Document:

EX-10.1

 

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the 14th day of
December, 2004, by and among Big Lots, Inc., an Ohio corporation (“BLI”), Big Lots Stores, Inc.,
an Ohio corporation (“BLSI”) (BLI, BLSI and their respective affiliates, predecessor, successor,
subsidiaries and other related companies are hereinafter jointly referred to as “Employer”), and
Norman J. Rankin (“Executive”).

WITNESSETH:

     WHEREAS, the Employer desires to engage Executive to perform services for the Employer
and Executive desires to perform such services, on the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the
sufficiency of which is hereby mutually acknowledged, the Parties hereby agree as follows:

1. EMPLOYMENT.

	 	(a)	 	Duties and Services. Employer hereby employs Executive as a Senior Vice
President (or other appropriate title as designated by the Employer in its sole
discretion) and Executive hereby accepts such employment, and shall perform services of
a business, professional or commercial nature for the Employer in furtherance of the
Employer’s business. In performance of these duties, Executive shall be subject to the
direction of and report to an individual holding one or more of the following titles:
Chief Executive Officer, President, Chief Administrative Officer and/or Executive Vice
President of Employer.
	 
	 	(b)	 	Additional Positions. Executive shall, without any compensation in
addition to that which is specifically provided in this Agreement, serve as an officer
of the Employer and in such substitute or further offices or positions with Employer as
shall from time to time be

 

 

	 	 	 	reasonably requested by the Employer. Each office and
position with the Employer, in
which Executive may serve or to which he may be appointed, shall be consistent in
title and duties with Executive’s position. For service as a director or officer of
Employer, which service shall in each instance be deemed to be at the request of the
Employer and its Board of Directors, Executive shall be entitled to the protection of
the applicable indemnification provisions of the charter and code of regulations of
Employer and Employer agrees to indemnify and hold harmless Executive from and
against any claims, liabilities, damages or expenses incurred by Executive in or
arising out of the status, capacities and activities as an officer or director of the
Employer, to the maximum extent permitted by law and in accordance with any agreement
for indemnification. On any termination of his employment, Executive shall be deemed
to have resigned from all offices and directorships held by Executive.
	 
	 	(c)	 	Full Time and Attention. Executive agrees to his employment as described
herein and agrees to devote all of his time and best efforts to the performance of his
duties under this Agreement. Except as expressly permitted herein, Executive shall not,
without the prior written consent of Employer, directly or indirectly during the term
of this Agreement, render services of a business, professional or commercial nature to
any other person or firm, whether for compensation or otherwise. So long as it does
not interfere with his full-time employment hereunder, Executive may attend to outside
investments and serve as a director, trustee or officer of or otherwise participate in
educational, welfare, social, religious and civic organizations.

2. TERM.

Subject to the provisions for termination provided in this Agreement, the term of this
Agreement shall commence on December 14, 2004 and shall continue thereafter until
Executive’s employment is terminated. This Agreement supersedes and replaces the
Employment Agreement between Big Lots Stores, Inc. and its parent, affiliated, predecessor,
successor, subsidiary and other related companies and Executive, entered into as of December
16, 2001.

3. COMPENSATION AND BENEFITS.

 

	 	(a)	 	Base Salary. As compensation for his services hereunder, the Employer
shall pay Executive, an annual base salary (the “Base Salary”) payable in equal
installments on regular payroll dates designated by the Employer, an annual rate of
Three Hundred Fifty Thousand Dollars ($350,000). At least annually, the Compensation
Committee of the BLI Board of Directors shall review Executive’s performance and
determine whether an increase in the Executive’s Base Salary is merited. Provided,
however, that in no event shall the Base Salary be adjusted to an amount lower than the
annual rate initially enumerated in this Paragraph.
	 
	 	(b)	 	Benefits. Executive shall be entitled to participate in any group
health care, hospitalization, life insurance, dental, disability or other benefit plans
(“Benefit Plans”) available to executives in the same or similar job classification
(other than bonus compensation or performance plans to the extent that such plans, in
the case of Executive, are in lieu of the bonus plan set forth in Paragraph 4 herein).
Executive’s participation in and benefits under any such Benefit Plans shall be in
accordance with the terms and subject to the conditions specified in the governing
document of the particular Benefit Plan(s).
	 
	 	(c)	 	Vacation and Sick Leave. Executive shall be entitled to such periods
of vacation and sick leave each year as provided under Employer’s Vacation and Sick
Leave Policy for executives of the same or similar job classification.
	 
	 	(d)	 	Automobile Allowance. During the term of this Agreement, Employer
shall provide Executive with an automobile or a monthly automobile allowance, in
accordance with applicable policies of the Employer for executives of the same or
similar job classification.

4. BONUS.

Executive shall be eligible to participate in the 1998 Big Lots, Inc. Key Associate Annual
Compensation Plan, as amended (or any such successor plan, hereinafter “Bonus Program”).

 

Executive shall be eligible to receive a bonus for the fiscal year beginning February 1,
2004, and for each subsequent fiscal year of employment completed during the term of this
Agreement. Executive’s bonus shall be an amount equal to the Base Salary at the end of such
fiscal year multiplied by the Bonus Payout percentage as determined by the Bonus Program set
each fiscal year by the Compensation Committee of BLI’s Board of Directors. The Bonus
Program is based upon the achievement of Employer’s annual financial plan. The Target Bonus
for Executive is 50% of Base Salary and the Stretch Bonus for Executive is 100% of Base
Salary, both of which are defined by the Compensation Committee of BLI’s Board of Directors
and are subject to adjustment by BLI’s Board of Directors; provided however, Executive’s
Target Bonus shall never fall below 50% of Base Salary and Executive’s Stretch Bonus shall
never fall below 100% of base salary. Payment of the Bonus described in this Paragraph is
subject to the terms of the Bonus Program and any agreements issued thereunder.

5. EXPENSES.

Employer shall reimburse Executive during the term of this Agreement for travel,
entertainment and other expenses reasonably incurred by Executive in the promotion of
Employer’s business. Executive shall furnish such documentation and/or receipts with
respect to reimbursement to be paid as requested by the Employer.

6. TERMINATION.

The employment of Executive under this Agreement and term hereof shall be controlled by this
Agreement, exclusively and without regard to any termination, severance, income
continuation, or similar policies of Employer. Such employment may be terminated:

	 	(a)	 	Without Cause, Employer Termination. By Employer without cause at any
time upon thirty (30) days notice to the Executive of such termination, or
	 
	 	(b)	 	Without Cause, Executive Termination. By Executive without cause at
any time upon thirty (30) days notice to the Employer of such termination, or

 

	 	(c)	 	Upon Death or Long-Term Disability of Executive. By Employer upon the
death or long-term disability of Executive, or
	 
	 	(d)	 	For Cause, Employer Termination. By Employer for cause at any time.
For purposes hereof, the term “cause” shall mean:

	 	(i)	 	Executive’s conviction of fraud, a felony or other crime
involving moral turpitude or Executive’s commission of acts of embezzlement or
theft in connection with his duties or in the course of his employment.
	 
	 	(ii)	 	Executive engaging in Competitive Activities, disclosing
confidential information, or his willful breach of any material provision of
this Agreement.
	 
	 	(iii)	 	The term “Competitive Activities” shall mean Executive’s
participation, without the written consent of the Board of Directors of the
Employer, in any business enterprise if such business enterprise engages in
direct competition with the Employer. For purposes of this Agreement, a
business enterprise shall be considered in direct competition with the Employer,
if such business enterprise’s sales, related to any activity then engaged in by
the Employer, amount to ten percent (10%) or more of such business enterprise’s
total sales or one percent (1%) of Employer’s annual sales. “Competitive
Activities” shall not include the mere ownership of securities in any
publicly-traded enterprise and the exercise of rights appurtenant thereto.
	 
	 	(iv)	 	Any termination of Executive for “cause” shall not be
effective until Employer delivers written notice to Employee pursuant to the
terms of Paragraph 11 of this Agreement.
	 
	 	(v)	 	Any termination by reasons of the foregoing Subparagraphs (i)-(iv) shall not
be in limitation of any other right or remedy the Employer may have under this
Agreement, at law, in equity or otherwise.

