8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 29, 2005

NACCO Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-9172	34-61505819
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
5875 Landerbrook Drive
Mayfield Heights, Ohio		44124-4017
(Address of principal executive offices)		(Zip Code)

     Registrant’s telephone number, including area code (440) 449-9600

N/A

(Former name or former address, if changed since last report.)

          Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Exhibit 10.1 NACCO Ind. 2005 Annual Incentive Comp Plan

Exhibit 10.2 N. American Coal 2005 Annual Incentive Comp Plan

Exhibit 10.3 NMHG Inc. 2005 Annual Incentive Comp Plan

Exhibit 10.4 Hamilton Beach/Procter Silex 2005 Annual Incentive Comp Plan

Exhibit 10.5 The Kitchen Collection 2005 Annual Incentive Comp Plan

Item 1.01 Entry into a Material Definitive Agreement.

     On March 29, 2005, NACCO Industries, Inc. (“NACCO”), The North American Coal Corporation (“NA Coal”), NACCO Materials Handling Group, Inc. (“NMHG”), Hamilton Beach/Proctor-Silex, Inc. (“HB/PS”) and The Kitchen Collection, Inc. (“KCI”) each adopted a 2005 Annual Incentive Compensation Plan (respectively, the “NACCO Annual Incentive Plan,” the “NA Coal Annual Incentive Plan,” the “NMHG Annual Incentive Plan,” the “HB/PS Annual Incentive Plan” and the “KCI Annual Incentive Plan”) for the benefit of certain of their respective employees, including executive officers.

     Additionally, as described further below, performance criteria were established for (a) the NACCO Annual Incentive Plan, the NACCO Industries, Inc. Supplemental Annual Incentive Compensation Plan, as amended and restated effective as of January 1, 2001 (the “Supplemental Plan”), the NA Coal Annual Incentive Plan, the NMHG Annual Incentive Plan, the HB/PS Annual Incentive Plan and the KCI Annual Incentive Plan (collectively referred to herein as the “Annual Incentive Plans”), and (b) the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (the “NACCO LTIP”), the NACCO Materials Handling Group, Inc. Long-Term Incentive Compensation Plan (the “NMHG LTIP”), the NACCO Materials Handling Group, Inc. Senior Executive Long-Term Incentive Compensation Plan (the “NMHG Senior Executive LTIP”), the Hamilton Beach/Proctor-Silex, Inc. Long-Term Incentive Compensation Plan (the “HB/PS LTIP”), the Hamilton Beach/Proctor-Silex, Inc. Senior Executive Long-Term Incentive Compensation Plan (the “HB/PS Senior Executive LTIP”) and The Kitchen Collection, Inc. Long-Term Incentive Compensation Plan (the “KCI LTIP”) (collectively referred to herein as the “LTIPs”).

     The Annual Incentive Plans provide that each participant is eligible to earn a target incentive award during the award term of January 1, 2005 to December 31, 2005. Final awards for each individual under the Annual Incentive Plans are based on the participant’s target award measured against established performance criteria and, for all such plans except the Supplemental Plan, performance by the participant against individual goals. The Compensation Committee of the Board of Directors of each of NACCO, NA Coal, NMHG, HB/PS and KCI (collectively referred to herein as the “Compensation Committees”), in its discretion, may also increase or decrease awards under its respective Annual Incentive Plan (except for the Supplemental Plan pursuant to which awards may be decreased, but not increased) and, except for the Supplemental Plan, may approve the payment of awards where performance would otherwise not meet the minimum criteria set for payment of awards. Awards under the Annual Incentive Plans range from 0% to 150% of the participant’s target award amount.

     For 2005, the performance criteria under the Annual Incentive Plans are as follows:

•   NACCO Annual Incentive Plan: 60% of the award is based on the performance criteria (other than return on total capital employed) established under the Annual Incentive Plans for NACCO’s subsidiaries and 40% of the award is based on NACCO’s consolidated return on total capital employed;

•   Supplemental Plan: NACCO’s consolidated return on total capital employed;

•   NA Coal Annual Incentive Plan: NA Coal’s net income, economic value income and support costs;

•   NMHG’s Annual Incentive Plan: NMHG’s return on total capital employed, net income and market share;

•   HB/PS Annual Incentive Plan: HB/PS’ return on total capital employed, net income and revenue; and

•   KCI Annual Incentive Plan: KCI’s return on total capital employed, net income and sales development.

