Document:

EX-10.8 Kitchen Collection 2006 Ann Incent Comp Pn

 

Exhibit 10.8

THE KITCHEN COLLECTION, INC.

2006 ANNUAL INCENTIVE COMPENSATION PLAN

Introduction

     The Kitchen Collection, Inc. (“the Company”) has established an Annual Incentive Compensation
Plan (“Plan”) as part of a competitive program for the officers and key management employees of the
Company.

Plan Objectives

     The Company desires to attract and retain talented employees to enable the Company to meet its
financial and business objectives. The objective of the Plan is to provide an opportunity to earn
annual incentive compensation to those employees whose performance has a significant impact on the
Company’s short-term and long-term profitability.

Administration

     The Plan is administered by the Compensation Committee of the Board of Directors of the
Company (the “Committee”). The Committee:

	 	A.	 	May amend, modify, or discontinue the Plan.
	 
	 	B.	 	Will designate Plan Participants.
	 
	 	C.	 	Will determine the annual performance criteria which generate the incentive
compensation pool.
	 
	 	D.	 	Will determine the total amount of both the target and actual annual incentive
compensation pool.
	 
	 	E.	 	Will approve individual incentive Awards to Participants who are officers of
the Company.
	 
	 	F.	 	May delegate to the Chief Executive Officer of the Company the approval of
incentive compensation Awards to Participants below officer level.
	 
	 	G.	 	May approve a pro rata incentive compensation Award for Participants in the
Plan whose employment is terminated before the end of the Award Term (1) due to death,
disability, retirement or facility closure or (2) under other circumstances at the
recommendation of the Chief Executive Officer of the Company. In furtherance of, but
without limiting the foregoing, except as determined by the Committee, a Participant
must be employed on December 31 of the Award Term in order to be entitled to receive an
Award hereunder.

     The Committee shall have complete authority to interpret all provisions of this Plan
consistent with law, to prescribe the form of any instrument evidencing any Award granted or paid
under this Plan, to adopt, amend and rescind general and special rules and regulations for its
administration, and to make all other determinations necessary or advisable for the administration
of this Plan. A majority of the Committee shall constitute a quorum, and the action of members of
the Committee present at any meeting at which a quorum is present or acts unanimously approved in
writing, shall be the act of the Committee. All acts and decisions of the Committee with respect
to any questions arising in connection with the administration and interpretation of this Plan,
including the severability of any or all of the provisions hereof, shall be conclusive, final and
binding upon the Company and all present and former Participants and employees and their respective
descendants, successors and assigns. No member of the Committee shall be liable for any such act
or decision made in good faith.

Determination of Corporate Incentive Compensation Pool

     Each Participant in the Plan will have an individual target incentive compensation percentage
which is determined by the Participant’s salary grade. This percentage is multiplied by the
mid-point of

 

 

the Participant’s salary grade to determine his individual target incentive compensation Award.
The total of the target incentive compensation Awards of all participants equals the target
corporate incentive compensation pool (“Target Pool”). The Target Pool is approved at the
beginning of each Award Year by the Committee.

     The actual corporate incentive compensation pool (”Actual Pool”) is determined as of the end
of each Award Year based on the Company’s actual performance against specific criteria established
in the beginning of the Award Year by the Committee. The Target Pool is adjusted upwards or
downwards by corporate performance adjustment factors to determine the Actual Pool. In no event
will the Actual Pool exceed 150% of the Target Pool, except that the Committee elects to increase
the Actual Pool by up to 10% as described below.

     The Target and Actual Pools may consist of the sum of two or more subpools, provided the
subpools have individual objectives.

     Subject to the Committee’s right to amend or terminate the Plan at any time, it is the intent
of the Plan that the Actual Pool, as determined above, will be the final total corporate incentive
compensation pool. However, the Committee, in its sole discretion, may increase or decrease by up
to 10% of the Actual Pool or may approve an incentive compensation pool where there would normally
be no pool due to Company performance which is below the criteria established for the year.

     The Actual and Target Pools exclude the Marketing Incentive Plan for regional, district, store
and support managers. However, total compensation for employees covered by the Marketing Incentive
Plan will be based on competitive levels.

Determination of Individual Incentive Compensation Awards

     Salary grades and the corresponding target incentive percentage for each Participant in the
Plan will be established at the beginning of each Award Year and approved by the Committee.
Individual target incentive compensation will then be adjusted by the appropriate pool or subpool
factor. Such adjusted individual incentive compensation will be further modified based on a
Participant’s performance as compared to his individual goals for the Award Year.