7. EFFECT OF TERMINATION.

 

	 	(a)	 	Without Cause Effect, Employer Termination. In the event of the
termination of Executive’s employment by Employer pursuant to Paragraph 6(a) above,
except as otherwise provided in Paragraph 5 of this Agreement, Employer shall have no
obligation to pay any compensation or benefits of any kind to Executive other than,

	 	(i)	 	Base Salary that has been earned but not been paid up to and
including the date of termination;
	 
	 	(ii)	 	A prorata portion of the Bonus under this Agreement based upon
the amount of time worked by the Executive in the fiscal year when such
termination is effective, provided, however, that such prorata portion will be
determined in the ordinary course of business and paid at such time following
the close of the fiscal year that such other eligible executives receive such
payment;
	 
	 	(iii)	 	A continuation of Base Salary, automobile allowance (or use of
present company automobile), any Benefit Plans for which Executive is eligible
and enrolled, for twelve (12) months following the termination of this
Agreement;
	 
	 	(iv)	 	The Benefit Plans and automobile allowance/use contained in
Subparagraph (iii), above, shall cease if during the twelve (12) months
following termination, Executive is entitled to receive the same or similar
benefits from another employer.

	 	(b)	 	Without Cause Effect, Executive Termination. In the event of the
termination of Executive’s employment by Executive pursuant to Paragraph 6(b) above,
Employer shall have no obligation to pay any compensation or benefits of any kind to
Executive other than Base Salary that has been earned but not been paid up to and
including the date of termination, and Executive shall not be entitled to receive any
Bonus under this Agreement or otherwise.
	 
	 	(c)	 	Death or Long-Term Disability. In the event of the termination of
Executive’s employment by reason of death or long-term disability pursuant to Paragraph
6(c) above, Employer shall have no obligation to pay any compensation or benefits of
any kind to Executive or the Executive’s estate, other than as follows:

	 	(i)	 	Base Salary that has been earned but not been paid up to and
including the date of termination;
	 
	 	(ii)	 	A prorata portion of the Bonus under this Agreement based upon
the amount of time worked by the Executive in the fiscal year when such
termination is effective, provided, however, that such prorata portion will be
determined in the ordinary course of business and paid at such time following
the close of the fiscal year that such other eligible executives receive such
payment;

 

	 	(iii)	 	In the case of long-term disability, a continuation of Base
Salary and any Benefit Plans for which Executive is eligible and enrolled for
six (6) months following the termination of this Agreement and any long-term
disability benefits for which Executive is eligible under the Employer’s
long-term disability group insurance plan.
	 
	 	(iv)	 	The term “Long-Term Disability” shall be construed as it is
defined in the Employer’s long-term disability group insurance plan.

	 	(d)	 	For Cause Effect. In the event of termination for any of the reasons
for cause set forth in Paragraph 6(d) above, except as otherwise provided in Paragraph
5 of this Agreement, Executive shall not be entitled to further compensation or other
benefits under this Agreement (other than as provided by law), except as to Base Salary
that has been earned but not been paid up to and including the date of termination.
Further, Executive shall not be entitled to receive any Bonus determined under this
Agreement or otherwise.

8. CHANGE IN CONTROL. 

If there is a Change in Control (as defined herein) and Executive’s employment is thereupon
terminated or terminated within twenty four (24) months after the effective date thereof,
Executive shall be entitled to the termination benefits as set forth in this Paragraph and
its subparagraphs in lieu of other provisions of this Agreement. For purposes of this
Paragraph, Executive’s employment shall be deemed to have been terminated following a change
in control only if Employer terminates such employment without cause (as defined in
paragraph 6(a) above), or if a Constructive Termination occurs. “Constructive Termination”
shall mean a resignation by Executive because of any material adverse change or material
diminution in Executive’s then current reporting relationships, job description, duties,
responsibilities, compensation, perquisites, office or location of employment (as reasonably
determined by Executive in his good faith discretion); provided, however, that Executive
shall notify Employer in writing at least forty five (45) days in advance of any election by
Executive to terminate his employment because of a Constructive Termination hereunder,
specifying the nature of the alleged adverse change or diminution and Employer shall have a
period of ten (10) business days after the receipt of such

 

notice to cure such alleged adverse change or diminution before Executive shall be entitled
to exercise any such rights and remedies. Executive shall not be entitled to the benefits
available hereunder unless such notice is timely given.

	 	(a)	 	Change in Control Benefits. The benefits payable to Executive are as
follows:

	 	(i)	 	Employer shall pay to Executive a lump sum cash payment, net of
any applicable withholding taxes, in an amount equal to two (2) times his Base
Salary immediately prior to the effective date of such Change in Control (the
“Lump Sum Payment”); provided, that if there are fewer than twenty four (24)
months remaining from the date of Executive’s termination to Executive’s normal
retirement date at age 65, Employer shall instead pay Executive a prorata amount
of the Lump Sum Payment based upon the number of months remaining until
Executive’s normal retirement date at age 65. The applicable amount shall be
paid on or before the next regular payroll date following the termination of the
Executive’s employment.
	 
	 	(ii)	 	In addition to the payment described in Paragraph 8(a)(i) above,
Employer shall pay to Executive a lump sum cash payment, net of any applicable
withholding taxes, in an amount equal to two (2) times the Executive’s then
current Stretch Bonus, as defined in and determined annually by the Compensation
Committee of BLI’s Board of Directors; provided, that:

	 	(A)	 	In the event the Executive’s Bonus is undefined or
is not subject to a maximum payout, the Executive’s Bonus shall be deemed
to be 200% of the Executive’s then current Base Salary, and
	 
	 	(B)	 	If there are fewer than twenty four (24) months
remaining from the date of Executive’s termination to Executive’s normal
retirement date at age 65, Employer shall instead pay Executive a prorata
amount of the Lump Sum Bonus Payment based upon the number of months
remaining until

 

	 	 	 	Executive’s normal retirement date at age 65. Executive shall receive
the Lump Sum Bonus Payment at the same time Executive receives the Lump
Sum Payment described above.

	 	(iii)	 	A continuation of any Benefit Plans for which Executive
(and his spouse and/or dependents, if their participation is permitted under the
terms of the subject plan) is eligible and enrolled for twelve (12) months
following the termination of this Agreement; provided, that Executive’s
participation in the plans referred to herein shall be terminated (other than as
provided by law) when and to the extent that Executive is entitled to receive
the same or similar benefits from another employer during such period.
Executive’s participation in and benefits under any such plan shall be on the
terms and subject to the conditions specified in the governing document of the
particular Benefit Plan(s).
	 
	 	(iv)	 	If all or any portion of the amount payable under paragraph
8(a)(i) and 8(a)(ii) of this Agreement, either alone or together with other
amounts that Executive is entitled to receive in connection with a Change in
Control, constitutes “excess parachute payments” within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”), or any
successor provision, that are subject to the excise tax imposed by Section 4999
of the Code (or any similar tax or assessment), the amounts payable hereunder
shall be increased to the extent necessary to place Executive in the same
after-tax position as Executive would have been had no such excise tax or
assessment been imposed on any such payment paid or payable to Executive under
Paragraph 8(a)(i) and 8(a)(ii) of this Agreement or any other payment that
Executive may receive as a result of such Change in Control. The determination
of the amount of any such tax or assessment and the resulting amount of
incremental payment required hereby in connection therewith shall be made by the
independent accounting firm employed by Employer
immediately prior to the applicable Change in Control, within thirty (30)
calendar

 

	 	 	 	days after the payment of the amount payable pursuant to Paragraph
8(a)(i) and 8(a)(ii) of this Agreement. Said incremental payment shall be
made within five (5) business days after said determination has been made.
	 
	 	(v)	 	If, after the date upon which any payment is to be made under
this Paragraph, it is determined (pursuant to final judgment of a court of
competent jurisdiction or an agreed upon tax assessment) that the amount of
excise or other similar taxes or assessments payable by Executive is greater
than the amount initially so determined, then Employer shall pay Executive an
amount equal to the sum of (i) such additional excise or other similar taxes,
plus (ii) any interest, fines and penalties resulting from such underpayment,
plus (iii) an amount necessary to reimburse Executive for any income, excise or
other tax or assessment payable by Executive with respect to the amounts
specified in (i) and (ii) above, and the reimbursement provided by this clause
(iii). Payment thereof shall be made within five (5) business days after the
date upon which such subsequent determination is made.
	 
