Document:

<PAGE>
                                                               EXHIBIT 10(cxxvi)

                                 AMENDMENT NO. 7

         AMENDMENT NO. 7 dated as of December 19, 2001 to the SECOND AMENDED AND
RESTATED CREDIT AGREEMENT dated as of October 11, 1990 and amended and restated
as of April 18, 1995 among Hamilton Beach/Proctor-Silex, Inc. (the "Company"),
Proctor-Silex Canada Inc. ("PSC") and Proctor-Silex S.A. de C.V. ("PSM", and
together with the Company and PSC, the "Obligors"); each of the Banks signatory
thereto; and KeyBank National Association, as U.S. Agent (in such capacity, the
"U.S. Agent") and The Bank of Nova Scotia, as Canadian Agent (in such capacity,
the "Canadian Agent", and together with the U.S. Agent, the "Agents").

         The Obligors, the Banks and the Agents are parties to the Second
Amended and Restated Credit Agreement referred to above, as amended and modified
by (i) Amendment No. 1 dated as of March 29, 1996, (ii) Amendment No. 2 dated as
of October 4, 1996, (iii) Amendment No. 3 dated as of April 14, 1997, (iv)
Amendment No. 4 dated as of April 22, 1998, (v) Amendment No. 5 dated as of June
10, 1998, and (vi) Amendment No. 6 dated as of December 8, 1998 (as so amended
and modified and in effect on the date hereof, the "Credit Agreement"). The
Obligors, the Banks and the Agents wish to amend the Credit Agreement in certain
respects and, accordingly, the parties hereto agree as follows:

         Section 1. Definitions. Except as otherwise defined in this Amendment
No. 7, terms defined in the Credit Agreement are used herein as defined therein.

         Section 2. Amendments. Subject to the satisfaction of the conditions
precedent specified in Section 4 below, but effective as of the date hereof, the
Credit Agreement shall be amended as follows:

         2.01 Definitions. Section 1.01 of the Credit Agreement shall be amended
by adding (to the extent not already included in said Section 1.01) or amending
(to the extent already included in said Section 1.01) the following definitions
to read in their entirety as follows:

     "Applicable Margin" shall mean, with respect to each type of Loan,
letter of credit fees and facility fees, for the fiscal quarter commencing
immediately following the delivery of a Compliance Certificate pursuant to the
last sentence of Section 9.01 hereof, the percentage per annum set forth in the
schedule immediately below opposite the EBITDA to Interest Expense Ratio as at
the last day of the Computation Period of the Company covered by such Compliance
Certificate.

<PAGE>

I.       Loans

                                Applicable Margin

<Table>
<Caption>
       EBITDA to                       Canadian                       Canadian
        Interest      Base Rate        Floating       Eurodollar      Discount
     Expense Ratio      Loans         Rate Loans        Loans        Rate Loans
     -------------    ---------       ----------      ----------     ----------
<S>                   <C>             <C>             <C>            <C>

     Level I Period
     Level II Period
    Level III Period                 Intentionally Omitted
     Level IV Period
     Level V Period
     Level VI Period
    Level VII Period
</Table>

II.      Fees

                                Applicable Margin

<Table>
<Caption>
     EBITDA to
      Interest                 Letter of
   Expense Ratio              Credit Fees                      Facility Fees
   -------------              -----------                      -------------
<S>                          <C>                               <C>
  Level I Period
  Level II Period
 Level III Period
  Level IV Period          Intentionally Omitted
  Level V Period
  Level VI Period
  Level VII Period
</Table>

provided that, if the Company shall fail to deliver the financial statements and
the accompanying Compliance Certificate within the time periods specified in
Section 9.01 hereof, the Applicable Margin shall be at the numerical Level one
higher than the current Level (or, if the current Level is the Level VII Period,
the Applicable Margin shall remain at the Level VII margin) for the fiscal
quarter commencing immediately following the date by which such Compliance
Certificate should have been so delivered. Notwithstanding anything in the
foregoing to the contrary, for the fiscal quarters of the Company ending on
March 31, 2002 and June 30, 2002, the Level for purposes of determining the
Applicable Margin shall be not less than the Level IV Period.

                                       2

<PAGE>

         "Cash Charges" shall mean, with respect to any period, cash charges for
such period relating to Non-Cash Charges included in the computation of "Cash
Flow" or "EBITDA," as the case may be, for any previous period.

         "Cash Flow" shall mean, for any period, the sum of the following for
any Person and its Subsidiaries (if any) determined on a consolidated basis in
accordance with GAAP: (i) income before taxes for such period minus (ii) equity
earnings of unconsolidated Subsidiaries and Affiliates for such period (or plus
equity losses of unconsolidated Subsidiaries and Affiliates for such period, as
the case may be) plus (iii) Net Non-Cash Charges for such period plus (iv)
Interest Expense for such period plus (v) depreciation and amortization for such
period.

         "EBITDA" shall mean, for any period, the sum of the following for any
Person and its Subsidiaries (if any) determined on a consolidated basis in
accordance with GAAP: (a) the sum of (i) net income for such period, plus (ii)
the aggregate amounts deducted in determining such net income in respect of (A)
income taxes for such period, (B) Interest Expense for such period, (C)
depreciation and amortization for such period, (D) Special Charges for such
period, (E) Net Non-Cash Charges for such period, plus (iii) any contribution of
capital made in accordance with clause (e) of Section 10 hereof, minus (b) any
cash benefit received by the Company in any quarter of fiscal year 2002 arising
as a result of actions or charges taken by the Company in the fourth quarter of
fiscal year 2001 and included in the computation of Special Charges.
Notwithstanding anything in the foregoing to the contrary, contributions of
capital made in accordance with clause (e) of Section 10 hereof shall be
included in EBITDA only for purposes of determining compliance with Section 9.07
hereof and for no other purpose in this Agreement, including, without
limitation, for purposes of determining the Applicable Margin.

         "EBITDA to Interest Expense Ratio " shall mean, at any time, for the
Company and its Subsidiaries, the ratio of (i) EBITDA for the current
Computation Period to (ii) Interest Expense for the current Computation Period.

         "Interest Expense" shall mean, for any period, for the Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP, the sum
of (i) all interest accrued during such period on Indebtedness of the Company
and its Subsidiaries (whether or not paid during such period) plus (ii) the net
amounts payable by the Company and its Subsidiaries (or minus the net amounts
receivable by the Company and its Subsidiaries) under Interest Rate Protection
Agreements (whether or not actually paid or received in such period); provided
that "Interest Expenses" shall exclude to the extent otherwise included (a)
accrued facility fees payable under Section 2.04(a) hereof and accrued letter of
credit fees payable under Section 2.01(II)(a)(4) hereof, in each case for the
period of determination, (b) all interest accrued during such period on Loans
made hereunder to the extent the proceeds of such Loans are used to fund Kitchen
Advances permitted under Section 9.17(h) hereof, and (c) the fees and expenses
of the U.S. Agent and the Company paid during such period in connection with
Amendment No. 7 to the Credit Agreement.

         "Level" shall mean any of the Level I Period, Level II Period, Level
III Period, Level IV Period, Level V Period, Level VI Period or Level VII
Period, as the case may be.

                                       3

<PAGE>

         "Level I Period" shall mean any period during which the EBITDA to
Interest Expense Ratio is greater than or equal to 4.0 to 1.