     Final incentive awards under the Annual Incentive Plans will be determined by the respective Compensation Committees following December 31, 2005. Final awards will be paid in cash to participants, less applicable federal, state and local income tax, social security and other standard withholdings and deductions, no later than March 15, 2006.

     The performance criteria under the LTIPs for awards granted after the conclusion of the specified periods are as follows:

•   NACCO LTIP: (a) for base period LTIP awards, NACCO’s consolidated return on total capital employed from January 1, 2005 through December 31, 2006, and (b) for consistent performance LTIP awards, NACCO’s consolidated return on total capital employed from January 1, 2005 through December 31, 2009;

•   NMHG LTIP: NMHG’s return on total capital employed from January 1, 2005 through December 31, 2005;

•   NMHG Senior Executive LTIP: NMHG’s return on total capital employed from January 1, 2005 through December 31, 2006;

•   HB/PS LTIP: HB/PS’ return on total capital employed from January 1, 2005 through December 31, 2005;

•   HB/PS Senior Executive LTIP: HB/PS’ return on total capital employed from January 1, 2005 through December 31, 2006; and

•   KCI LTIP: KCI’s return on total capital employed from January 1, 2005 through December 31, 2005.

Exhibits to Current Report on Form 8-K

     Each of the NACCO Annual Incentive Plan, the NA Coal Annual Incentive Plan, the NMHG Annual Incentive Plan, the HB/PS Annual Incentive Plan and the KCI Annual Incentive Plan is attached to this Current Report on Form 8-K and is hereby incorporated herein by reference. Each of the foregoing summaries of such plans is qualified in its entirety by reference to the full text of such plan, attached hereto as an exhibit.

Item 9.01 Financial Statements and Exhibits.

          (c) Exhibits.

Exhibit No.	Exhibit Description
10.1	NACCO Industries, Inc. 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.
10.2	The North American Coal Corporation 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.
10.3	NACCO Materials Handling Group, Inc. 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.
10.4	The Hamilton Beach/Proctor-Silex, Inc. 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.
10.5	The Kitchen Collection, Inc. 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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

Date: April 1, 2005

EXHIBIT INDEX

Exhibit No.	Exhibit Description
10.1	NACCO Industries, Inc. 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.
10.2	The North American Coal Corporation 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.
10.3	NACCO Materials Handling Group, Inc. 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.
10.4	The Hamilton Beach/Proctor-Silex, Inc. 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.
10.5	The Kitchen Collection, Inc. 2005 Annual Incentive Compensation Plan, effective as of January 1, 2005.

EX-10.1

Exhibit 10.1

NACCO INDUSTRIES, INC.
2005 ANNUAL INCENTIVE COMPENSATION PLAN

1. Purpose of the Plan

     The purpose of the NACCO Industries, Inc. 2005 Annual Incentive Compensation Plan (the “Plan”) is to further the profits and growth of NACCO Industries, Inc. (the “Company”) by enabling the Company to attract and retain key employees of the Company by offering annual incentive compensation to those key employees who will be in a position to help the Company to meet its financial and business objectives.

2. Definitions

     (a) “Award” means cash paid to a Participant under the Plan for the Award Term in an amount determined in accordance with Section 4. A Participant’s Award shall be equal to the sum of his 40% Award and his 60% Award, as further described in Section 4.

     (b) “Award Term” means the period from January 1, 2005 through December 31, 2005.

     (c) “60% Base Amount” means for any Participant a dollar amount, which shall be equal to the salary midpoint for the Salary Points assigned to the Participant by the Committee for the Award Term multiplied by 60% of the short-term incentive compensation target percent for those Salary Points. Attached hereto as Exhibit A is a schedule listing the 60% Base Amount for each Participant for the Award Term.

     (d) “40% Base Amount” means for any Participant a dollar amount, which shall be equal to the salary midpoint for the Salary Points assigned to the Participant by the Committee for the Award Term multiplied by 40% of the short-term incentive compensation target percent for those Salary Points. Attached hereto as Exhibit B is a schedule listing the 40% Base Amount for each Participant for the Award Term. Where applicable, the 40% Base Amount and the 60% Base Amount shall be referred to herein collectively as the “Base Amount(s).”