	 	(vi)	 	In addition to the benefits described above, Executive shall be
entitled to all rights derived under the Big Lots, Inc. 1996 Performance
Incentive Plan, as Amended (f/k/a Consolidated Stores Corporation 1996
Performance Incentive Plan, as Amended) in the event of a “Change in Effective
Control” (as defined in that plan).

	 	(b)	 	Change in Control Defined. As used herein, “Change in Control” means
any of the following events:

	 	(i)	 	Any person or group (as defined for purposes of Section 13(d) of
the Securities Exchange Act of 1934) becomes the beneficial owner of, or has the
right to acquire (by contract, option, warrant, conversion of convertible
securities or otherwise),

 

	 	 	 	20% or more of the outstanding equity securities of BLI entitled to vote for
the election of directors;
	 
	 	(ii)	 	A majority of the Board of Directors of BLI is replaced within
any period of two (2) years or less by directors not nominated and approved by a
majority of the directors of BLI in office at the beginning of such period (or
their successors so nominated and approved), or a majority of the Board of
Directors of BLI at any date consists of persons not so nominated and approved;
	 
	 	(iii)	 	The stockholders of BLI approve an agreement to reorganize,
merge or consolidate with another corporation (other than BLSI or an affiliate);
or
	 
	 	(iv)	 	The stockholders of BLI adopt a plan or approve an agreement to
sell or otherwise dispose of all or substantially all of BLI’s assets (including
without limitation, a plan of liquidation or dissolution), in a single
transaction or series of related transactions.

	 	(c)	 	Effective Date/Terms. The effective date of any such Change in Control
shall be the date upon which the last event occurs or last action taken such that the
definition of such Change in Control (as set forth above) has been met. For purposes
of this Agreement, the term “affiliate” shall mean:

	 	(i)	 	Any person or entity qualified as part of an affiliated group
which includes BLSI and BLI pursuant to Section 1504 of the Code; or
	 
	 	(ii)	 	Any person or entity qualified as part of a parent-subsidiary
group of trades and businesses under common control within the meaning of
Treasury Regulation Section 1.414(c-2)(b). Determination of affiliate shall be
tested as of the date immediately prior to any event constituting a Change in
Control. The other provisions of this Paragraph notwithstanding, the term
“Change in Control” shall not mean any transaction, merger, consolidation, or
reorganization in which BLI

 

	 	 	 	exchanges or offers to exchange newly issued or treasury shares in an amount
less than 50% of the then outstanding equity securities of BLI entitled to
vote for the election of directors, for 51% or more of the outstanding equity
securities entitled to vote for the election of at least the majority of the
directors of a corporation other than BLI or an affiliate thereof (the
“Acquired Corporation”), or for all or substantially all of the assets of the
Acquired Corporation.

	 	(d)	 	Legal Counsel. If Executive hires legal counsel with respect to any
alleged failure of Employer to comply with any terms of Paragraph 8 of this Agreement,
or institutes any negotiation or institutes or responds to any legal action to assert
or defend the validity of or to enforce Executive’s rights under Paragraph 8 of this
Agreement, or to recover damages for breach of Paragraph 8 of this Agreement, Employer
shall pay Executive’s actual expenses for attorneys’ fees and disbursements, together
with such additional payments, if any, as may be necessary so that the net after-tax
payments so made to Executive equal such fees and disbursements; provided, however,
that Executive shall be responsible for his own fees and expenses with respect to any
lawsuit between Executive and Employer to enforce rights or obligations under this
Paragraph 8 in which Employer is the prevailing party. The fees and expenses incurred
by Executive in instituting or responding to any such negotiation or legal action shall
be paid by Employer as they are incurred, in advance of the final disposition of the
action or proceeding, upon receipt of an undertaking by Executive to repay such amounts
if Employer is ultimately determined to be the prevailing party.
	 
	 	(e)	 	Interest. If any amount due Executive by the terms of this Paragraph 8
is not paid when due, then Employer shall pay interest on said amount at an annual rate
equal to the base lending rate of National City Bank, Cleveland, Ohio, or successor, as
in effect from time to

 

	 	 	 	time, for the period between the date on which such payment is due and the date said
amount is paid.
	 
	 	(f)	 	No Right of Setoff. Employer’s obligation to pay Executive the
compensation and to make the arrangement required in this Paragraph 8 shall be absolute
and unconditional and shall not be affected by any circumstance, including, without
limitation, any setoff, counterclaim, recoupment, defense or other right that Employer
may have against Executive or otherwise. All amounts payable by Employer hereunder
shall be paid without notice or demand. Subject to the proviso in this Paragraph 8,
each and every payment made hereunder by Employer shall be final and Employer shall not
seek to recover all or any part of such payment from Executive or from whosoever may be
entitled thereto, for any reason whatsoever. Executive shall not be obligated to seek
other employment or compensation or insurance in mitigation of any amount payable or
arrangement made under this Paragraph 8, and the obtaining of any such other employment
or compensation or insurance, except as otherwise provided in this Agreement, shall in
no event effect any reduction of Employer’s obligations to make the payments and
arrangements required under this Paragraph 8.

9. COVENANTS OF EXECUTIVE.

	 	(a)	 	Covenants. Executive acknowledges that the principal businesses of
Employer include the operation of its “Big Lots” discount general merchandise consumer
goods retail outlets, the inventories of which are acquired primarily through special
purchase situations such as overstocks, closeouts, liquidations, bankruptcies,
wholesale distribution of overstocked, distressed, or liquidated inventories, the
operation of its Big Lots Furniture Stores, and its wholesale operations (the “Company
Business”); and Employer is one of the limited number of entities who have developed
such business; and the Company Business is national in scope; and Executive’s work for
Employer will give him access to the

 

	 	 	 	confidential affairs of Employer; and the agreements and covenants of Executive
contained in Subparagraphs (i)-(iii) herein (“Restrictive Covenants”) are essential
to the business and goodwill of Employer. Accordingly, Executive covenants and
agrees that:

	 	(i)	 	During the term of Executive’s employment with Employer and for a
period of one (1) year (the “Restricted Period”) following the termination of
his employment in any manner, Executive shall not in any location where
Employer’s retail stores are located throughout the United States, directly or
indirectly, (1) engage in the Company Business for Executive’s own account
(other than pursuant to this Agreement), (2) render any services to any person
engaged in such activities (other than Employer), or (3) become employed, by
Wal-Mart, Kmart, Target, Dollar General, Family Dollar, Dollar Tree, Retail
Ventures, Inc., Fred’s, 99¢ Stores, Canned Foods, Tuesday Morning, TJX
Corporation, or any grocery store chain, regardless of size. Further, Employee
agrees not to render any services to, or in any manner become employed by, any
parent, subsidiary or other related entity of the above listed entities.
However, in the event of a Change in Control as defined in this Agreement, the
Restricted Period shall be for a period of six (6) months.
	 
	 	(ii)	 	During the term of Executive’s employment with Employer and for a
period of two (2) years following the termination of his employment in any
manner, Executive shall keep secret and retain in strictest confidence, and
shall not use for his benefit or the benefit of others, all confidential matters
relating to the Company Business hereafter learned by Executive, and shall not
disclose them to anyone except with Employer’s express written consent and
except for information which is at the time of receipt or thereafter, becomes
publicly known through no wrongful act of Executive, or is received from a third
party not under an obligation to keep such information confidential and without
breach of this Agreement.

 

	 	(iii)	 	During the term of Executive’s employment with Employer and for
a period of two (2) years following the termination of his employment in any
manner, without Employer’s prior written consent, Executive will not directly or
indirectly, solicit, encourage to leave the employment of Employer or hire any
employee of Employer.

	 	(b)	 	Acknowledgment. Executive acknowledges that the foregoing
restrictions are reasonable in light of the nature of the services the Employer
provides. Executive and the Employer agree that the Employer has legitimate reasons
for requiring such Restrictive Covenants from Executive. Executive acknowledges that
he understands the restrictions and has had an opportunity to fully discuss these
restrictions with the Employer and accepts the restrictions.
	 