         "Level II Period" shall mean any period during which the EBITDA to
Interest Expense Ratio is less than 4.0 to 1 but greater than or equal to 3.5 to
1.

         "Level III Period" shall mean any period during which the EBITDA to
Interest Expense Ratio is less than 3.5 to 1 but greater than or equal to 3.25
to 1.

         "Level IV Period" shall mean any period during which the EBITDA to
Interest Expense Ratio is less than 3.25 to 1 but greater than or equal to 3.0
to 1.

         "Level V Period" shall mean any period during which the EBITDA to
Interest Expense Ratio is less than 3.0 to 1 but greater than or equal to 2.75
to 1.

         "Level VI Period" shall mean any period during which the EBITDA to
Interest Expense Ratio is less than 2.75 to 1 but greater than or equal to 2.50
to 1.

         "Level VII Period" shall mean any period during which the EBITDA to
Interest Expense Ratio is less than 2.50 to 1.

         "Net Non-Cash Charges" shall mean, with respect to any period, the
amount (expressed as either a positive or negative number) obtained by
subtracting Cash Charges for such period from Non-Cash Charges for such period.

         "Non-Cash Charges" shall mean, with respect to any period, non-cash
charges in connection with transactions involving charges to income of
$1,000,000 or more in any individual transaction for such period.

         "Special Charges" shall mean the nonrecurring charges and losses
identified on Schedule XII hereto to be taken by the Company in accordance with
GAAP in connection with the Company's restructuring and other corporate actions
taken during the fiscal quarters of the Company ending December 31, 2001 and
March 31, 2002, provided, however, that the aggregate amount of all such charges
shall not exceed [ Intentionally Omitted].

         2.02 EBITDA to Interest Expense Ratio . Section 9.07 of the Credit
Agreement shall be amended in its entirety as follows:

                  9.07 EBITDA to Interest Expense Ratio . The Company shall not
         permit the EBITDA to Interest Expense Ratio to be less than (a) for the
         fiscal quarter of the Company ending December 31, 2001, 2.75 to 1.00,
         (b) for the fiscal quarter of the Company ending March 31, 2002, 2.25
         to 1.00, (c) for the fiscal quarter of the Company ending June 30,
         2002, 2.25 to 1.00, (d) for the fiscal quarter of the Company ending
         September 30, 2002, 2.75 to 1.00, (e) for the fiscal quarter of the
         Company ending December 31, 2002, 4.00 to 1.00, and (f) for the fiscal
         quarter of the Company ending March 31, 2003 and each fiscal quarter of
         the Company thereafter, [intentionally omitted].

                                       4

<PAGE>

         2.03 Restricted Payments. The following sentence is hereby added to
clause (b) of Section 9.12 of the Credit Agreement:

                  "Notwithstanding the foregoing, (1) during the fourth quarter
         of the fiscal year of the Company ending December 31, 2002, the Company
         may pay Management Fees to NACCO for services actually rendered during
         such fiscal year in an aggregate amount not to exceed U.S.$2,400,000
         provided that (I) such Management Fees shall not be paid until the
         Compliance Certificate for the third quarter of such fiscal year has
         been delivered, (II) the EBITDA to Interest Expense Ratio for the third
         quarter of such fiscal year is not less than 2.75 to 1.00, and (III)
         such Management Fees shall be included in the aggregate amount of all
         Restricted Payments that are authorized to be made during such fiscal
         year, and (2) the aggregate amount of Restricted Payments of the type
         described in clause (a) of the definition of "Restricted Payments" that
         may be made in any fiscal year of the Company in accordance with this
         clause (b) shall not exceed fifty percent (50%) of the amount that
         would otherwise be permitted by this clause (b) but for this sub-clause
         (2)."

         2.04 Transactions with Affiliates. The following clause (x) is hereby
added to Section 9.15 of the Credit Agreement:

                  "and (x) the Company may pay Management Fees permitted by the
         last sentence of Section 9.12(b) hereof."

         2.04 Events of Default. Clause (e) of Section 10 of the Credit
Agreement shall be amended in its entirety as follows:

                  (e) Any Obligor shall default in the performance of any of
         their respective obligations under Sections 9.01(h) or 9.07, 9.08,
         9.09, 9.12, 9.13 or 9.14 (other than with respect to non-consensual
         Liens of the generic type described in Sections 9.14(b), (c), (d), (e),
         (f) and (g) hereof (the "Non-Consensual Liens")), 9.15 through 9.18
         (inclusive), 9.21, 9.24 or 9.27 hereof and, with respect only to a
         default by the Company of its obligations under Sections 9.07, 9.08 or
         9.09, neither NACCO nor any other Majority Interest Party shall have
         made a contribution of equity capital to the Company within 30 days
         after the Compliance Certificate for the Computation Period of the
         Company with respect to which default has occurred should have been
         delivered in accordance with Section 9.01 hereof in an amount
         sufficient to cure such default (which capital contribution shall not
         be returned to NACCO or such Majority Interest Party until the
         Revolving Credit Termination Date and shall not be included in the
         calculation of any financial covenant for any purpose hereunder other
         than for purposes of determining compliance with Sections 9.07, 9.08 or
         9.09 and specifically shall be excluded from the determination of the
         EBITDA to Interest Expense Ratio for purposes of determining the
         Applicable Margin); or any Obligor shall default in the performance of
         any of their respective obligations under Section 9.14 (with respect to
         Non-Consensual Liens) hereof and such default in performance shall
         continue unremedied for a period of 10 days after the occurrence
         thereof or any Obligor shall default in the performance of any of its
         other covenants or agreements in this Agreement and such default shall
         continue unremedied for a period of 30 days after the occurrence
         thereof; or

                                       5

<PAGE>

         2.05 Schedule XII. There is hereby added to the Credit Agreement the
schedule identified as Schedule XII "Special Charges" attached to this Amendment
No. 7.

         Section 3. Representations and Warranties. The Company represents and
warrants to the Banks that on and as of the date hereof:

         (a) (i) the execution and delivery by the Obligors of this Amendment
No. 7, and the performance by the Obligors of their obligations under the Credit
Agreement, as amended hereby, have been duly authorized by all necessary
corporate action of the Obligors, and will not violate any provision of law, or
any Obligor's charter or by-laws, or result in a breach of or constitute a
default or require a consent under any indenture or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which any Obligor or any of its Property may be bound or affected, and (ii) each
of this Amendment No. 7 and the Credit Agreement, as amended hereby, constitutes
the legal, valid and binding obligation of the Obligors, in each case
enforceable against the Obligors in accordance with its terms;

         (b) no Default or Event of Default has occurred and is continuing, and
the representations and warranties set forth in Section 8 of the Credit
Agreement are true and complete on the date hereof (or if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).

It shall be an Event of Default for all purposes under the Credit Agreement, as
amended hereby, if any representation or warranty made by the Company in this
Amendment No. 7 shall prove to have been false or misleading as of the time made
or furnished in any material respect.