     (e) “Committee” means the Compensation Committee of the Company’s Board of Directors or any other committee appointed by the Company’s Board of Directors to administer this Plan in accordance with Section 3, so long as any such committee consists of not less than two directors of the Company and so long as each member of the Committee is not an employee of the Company or any of its subsidiaries.

     (f) “Participant” means any person who is classified by the Company as a salaried employee, 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. Employees of the Company’s subsidiaries shall not be 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 a 60% Award and or a 40% Award for the Award Term and the amount of his Base Amounts. If a Participant receives a change in Salary Points, salary midpoint and/or short-term incentive compensation target percent, such change and any resulting change in his Base Amount(s) will be reflected on an amended Exhibit A or Exhibit B, as applicable. Unless otherwise determined by the Committee, a Participant must be both employed by the Company and a Participant on December 31 of the Award Term, and the

amount of any Award to a Participant who was not also employed by the Company and a Participant on the first day of the Award Term shall be not more than the pro-rated amount based upon the number of days actually employed by the Company in the Award Term. Attached hereto as Exhibit A is a schedule listing the Participants eligible for a 60% Award for the Award Term and attached hereto as Exhibit B is a schedule listing the Participants eligible for a 40% Award for the Award Term.

     (g) “Salary Points” means the salary points assigned to a Participant by the Committee pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee.

     (h) “Supplemental Plan” means the NACCO Industries, Inc. Supplemental Annual Incentive Compensation Plan.

3. Administration

     This Plan shall be administered by the Committee. 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, all other employees of the Company, 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.

4. Awards

     The Committee may, from time to time and upon such conditions as it may determine, authorize Awards for Participants, which Awards shall be not inconsistent with, and shall be subject to all of the requirements of, the following provisions:

     (a) Performance Targets. The Committee shall determine performance target descriptions, weightings and targets for the Award Term. The targets applicable to the 60% Awards shall be attached hereto as Exhibit C and the targets for the 40% Awards shall be attached hereto as Exhibit D. The Committee shall have the power to add, delete and amend target descriptions, weightings and targets during or after the Award Term, which shall be reflected on an amended Exhibit C or Exhibit D, as applicable. No performance targets used in this Plan which are applicable to a Participant hereunder shall be used in the Supplemental Plan in the same year for such Participant.

     (b) 60% Awards. Following the end of the Award Term, the Committee shall compare the actual performance against the performance targets for each of the performance target descriptions in Exhibit C which are applicable to the 60% Awards. Based thereupon, the Committee shall determine the total payout percentage under the Plan for the 60% Awards (the “60% Payout Percentage”). The Committee shall then determine the 60% Award for each Participant, which shall be equal to the Participant’s 60% Base Amount, multiplied by the 60% Payout Percentage, and further adjusted by such other factors, including an individual performance factor for each Participant, as the Committee shall determine are appropriate; provided, however, that no 60% Award may be made to any Participant which exceeds 150% of his 60% Base Amount.

     (c) 40% Awards. The amount of the 40% Awards shall be determined in accordance with the provisions of Exhibit D hereto.

     (d) Payment Provisions. Promptly following the 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 pursuant to Section 5; 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.

5. Withholding Taxes

     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.

6. Amendment and Termination

     The Committee may alter or amend this Plan (including the Exhibits hereto) from time to time or terminate it in its entirety; provided, however, that no such action shall, without the consent of a Participant, affect the rights in an outstanding Award of such Participant.

7. 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 Delaware.

     (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 the Participants hereunder are unsecured creditors 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.

8. Effective Date

     This Plan shall become effective as of January 1, 2005.

EX-10.2

Exhibit 10.2

THE NORTH AMERICAN COAL CORPORATION
2005 ANNUAL INCENTIVE COMPENSATION PLAN

SUMMARY

This Incentive Compensation Plan (the “Plan”) offers a highly attractive incentive compensation opportunity to senior managers of The North American Coal Corporation (the “Company” or “NAC”) and its subsidiaries (the “Subsidiaries”) when specified performance objectives under their control or influence are achieved. This is accomplished through a structure containing the following elements:

n	Each Participant is assigned an individual incentive target, stated as a percentage of their base salary midpoint, that establishes the target incentive compensation Award they may receive under the Plan when performance objectives are met.
n	The individual target Award is allocated among the following performance components:

-   North American Coal (NAC) corporate performance.