	 	(c)	 	Maximum Enforceable Restriction. In the event that any or all of the
Restrictive Covenants contained in this Paragraph shall be determined by a court of
competent jurisdiction to be unenforceable by reason of the temporal restrictions being
too great, or by reason that the range of activities covered are too great, or for any
other reason, they shall be interpreted to extend over the maximum period of time,
range of activities or other restrictions as to which they may be enforceable.
	 
	 	(d)	 	Injunctive Relief. The Parties agree that a breach of the Restrictive
Covenants contained in this Paragraph may cause irreparable damage to the Employer, the
extent of which may be difficult to ascertain, and that the award of damages may not be
adequate relief. Therefore, Executive agrees that, in the event of a breach or a
threatened breach of the Restrictive Covenants, the Employer may institute an action to
compel the specific performance of same and obtain injunctive relief, without bond;
Executive agrees not to assert adequacy of money damages as a defense and agrees that
such remedy shall be cumulative, not exclusive, and in addition to any other available
remedies, and that the Employer may require Executive to account for and pay over to
Employer all compensation, profits, monies, accruals, increments, or other benefits
derived or received by him as the result of any transactions constituting a breach of
the Restrictive Covenants. Employer may set off any amounts finally determined by a
court of competent jurisdiction to be due it under this Paragraph against any amounts
owed to Executive. The Parties agree that any action for breach of the

 

	 	 	 	Restrictive Covenants and/or injunctive relief shall be venued in the Court of Common
Pleas, Franklin County, Ohio, and that Ohio law governs the terms of this Agreement.
	 
	 	(e)	 	Tolling Period. Executive acknowledges that under the terms of the
Restrictive Covenants contained in this Paragraph, the Employer is entitled to receive
a period of one (1) year of non-competition, and two (2) years of non-solicitation and
confidentiality immediately following termination of Executive’s employment. Executive
agrees that if any of these obligations to the Employer are breached during the one (1)
year period or non-competition, and/or the two (2) year period of non-solicitation and
confidentiality, then the time period will be extended for the length of time that
Executive failed to fulfill his obligations.

10. WITHHOLDING TAXES.

Except as otherwise provided, all payments to Executive, including the bonus compensation
under this Agreement, shall be subject to withholding on account of federal, state, and
local taxes as required by law.

11. NOTICES.

Any notice or other communication required or permitted hereunder shall be in writing and
shall be delivered personally, sent by facsimile transmission or sent by certified or
priority mail, postage prepaid. Any such notice shall be deemed given when so delivered
personally, or sent by facsimile transmission or, if mailed, five (5) days after the date of
deposit in the United States mail as follows:

	 	 	 	 	 	 	 
	 

	 	(a)
	 	If to the Employer to:
	 	Big Lots Stores, Inc.
	 

	 	 	 	 	 	300 Phillipi Road
	 

	 	 	 	 	 	Columbus, Ohio 43228-1310
	 

	 	 	 	 	 	Attention: General Counsel
	 
	 	 	 	 	 	 
	 

	 	 	 	With a copy to:
	 	Big Lots Stores, Inc.
	 

	 	 	 	 	 	300 Phillipi Road
	 

	 	 	 	 	 	Columbus, Ohio 43228-1310
	 

	 	 	 	 	 	Attention: Chief Executive Officer
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	If to the Executive to:
	 	Norman J. Rankin
	 

	 	 	 	 	 	6664 Bantry Court
	 

	 	 	 	 	 	Dublin, Ohio 43016

 

	 	(c)	 	Change of Address. Any such person may by notice given in accordance with this Paragraph to the other parties
hereto, designate another address or person for receipt by such person of notices hereunder.

12. SEVERABLE PROVISIONS.

The provisions of this Agreement are severable, and if any one or more provisions may be
determined to be invalid or otherwise unenforceable, in whole or in part, the remaining
provisions and any partially unenforceable provision, to the maximum extent enforceable,
shall, nevertheless, be binding and enforceable.

13. MODIFICATION.

This Agreement collectively sets forth the entire understanding of the Parties with respect
to the subject matter hereof, supersedes all existing agreements between them concerning
such subject matter, and may be modified only by a written instrument duly executed by each
party.

14. WAIVER.

Any waiver by either party of a breach of any provision of this Agreement shall not operate
as or be construed to be a waiver of any other breach of such provision or of any breach of
any other provision of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict adherence to that
term or any other term of this Agreement. Any waiver must be in writing.

15. BINDING EFFECT.

Executive’s rights and obligations under this Agreement shall not be transferable by
assignment or otherwise, such rights shall not be subject to commutation, encumbrance, or
the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be
void. The provisions of this Agreement shall be binding upon and inure to the benefit of
Executive and his heirs and personal representatives, and shall be binding upon and inure to
the benefit of the Employer and its successors.

16. NO THIRD-PARTY BENEFICIARIES.

 

This Agreement does not create, and shall not be construed as creating, any rights
enforceable by any person not a party to this Agreement.

17. HEADINGS.

The headings in this Agreement are solely for the convenience of reference and shall be
given no effect in the construction or interpretation of this Agreement.

	18.	 	COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
	 
	19.	 	GOVERNING LAW, JURISDICTION AND ARBITRATION.
	 
	 	 	This Agreement shall be governed by and construed in accordance with the laws of the State
of Ohio, without giving effect to conflict of laws. Any dispute arising out of or relating
to this Agreement or any breach of this Agreement, with the exceptions of the Restrictive
Covenants contained in Paragraph 9, shall be submitted to and determined in binding
arbitration, and such method shall be the exclusive method for resolving such disputes.
This provision includes any and all claims and remedies that the Executive could bring
against the Employer arising out of his employment, including, but not limited to, claims
for negligence, wrongful discharge, discrimination, harassment, intentional tort, infliction
of emotional distress, defamation, or loss of consortium. Submission may be made by either
party and must be made within thirty (30) days subsequent to the dispute arising.
Thereafter, the parties hereto shall take such steps as are necessary to assure that the
dispute will be promptly settled by arbitration, in accordance with the then-current
Commercial Arbitration Rules of the American Arbitration Association, within ninety (90)
days of its submission. The arbitration shall be conducted by a single arbitrator selected
by the parties. If the parties have not selected an arbitrator within ten (10) days of
written demand for arbitration, the arbitrator shall be selected by the American Arbitration
Association. Each party shall bear all its own legal fees and expenses. All arbitration
proceedings shall be conducted in the

 

federal judicial district where Executive maintains his principal place of employment for
the Company. Judgment upon any award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.

20. EMPLOYER PROPERTY.

Upon termination of Executive’s employment for any reason, or at any time at the Employer’s
request, Executive shall deliver up to the Employer, all property, keys, materials,
documents, records, manuals, notebooks, or papers and any copies thereof maintained in any
form that in any way relate to the business and activities of the Employer that may be in
the possession, or under the control of Executive.

21. CONFLICTING AGREEMENTS.

Executive represents and warrants that he is free to enter into this Agreement and that
Executive has not made and will not make any agreements in conflict with this Agreement.

22. SURVIVAL.

The covenants, agreements, representations, and warranties contained in or made pursuant to
this Agreement shall survive Executive’s termination of employment, whatever the reason for
termination of such employment, and shall survive any termination of this Agreement,
irrespective of any investigation made by or on behalf of any party.

WHEREUPON, the Parties hereto voluntarily enter into this Agreement as of this 14th day of December, 2004.

	 	 	 	 	 
	Big Lots, Inc.

	 	Executive
	 	 
	 
	 	 	 	 
	/s/ Michael J. Potter

	 	/s/ Norman J. Rankin	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	By: Michael J. Potter

	 	Printed Name: Norman J. Rankin	 	 
	 
	 	 	 	 
	Its: Chief Executive Officer
	 	 	 	 
	 
	 	 	 	 
	Big Lots Stores, Inc.
	 	 	 	 
