EX-10.6



 




Exhibit 10.6


THE NORTH AMERICAN COAL CORPORATION

DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES


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



 









 





THE NORTH AMERICAN COAL CORPORATION

DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES




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



ARTICLE I.

INTRODUCTION



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
this Plan is to 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 and to provide for the continued deferral of certain frozen benefits.



Section 1.03 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 1.04 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 1.05 Status of Plan. This document is classified as a single “plan” for purposes
of recordkeeping, the Code and the requirements of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”). For purposes of the federal securities laws, however, this document
shall be classified as two separate “plans.” One plan shall consist of the Accounts of those
persons who satisfy the requirements of an “accredited investor” or a “sophisticated purchaser”
under Rule 506 of the Securities Act of 1933 and the other plan shall consist of the Accounts of
all other Plan Participants.



Section 1.06 Application of Code Section 409A.





	 	(a)	 	As a result of the changes to the payment provisions of 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 VAP 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”) and (iii) amounts credited to the Excess Matching Sub-Account for periods
prior to January 1, 2005 (the “Pre-2005 Excess Matching 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”).






	 	(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 Employers do
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 1.07 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 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 2.01 Account shall mean the record maintained in accordance with Section 3.05 by
the Employer 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 1.06
hereof.



Section 2.02 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 2.03 Benefits Committee shall mean the NACCO Industries, Inc. Benefits
Committee.



Section 2.04 Bonus shall mean any bonus under The North American Coal Corporation 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 2.05 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) or any successor or replacement thereto.




2









 







Section 2.06 Company shall mean The North American Coal Corporation or any entity that
succeeds The North American Coal Corporation by merger, reorganization or otherwise.



Section 2.07 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 Section
401(a)(17). Notwithstanding the foregoing, the timing and crediting of Bonuses hereunder shall be
as specified in Section 3.01.



Section 2.08 Compensation Committee shall mean the Compensation Committee of the
Board of Directors of the Company.



Section 2.09 Covered Employee shall mean any Participant who, prior to December 31, 2007,
is designated by the Compensation Committee as an actual or potential “covered employee” for
purposes of Code Section 162(m) for the 2008 calendar year.



Section 2.10 Employer shall mean the Company and any other Controlled Group Member that
adopts this Plan pursuant to Section 8.07.



Section 2.11 Excess Retirement Benefit or Benefit shall mean a VAP Deferral Benefit, an
Excess Profit Sharing Benefit, an Excess 401(k) Benefit or an Excess Matching Benefit (all as
described in Article III) that is payable to or with respect to a Participant under this Plan.



Section 2.12 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 2.13 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)(1)(A)(i), (ii)
or (iii) for this purpose: (i) the definition of “compensation” (A) shall 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.




3









 












	 	•	 	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 (or a related entity) is publicly traded on an
established securities market or otherwise on the date of the Participant’s
Termination of Employment.




Section 2.14 NACCO shall mean NACCO Industries, Inc.



Section 2.15 Participant.





	 	(a)	 	For purposes of Sections 3.01 and 3.02 of the Plan, the term “Participant” means an
Employee of an Employer (other than a San Miguel Employee or a Florida Dragline Employee)
who is a Participant in the Savings Plan (i) who is unable to make all of the Before-Tax
Contributions that he has elected to make to the Savings Plan, or is unable to receive the
maximum amount of Matching Contributions under the Savings Plan because of the limitations
of Code Section 402(g), 401(a)(17), 401(k)(3), 401(m) or 415 or as a result of his deferral
of Compensation under this Plan; (ii) who is in salary grade 14 or above; and (iii) whose
total compensation from the Controlled Group for the year in which a deferral election is
required is at least $115,000.
	 
	 	(b)	 	For purposes of Section 3.04 of the Plan, the term “Participant” means an Employee of
an Employer (i) who is a Salaried Profit Sharing Employee under the Savings Plan, (ii)
whose Profit Sharing Contribution under the Savings Plan is limited by the application of
Code Section 401(a)(17) or 415 or is reduced due to his deferral of Compensation under this
Plan, (iii) who is in salary grade 14 or above, and (iv) whose total compensation from the
Controlled Group for the year in which an Excess Profit Sharing Benefit 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 2.16 Plan shall mean The North American Coal Corporation Deferred Compensation Plan
for Management Employees, as herein set forth or as duly amended.