         Section 4. Conditions Precedent. The amendments to the Credit Agreement
set forth in said Section 2 shall become effective as of the date hereof,
subject to the next succeeding sentence, upon the receipt by the Agents of this
Amendment No. 7, duly executed and delivered by the Obligors, the Majority Banks
and the Agents and payment by the Obligors to each of the Banks signing this
Amendment No. 7 a fee equal to .20% of its Revolving Credit Commitment.
Notwithstanding anything in the foregoing to the contrary, but subject to the
conditions precedent set forth above, the amendment to the defined term
"Applicable Margin" set forth in Section 2.01 hereof shall not be effective
until the close of business on December 31, 2001.

         Section 5. Miscellaneous. The Obligors shall pay all of the fees and
expenses of the U.S. Agent, including its reasonable legal fees and expenses, in
connection with this Amendment No. 7. Except as amended by this Amendment No. 7,
the Credit Agreement shall remain unchanged and in full force and effect.
Reference in the Credit Agreement to "this Agreement" or words of similar import
shall be deemed to be references to the Credit Agreement as amended hereby. This
Amendment No. 7 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and any
of the parties hereto may execute this Amendment No. 7 by signing any such
counterpart. This Amendment No. 7 shall be governed by, and construed in
accordance with, the law of the State of New York. This Amendment No. 7 shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

                                       6

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 7 to be duly executed and delivered as of the day and year first
above written.

                                            OBLIGORS

                                            HAMILTON BEACH/PROCTOR-SILEX, INC.

                                            By:       /s/  James H. Taylor
                                               ---------------------------------
                                               Title:  Vice President and
                                                       Treasurer

                                            PROCTOR-SILEX CANADA INC.

                                            By:       /s/  James H. Taylor
                                               ---------------------------------
                                               Title:  Treasurer

                                            PROCTOR-SILEX S.A. de C.V.

                                            By:       /s/  James H. Taylor
                                               ---------------------------------
                                               Title:  Vice President and
                                                       Treasurer

                                            BANKS

                                            KEYBANK NATIONAL ASSOCIATION,
                                            Individually and as U.S. Agent

                                             By:       /s/  Thomas J. Purcell
                                                --------------------------------
                                                Title:  Senior Vice President

                                             THE BANK OF NOVA SCOTIA,
                                             Individually and as Canadian Agent

                                             By:       /s/  Nadine Bell
                                                --------------------------------
                                                Title:  Assistant Agent

                                       7
<PAGE>

                                            BANK ONE, N.A.
                                            (formerly First Chicago NBD)

                                            By:      /s/  Glenn A. Currin
                                               ---------------------------------
                                               Title:   Director

                                            ISTITUTO BANCARIO SAN PAOLO DI
                                             TORINO SPA - INSTITUTO MOBILARE
                                             ITALIANO SPA

                                            By:     /s/  Carlo Persico
                                               ---------------------------------
                                               Title:  General Manager

                                            and     /s/  Glen Binder
                                               ---------------------------------
                                               Title:  Vice President

                                            CREDIT AGRICOLE INDOSUEZ

                                            By:
                                               ---------------------------------
                                               Title:

                                            and
                                               ---------------------------------
                                               Title:

                                            SUNTRUST BANK
                                            (formerly Crestar Bank)

                                            By:       /s/  Mark A. Flatin
                                               ---------------------------------
                                               Title:  Director

                                            WACHOVIA BANK, N.A.

                                            By:        /s/  David J.C. Silander
                                               ---------------------------------
                                               Title:   Vice President

                                       8<PAGE>
                                                              EXHIBIT 10(cxxvii)

                       HAMILTON BEACH/PROCTOR-SILEX, INC.
                              UNFUNDED BENEFIT PLAN

                  Hamilton Beach/Proctor-Silex, Inc. (the "Company") does hereby
amend and completely restate the Hamilton Beach/Proctor-Silex, Inc. Unfunded
Benefit Plan to read as follows, effective as of October 1, 2001.

                                    ARTICLE I
                                     PREFACE

                  SECTION 1.1 Effective Date. The original effective date of
this Plan was March 10, 1993. The effective date of this amendment and
restatement is October 1, 2001.

                  SECTION 1.2 Purpose of the Plan. The purpose of this Plan is
to (a) allow certain Employees to defer the receipt of certain long-term
incentive compensation award payments, (b) provide for certain Employees the
benefits they would have received under the Cash Balance Plan but for (i) the
dollar limitation on Compensation taken into account as a result of Section
401(a)(17) of the Code, and (ii) the limitations imposed under Section 415 of
the Code, and/or (c) provide for certain Employees the benefits they would have
received under the Savings Plan but for the limitations imposed under Section
402(g), 401(m), 401(a)(17), 401(k)(3) or 415 of the Code.

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

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

                                   ARTICLE II
                                   DEFINITIONS

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

                  SECTION 2.1 Account shall mean the record maintained by the
Company in accordance with Section 3.6 as the sum of the Participant's Excess
Profit Sharing Sub-Account, Basic Excess 401(k) Sub-Account, Basic Excess
Matching Sub-Account, Additional Excess 401(k) Sub-Account, Additional Excess
Matching Sub-Account and LTIP Deferral Sub-Account.

<PAGE>

                  SECTION 2.2 Adjusted ROE.

                  (a) For purposes of this Section, the following terms shall
have the following meanings:

                  (i) "Net Income (before extraordinary items)" is defined as
         consolidated net income, as defined by general accepted accounting
         principals ("GAAP"), for the Company for the subject year before
         extraordinary items, but including any extraordinary items related to
         refinancings (net of tax);

                  (ii) "Amortization of Goodwill" is defined as the consolidated
         amortization expense related to the intangible asset goodwill for the
         Company for the subject year;

                  (iii) "Weighted Average Stockholders' Equity" is calculated by
         adding the consolidated stockholders' equity for the Company, as
         defined by GAAP, at the beginning of the subject year and the end of
         each month of the subject year and dividing by thirteen;

                  (iv) "Weighted Average Accumulated Amortization of Goodwill"
         is calculated by adding consolidated accumulated amortization of
         goodwill, as defined by GAAP, at the beginning of the subject year and
         the end of each month of the subject year and dividing by thirteen.

                  (b) "Adjusted ROE" shall mean the average return on equity of
the Company calculated for the applicable time period, based on A divided by B,
where:

         A =      Net Income (before extraordinary items) + Amortization of
                  Goodwill; and

         B =      Weighted Average (Shareholders' Equity + Accumulated
                  Amortization of Goodwill)

Adjusted ROE shall be determined at least annually by the Company.

                  SECTION 2.3 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 2.4 Cash Balance Employee shall mean a participant in
the Cash Balance Plan.

                  SECTION 2.5 Cash Balance Plan shall mean Part II of the
Combined Defined Benefit Plan for NACCO Industries, Inc. and Its Subsidiaries
(commonly known as the "Hamilton Beach/Proctor-Silex, Inc. Profit Sharing
Retirement Plan") (or any successor thereto), as the same may be amended from
time to time. Benefits under the Cash Balance Plan were permanently frozen
effective for Plan Years beginning on or after January 1, 1997.

                  SECTION 2.6 Company shall mean Hamilton Beach/ Proctor-Silex,
Inc.

                                       2
<PAGE>

                  SECTION 2.7 Compensation. For purposes of Sections 3.2 and 3.3
of the Plan, the term "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).

                  SECTION 2.8 Excess Retirement Benefit or Benefit shall mean an
LTIP Deferral Benefit, an Excess Pension Benefit, an Excess Profit Sharing
Benefit, a Basic or Additional Excess 401(k) Benefit or a Basic or Additional
Excess Matching Benefit (as described in Article III) which is payable to or
with respect to a Participant under this Plan.