	 
	 	 	 	 
	/s/ Brad A. Waite
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	By: Brad A. Waite
	 	 	 	 
	 
	 	 	 	 
	Its: Executive Vice PresidentCOLUMBUS MCKINNON CORPORATION THRIFT 401(K) PLAN
                  AMENDMENT NO. 12 OF THE 1998 PLAN RESTATEMENT

     Columbus  McKinnon  Corporation  (the  "Corporation")   hereby  amends  the
Columbus McKinnon  Corporation  Thrift 401(K) Plan (the "Plan"),  as amended and
restated in its entirety  effective  January 1, 1998, and as further  amended by
Amendment  Nos.  1through 11, as permitted  under  Section 14.1 of the Plan,  as
follows:

     1. New Section 1.13A, entitled "Electronic Administration System," is added
to the Plan effective January 1, 2006 to read as follows:

"1.13A  ELECTRONIC  ADMINISTRATION  SYSTEM  MEANS  ANY  TELEPHONIC  OR  COMPUTER
OPERATED SYSTEM INCLUDING,  BUT NOT LIMITED TO, A VOICE RESPONSE SYSTEM ACCESSED
BY TELEPHONE AND A WEBSITE  ACCESSED BY INTERNET,  THAT PERMITS A PARTICIPANT TO
COMMUNICATE  INSTRUCTIONS  REGARDING  THE  EXERCISE  OF A  PARTICIPANT  RIGHT OR
ELECTION UNDER THE PLAN TO THE COMMITTEE OR ITS DESIGNEE."

     2. Section 2.4,  entitled  "Notice and  Enrollment",  is amended  effective
January 1, 2006 to read as follows:

"2.4 AUTOMATIC ENROLLMENT OF NEW ELIGIBLE EMPLOYEES.

     (A) DEEMED  ELECTION TO MAKE SALARY  REDUCTION  CONTRIBUTIONS.  AN ELIGIBLE
EMPLOYEE SHALL BE DEEMED TO ELECT TO MAKE SALARY REDUCTION  CONTRIBUTIONS AT THE
RATE OF 2 PERCENT OF BASE PAY WHICH  ELECTION  SHALL BE EFFECTIVE  FOR THE FIRST
PAY  PERIOD  BEGINNING  ON OR AFTER  THE DATE ON WHICH  THE  EMPLOYEE  BECOMES A
PARTICIPANT  UNDER  SECTION  2.1(B)  SUBJECT TO THE FURTHER  PROVISIONS  OF THIS
SECTION  2.4. A DEEMED  ELECTION  UNDER THIS  SECTION 2.4 SHALL REMAIN IN EFFECT
FROM YEAR TO YEAR, UNTIL IT IS SUPERSEDED BY AN AFFIRMATIVE  ELECTION  DESCRIBED
IN SECTION 3.1.

     (B)  NOTICE  REGARDING  AFFIRMATIVE  ELECTIONS.  NO DEEMED  ELECTION  UNDER
SECTION  2.4(A) SHALL BE GIVEN  EFFECT  UNLESS THE EMPLOYEE IS GIVEN A NOTICE IN
WRITING OR BE E-MAIL THAT THE EMPLOYEE MAY AFFIRMATIVELY  ELECT, DURING A PERIOD
OF NOT LESS THAN 10 DAYS  FOLLOWING  THE RECEIPT OF SUCH  NOTICE  (THE  "INITIAL
ELECTION  PERIOD"),  TO MAKE ANY ELECTION PERMITTED UNDER SECTION 3.1, INCLUDING
AN ELECTION TO MAKE NO SALARY REDUCTION  CONTRIBUTIONS.  THE NOTICE SHALL ADVISE
THE EMPLOYEE THAT HE MAY CHANGE HIS ELECTION (WHETHER IT IS A DEEMED ELECTION OR
AN AFFIRMATIVE ELECTION) AT ANY TIME BY MAKING A NEW ELECTION,  AND THAT THE NEW
ELECTION SHALL BE EFFECTIVE AS PROVIDED IN SECTION 3.1(B). THE NOTICE SHALL ALSO
DESCRIBE THE MANNER IN WHICH THE EMPLOYEE MUST MAKE AN AFFIRMATIVE ELECTION.

     (C) EFFECT OF AN AFFIRMATIVE  ELECTION. AN AFFIRMATIVE ELECTION MADE WITHIN
THE INITIAL  ELECTION  PERIOD UNDER  SECTION  2.4(B) SHALL  SUPERSEDE THE DEEMED
ELECTION  UNDER SECTION 2.4(A)  BEGINNING ON THE DATE THE DEEMED  ELECTION WOULD
OTHERWISE HAVE BEEN EFFECTIVE. AN AFFIRMATIVE ELECTION MADE BY AN EMPLOYEE AFTER
THE INITIAL  ELECTION  PERIOD  UNDER  SECTION  2.4(B)  SHALL BE GIVEN  EFFECT AS
PROVIDED IN SECTION 3.1(B)."

<PAGE>

     3. Section  3.1,  entitled  "Salary  Reduction  Contributions",  is amended
effective January 1, 2006 by changing subsections (a) and (b) thereof to read as
follows:

     "(A) ELECTION OF SALARY REDUCTION CONTRIBUTIONS.

          (1) IN GENERAL.  AN ELIGIBLE  EMPLOYEE  MAY ELECT THAT HIS BASE PAY BE
     REDUCED BY A SPECIFIED  FULL  PERCENTAGE OF AT LEAST 1 PERCENT AND NOT MORE
     THAN 30 PERCENT AND TO HAVE SUCH AMOUNT  CONTRIBUTED BY HIS EMPLOYER TO THE
     PLAN ON HIS BEHALF. SUCH ELECTION SHALL BE EFFECTIVE  COMMENCING AS SOON AS
     PRACTICABLE  AFTER THE ELECTION IS MADE AND SHALL  CONTINUE IN EFFECT UNTIL
     CHANGED OR DISCONTINUED.

          (2) DEEMED ELECTION OF NEW ELIGIBLE EMPLOYEE. AN ELIGIBLE EMPLOYEE WHO
     IS  DEEMED TO ELECT A SALARY  REDUCTION  CONTRIBUTION  OF 2  PERCENT  UNDER
     SECTION 2.4 MAY IN LIEU OF SUCH DEEMED ELECTION MAKE AN ELECTION UNDER THIS
     SECTION 3.1 TO MAKE A CONTRIBUTION OF A DIFFERENT PERCENTAGE (BETWEEN 1 AND
     30 PERCENT) OR TO MAKE NO CONTRIBUTION AND SUCH ELECTION SHALL BE EFFECTIVE
     AS OF THE TIME THE DEEMED ELECTION WOULD HAVE BEEN EFFECTIVE.

          (3)  HIGHLY  COMPENSATED  EMPLOYEES.  THE  PERCENTAGE  ELECTED  BY ANY
     ELIGIBLE  EMPLOYEE  WHO IS A HIGHLY  COMPENSATED  EMPLOYEE  IS  SUBJECT  TO
     REDUCTION  BY THE  COMMITTEE  TO THE EXTENT IT DEEMS  ADVISABLE IN ORDER TO
     INSURE COMPLIANCE WITH SECTION 4.2

     (B) CHANGE OR DISCONTINUANCE OF ELECTION.

          (1) IN GENERAL.  A PARTICIPANT MAY DISCONTINUE HIS SALARY REDUCTION OR
     CHANGE HIS RATE OF SALARY  REDUCTION  (WITHIN THE LIMITS OF SECTION 3.1 AND
     SUBJECT TO ARTICLE 4 AND ARTICLE 5) BY MAKING A NEW ELECTION  UNDER SECTION
     3.1(A) AT SUCH TIME AND IN SUCH MANNER AS THE COMMITTEE MAY PRESCRIBE. SUCH
     DISCONTINUANCE  OR  CHANGE  SHALL  BE  EFFECTIVE   COMMENCING  AS  SOON  AS
     PRACTICABLE  AFTER THE NEW ELECTION IS MADE,  AND SHALL  CONTINUE IN EFFECT
     UNTIL CHANGED OR DISCONTINUED BY A SUBSEQUENT ELECTION.

          (2) AUTOMATIC  CONTRIBUTION  INCREASE. A PARTICIPANT MAY ELECT TO HAVE
     HIS RATE OF SALARY REDUCTION CONTRIBUTION  AUTOMATICALLY  INCREASED BY SUCH
     AMOUNTS AND AT SUCH TIMES AS THE PARTICIPANT MAY DETERMINE  (SUBJECT TO ANY
     LIMITS  IMPOSED BY THE COMMITTEE) BY MAKING AN ELECTION BY AT SUCH TIME AND
     IN SUCH  MANNER AS THE  COMMITTEE  MAY  PRESCRIBE.  THE  ELECTION  SHALL BE
     EFFECTIVE  COMMENCING AS SOON AS  PRACTICABLE  AFTER IT IS MADE,  AND SHALL
     CONTINUE IN EFFECT UNTIL CHANGED OR DISCONTINUED BY A SUBSEQUENT ELECTION."