Section 2.17 Plan Administrator shall mean the Administrative Committee appointed under the
Savings Plan.



Section 2.18 Plan Year shall mean the calendar year.



Section 2.19 ROTCE. For 2007 and prior Plan Years, ROTCE shall mean the consolidated
return on total capital employed for NACCO, as determined by NACCO, for purposes of granting awards
under the NACCO Industries, Inc. long-term incentive compensation plan as in effect for a
particular Plan Year.




4









 







Section 2.20 ROTCE Table Rate. For 2008 and future Plan Years, ROTCE Table Rate shall mean
the interest rate determined under the annual ROTCE Table that is adopted and approved by the
Compensation Committee within the first 90 days of each Plan Year.



Section 2.21 Savings Plan shall mean The North American Coal Corporation Retirement Savings
Plan (or any successor plan).



Section 2.22 Termination of Employment shall mean, 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 business day of each Plan Year and/or any
other date chosen by the Plan Administrator.




ARTICLE III.

EXCESS RETIREMENT BENEFITS — CALCULATION OF AMOUNT



Section 3.01 Basic and Additional Excess 401(k) Benefits.





	 	(a)	 	Amount of Excess 401(k) Benefits. Each 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 Code Sections 402(g), 401(a)(17), 401(k)(3)and
415. All amounts deferred under this Section shall be referred to herein collectively as
the “Excess 401(k) Benefits.” Notwithstanding the foregoing, (1) 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 and (2) 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 is effective January 1, 2008.
	 
	 	(b)	 	Classification of Excess 401(k) Benefits. The Excess 401(k) Benefits for a
particular Plan Year shall be calculated per pay period 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




5









 






	 	 	 	for such Plan Year over (2) 7%, and the denominator of which is the
percentage of Compensation elected to be deferred.






	 	(iii)	 	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 during 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, however,
that no new deferral elections shall be permitted under this Plan for Plan Years beginning
on or after January 1, 2008.




Section 3.02 Excess Matching Benefits. A Participant shall have credited to his Excess
Matching Sub-Account an amount equal to the Matching 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 or as a
result of his deferral of Compensation under this Plan (the “Excess Matching Benefits”). The last
Excess Matching Benefits that are credited to the Excess Matching Sub-Account shall be for the 2007
Plan Year.



Section 3.03 VAP Deferral Benefits. The Accounts of certain Participants contain amounts
that were allocated to a VAP Deferral Sub-Account (the “VAP Deferral Benefits”) hereunder prior to
December 31, 2004.



Section 3.04 Excess Profit Sharing Benefits. Each Employer shall credit to a Sub-Account
(the “Excess Profit Sharing Sub-Account”) established for each Participant who is an Employee of
such Employer, an amount equal to the excess, if any, of (i) the amount of the Employer’s Profit
Sharing Contribution that would have been made to the Savings Plan on behalf of the Participant for
a Plan Year if (1) such Plan did not contain the limitations imposed under Code Sections 401(a)(17)
and 415 and (2) the term “Compensation” (as defined in Section 2.07 hereof) were used for purposes
of determining the amount of Profit Sharing Contributions under the Savings Plan, over (ii)
the amount of the Employer’s Profit Sharing Contribution that is 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 3.05 Participants’ Accounts. Each Employer shall establish and maintain on its
books for each Participant who is an Employee of such Employer an Account which shall contain the
following entries:




6









 









	 	(a)	 	Credits to a Basic or Additional Excess 401(k) Sub-Account (as applicable) for the
Excess 401(k) Benefits described in Section 3.01, which shall be credited to the
Sub-Account when a Participant is prevented from making a Before-Tax Contribution under the
Savings Plan;
	 
	 	(b)	 	Credits to a Basic Excess Matching Sub-Account for the Basic Excess Matching Benefits
described in Section 3.02, which shall be credited to the Sub-Account when a Participant is
prevented from receiving Matching Contributions under the Savings Plan;
	 
	 	(c)	 	Credits to a VAP Deferral Sub-Account for the VAP Deferral Benefits described in
Section 3.03, which were credited to the Sub-Account at the time such Benefits were
deferred under this Plan;
	 
	 	(d)	 	Credits to an Excess Profit Sharing Sub-Account for the Excess Profit Sharing Benefits
described in Section 3.04, which shall be credited to the Sub-Account at the time the
Profit Sharing Contributions are otherwise credited to Participants’ accounts under the
Savings Plan;
	 
	 	(e)	 	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 and for the uplift described in Article VI (as applied to Covered Employees);
and
	 
	 	(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.




