




     Section 9.06 Severability. If any provision of the 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.



     Section 9.07 Effect on other Benefits. Benefits payable to or with respect to a
Participant under the Profit Sharing Plan or any other Employer sponsored (qualified or
nonqualified) plan, if any, are in addition to those provided under the Plan.



     Section 9.08 Liability for Payment. Each Employer shall be liable for the payment of
the Excess Retirement Benefits that are payable hereunder to or on behalf of its Employees.



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Article X.

ADMINISTRATION OF PLAN




     Section 10.01 Administration. The Plan shall be administered by the Plan
Administrator. The Plan Administrator shall have 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 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 provisions of Sections 10.03 and
10.04 hereof. 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 Benefits, to a named administrator or administrators.



     Section 10.02 Regulations. The Plan Administrator shall 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 provisions of Sections 10.03 and 10.04 hereof, be
final and binding on all persons.



     Section 10.03 Claims Procedures. The Plan Administrator shall determine the rights of
a person to any Benefits hereunder. Any person who believes that he has not received the 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. 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)
who wants to contest that decision must file with the Plan Administrator a written request for a
review of such claim within 60 days after receipt of denial of a 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



13









 




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 10.01 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 10.04 Revocability of Prior Action. Any action taken by the Plan
Administrator, the Compensation Committee or an Employer 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 Benefits under the Plan constitutes acceptance of and agreement to
the Plan Administrator’s, Compensation Committee’s or the Employer’s 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 or on his behalf.



     Section 10.05 Amendment. Subject to Section 10.07, the Company (with the approval or
ratification of the Compensation Committee) does hereby reserve the right to amend, at any time,
any or all of the provisions of the Plan, without the consent of the Participant, Beneficiary or
any other person. Any such amendment shall be expressed in an instrument executed by an officer
of the Company on the order of the Compensation Committee and shall become effective as of the date
designated in such instrument or, if no such date is specified, on the date of its execution.



     Section 10.06 Termination. The Compensation Committee has taken action to terminate
the portion of the Plan that applies to non-Covered Employees in 2008 on the date when the last
non-Covered Employee receives the full payment of his Account balance hereunder. In addition,
subject to Section 10.07, the Compensation Committee does hereby reserve the right to terminate the
remainder of the Plan at any time without the consent of the Participant, Beneficiary or any other
person. Such termination shall be expressed in an instrument executed by an officer of the Company
on the order of the Compensation Committee and shall become effective as of the date designated in
such instrument, or if no date is specified, on the date of its execution. 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 of distribution of the Participant’s Excess Retirement
Benefits, including requiring that all amounts credited to the Participant’s Account hereunder be
immediately distributed in the form of a lump sum payment; provided such action is permitted under
Code Section 409A and the Treasury Regulations thereunder.



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     Section 10.07 Limitations on Amendment and Termination. Notwithstanding the foregoing
provisions of this Article, no amendment or termination of the Plan shall, without the written
consent of the Participant (or, in the case of his death, his Beneficiary), (a) reduce the amount
of any Excess Retirement Benefit under the Plan of the Participant or any Beneficiary as of the
date of the amendment or termination or (b) alter the time of payment provisions described in
Article VII of the Plan, except for any amendments that are required to bring such provisions into
compliance with the requirements of Code Section 409A or that accelerate the time of payment. The
foregoing limitations shall not prevent the Compensation Committee from making any other changes to
the Plan including, without limitation, (i) changing the earnings rate that is credited to
Participants’ Account under Article V and/or (ii) changing or eliminating the amount of the uplift
described in Section 7.01(c).



     EXECUTED, this 14th day of December, 2007.



	 	 	 	 	 
	 	NACCO INDUSTRIES, INC.

 	 
	 	By:  	/s/ Charles A. Bittenbender
 	 
	 	 	Title: 	Vice President, General Counsel and Secretary 	 
	 	 	 	 



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Appendix A. Change in Control. 






Change in Control. The term “Change in Control” shall mean the occurrence of (i),
(ii) or (iii) 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.	 	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:






	 	(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




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	 	(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 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.






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