     4. Section 6.4,  entitled "Notice to  Participants,"  is amended  effective
January 1, 2006 to read as follows:

<PAGE>

"6.4 NOTICE TO  PARTICIPANTS.  THE COMMITTEE SHALL NOTIFY EACH  PARTICIPANT (AND
EACH  ALTERNATE  PAYEE  UNDER  A  QDRO  AND  EACH   BENEFICIARY  OF  A  DECEASED
PARTICIPANT) OF THE BALANCE IN SUCH PERSON'S  ACCOUNT AS OF THE LAST DAY OF EACH
PLAN YEAR.  THE  COMMITTEE  MAY IN ITS  DISCRETION  NOTIFY  SUCH  PERSONS OF THE
BALANCES IN THEIR ACCOUNTS AT MORE FREQUENT  INTERVALS AND MAKE SUCH INFORMATION
AVAILABLE TO PARTICIPANTS BY MEANS OF AN ELECTRONIC ADMINISTRATION SYSTEM."

     5. Article 7,  entitled  "Funding and  Investments,"  is amended  effective
January 1, 2006 to read as follows:

                                   "ARTICLE 7

                             FUNDING AND INVESTMENTS

7.1 FUNDING METHOD AND POLICY.

     (A) IN GENERAL. THE FUNDING METHOD AND POLICY OF THE PLAN IS THE PAYMENT OF
ALL  CONTRIBUTIONS  TO THE  TRUSTEE,  WITH THE  CONTRIBUTIONS  TO BE HELD BY THE
TRUSTEE IN ACCORDANCE WITH THE TERMS OF THE TRUST AGREEMENT,  AND THE INVESTMENT
OF CONTRIBUTIONS  AND OTHER AMOUNTS ALLOCATED TO THE ACCOUNT OF EACH PARTICIPANT
IN THE INVESTMENT FUND OR FUNDS DESIGNATED BY THE PARTICIPANT IN ACCORDANCE WITH
THIS ARTICLE 7.

     (B) COMMITTEE TO MAKE INVESTMENT FUNDS AVAILABLE.  THE COMMITTEE SHALL MAKE
AVAILABLE THREE OR MORE INVESTMENT FUNDS FOR THE INVESTMENT OF PLAN ASSETS. EACH
OF THE INVESTMENT  FUNDS SHALL HAVE SUCH INVESTMENT  OBJECTIVES AS THE COMMITTEE
SHALL APPROVE, IT BEING INTENDED THAT EACH PARTICIPANT SHALL BE OFFERED A NUMBER
OF INVESTMENT CHOICES, AT LEAST SOME OF WHICH HAVE MATERIALLY DIFFERENT RISK AND
RETURN CHARACTERISTICS, WHICH WILL PERMIT THE SELECTION BY THE PARTICIPANT OF AN
INVESTMENT  PORTFOLIO  SUITABLE  TO  HIS  INVESTMENT  OBJECTIVES.  EACH  OF  THE
INVESTMENT  FUNDS SHALL CONSIST OF ONE OR MORE INVESTMENT  VEHICLES  SELECTED BY
THE COMMITTEE,  INCLUDING WITHOUT LIMITATION,  POOLED FUNDS AND/OR MUTUAL FUNDS.
ASSETS OF ANY  INVESTMENT  FUND MAY BE  TEMPORARILY  HELD IN CASH OR INVESTED IN
SHORT-TERM FIXED INCOME OBLIGATIONS ISSUED BY GOVERNMENTS,  GOVERNMENT AGENCIES,
OR CORPORATIONS, INCLUDING BANK DEPOSITS.

     (C)  INFORMATION  PROVIDED TO  PARTICIPANTS.  THE  COMMITTEE  SHALL PROVIDE
SUFFICIENTLY  DETAILED  INFORMATION  TO THE  PARTICIPANTS  WITH  RESPECT  TO THE
INVESTMENT FUNDS TO ENABLE PARTICIPANTS TO EXERCISE CONTROL OVER THE PLAN ASSETS
ALLOCATED TO THEIR ACCOUNTS WITHIN THE MEANING OF SECTION 404(C) OF ERISA.

     (D)  VOTING OF  SHARES.  THE  TRUSTEE  SHALL  VOTE ALL  SHARES  HELD IN ALL
INVESTMENT FUNDS, INCLUDING WITHOUT LIMITATION, SHARES OF A MUTUAL FUND.

7.2 CHANGES IN INVESTMENT FUNDS.

<PAGE>

     (A) RIGHT TO CHANGE  INVESTMENT  FUNDS. THE COMMITTEE IS AUTHORIZED TO MAKE
AVAILABLE  SUCH  ADDITIONAL  OR  DIFFERENT  INVESTMENT  FUNDS  AS  IT  MAY  DEEM
APPROPRIATE.  WITHOUT LIMITING THE FOREGOING, THE COMMITTEE IS AUTHORIZED AT ANY
TIME  AND FROM  TIME TO TIME TO ADD  ADDITIONAL  INVESTMENT  FUNDS  HAVING  SUCH
INVESTMENT OBJECTIVES AS IT SHALL DETERMINE,  TO MODIFY THE PROVISIONS GOVERNING
ANY EXISTING  INVESTMENT  FUND, OR TO ELIMINATE ONE OR MORE EXISTING  INVESTMENT
FUNDS.

     (B) PLAN  ASSETS  HELD IN  DISCONTINUED  FUNDS.  IN THE  EVENT AN  EXISTING
INVESTMENT  FUND  IS  ELIMINATED  IN  ACCORDANCE  WITH  THIS  SECTION  7.2 AND A
PARTICIPANT  WITH  PLAN  ASSETS  INVESTED  IN THE  FUND  FAILS  TO  GIVE  TIMELY
INSTRUCTIONS TO THE COMMITTEE TO REINVEST SUCH ASSETS IN A DIFFERENT  INVESTMENT
FUND, THE PARTICIPANT'S ASSETS SHALL BE REINVESTED IN THE CONTINUING  INVESTMENT
FUND THAT CONTAINS  INVESTMENTS MOST SIMILAR TO THOSE THAT WERE  DISCONTINUED OR
IN SUCH  OTHER  DEFAULT  INVESTMENT  FUND AS THE  COMMITTEE  MAY  SELECT  IN ITS
DISCRETION.

7.3 INVESTMENT OF FUTURE CONTRIBUTIONS.

     (A) RIGHT TO ELECT  INVESTMENTS.  AT THE TIME HE BECOMES A PARTICIPANT  AND
FROM TIME TO TIME THEREAFTER,  EACH PARTICIPANT MAY ELECT THE INVESTMENT FUND OR
FUNDS  AND  THE   PORTION   THEREOF  IN  WHICH  HIS  FUTURE   SALARY   REDUCTION
CONTRIBUTIONS,  RELATED MATCHING  CONTRIBUTIONS AND ROLLOVER  CONTRIBUTIONS,  IF
ANY, ARE TO BE INVESTED. INVESTMENT FUNDS SHALL BE ELECTED IN MULTIPLES OF 5% OF
CONTRIBUTIONS,  OR IN SUCH OTHER  PERCENTAGES AS THE COMMITTEE SHALL  AUTHORIZE.
ALL CONTRIBUTIONS SHALL BE INVESTED IN THE SAME PORTIONS, IN THE SAME INVESTMENT
FUND OR FUNDS.

     (B) MANNER OF ELECTING  INVESTMENTS.  INVESTMENT  FUNDS SHALL BE ELECTED BY
THE PARTICIPANT  FILING A WRITTEN  INVESTMENT  SELECTION ON A FORM PRESCRIBED BY
THE COMMITTEE,  BY THE PARTICIPANT ENTERING THE APPROPRIATE  INFORMATION INTO AN
ELECTRONIC  ADMINISTRATION  SYSTEM IN A FORM  PRESCRIBED  BY THE  ADMINISTRATIVE
COMMITTEE,  OR IN SUCH OTHER MANNER AS MAY BE AUTHORIZED  BY THE  ADMINISTRATIVE
COMMITTEE.