Section 3.06 Statements. Participants shall be provided with statements of their Account
balances at least once each Plan Year.




ARTICLE IV.

EARNINGS



Section 4.01 Earnings For Periods Prior to January 1, 2008.





	 	(a)	 	Basic 401(k), Basic Matching and Excess Profit Sharing Sub-Accounts. 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 Basic Excess 401(k) Sub-Account, the Basic Excess
Matching Sub-Account and the Excess Profit Sharing 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 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, such Sub-Accounts shall retroactively be credited with the excess (if any) of
(i) the amount determined under the preceding sentence over (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. This ROTCE
calculation shall be made during




7









 






	 	 	 	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 NACCO. For any subsequent month following such termination,
the ROTCE calculation shall not apply. The Fixed Income Fund calculation described in
Subsection (a) 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 Excess 401(k) Sub-Accounts. 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 Additional Excess 401(k) 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
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.



     (c) VAP Deferral Sub-Accounts. 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 VAP
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 “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 U.S.
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 4.02 Earnings for Periods on or after January 1, 2008.




          (a) Earnings Applicable to non-Covered Employees. Except as otherwise described in
the Plan, at the end of each calendar month during 2008, all Sub-Accounts of all Participants who
are not Covered Employees 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 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.




          (b) Earnings Applicable to Covered Employees. Except as otherwise described in the
Plan, for periods on and after January 1, 2008, at the end of each calendar month during a Plan
Year, all Sub-Accounts of the Covered Employees 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 such month by the Fixed Income Fund. Notwithstanding the foregoing, in the event
that the ROTCE Table Rate determined for such Plan Year exceeds the rate credited under the
preceding sentence to the Excess Profit Sharing Sub-Account, Basic Excess 401(k) Sub-Account and
Basic Excess Matching Sub-Account Sub-Accounts, such Sub-Accounts shall retroactively be credited
with the excess (if any) of (i) the amount determined under the preceding sentence over (ii) the
amount determined by multiplying the Participant’s average Sub-Account balance during each month of
such Plan Year by the ROTCE Table Rate determined for such Plan Year, compounded monthly. This
ROTCE Table Rate calculation shall




8









 







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 the
Participant incurred a Termination of Employment, as calculated by NACCO. For any subsequent month
following such Termination, such ROTCE Table Rate 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.



Section 4.03 Changes in/Limitations on Earnings Assumptions.





	 	(a)	 	For periods prior to January 1, 2008, the Company (with the approval or ratification of
the Benefits Committee) or the Compensation Committee may change (but not suspend) the
earnings rate credited on Accounts hereunder at any time. For periods on or after January
1, 2008, 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 which exceeds 14%.





ARTICLE V.

VESTING



Section 5.01 Vesting A Participant shall always be 100% vested in the amounts credited to
his Account hereunder.




ARTICLE VI.

TIME AND FORM OF PAYMENT TO PARTICIPANTS



Section 6.01 Time and Form of Payment.




          (a) Prior Elections. Except as described in Subsection (d) of this Section, 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 be cancelled immediately after the close of
business on that date.




          (b) Payment Rules for Non-Covered Employees. The amounts allocated to the Account of
a Participant who is not a Covered Employee shall automatically be paid to the Participant (or his
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 Employees. Except as otherwise described in Section
6.01(e) or Section 6.02(c), the amounts allocated to the Account of Participant who is a Covered
Employee shall be paid under the following rules: (X) his Account balance as of December 31, 2007
(after adjustment for the Excess Profit Sharing Benefits and 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 (Y) the earnings that are credited to his Account 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




9









 







March 15th of the immediately following Plan Year. Notwithstanding the foregoing,
during the Plan Year in which a Covered Employee receives a payment of his frozen Account balance,
such Covered Employee shall also receive payment of the pro-rata earnings and the corresponding 15%
uplift for such Plan Year at the same time he receives payment of such Account balance.