                  SECTION 2.9 Fixed Income Fund shall mean the Stable Asset 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 to the Stable Asset Fund.

                  SECTION 2.10 401(k) Employee shall mean a participant in the
Savings Plan who is eligible for Before-Tax and Matching Employer Contributions
thereunder.

                  SECTION 2.11 Insolvent. For purposes of this Plan, the Company
shall be considered Insolvent at such time as it (a) is unable to pay its debts
as they mature, or (b) is subject to a pending voluntary or involuntary
proceeding as a debtor under the United States Bankruptcy Code.

                  SECTION 2.12 LTIP Plan shall mean the Hamilton
Beach/Proctor-Silex, Inc. Long-Term Incentive Compensation Plan, or any
successor thereto.

                  SECTION 2.13 Participant.

                  (a) For purposes of Section 3.1 of the Plan, the term
"Participant" shall mean a Cash Balance Employee whose benefit under the Cash
Balance Plan is limited by the application of Section 401(a)(17) or 415 of the
Code.

                  (b) For purposes of Section 3.2 of the Plan, the term
"Participant" shall mean a Profit Sharing Employee (i) whose Post-1996 Profit
Sharing Contributions for a Plan Year are limited by the application of Section
401(a)(17) or 415 of the Code and (ii) who is classified in job grades 17 or
above and, effective January 1, 2002, whose total compensation from the
Controlled Group for the year of such Contribution is at least $115,000.

                  (c) For purposes of Sections 3.3 and 3.4 of the Plan, the term
"Participant" shall mean a 401(k) Employee (i) who is unable to make all of the
Before-Tax Contributions that he has elected to make to the Savings Plan, or who
is unable to receive the maximum amount of Post-1994 Matching Employer
Contributions under the Savings Plan, because of the limitations imposed under
Section 402(g), 401(a)(17), 401(k)(3) or 401(m) of the Code and (ii) who is
classified in job grades 17 or above and, effective January 1, 2002, whose total
compensation from the Controlled Group for the year in which the deferral
election is required is at least $115,000.

                                       3
<PAGE>

                  (d) For purposes of Section 3.5 of the Plan, the term
"Participant" shall mean an Employee of the Company who is a participant in the
LTIP Plan and who is classified in job grades 17 and above and, effective
January 1, 2002, whose total compensation from the Controlled Group for the year
in which the deferral election is required is at least $115,000. In addition,
the Employee must be an active Employee (i.e., have not terminated employment or
retired) at the time the LTIP Deferral Benefit is deferred hereunder.

                  (e) The term "Participant" shall also include any other person
who, as of September 30, 2001, was entitled to receive a Benefit under the Plan.

                  (f) Notwithstanding the change in eligibility requirements
which became effective January 1, 2002, any Employee of the Company who (i) was
eligible to participate in the Plan on December 31, 2001, and (ii) actually had
amounts allocated to an Account under the Plan as of such date, shall remain as
an eligible Participant in the Plan on and after January 1, 2002.

                  SECTION 2.14 Plan shall mean the Hamilton Beach/Proctor-Silex,
Inc. Unfunded Benefit Plan as herein set forth or as duly amended.

                  SECTION 2.15 Plan Administrator shall mean the Company.

                  SECTION 2.16 Plan Year shall mean the calendar year.

                  SECTION 2.17 Profit Sharing Employee shall mean a participant
in the Savings Plan who is eligible for Post-1996 Profit Sharing Contributions.

                  SECTION 2.18 Qualified Plan shall mean (a) for Cash Balance
Employees, the Cash Balance Plan, (b) for Profit Sharing Employees, the
profit-sharing portion of the Savings Plan and (c) for 401(k) Employees, the
Before-Tax Contributions and Matching Employer Contributions portion of the
Savings Plan. References throughout this Plan to a "Qualified Plan" shall be
deemed to refer to the underlying Qualified Plan to which a particular Benefit
relates.

                  SECTION 2.19 Savings Plan shall mean the Hamilton
Beach/Proctor-Silex, Inc. Employees' Retirement Savings Plan (401(k)), as the
same may be amended from time to time, or any successor thereto.

                  SECTION 2.20 Unforeseeable Emergency shall mean an event which
results (or will result) in severe financial hardship to the Participant as a
consequence of an unexpected illness or accident or loss of the Participant's
property due to casualty or other similar extraordinary or unforeseen
circumstances out of the control of the Participant.

                  SECTION 2.21 Valuation Date shall mean the last business day
of each Plan Year and any other date chosen by the Plan Administrator.

                                       4
<PAGE>

                                  ARTICLE III
                           EXCESS RETIREMENT BENEFITS

                  SECTION 3.1 Excess Pension Benefits. The Excess Pension
Benefit payable to a Participant who is a Cash Balance Employee shall be a
monthly benefit equal to the excess, if any, of (a) the amount of the monthly
benefit that would be payable to such Participant under the Cash Balance Plan
(in the form actually paid) if such Plan did not contain the limitations imposed
under Sections 401(a)(17) and 415 of the Code and, effective as of January 1,
1995, the definition of Compensation under such Plan included any amounts
deferred under Section 3.3 of this Plan, over (b) the amount of the monthly
benefit that is actually payable to the Participant under the Cash Balance Plan.

                  SECTION 3.2 Excess Profit Sharing Benefits. At the time
described in Section 3.6(a), the Company shall credit to a Sub-Account (the
"Excess Profit Sharing Sub-Account") established for each Participant who is a
Profit Sharing Employee, an amount equal to the excess, if any, of (a) the
amount of the Company's Post-1996 Profit Sharing Contribution which would have
been made to the profit sharing portion of the Savings Plan on behalf of the
Participant if (i) such Plan did not contain the limitations imposed under
Sections 401(a)(17) and 415 of the Code and (ii) the term "Compensation" (as
defined in Section 2.7 hereof) were used for purposes of determining the amount
of profit sharing contributions under the Savings Plan, over (b) the amount of
the Company's Post-1996 Profit Sharing Contribution which is actually made to
the Savings Plan on behalf of the Participant for such Plan Year (the "Excess
Profit Sharing Benefits").

                  SECTION 3.3 Basic and Additional Excess 401(k) Benefits.

                  (a) Amount of Excess 401(k) Benefits. Each 401(k) Employee who
is a Participant, may, prior to the first day of any Plan Year, by completing an
approved deferral election form direct the Company to reduce his Compensation
for such Plan Year by the difference between (i) a specified percentage, in 1%
increments, with a maximum of 17%, of his Compensation for the Plan Year, and
(ii) the maximum Before-Tax Contributions actually permitted to be contributed
for him to the Savings Plan for such Plan Year by reason of the application of
the limitations imposed under Sections 402(g), 401(a)(17), or 401(k)(3) of the
Code (which amounts shall be referred to as the "Excess 401(k) Benefits").

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

                  (i) The Basic Excess 401(k) Benefits shall be determined by
         multiplying each Excess 401(k) Benefit by a fraction, the numerator of
         which is the lesser of the percentage of Compensation elected to be
         deferred in the 401(k) 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

                                       5
<PAGE>

         difference between (1) the percentage of Compensation elected to be
         deferred in the 401(k) Deferral Election Form for such Plan Year and
         (2) 7%, and the denominator of which is the percentage of Compensation
         elected to be deferred.