     (C) WHEN  ELECTIONS  BECOME  EFFECTIVE.  AN INVESTMENT  ELECTION UNDER THIS
SECTION 7.3 SHALL BECOME  EFFECTIVE AS SOON AS  PRACTICABLE AS DETERMINED BY THE
COMMITTEE.

     (D) EFFECT OF AN ELECTION.  AN INVESTMENT  ELECTION  UNDER THIS SECTION 7.3
SHALL APPLY TO ALL CONTRIBUTIONS  CREDITED TO THE  PARTICIPANT'S  ACCOUNT ON AND
AFTER THE EFFECTIVE DATE OF THE ELECTION AND SHALL REMAIN  EFFECTIVE UNTIL A NEW
ELECTION UNDER THIS SECTION 7.3 BECOMES EFFECTIVE.

     (E)  FAILURE  TO  ELECT  INVESTMENTS.  IF A  PARTICIPANT  FAILS  TO MAKE AN
ELECTION OF INVESTMENT  FUND OR FUNDS UNDER THIS SECTION 7.3, HE SHALL BE DEEMED
TO HAVE ELECTED THAT HIS FUTURE CONTRIBUTIONS BE INVESTED 100% IN THE INVESTMENT
FUND OR FUNDS DESIGNATED FROM TIME TO TIME BY THE COMMITTEE.

<PAGE>

7.4 REINVESTMENT OF EXISTING ACCOUNT BALANCE.

     (A) RIGHT TO REINVEST.  A PARTICIPANT MAY AT ANY TIME ELECT THAT THE ENTIRE
BALANCE OF HIS ACCOUNT BE REINVESTED IN SUCH DIFFERENT INVESTMENT FUND OR FUNDS,
OR IN SUCH  DIFFERENT  PERCENTAGES  PERMITTED  UNDER  SECTION  7.3,  AS HE SHALL
DIRECT.  EACH SUB-ACCOUNT SHALL BE REINVESTED IN THE SAME PORTIONS,  IN THE SAME
INVESTMENT FUND OR FUNDS.  ELECTIONS TO REINVEST  ACCOUNT BALANCES SHALL BE MADE
IN A MANNER  SIMILAR TO ELECTIONS  PERMITTED  UNDER SECTION 7.3 AND SHALL BECOME
EFFECTIVE AS PROVIDED UNDER SECTION 7.3(C).

     (B)  RETROSPECTIVE  EFFECT. A REINVESTMENT  ELECTION UNDER THIS SECTION 7.4
SHALL  APPLY ONLY TO AMOUNTS  CREDITED TO THE  PARTICIPANT'S  ACCOUNTS AS OF THE
APPLICABLE  VALUATION DATE AND SHALL NOT APPLY TO  CONTRIBUTIONS  RECEIVED AFTER
THAT DATE.

     (C) AUTOMATIC  REBALANCING  ELECTION.  A PARTICIPANT  MAY ELECT TO HAVE HIS
INVESTMENT  PORTFOLIO UNDER THE PLAN AUTOMATICALLY  REINVESTED FROM TIME TO TIME
IN  SUCH  INVESTMENT  FUNDS  AND IN  SUCH  PERCENTAGES  AS THE  PARTICIPANT  MAY
DETERMINE.  AN ELECTION  UNDER THIS SECTION  7.4(C) SHALL BE MADE IN SUCH MANNER
AND AT SUCH TIME AS THE  COMMITTEE  SHALL  PRESCRIBE  AND SHALL REMAIN IN EFFECT
UNTIL  SUPERSEDED  BY AN ELECTION  UNDER THIS  SECTION  7.4(C)  THAT  CHANGES OR
CANCELS THE PREVIOUS ELECTION.

     (D) AUTOMATIC REBALANCING NOTIFICATION.  A PARTICIPANT MAY ELECT TO RECEIVE
A NOTICE  FROM THE  COMMITTEE  WHENEVER  THE  PERCENTAGES  OF THE  PARTICIPANT'S
ACCOUNT  INVESTED  IN VARIOUS  INVESTMENT  FUNDS  INCREASE  OR  DECREASE  BEYOND
SPECIFIED  LIMITS.  SUCH NOTICES SHALL BE GIVEN WITH SUCH  FREQUENCY AND IN SUCH
FORM AS THE COMMITTEE MAY  PRESCRIBE  FROM TIME TO TIME. AN ELECTION  UNDER THIS
SECTION  7.4(D)  SHALL BE MADE IN SUCH MANNER AND AT SUCH TIME AS THE  COMMITTEE
SHALL PRESCRIBE AND SHALL REMAIN IN EFFECT UNTIL SUPERSEDED BY AN ELECTION UNDER
THIS SECTION 7.4(D) THAT CHANGES OR CANCELS THE PREVIOUS ELECTION.

7.5 ALLOCATION OF WITHDRAWALS,  LOANS AND  DISTRIBUTIONS.  WHERE A PARTICIPANT'S
CONTRIBUTIONS  ARE INVESTED IN MORE THAN ONE INVESTMENT  FUND, THE AMOUNT OF ANY
WITHDRAWAL,  LOAN, OR DISTRIBUTION SHALL BE CHARGED AGAINST EACH SUCH INVESTMENT
FUND IN  PROPORTION TO THE  PARTICIPANT'S  ACCOUNT  BALANCE IN EACH,  UNLESS THE
COMMITTEE SHALL ESTABLISH  PROCEDURES  PERMITTING  PARTICIPANTS TO DESIGNATE THE
SOURCE OF A LOAN, WITHDRAWAL OR DISTRIBUTION AND THE PARTICIPANT SHALL HAVE MADE
A DESIGNATION.

7.6 MERGED PLAN INVESTMENTS.  THE COMMITTEE MAY DIRECT THE TRUSTEE TO RETAIN ANY
INVESTMENT MADE UNDER A TAX-QUALIFIED PLAN THAT IS MERGED INTO THE PLAN FOR SUCH
LENGTH OF TIME AS THE COMMITTEE MAY DEEM  APPROPRIATE IN ORDER TO FACILITATE THE
MERGER OF SUCH PLAN INTO THE PLAN,  FACILITATE THE  ADMINISTRATION  OF THE PLAN,
AVOID WITHDRAWAL  PENALTIES,  OR TO ACCOMPLISH ANY SIMILAR GOAL. THE INVESTMENTS
OF  MERGED  PLANS  THAT ARE  RETAINED  UNDER THE PLAN MAY  INCLUDE,  BUT ARE NOT
LIMITED TO, GUARANTEED  INVESTMENT CONTRACTS AND INVESTMENTS UNDER GROUP ANNUITY
CONTRACTS ISSUED BY INSURANCE  COMPANIES.  THE EARNINGS AND LOSSES INCURRED WITH
RESPECT TO SUCH INVESTMENTS  SHALL, TO THE EXTENT  PRACTICABLE,  BE ALLOCATED TO

<PAGE>

PARTICIPANTS  WHO WERE  PARTICIPANTS IN THE RELEVANT MERGED PLANS, IN ACCORDANCE
WITH THEIR  RESPECTIVE  ACCOUNT  BALANCES AND  INVESTMENT  SELECTIONS  UNDER THE
MERGED PLANS."

     6. New Section 9.7,  entitled  "Forfeiture of Uncashed Checks," is added to
the Plan effective January 1, 2006 and shall read as follows:

`9.7 FORFEITURE OF UNCASHED CHECKS. IN THE EVENT THAT A DISTRIBUTION  PAYMENT IS
MADE BY THE PLAN TO A PARTICIPANT OR  BENEFICIARY  BY MEANS OF A CHECK,  AND THE
CHECK IS NOT  CASHED  WITHIN  ONE YEAR  FOLLOWING  THE  DATE OF  ISSUE,  AND THE
COMMITTEE DETERMINES THAT THE CHECK IS UNLIKELY TO BE CASHED IN THE FUTURE, THEN
THE  COMMITTEE  MAY STOP  PAYMENT ON THE CHECK,  IN WHICH CASE THE AMOUNT OF THE
CHECK  SHALL BE  FORFEITED  TO THE PLAN AND USED TO PAY PLAN  EXPENSES.  IN SUCH
CASE,  THE  AMOUNT  OF  THE  CHECK,  WITHOUT  INTEREST,  SHALL  BE  PAID  TO THE
PARTICIPANT OR BENEFICIARY  (OR OTHER PERSON  ENTITLED TO THE PAYMENT) IF AT ANY
LATER TIME A CLAIM IS MADE BY THE  PARTICIPANT OR  BENEFICIARY  (OR OTHER PERSON
ENTITLED TO THE PAYMENT). NOTHING IN THIS SECTION 9.7 SHALL DIMINISH THE DUTY OF
THE COMMITTEE TO SEARCH FOR LOST PARTICIPANTS AND BENEFICIARIES AND TO TAKE SUCH
ACTIONS AS MAY BE REASONABLE UNDER THE CIRCUMSTANCES TO ENSURE THAT DISTRIBUTION
CHECKS ARE CASHED."