          (d) Payment Rules for Terminated Employees. Notwithstanding the foregoing, if a
Participant who is not a Covered Employee was in pay status on December 31, 2007, such Participant
shall receive his normally scheduled installment payment at the appropriate time during 2008
(determined in accordance with the terms of the Plan as in effect prior to this restatement and his
payment election, as applicable), with each such installment payment being classified as a single
payment for purposes of Code Section 409A.




          (e) Payment Rules in the Event of a Change in Control. Notwithstanding any provision
of the Plan to the contrary, in the event of a Change in Control, all amounts allocated to the
Accounts of all Participants 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 6.02 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 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 8.05) 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
1st day of the 7th month following Termination of Employment.




10









 












	 	(d)	 	Time of Payment/Processing. Except as described in Section 6.01(e) or Section
6.02(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 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. To the extent required by applicable law, the Employers
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.




Section 6.03 Liability for Payment/Expenses. The Employer by which the Participant was
last employed prior to his payment commencement date under the Plan shall process and pay all
Excess Retirement Benefits hereunder to or on behalf of such Participant, but such Employer’s
liability shall be limited to its proportionate share of such amount, as hereinafter provided. If
the Excess Retirement Benefits payable to or on behalf of a Participant are based on the
Participant’s employment with more than one Employer, the liability for such Benefits shall be
shared by all such Employers (by reimbursement to the Employer making such payment) as may be
agreed to among them in good faith (taking into consideration the Participant’s service and
Compensation paid by each such Employer) and as will permit the deduction (for purposes of federal
income tax) by each such Employer of its portion of the payments made and to be made hereunder.
Expenses of administering the Plan shall be paid by the Employers, as directed by the Company.




ARTICLE VII.

BENEFICIARIES



Section 7.01 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 and received by the Plan Administrator prior to the Participant’s death. Separate
Beneficiary designations may be made for (i) the Excess 401(k) and Matching Benefits, (ii) the VAP
Deferral Benefits and (iii) 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 the estate of the last to
die of the Participant and his Beneficiaries. 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 provides for a different allocation. 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.




11









 







Section 7.02 Distributions to Beneficiaries. The Excess Retirement Benefit payable to a
Participant’s Beneficiary under this Plan shall be equal to the balance in the applicable
Sub-Account on the date of the distribution of the 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 be paid to the Participant under Article VI.




ARTICLE VIII.

MISCELLANEOUS



Section 8.01 Liability of Employers. Nothing in this Plan shall constitute the creation of
a trust or other fiduciary relationship between an Employer and any Participant, Beneficiary or any
other person.



Section 8.02 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 beneficial ownership
interest in, any assets of an Employer 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 8.03 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
Employers solely at the will of the Employers subject to discharge at any time, with or without
cause.



Section 8.04 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 8.05 Anti-Assignment/Early Payment in the Event of a QDRO.





	 	(a)	 	Subject to Subsection (b), 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.
	 
	 	(b)	 	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 all or a part of a Participant’s or Beneficiary’s Account under this Plan to an
“alternate payee” as defined in Code Section 414(p).




12









 










Section 8.06 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.



Section 8.07 Adoption by Other Employers. Any member of the Controlled Group that is an
Employer under the Savings Plan may adopt this Plan with the consent of the Benefits Committee by
executing an instrument evidencing its adoption of this Plan on the order of its Board of Directors
(or the applicable committee of such Board of Directors) (or its delegate) and filing a copy
thereof with the Company. Such adoption may be subject to such terms and conditions as the
Benefits Committee requires or approves.



Section 8.08 Effect on other Benefits. Benefits payable to or with respect to a
Participant under the Savings Plan or any other Employer-sponsored (qualified or nonqualified)
plan, if any, are in addition to those provided under this Plan.




ARTICLE IX.

ADMINISTRATION OF PLAN



Section 9.01 Administration. The Plan shall be administered by the Plan Administrator.
The Plan Administrator shall have the 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 person 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 provisions of Sections 9.03 and 9.04 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
Excess Retirement Benefits, to a named administrator or administrators. Pursuant to this
delegation power, the Company has appointed the Administrative Committee under the Savings Plan (as
it exists from time to time) as the Plan Administrator of this Plan.