-   Bellaire Corporation cash flow.

-   Business unit results.

-   Individual achievement.

n	Percentage weightings are assigned to each component, based on the Participant’s accountabilities and their impact on each component.
n	One or more performance objectives will be established at the beginning of the Award Year for each performance component.
n	A performance range, which defines the acceptable level of results, from threshold to maximum, is created for each performance objective.
n	A payout range is defined, which provides for actual incentive Award payments of up to 150 percent of the incentive target Award, except to the extent the Committee elects to increase or decrease the actual pool by up to 10 percent, as described below.
n	A performance/payout formula combines the two ranges into a matrix that defines the level of incentive compensation payment that will result from each level of performance.
n	After audited financials are available, actual Awards will be calculated based on actual results against the established objectives.
n	A final individual performance adjustment may be made, within a range of +10 percent of the calculated Award, based on a judgment of the Participant’s overall performance.
n	All Awards will be paid in cash, within two and one-half months after the end of the Award Term.

This Incentive Compensation Plan allows management and the Committee to establish, in advance, the performance expectations and related incentive compensation potential that Plan Participants can expect for the Award Year. At the end of the Award Year, the Plan focuses judgment of the management team’s performance on predetermined objectives that should produce fairness in the determination of Awards.

PLAN STRUCTURE

Individual Incentive Targets

The primary focus of the Plan is the individual incentive compensation target Award. At the beginning of each Award Term, each Participant is assigned a target Award, stated as a percentage of the mid-point of base salary, which is payable under the Plan when all relevant performance objectives are achieved. The Plan provides for payments above or below the target Award to reflect acceptable variances from performance objectives.

Performance Goals

The following four sets of performance goals apply for the 2005 Award Term:

Intentionally Omitted

Incentive Award Range

Actual performance results attained probably will not match the established performance goals exactly. Therefore, the Plan is designed to provide incentive compensation payouts of up to 150 percent of the target Award if actual results fall within a predetermined range of acceptable performance.

The Award range is defined as follows:

	% of
Award Level	Target			Description
Maximum		150	%	Highest level of incentive paid.
Target		100	%	Competitive incentive opportunity for achieving all-important goals.
Threshold	25% to 50%			Incentive paid when results meet minimum acceptable standards.
Below threshold		0	%	Performance does not merit incentive payment.

Component Weightings

Participants’ potential incentive Awards will be allocated between performance components based on their individual impact on results. The allocations allow for Awards to be earned based on the achievement of the performance objectives over which each Participant has the most control. Weightings will be stated as a percentage and total 100 percent for each Participant. The weightings will be established at the beginning of each Award Year to reflect current organizational accountabilities and the relative importance of the various performance components. The applicable weightings for the 2005 Award Year are as follows:

Intentionally Omitted

When there is more than one goal for a performance component, further percentage weightings may be assigned, within the overall weightings, to reflect the relative priority of each goal. For example, if the individual component has a 40 percent weighting and there are five individual goals, each individual goal might be assigned a priority weighting of 20 percent.

Performance Range

A range of performance acceptable for incentive compensation payment will be established for each performance objective. For quantitative goals, the range may be set as a percentage of the objective. For goals that cannot be quantified, the range will be defined in narrative form.

The following general definitions will apply. The percentage ranges indicated are only guidelines; specific percentage ranges or narrative descriptions will be determined for each goal based on the definitions.

	Performance
Performance	Percentage
Level	Guideline			Definition
Threshold		75	%	Minimum acceptable results justifying payment of incentives.
Objective		100	%	Results meet high performance demands justifying fully competitive rewards.
Maximum		125	%	Highest foreseeable level of performance.

     Performance/Payout Formula

     Combining the performance and payout ranges yields a performance/payout formula as in the following example:

Performance	Definition	Results			Award Levels	Payout
Threshold	Minimum		75	%	Threshold		50	%
Objective	On plan		100	%	Target		100	%
Maximum	Exceeding expectations		125	%	Maximum		150	%

This formula is applied separately to the results of each established performance element to determine the incentive amount earned in accordance with assigned weightings. Performance that falls between the defined levels would result in proportionally adjusted payouts, which may be calculated mathematically or determined judgmentally.