     7. Section 10.3,  entitled  "Hardship  Withdrawals,"  is amended  effective
January 1, 2005 by changing Section 10.3(d)(2) to read as follows:

          "(2) DEEMED  IMMEDIATE AND HEAVY FINANCIAL NEED. A WITHDRAWAL SHALL BE
     DEEMED TO BE MADE ON ACCOUNT OF AN IMMEDIATE  AND HEAVY  FINANCIAL  NEED OF
     THE PARTICIPANT IF THE WITHDRAWAL IS ON ACCOUNT OF ONE OF THE FOLLOWING:

               (A) EXPENSES FOR (OR NECESSARY TO OBTAIN) MEDICAL CARE THAT WOULD
          BE DEDUCTIBLE UNDER CODE SECTION 213(D) (DETERMINED  WITHOUT REGARD TO
          WHETHER THE EXPENSES EXCEED 7.5% OF ADJUSTED GROSS INCOME);

               (B)  COSTS  DIRECTLY  RELATED  TO  THE  PURCHASE  OF A  PRINCIPAL
          RESIDENCE FOR THE PARTICIPANT (EXCLUDING MORTGAGE PAYMENTS);

               (C) PAYMENT OF TUITION,  RELATED  EDUCATIONAL  FEES, AND ROOM AND
          BOARD  EXPENSES,  FOR UP TO  THE  NEXT  12  MONTHS  OF  POST-SECONDARY
          EDUCATION FOR THE PARTICIPANT,  OR THE PARTICIPANT'S SPOUSE, CHILDREN,
          OR DEPENDENTS  (AS DEFINED IN CODE SECTION 152, AND, FOR TAXABLE YEARS
          BEGINNING ON OR AFTER JANUARY 1, 2005,  WITHOUT REGARD TO CODE SECTION
          152(B)(1), (B)(2) AND (D)(1)(B)); OR

               (D) PAYMENTS NECESSARY TO PREVENT THE EVICTION OF THE PARTICIPANT
          FROM THE  PARTICIPANT'S  PRINCIPAL  RESIDENCE  OR  FORECLOSURE  ON THE
          MORTGAGE ON THAT RESIDENCE;

<PAGE>

               (E) PAYMENT FOR BURIAL OR FUNERAL EXPENSES FOR THE  PARTICIPANT'S
          PARENT, SPOUSE, CHILD OR DEPENDENT; OR

               (F)  PAYMENT  OF  EXPENSES  FOR  THE  REPAIR  OF  DAMAGE  TO  THE
          PARTICIPANT'S PRINCIPAL RESIDENCE PROVIDED SUCH EXPENSES WOULD QUALIFY
          FOR A CASUALTY  DEDUCTION UNDER CODE SECTION 165  (DETERMINED  WITHOUT
          REGARD TO WHETHER THE LOSS EXCEEDS 10% OF THE  PARTICIPANT'S  ADJUSTED
          GROSS INCOME."

     8. Section 10.5, entitled "Loan Documents and Policy," is amended effective
January 1, 2006 to read as follows:

"10.5 LOAN DOCUMENTS AND POLICY.

     (A)  LOAN  DOCUMENTS.  THE  COMMITTEE  SHALL  PREPARE  THE  FOLLOWING  LOAN
DOCUMENTS,  WHICH SHALL BE  EXECUTED BY THE  PARTICIPANT  AND  DELIVERED  TO THE
COMMITTEE PRIOR TO THE DISBURSEMENT OF ANY LOAN PROCEEDS:  [1] A PROMISSORY NOTE
PAYABLE TO THE TRUSTEE AND CONTAINING SUCH TERMS AND CONDITIONS AS THE COMMITTEE
SHALL  DETERMINE;  [2] A SECURITY  AGREEMENT  GRANTING  TO THE TRUSTEE A LIEN ON
ONE-HALF  THE  VALUE  OF  THE  PARTICIPANT'S   ACCOUNT;  AND  [3]  AN  AGREEMENT
AUTHORIZING  THE EMPLOYER TO DEDUCT  INSTALLMENTS OF PRINCIPAL AND INTEREST FROM
HIS WAGES  DURING THE PERIOD THAT THE LOAN REMAINS  OUTSTANDING.  ALTERNATIVELY,
THE COMMITTEE MAY ESTABLISH PROCEDURES WHERE APPLICATIONS FOR LOANS ARE MADE VIA
AN  ELECTRONIC  ADMINISTRATION  SYSTEM AND THE ONLY  DOCUMENTATION  OF THE LOAN,
INCLUDING THE  PARTICIPANT'S  AGREEMENT TO THE TERMS AND CONDITIONS OF THE LOAN,
ARE [1] RESPONSES  GIVEN BY THE  PARTICIPANT  VIA THE ELECTRONIC  ADMINISTRATION
SYSTEM  AND [2] THE  NEGOTIATION  OF A DRAFT  ISSUED TO THE  PARTICIPANT  IN THE
AMOUNT OF THE LOAN PROCEEDS,  AND/OR [3] SUCH  ADDITIONAL  DOCUMENTATION  AS THE
COMMITTEE DEEMS APPROPRIATE.

     (B) WRITTEN LOAN POLICY.  THE  COMMITTEE IS  AUTHORIZED TO IMPOSE TERMS AND
CONDITIONS ON LOANS THAT ARE IN ADDITION TO AND/OR  DIFFERENT FROM THE TERMS AND
CONDITIONS  SET FORTH IN SECTION 10.4,  AND TO CHANGE SUCH TERMS AND  CONDITIONS
FROM TIME TO TIME, AS IT DEEMS  APPROPRIATE.  SUCH ADDITIONAL  AND/OR  DIFFERENT
TERMS  AND  CONDITIONS  SHALL BE SET FORTH IN A WRITTEN  LOAN  POLICY  WHICH MAY
CONSIST IN WHOLE OR PART IN THE LANGUAGE  INCORPORATED IN  ADMINISTRATIVE  FORMS
AND/OR THE PROGRAMMING IN AN ELECTRONIC ADMINISTRATION SYSTEM."

     9. Section 11.3,  entitled  "Authority of Committee," is amended  effective
January 1, 2006 by adding new subsection (e) thereto, to read as follows:

     "(E) PLAN ADMINISTRATION PROCEDURES. BY WAY OF ADDITIONAL EXPLANATION,  AND
WITHOUT  MEANING  TO  IMPLY  ANY  LIMITATION  ON THE  AUTHORITY  GRANTED  TO THE
COMMITTEE  UNDER  SECTION  11.3(A),  THE  COMMITTEE MAY DETERMINE THE METHODS BY
WHICH  COMMITTEE  DECISIONS,   PARTICIPANT   ELECTIONS  AND  OTHER  MATTERS  ARE
COMMUNICATED  UNDER THE PLAN.  TO THE EXTENT  PERMITTED  BY  APPLICABLE  LAW AND

<PAGE>

REGULATIONS,  AND NOTWITHSTANDING  REFERENCES  ELSEWHERE IN THE PLAN DOCUMENT TO
"FORMS" AND  "WRITING,"  SUCH ITEMS MAY BE  COMMUNICATED  BY MEANS OF ELECTRONIC
ADMINISTRATION SYSTEMS IN ADDITION TO OR IN LIEU OF WRITTEN COMMUNICATIONS."

WITNESS  WHEREOF,  this  instrument  of  amendment  has been  executed by a duly
authorized officer of the Corporation this 27th day of December, 2005.

                          COLUMBUS McKINNON CORPORATION

                          By     Timothy R. Harvey
                                 -----------------------------

                          Title: General Counsel and Secretary
                                 -----------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]