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

                  (c) Rules Relating to Excess 401(k) Deferral Elections.

                  (i) Deferral Period/Payment Date. The initial deferral
         election made by a Participant shall also contain the Participant's
         election regarding the time of the commencement of payment of the
         Participant's entire Excess 401(k) Sub-Account hereunder. The
         Participant may elect to commence payment of his Excess 401(k)
         Sub-Account as soon as practicable following (1) the date on which he
         ceases to be an Employee of a Controlled Group Member, (2) January 1st
         of the year following the date on which he ceases to be an Employee of
         a Controlled Group Member, (3) the date on which he attains a specified
         age, or (4) the earlier or later of such dates. A Participant who does
         not timely and properly file such an election form shall be deemed to
         have elected to receive his Excess 401(k) Sub-Account as soon as
         practicable following the date on which he ceases to be an Employee of
         a Controlled Group Member.

                  (ii) Change of Payment Date. Notwithstanding the foregoing, a
         Participant who is an Employee may elect to change the payment date
         selected (or deemed selected) for his Excess 401(k) Sub-Account to one
         of the other dates permitted under (i) above; provided, however that
         (1) the form electing such change is filed with the Plan Administrator
         at least two (2) years prior to the original payment date and while the
         Participant is an Employee, (2) the new payment date is at least two
         (2) years after the date the form is filed and (3) the Participant
         remains employed throughout such two (2) year period. Any election to
         change the payment date which does not meet all of the foregoing
         requirements shall not be valid and, in such case, payment shall be
         made in accordance with the Participant's last effective payment date
         election.

                  (iii) Special Election. Due to administrative errors on the
         part of the Company, all payment date elections which were made by
         Participants who are actively employed by the Company on November 1,
         2000 were deemed null and void as of such date. Such Participants were
         given new payment date election forms which had to be completed during
         a 45-day election period specified by the Company. Such elections
         superceded all prior elections. Any such Participant who did not timely
         and properly file such an election form is deemed to have elected to
         receive all amounts credited to his Excess 401(k) Sub-Account (whether
         before or after the Effective Date of this restatement of the Plan) as
         soon as practicable following the date on which he ceases to be an
         Employee of the Controlled Group; provided, however, that such a
         Participant may elect to change such deemed payment date in accordance
         with the requirements of (ii) above.

                                       6
<PAGE>

                  (d) Effect and Duration of Deferral Election. Any direction by
a Participant to make deferrals of Excess 401(k) Benefits hereunder shall be
effective with respect to Compensation otherwise payable to the Participant
during the Plan Year for which the 401(k) Deferral Election Form is in effect,
and the Participant shall not be eligible to receive such Excess 401(k)
Benefits. Instead, such amounts shall be credited to the Participant's Basic and
Additional Excess 401(k) Sub-Accounts (as applicable) as provided in Section
3.6(b). Any directions made in accordance with Subsection (a) above shall be
irrevocable and shall remain in effect for subsequent Plan Years unless changed
or terminated by the Participant for Plan Years commencing after such change or
termination, on the appropriate form provided by the Plan Administrator, prior
to the first day of such subsequent Plan Year.

                  (e) Automatic Termination/Suspension of Deferral Election.

                  (i) A Participant's direction to make deferrals of Excess
         401(k) Benefits shall automatically terminate on the earlier of the
         date on which (1) the Participant ceases employment with the Company,
         (2) the Company is deemed Insolvent, (3) the Participant is no longer
         eligible to make deferrals of Excess 401(k) Benefits hereunder, or (4)
         the Plan is terminated.

                  (ii) Any Participant whose eligibility to make Before-Tax
         Contributions to the Savings Plan has been suspended because he has
         taken a hardship withdrawal from the Savings Plan shall not be eligible
         to make deferrals of Excess 401(k) Benefits under this Plan for the
         period of his suspension from the Savings Plan.

                  (iii) The Plan Administrator may, in its sole and absolute
         discretion, pursuant to nondiscriminatory rules adopted by the Plan
         Administrator, reduce and/or cease the deferral of Excess 401(k)
         Benefits being made by one or more Participants, to the extent deemed
         necessary or desirable in order to satisfy the requirements of any
         applicable law (including, without limitation, federal securities
         laws).

                  SECTION 3.4 Excess Matching Benefits.

                  (a) Amount. A 401(k) Employee shall have credited to his Basic
or Additional Excess Matching Sub-Account (as applicable) an amount equal to the
Post-1994 Matching Employer Contributions attributable to the Basic or
Additional 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) and 401(m) (collectively, the "Excess Matching Benefits").

                  (b) Time of Payment. The Excess Matching Benefits shall be
paid (or commence to be paid) at the same time as Participant's Excess 401(k)
Benefits.

                  SECTION 3.5 LTIP Deferral Benefits.

                  (a) Amount. Each Participant (as defined in Section 2.13(d))
may, with the consent of the Company, by completing an approved election form,
direct the Company to (i) reduce an Award (as that term is defined in the LTIP
Plan) payable under the LTIP Plan by a

                                       7
<PAGE>

specified dollar amount or percentage and (ii) to credit the amount of the
reduction (the "LTIP Deferral Benefit") to the LTIP Deferral Sub-Account
hereunder.

                  (b) Deferral Election. A Participant may elect to make a
separate deferral election with respect to each Award under the LTIP Plan.
Except as specifically permitted by the Company, each such election must be made
no later than one year prior to the date such Award would otherwise be payable
to the Participant under the LTIP Plan.

                  (c) Deferral Period/Payment Date. The initial deferral
election made by a Participant shall also contain the Participant's election
regarding the time of the commencement of payment of the Participant's entire
LTIP Deferral Sub-Account hereunder. The Participant may elect to commence
payment of his LTIP Deferral Sub-Account as soon as practicable following (1)
the date on which he ceases to be an Employee of a Controlled Group Member, (2)
January 1st of the year following the date on which he ceases to be an Employee
of a Controlled Group Member, (3) the date on which he attains a specified age,
or (4) the earlier or later of such dates. A Participant who does not timely and
properly file such an election form shall be deemed to have elected to receive
his LTIP Deferral Sub-Account as soon as practicable following the date on which
he ceases to be an Employee of a Controlled Group Member.

                  (d) Change of Payment Date. Notwithstanding the foregoing, a
Participant who is an Employee may elect to change the payment date selected (or
deemed selected) for his LTIP Deferral Sub-Account to one of the other dates
permitted under (i) above; provided, however that (1) the form electing such
change is filed with the Plan Administrator at least two (2) years prior to the
original payment date and while the Participant is an Employee, (2) the new
payment date is at least two (2) years after the date the form is filed and (3)
the Participant remains employed throughout such two (2) year period. Any
election to change the payment date which does not meet all of the foregoing
requirements shall not be valid and, in such case, payment shall be made in
accordance with the Participant's last effective payment date election.

                  (e) Effect and Duration of LTIP Deferral Election. Any
direction by a Participant to defer receipt of all or part of an Award under the
LTIP Plan and to receive LTIP Deferral Benefits in lieu of such Award shall be
irrevocable with respect to such Award.