     The total of all individual incentive compensation Awards must not exceed the Actual Pool for
the Award Year.

     A. Example Calculation for Determination of Actual Pool

Intentionally Omitted

     B. Example
Calculation for Determination of Individual Incentive Compensation Awards

Intentionally Omitted

Payment Date/Taxes

     Promptly following the Committee’s approval of the final Awards, the Company shall pay the
amount of such Awards to the Participants in cash, subject to all withholdings and deductions
described in the following sentence; provided, however, that (i) no Award shall be payable to a
Participant except as determined by the Committee and (ii) in no event shall the Awards be paid
later than two and one-half months after the close of the Award Term. Any Award paid to a
Participant under this Plan shall be subject to all applicable federal, state and local income tax,
social security and other standard withholdings and deductions.

 

 

Definitions

     (a) “Award” means cash paid to a Participant under the Plan for the Award Term in an amount
determined in accordance with the Plan.

     (b) “Award Term” means the period from January 1, 2006 through December 31, 2006.

     (c) “Participant” means any person who is classified by the Company as a salaried employee and
in salary grades 4 and above, who in the judgment of the Committee occupies a key position in which
his efforts may significantly contribute to the profits or growth of the Company; provided,
however, that the Committee may select any employee who is expected to contribute, or who has
contributed, significantly to the Company’s profitability to participate in the Plan and receive an
Award hereunder; and further provided, however, that following the end of the Award Term the
Committee may make one or more discretionary Awards to employees of the Company who were not
previously designated as Participants. Directors of the Company who are also employees of the
Company are eligible to participate in the Plan. The Committee shall have the power to add
Participants at any later date in the Award Term if individuals subsequently become eligible to
participate in the Plan. Each Participant shall be notified that he is eligible to receive an
Award and the amount of his target Award. If a Participant receives a change in salary midpoint,
such Participant shall be notified of any resulting change in his target Award.

General Provisions

     (a) No Right of Employment. Neither the adoption or operation of this Plan, nor any
document describing or referring to this Plan, or any part thereof, shall confer upon any employee
any right to continue in the employ of the Company, or shall in any way affect the right and power
of the Company to terminate the employment of any employee at any time with or without assigning a
reason therefor to the same extent as the Company might have done if this Plan had not been
adopted.

     (b) Governing Law. The provisions of this Plan shall be governed by and construed in
accordance with the laws of the State of Ohio.

     (c) Miscellaneous. Headings are given to the sections of this Plan solely as a
convenience to facilitate reference. Such headings, numbering and paragraphing shall not in any
case be deemed in any way material or relevant to the construction of this Plan or any provisions
thereof. The use of the masculine gender shall also include within its meaning the feminine. The
use of the singular shall also include within its meaning the plural, and vice versa.

     (d) American Jobs Creation Act. It is intended that this Plan be exempt from the
requirements of Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation
Act.

     (e) Limitation on Rights of Participants; No trust. No trust has been created by the
Company for the payment of Awards granted under this Plan; nor have the Participants been granted
any lien on any assets of the Company to secure payment of such benefits. This Plan represents
only an unfunded, unsecured promise to pay by the Company and a Participant hereunder is a mere
unsecured creditor of the Company.

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

     (g) Effective Date. This Plan shall become effective as of January 1, 2006.

2006 Performance Targets

     The performance targets for the Plan are attached as an Addendum to this document.EX-10.9 Kitchen Collection Long Term Incent Comp P

 

Exhibit 10.9

Award Control Number:

THE KITCHEN COLLECTION, INC.

LONG-TERM INCENTIVE

COMPENSATION AWARD

(NOT TRANSFERABLE)

Form of Award Unit CERTIFICATE

THE KITCHEN COLLECTION, INC.

(the “Company”) pursuant to action of the Compensation Committee of its Board of
Directors (the “Committee”), hereby grants to
                                         (the “Grantee”),                      Award Units
having an Award Unit Price
$              per Unit
pursuant to and subject to the provisions of The
Kitchen Collection, Inc. Long-Term Compensation Plan (the “Plan”). This Award granted
on and this Certificate executed at Chillicothe, OH as of
January 1, 2007, the “Date of Grant”
The Award Units granted in this Certificate shall have a maturity date of  January 1,
2012  (but shall mature earlier in accordance with Plan terms on death, disability or
retirement).

Recipient acknowledges having received a complete copy of the Plan.

THE KITCHEN Collection, Inc.

	 	 	 	 	 
	 

	 	 	 	 
	BY

	 	************************************	 	 
	 

	 	 	 	 
	 

	 	President and Chief Executive Officer	 	 

Please review carefully the summary of general provisions pertinent to this award on the
reverse side.