Corporate Performance Threshold

Notwithstanding any provision of the Plan to the contrary, no incentive compensation Awards will be earned under the Plan in any Award Year unless the threshold level of the corporate performance component is achieved. Once the corporate performance threshold is attained, each performance objective is separate and distinct. This means that partial Awards can be earned for the attainment of one performance objective even if another is not sufficient to generate a payout.

Individual Adjustment Factor

Each individual Award, as calculated above, may be adjusted upward or downward by as much as 10 percent of the total Award, based on management’s perceptions of each individual’s overall performance.

Partial Awards

Executives who are hired or promoted during an Award Year to positions eligible for participation in the Plan may be included in the Plan on a prorata basis (as determined by the Committee, in its sole discretion). Unless otherwise determined by the Committee, a Participant must be employed by an Employer on December 31 of the Award Term in order to be entitled to receive an Award hereunder.

Committee Discretion

It is the intent of the Plan that the total incentive compensation, as determined above, will be the final total corporate incentive compensation to be paid under the Plan. However, the Committee, in its sole discretion, may increase or decrease, by up to 10 percent, the total incentive compensation Award pool or may approve incentive compensation Award payments where normally there would be no payment, due to corporate performance which is below the criteria established for the Award Year.

This Plan shall be administered by the Committee. 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 Employers 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.

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, 2005 through December 31, 2005.

     (c) “Employer” means the Company and the Subsidiaries.

     (d) “Participant” means any person who is classified by an Employer as a salaried employee, 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 Employers; provided, however, that the Committee may select any employee who is expected to contribute, or who has contributed, significantly to the Employers’ 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 Employers who were not previously designated as Participants. Directors of the Company who are also employees of the Employers 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 PLAN 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 an Employer, or shall in any way affect the right and power of the Employer to Terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Employer 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 Texas.

     (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 Employers for the payment of Awards granted under this Plan; nor have the Participants been granted any lien on any assets of the Employers to secure payment of such benefits. This Plan represents only an unfunded, unsecured promise to pay by the Participant’s Employer and a Participant hereunder is a mere unsecured creditor of his Employer.

     (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 and the Subsidiaries from all liability with respect to such Award.

     (g) Effective Date. This Plan shall become effective as of January 1, 2005.

2005 PERFORMANCE TARGETS

     The performance targets for the Plan are attached as an Addendum to this document.

EX-10.3

Exhibit 10.3

NACCO MATERIALS HANDLING GROUP, INC.
2005 ANNUAL INCENTIVE COMPENSATION PLAN

Introduction

     NACCO Materials Handling Group, Inc., (the “Company”) has established an Annual Incentive Compensation Plan (“Plan”) as part of a competitive compensation program for the officers and key management employees of the Employers.

Plan Objective

     The Employers desire to attract and retain talented employees to enable the Employers to meet their 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 compensation Awards to Participants who are officers and employees classified above salary grade 30.
f.	May delegate to the Chief Executive Officer of the Company the approval of incentive compensation Awards to Participants who are classified in salary grade 30 and below.
g.	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. Notwithstanding the foregoing, the Committee may approve a pro-rated incentive compensation Award for Participants in the Plan whose employment is terminated (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.

     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 Employers 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 Term by the Committee.

     The actual corporate incentive compensation pool (“Actual Pool”) is determined as of the end of each Award Term based on the Company’s actual performance against specific criteria established in the beginning of the Award Term 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 to the extent 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% 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 Award Term.

     The Actual and Target Pools exclude the Marketing Incentive Plan for regional parts, service, sales and national account managers. However, total compensation or 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 percentages for each Participant in the Plan will be established at the beginning of each Award Term 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 then be further modified based on the team performance to which an individual belongs compared to the team goals for the Award Term, and may be further modified based on a Participant’s performance as compared to their individual goals for the Award Term.

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

     Below are examples of actual pool and individual Award calculations.

     a. Example calculation for determination actual pool:

Intentionally Omitted

     b. Example calculation for determination of individual incentive compensation Award:

     John Doe:

Intentionally Omitted

Payment Date/Taxes

     Promptly following the Committee’s approval of the final Awards, the Employers 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, 2005 through December 31, 2005.

     (c) “Disability” means an approved application for disability benefits under the Company’s long term disability plan or under any applicable government program.