Section 9.02 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 to the provisions of Sections 9.03 and 9.04 hereof, be final and
binding on all persons.







13









 







Section 9.03 Claims and Appeals Procedures.





	 	(a)	 	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 must file a claim in writing
with the Plan Administrator specifying the basis for his claim and the facts upon which he
relies in making such a claim. Such a claim must be signed by the claimant or his duly
authorized representative (the “Claimant”).
	 
	 	(b)	 	Whenever the Plan Administrator denies (in whole or in part) a claim for benefits under
the Plan, the Plan Administrator shall transmit a written notice of such decision to the
Claimant, 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). Such notice shall be written in a manner
calculated to be understood by the Claimant and shall state (i) the specific reasons for
the denial; (ii) specific reference to pertinent Plan provisions on which the denial is
based; (iii) 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 (iv) an explanation of the Plan’s 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.
	 
	 	(c)	 	Within 60 days after receipt of denial of a claim, the Claimant must file with the
Plan Administrator a written request for a review of such claim. If such an appeal is not
filed 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, a named fiduciary designated by the Plan Administrator 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 named fiduciary shall have the same
power to interpret the Plan and make findings of fact thereunder as is given to the Plan
Administrator under Section 9.01 above. The named fiduciary 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 (i) shall be written in a manner calculated to be understood by
the Claimant, (ii) shall state the specific reasons for the decision and the specific Plan
provisions on which the decision was based and (iii) shall, to the extent permitted by
applicable 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 9.04 Revocability of Action/Recovery. Any action taken by the Plan Administrator
or an Employer with respect to the rights or benefits under the Plan of any person shall be
revocable




14









 







by the Plan Administrator or the Employer 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 Plan Administrator’s or the Employer’s making any appropriate adjustments in
future payments to they payee (or to recover from such person) any excess payment or underpayment
previously made to him.



Section 9.05 Amendment. The Company (with the approval or ratification of the Compensation
Committee) may at any time (without the consent of an Employer) authorize the amendment of any or
all of the provisions of this Plan, except that without the prior written consent of the affected
Participant no such amendment (a) may reduce the amount of any Participant’s Excess Retirement
Benefit as of the date of such amendment; (b) may 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)
may alter the time of payment provisions described in Article VI hereof, except for amendments that
are required to bring such provisions into compliance with the requirements of Code Section 409A or
that accelerate the time of payment in a manner permitted by Code Section 409A. Any amendment
shall be in the form of a written instrument executed by an officer of the Company on the order of
the Compensation Committee. 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 9.06 Termination.





	 	(a)	 	The Compensation Committee has authorized the termination of the Plan, as related to
non-Covered Employees, effective in 2008 when the last payment is made to a non-Covered
Employee hereunder.
	 
	 	(b)	 	In addition, subject to the limitations described in Section 9.05, the Compensation
Committee, in its sole discretion, may terminate this Plan as related to one or more
Covered Employees at any time and for any reason whatsoever. Any such termination shall be
expressed in the form of a written instrument executed by an officer of the Company on the
order of the Compensation Committee. Subject to the foregoing provisions of this
Subsection, such termination shall become effective as of the date specified in such
instrument or, if no such date is specified, on the date of its execution. Written notice
of any termination shall be given to the Participants at a time determined by the Plan
Administrator.




15









 












	 	(c)	 	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 a portion thereof), the Company,
in its sole and absolute discretion (but with the consent of the Compensation Committee),
shall have the right to change the time and form of distribution of Participants’ Excess
Retirement Benefits, including requiring that all amounts credited to Participant’s Accounts
hereunder be immediately distributed in the form of a lump sum payment.






Executed, this 14th day of December, 2007.



	 	 	 	 	 
	 	THE NORTH AMERICAN COAL CORPORATION

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



16









 






	 	 	 	 	 



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 (such a Business Combination, an “Excluded Business Combination”) 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:






	 	(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




17









 






	 	 	 	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 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




18









 






	 	 	 	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 North American
Coal Corporation and its successors (“NA Coal”), any direct or indirect
subsidiary of NA Coal and any entity that directly or indirectly controls
NA Coal.






19