                  (f) Automatic Termination/Suspension of LTIP Deferral
Election.

                  (i) A Participant's direction to make deferrals of LTIP
         Deferral Benefits shall automatically terminate on the earlier of the
         date on which (1) the Participant ceases employment with the Company,
         (2) the Company is deemed Insolvent, (3) the Participant ceases to
         satisfy the requirements of Section 2.13(d) or (4) the Plan is
         terminated.

                  (ii) The Plan Administrator may, in its sole and absolute
         discretion, pursuant to nondiscriminatory rules adopted by the Plan
         Administrator, reduce and/or cease the deferral of LTIP Deferral
         Benefits being made by one or more Participants, to the extent deemed
         necessary or desirable in order to satisfy the requirements of any
         applicable law (including, without limitation, federal securities
         laws).

                  SECTION 3.6 Participant's Account. The Company shall establish
and maintain on its books an Account for each Participant which shall contain
the following entries:

                                       8
<PAGE>

                  (a) Credits to an Excess Profit Sharing Sub-Account for the
Excess Profit Sharing Benefits described in Section 3.2, 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;

                  (b) Credits to a Basic or Additional Excess 401(k) Sub-Account
(as applicable) for the Basic and Additional Excess 401(k) Benefits described in
Section 3.3, which shall be credited to the Sub-Account when a 401(k) Employee
is prevented from making a Before-Tax Contribution under the Savings Plan;

                  (c) Credits to a Basic or Additional Excess Matching
Sub-Account (as applicable) for the Basic or Additional Excess Matching Benefits
described in Section 3.4, which shall be credited to the Sub-Account when a
401(k) Employee is prevented from receiving Post-1994 Matching Employer
Contributions under the Savings Plan;

                  (d) Credits to an LTIP Deferral Sub-Account for the LTIP
Deferral Benefits described in Section 3.5, which shall be credited to the
Sub-Account at the time the Award would otherwise be payable to the Participant
under the LTIP Plan;

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

                  (f) Debits for any distributions made from such Sub-Accounts
and any amounts forfeited under Section 6.1(d).

                  To the extent determined necessary by the Company, the Company
may also establish a "notional account" in the name of each Cash Balance
Employee to reflect the Excess Pension benefits payable to such Employees.

                  SECTION 3.7 Effect on other Benefits. Benefits payable to or
with respect to a Participant under the Qualified Plans or any other
Company-sponsored (qualified or nonqualified) plan, if any, are in addition to
those provided under this Plan.

                                   ARTICLE IV
                                    EARNINGS

                  SECTION 4.1 Earnings on Basic 401(k) and Matching Sub-Accounts
and Profit Sharing Sub-Accounts.

                  (a) Subject to Subsection (b) and Section 4.4, at the end of
each calendar month during a Plan Year, the Excess Profit Sharing Sub-Account,
Basic Excess 401(k) Sub-Account and Basic Excess Matching Sub-Account of each
Participant shall be credited with an amount determined by multiplying such
Participant's 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 Adjusted ROE determined for such Plan Year
exceeds the rate credited to the Sub-Accounts under the preceding sentence, such
Sub-Accounts shall retroactively be credited with the difference between (1) the
amount determined

                                       9
<PAGE>
under the preceding sentence, and (2) the amount determined by multiplying the
Participant's average Sub-Account balance during each month of such Plan Year by
the Adjusted ROE determined for such Plan Year, compounded monthly.

                  (b) The Adjusted ROE calculation described in Subsection (a)
shall be made during the month in which the Participant terminates employment
and shall be based on the year-to-date Adjusted ROE for the month ending prior
to the date the Participant terminated employment, as calculated by the Company.
For any subsequent month, such Adjusted ROE 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 4.2 Earnings on Additional 401(k) and Matching
Sub-Accounts. Subject to Section 4.3, at the end of each calendar month during a
Plan Year, the Additional Excess 401(k) Sub-Account and Additional Excess
Matching 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 earning during such month by the Fixed Income
Fund. The earnings calculation for the month in which the participant receives a
distribution from his Sub-Account shall be based on the blended rate earned
during the preceding month by the Fixed Income Fund.

                  SECTION 4.3 Earnings on LTIP Deferral Sub-Accounts. Subject to
Section 4.4, at the end of each calendar month during a Plan Year, the LTIP
Deferral Sub-Account of each Participant shall be credited with an amount
determined by multiplying such Participant's average Sub-Account balance during
such month by the "10-Year U.S. Treasury Yield" plus 2.0%. For purposes hereof,
the 10-Year U.S. Treasury Yield shall be the 10 year yield on US Treasury issues
as listed in the Bond Market Data Bank for the last day of the preceding
calendar quarter as printed in the Wall Street Journal. 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 4.4 Changes in Limitations on Earnings Assumptions.

                  (a) The NACCO Industries, Inc. Benefits Committee (the
"Committee") may change (but not suspend) the earnings rate credited to Accounts
hereunder at any time upon at least 30 days advance notice to Participants.

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

                                    ARTICLE V
                                     VESTING

                  SECTION 5.1 Vesting. A Participant shall always be 100% vested
in all amounts credited to his Account hereunder and in his Excess Pension
Benefits.

                                       10
<PAGE>

                                   ARTICLE VI
                    DISTRIBUTION OF BENEFITS TO PARTICIPANTS

                  SECTION 6.1 Time and Manner of Payment.

                  (a) Excess Pension Benefits.

                  (i) Timing. A Participant who is a Cash Balance Employee is
         required to elect the time and manner of payment of his benefits under
         the Cash Balance Plan before he will be eligible to receive payment of
         his Excess Pension Benefit hereunder. The Excess Pension Benefit
         payable to a Participant shall be paid at the same time or times and in
         the same manner as the benefits payable to the Participant under the
         Cash Balance Plan.

                  (ii) Form. Notwithstanding the foregoing, in the event that
         the monthly payments of the Excess Pension Benefits payable to a
         Participant hereunder following the Participant's termination of the
         employment with the Controlled Group amount to less than Fifty Dollars
         ($50) per month, such Excess Pension Benefits shall be paid in the form
         of a single lump sum payment. Such lump sum amount shall be equal to
         the Actuarial Equivalent present value of such Excess Pension Benefits.

                  (b) Excess Profit Sharing Benefits. The Excess Profit Sharing
Benefit payable to a Participant shall be paid in the form of a single lump sum
payment at the time the corresponding Post-1996 Profit Sharing Contributions
payable to the Participant under the Savings Plan commence to be paid.

                  (c) Excess 401(k) and Matching Benefits/LTIP Deferral
Benefits.

                  (i) Timing. A Participant's Excess 401(k) Sub-Account, Excess
         Matching Sub-Account and LTIP Deferral Sub-Account shall be paid (or
         commence to be paid) to the Participant as soon as practicable after
         the date specified in the Participant's last valid election form (as
         provided in Section 3.3(c) or 3.5(c), as applicable).

                  (ii) Normal Form of Payment. The Excess 401(k) Sub-Account ,
         Excess Matching Sub-Account and LTIP Deferral Sub-Account shall each be
         distributed in the form of ten annual installments with each
         installment being based on the value of the applicable Sub-Account on
         the Valuation Date immediately preceding the date such installment is
         to be paid and being a fraction of such value in which the numerator is
         one and the denominator is the total number of remaining installments
         to be paid.