 

 

Form of Award Unit Certificate

General Provisions**

	1.	 	Vesting/Taxes: These Award Units are fully vested as of the Grant Date. As a
result, they are subject to FICA taxes when granted. (However, under current tax law, they
are not subject to federal, state or local income taxes until paid out.) All payments under
the Plan will be reduced by the amount of any employment or other taxes that are required to
be withheld therefrom.

	2.	 	Payment Restrictions: The Book Value Units granted under the Award shall be subject
to a payment restriction for a period of five years from the Grant Date (the “Maturity Date”);
provided that such payment restrictions automatically lapse upon a termination of employment
by reason of death, Disability or Retirement. The Committee may not accelerate the time at
which such payment restrictions will lapse. In addition, the Maturity Date for certain “key
employees” (generally, the top 50 paid employees across the NACCO group) will be delayed until
6 months after retirement.

	3.	 	Payment Date / Value: Unless a Participant makes a deferral election under Paragraph
4 below, as soon as practicable following the lapse of a payment restriction applicable to an
Award pursuant to Paragraph 2 above, the Company will deliver to the Participant (or, if
applicable, his Beneficiary), a check in full payment of the Book Value Units granted pursuant
to such Award. For Participants who are employed on the Maturity Date, the value of the Book
Value Units is based on the Book Value as of the Quarter Date coinciding with or immediately
preceding the Maturity Date. For Participants who terminated employment for reasons other than
Disability or Retirement, the value of the Book Value Units is based on the Book Value as of
the ending Quarter Date coincident with or immediately preceding the date of termination
(despite the fact that payment is not made until Maturity Date). Finally, for Participants
who die or who terminate employment before the Maturity Date due to Disability or Retirement,
the value of the Book Value Units is based on the Book Value as of the ending Quarter Date
coincident with or immediately preceding death, Disability or Retirement (or 6 months later in
the case of key employees).

	4.	 	Deferral Option: A participant may make an irrevocable election to defer receipt of
his entire Award under the Plan. A separate deferral election must be made with respect to
each Award granted under the Plan. The Awards that are subject to a deferral election
continue to be subject to the terms and conditions of this Plan and shall continue to be
valued in accordance with the terms of the Plan until the date of payment. In order to make a
deferral election, the election (i) must apply to 100% of an Award granted for a particular
year, (ii) must be made at least 12 months prior to the Maturity Date of the Award and (iii)
will not be given effect until at least 12 months after the date on which the election is
made. If a valid and timely deferral election is made with respect to an Award, the payment
of the Award will automatically be deferred until the 10th anniversary of the Grant
Date of such Award and will then be paid in the form of a lump sum payment as soon as
practicable after the 10th anniversary date. Notwithstanding the foregoing, all
deferral elections will automatically terminate (and will be void and of no further effect)
upon a Participant’s death or termination of employment due to Disability. If a deferral
election is voided, payment of the deferred Awards will be made as soon as practicable
following the participant’s death or termination due to Disability, based on the Book Value
as of the Quarter Date coincident with or immediately preceding such date.

	5.	 	Assignability: This Award is not transferable for any reason whatsoever; provided,
however, that upon the death of a Participant the right to the proceeds of this Award may be
transferred to a Beneficiary.

	6.	 	No Right of Employment: Neither the adoption or operation of the Plan, nor any
document describing or referring to this Plan, or any part thereof, shall confer upon any
employee any right to continue in the employ of the Company, or shall in any way affect the
right and power of the Company to terminate the employment of any employee at any time with or
without assigning a reason therefor to the same extent as the Company might have done if this
Plan had not been adopted.

	7.	 	Limitation of Rights: No trust has been created by the Company for the payment of
Book Value Units granted under this Plan; nor have the grantees of Awards been granted any
lien on any assets of the Company to secure payment of such benefits. This Plan represents
only an unfunded, unsecured promise to pay by the Company, and the grantees hereunder are
unsecured creditors of the Company.

	8.	 	**Disclaimers: The IRS has not issued the final guidance that is needed to bring the
Plan into compliance with the requirements of the American Jobs Creation Act of 2004 (the
“Act”). Additional Plan amendments may be required. You will be notified if any amendments
are made and, if any substantive changes are required, you will be issued a revised
Certificate at that time. Words used in this Award Certificate that are defined in the Plan
are used herein as so defined. The terms of this Award are subject to all terms and
conditions of the Plan document. The Company reserves the right to amend or terminate the
Plan, in whole or in part, at any time.

KCI LTIP AWARD CERTIFICATE

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