                  (iii) Optional Forms of Payment. Notwithstanding the
         foregoing, the Participant may elect to receive the amounts credited to
         his Excess 401(k) Sub-Account and/or his Excess Matching Sub-Account
         and/or his LTIP Deferral Sub-Account in the form of a single lump sum
         payment or in annual installments for a period of less than 10 years by
         filing a notice in writing, signed by the Participant and filed with
         the Plan Administrator while the Participant is alive and at least one
         year prior to the time he had elected to commence receiving payment of
         such Sub-Account. Any such election of the form of payment may be
         changed at any time and from time to time, without the consent

                                       11
<PAGE>

         of any other person, by filing a later election in writing that is
         signed by a Participant and filed with the Plan Administrator while
         such Participant is alive and at least one year prior to the time he
         had elected to commence receiving payment of such Sub-Account.

                  (iv) Unforeseeable Emergency Distributions. Notwithstanding
         the foregoing, the Company may at any time, upon written request of the
         Participant cause to be paid to such Participant an amount equal to all
         or any part of the Participant's Excess 401(k) Sub-Account and/or
         Excess Matching Sub-Account and/or LTIP Deferral Sub-Account if the
         Company determines, in its absolute discretion based on such reasonable
         evidence that it shall require, that such a payment or payments is
         necessary for the purpose of alleviating the consequences of an
         Unforeseeable Emergency occurring with respect to the Participant.
         Payments of amounts because of an Unforeseeable Emergency shall be
         permitted only to the extent reasonably necessary to satisfy the
         emergency need.

                  (d) Withdrawals Subject to a 10% Penalty.

                  (i) The provisions of this Subsection shall apply
         notwithstanding any other provision of the Plan to the contrary.

                  (ii) A Participant who is an Employee may, at any time (and
         from time to time) elect in writing to receive a withdrawal from one or
         more of the following Sub-Accounts:

                           (A) the Additional Excess 401(k) Sub-Account;

                           (B) the Additional Excess Matching Sub-Account; and

                           (C) the LTIP Deferral Sub-Account.

                  (iii) In addition to the amounts described in (ii) above,
         Participants who have ceased to be Employees of the Controlled Group
         may also elect in writing to receive a withdrawal from one or more of
         the following Sub-Accounts:

                           (A) the Basic Excess 401(k) Sub-Account;

                           (B) the Basic Excess Matching Sub-Account; and

                           (C) the Excess Profit Sharing Sub-Account.

                  (iv) Withdrawals under this Subsection shall be equal to the
         entire amount credited to any such Sub-Account, less 10%. Such 10%
         reduction shall be treated as a forfeiture hereunder and shall
         immediately be subtracted from the applicable Sub-Account, never to be
         restored.

                  (e) Payment Restriction. 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 any amount payable, when added to
any other compensation received or to be received by the Participant in the same
calendar year, would not be deductible by the Company

                                       12
<PAGE>

by reason of Section 162(m) of the Code. The amount to be deferred will equal
the amount that otherwise would not be deductible by the Company by reason of
Section 162(m) of the Code, but in no event greater than the total amount
otherwise payable hereunder. The deferred amount shall become payable on
December 31 of the first succeeding calendar year in which such amount, when
added to all other compensation received or to be received by the Participant in
such calendar year, would not be non-deductible by the Company by reason of
Section 162(m) of the Code. The Nominating, Organization and Compensation
Committee of the Board of Directors, in its sole and absolute discretion, shall
have the authority to waive this payment restriction (in whole or in part) upon
the written request of the Participant.

                  SECTION 6.2 Small Sub-Accounts. Notwithstanding the foregoing,
in the event that the Participant's Account does not exceed $10,000 at the time
of such Participant's termination of employment with the Controlled Group, such
Account shall automatically be paid to him in a single lump sum payment as soon
as practicable following his termination of employment.

                  SECTION 6.3 Liability for Payment/Expenses. The Company shall
be liable for the payment of the Excess Retirement Benefits which are payable
hereunder to the Participants. Expenses of administering the Plan shall be paid
by the Company.

                                  ARTICLE VII
                                  BENEFICIARIES

                  SECTION 7.1 Beneficiary Designations. A designation of a
Beneficiary hereunder may be made only by an instrument (in form acceptable to
the Plan Administrator) signed by the Participant and filed with the Plan
Administrator prior to the Participant's death. Separate Beneficiary
designations may be made for each Benefit under the Plan. In the absence of such
a designation and at any other time when there is no existing Beneficiary
designated hereunder, (a) the Beneficiary of a Participant for his Excess
Pension Benefits shall be his beneficiary under the Cash Balance Plan and (b)
the Beneficiary of a Participant for his Account shall be his Beneficiary under
the Savings Plan. A person designated by a Participant as his Beneficiary who or
which ceases to exist shall not be entitled to any part of any payment
thereafter to be made to the Participant's Beneficiary unless the Participant's
designation specifically provided to the contrary. If two or more persons
designated as a Participant's Beneficiary are in existence with respect to a
single Excess Retirement Benefit 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.

                  SECTION 7.2 Change in Beneficiary. (a) Anything herein or in
the Qualified Plans to the contrary notwithstanding, a Participant may, at any
time and from time to time, change a Beneficiary designation hereunder without
the consent of any existing Beneficiary or any other person. A change in
Beneficiary hereunder may be made regardless of whether such a change is also
made under the applicable underlying Qualified Plan. In other words, the
Beneficiary hereunder need not be the same as under the applicable underlying
Qualified Plan.

                                       13
<PAGE>

                  (b) Any change in Beneficiary shall be made by giving written
notice thereof to the Plan Administrator and any change shall be effective only
if received by the Plan Administrator prior to the death of the Participant.

                  SECTION 7.3 Distributions to Beneficiaries.

                  (a) Amount of Benefits.

                  (i) Amount of Excess Pension Benefit. The Excess Pension
         Benefit payable to a Beneficiary under this Plan shall be a monthly
         benefit equal to the excess, if any, of (A) the amount of the monthly
         benefit that would be payable to the Beneficiary last effectively
         designated by the Participant under the Cash Balance Plan (in the form
         actually paid) if such Plan did not contain the limitations imposed
         under Sections 401(a)(17) or 415 of the Code and the definition of
         Compensation under such Plan included any amounts deferred under this
         Plan over (B) the amount of the monthly benefit that is actually paid
         to such Beneficiary under such Plan.

                  (ii) Amount of Excess Profit Sharing Benefit. The Excess
         Profit Sharing Benefit payable to a Participant's Beneficiary under
         this Plan shall be equal to such Participant's Excess Profit Sharing
         Sub-Account balance on the date of the distribution.

                  (iii) Amount of Excess 401(k) and Excess Matching Benefits.
         The Excess 401(k) and Excess Matching Benefits payable to a
         Participant's Beneficiary under this Plan shall be equal to such
         Participant's Excess 401(k) and Excess Matching Sub-Account balances on
         the date of distribution.

                  (iv) Amount of LTIP Deferral Benefit. The LTIP Deferral
         Benefits payable to a Participant's Beneficiary under this Plan shall
         be equal to such Participant's LTIP Deferral Sub-Account balance on the
         date of distribution.

                  (b) Time and Manner of Payment.

                  (i) Excess Pension Benefit. The Excess Pension Benefit payable
         to a Beneficiary under this Plan shall be paid at the same time or
         times and in the same manner as the benefits payable to the Beneficiary
         last effectively designated by the Participant under the Cash Balance
         Plan; provided however, that the provisions of Subsection 6.1(a)(ii)
         shall apply to such Benefit, treating the Beneficiary hereunder as if
         he were the Participant.

                  (ii) Excess Profit Sharing Benefit/Excess 401(k) Benefit and
         Excess Matching Benefit/LTIP Deferral Benefit. The Excess Profit
         Sharing Benefit, Excess 401(k) Benefit and Excess Matching Benefit and
         LTIP Deferral Benefit payable to a Beneficiary under this Plan shall be
         paid as soon as practicable following the death of the Participant in
         the form of a lump sum payment.

                  (c) Effect of Different Beneficiaries under this Plan and the
Cash Balance Plan. In the event the Beneficiary designated hereunder for the
Excess Pension Benefit is different than the Beneficiary under the Cash Balance
Plan, (i) if the Beneficiary hereunder dies

                                       14
<PAGE>

after the Participant but while the Beneficiary under the Cash Balance Plan is
still living, any remaining payments hereunder shall be payable, as they come
due, to the estate of the Beneficiary hereunder and (ii) if the Beneficiary
hereunder predeceases the Beneficiary under the Cash Balance Plan and the
Participant, the Beneficiary hereunder shall revert to the Beneficiary last
effectively designated under the Cash Balance Plan unless and until the
Participant again makes a change of Beneficiary pursuant to Section 7.2.

                                  ARTICLE VIII
                                  MISCELLANEOUS

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

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

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

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

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

                  SECTION 8.6 Severability. If any provision of this Plan or the
application thereof to any circumstance(s) or person(s) is held to be invalid by
a court of competent

                                       15
<PAGE>

jurisdiction, the remainder of the Plan and the application of such provision to
other circumstances or persons shall not be affected thereby.

                                   ARTICLE IX
                             ADMINISTRATION OF PLAN

                  SECTION 9.1 Administration. (a) In general. The Plan shall be
administered by the Plan Administrator. The Plan Administrator shall have
discretion to interpret where necessary all provisions of the Plan (including,
without limitation, by supplying omissions from, correcting deficiencies in, or
resolving inconsistencies or ambiguities in, the language of the Plan), to make
factual findings with respect to any issue arising under the Plan, to determine
the rights and status under the Plan of Participants, or other persons, to
resolve questions (including factual questions) or disputes arising under the
Plan and to make any determinations with respect to the benefits payable under
the Plan and the persons entitled thereto as may be necessary for the purposes
of the Plan. Without limiting the generality of the foregoing, the Plan
Administrator is hereby granted the authority (i) to determine whether a
particular Employee is a Participant, and (ii) to determine if a person is
entitled to Excess Retirement Benefits hereunder and, if so, the amount and
duration of such Benefits. The Plan Administrator's determination of the rights
of any person hereunder shall be final and binding on all persons, subject only
to the provisions of Sections 9.3 and 9.4 hereof.

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

                  SECTION 9.2 Regulations. The Plan Administrator shall
promulgate any rules and regulations it deems necessary in order to carry out
the purposes of the Plan or to interpret the provisions of the Plan; provided,
however, that no rule, regulation or interpretation shall be contrary to the
provisions of the Plan. The rules, regulations and interpretations made by the
Plan Administrator shall, subject only to the provisions of Sections 9.3 and 9.4
hereof, be final and binding on all persons.

                  SECTION 9.3 Claims Procedures. The Plan Administrator shall
determine the rights of any person to any Excess Retirement Benefits hereunder.
Any person who believes that he has not received the Excess Retirement Benefits
to which he is entitled under the Plan may file a claim in writing with the Plan
Administrator. The Plan Administrator shall, no later than 90 days after the
receipt of a claim (plus an additional period of 90 days if required for
processing, provided that notice of the extension of time is given to the
claimant within the first 90 day period), either allow or deny the claim in
writing. If a claimant does not receive written notice of the Plan
Administrator's decision on his claim within the above-mentioned period, the
claim shall be deemed to have been denied in full.

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

                  (a) the specific reasons for the denial;

                                       16
<PAGE>

                  (b) specific reference to pertinent Plan provisions on which
the denial is based;

                  (c) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and

                  (d) an explanation of the claim review procedure.

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

                  The Company shall mail or deliver to the claimant a written
decision on the matter based on the facts and the pertinent provisions of the
Plan within 60 days after the receipt of the request for review (unless special
circumstances require an extension of up to 60 additional days, in which case
written notice of such extension shall be given to the claimant prior to the
commencement of such extension). Such decision shall be written in a manner
calculated to be understood by the claimant, shall state the specific reasons
for the decision and the specific Plan provisions on which the decision was
based and shall, to the extent permitted by law, be final and binding on all
interested persons. If the decision on review is not furnished to the claimant
within the above-mentioned time period, the claim shall be deemed to have been
denied on review.

                  SECTION 9.4 Revocability of Plan Administrator/ Company
Action. Any action taken by the Plan Administrator or the Company with respect
to the rights or benefits under the Plan of any person shall be revocable by the
Plan Administrator or the Company as to payments not yet made to such person,
and acceptance of any Excess Retirement Benefits under the Plan constitutes
acceptance of and agreement to the Plan Administrator's or the Company's making
any appropriate adjustments in future payments to such person (or to recover
from such person) any excess payment or underpayment previously made to him.

                  SECTION 9.5 Amendment. The Committee may at any time amend any
or all of the provisions of this Plan, except that (a) no such amendment may
adversely affect the amount of any Participant's Excess Retirement Benefit as of
the date of such amendment and (b) no such amendment may suspend the crediting
of earnings on the balance of a Participant's Account, until the entire balance
of such Account has been distributed, in either case, without the prior written
consent of the affected Participant. Any amendment shall be in the form of a
written instrument executed by an officer of the Company on the order of the
Committee. Subject to the

                                       17
<PAGE>

foregoing provisions of this Section, such amendment shall become effective as
of the date specified in such instrument or, if no such date is specified, on
the date of its execution.

                  SECTION 9.6 Termination.

                  (a) The Company, in its sole discretion, may terminate this
Plan at any time and for any reason whatsoever, except that, subject to
Subsection (b) hereof, (i) no such termination may adversely affect the amount
of any Participant's Excess Retirement Benefit as of the date of such
termination and (ii) no such termination may suspend the crediting of earnings
on the balance of a Participant's Account, until the entire balance of such
Account has been distributed, in either case, without the prior written consent
of the affected Participant. 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 Nominating, Organization and Compensation Committee of the Board of
Directors of the Company. Subject to the foregoing provisions of this Section,
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 as soon as
practicable after the instrument is executed.

                  (b) Notwithstanding anything in the Plan to the contrary, in
the event of a termination of the Plan (or any portion thereof), the Company, in
its sole and absolute discretion, shall have the right to change the time and
form of distribution of Participants' Excess Retirement Benefits.

                  Executed this 20th day of October, 2001.

                                              HAMILTON BEACH/PROCTOR-SILEX, INC.

                                              By: /s/ Michael J. Morecroft
                                                  ------------------------------
                                                  Title: President and CEO

                                       18

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