     (d) “Employers” mean the Company, NMHG Oregon, Inc. and their Subsidiaries.

     (e) “Participant” means any person who is classified by the Employers as a salaried employee and in salary grade 22 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 Employers; provided, however, that the Committee may select any employee who is expected to contribute, or who has contributed, significantly to the Employers’ 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 Employers 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; provided that they are employed by an Employer for at least 90 calendar days during the Award Term.

     (f) “Retirement” means (i) the termination of a U.S. Participant’s employment with the Employers after the Participant has reached age 60 and completed at least 15 years of service with the Employers or (ii) the termination of a non-U.S. Participant’s employment with the Employers which qualifies as retirement under local practices and procedures and/or which qualifies the non-U.S. Participant for foreign retirement benefits.

General Plan 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 Employers, or shall in any way affect the right and power of an Employer to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Employer 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 North Carolina.

     (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 Employers for the payment of Awards granted under this Plan; nor have the Participants been granted any lien on any assets of the Employers to secure payment of such benefits. This Plan represents only an unfunded, unsecured promise to pay by the Participant’s Employer and a Participant hereunder is a mere unsecured creditor of his Employer. Notwithstanding the foregoing, in the event that NMHG Oregon, Inc. is unable

or refuses to satisfy its obligations hereunder with respect to the payment of Awards to or on behalf of its employees, the Company shall guarantee and be responsible for the payment thereof.

     (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, 2005.

2005 Performance Targets

The performance targets for the Plan are attached as an Addendum to this document.

EX-10.4

Exhibit 10.4

HAMILTON BEACH/PROCTOR-SILEX
Annual Incentive Compensation Plan – 2005

Introduction

Hamilton Beach/Proctor-Silex, Inc. (the “Company”) has established an Annual Incentive Compensation Plan (the “Plan”) as part of a competitive compensation program for the officers and key management employees of the Company and its Subsidiaries. This Plan is also referred to as the Short Term Incentive Compensation Plan.

Plan Objective

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 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 generates 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 compensation Awards to Participants who are officers and employees above Hay Salary Job Grade 17.
f.	May delegate to the Chief Executive Officer of the Company the power to approve incentive compensation Awards to Participants in and below Hay Salary Job Grade 17.
g.	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. Notwithstanding the foregoing, the Committee may approve a pro rata incentive compensation Award for Participants who terminate employment prior to December 31 of the Award Term, provided those Participants were actively at work for 90 days in the Award Term and whose employment is terminated (1) due to death, Disability, Retirement or Facility Closure or Partial Closure or under other circumstances at the recommendation of the Chief Executive Officer of the Company.

     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 Hay Salary Job Grade.

This percentage is multiplied by the midpoint of the Participant’s Hay Salary Job Grade to determine his/her individual target incentive compensation Award.

The total of the target incentive compensation Awards of all Participants equals the target corporate incentive compensation pool (the “Target Pool”). The Target Pool is approved at the beginning of each Award Term by the Committee.

The actual corporate incentive compensation pool (the “ Actual Pool”) is determined as of the end of each Award Term based on the Company’s actual performance against specific criteria established in the beginning of the Award Term 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 to the extent that the Committee elects to increase the Actual Pool by up to 10%, as described below.

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% 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 Award Term.

The Actual and Target Pools exclude commission personnel such as salespersons, regional general managers, and manufacturers representatives.

Determination of Individual Incentive Compensation Awards

Hay Salary Job Grades and the corresponding target incentive percentage for each Participant in the Plan will be established at the beginning of each Award Term and approved by the Committee. Individual target incentive compensation will then be adjusted by the appropriate pool factor. Such adjusted individual incentive compensation will then be further modified based on a Participant’s performance as compared to his individual goals for the year. If a Participant’s performance during the Award Term is determined to be unsatisfactory, the Committee reserves the right to reduce the Participant’s Award for the Award Term to zero. The total of all individual incentive compensation Awards must not exceed the Actual Pool for the Award Term.

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, 2005 through December 31, 2005.

     (c) “Disability” means an approved application for disability benefits under the Company’s long term disability plan or under any applicable government program.

     (d) “Facility Closure or Partial Closure” means any layoff which requires a WARN Act notice in the United States or, in Mexico, any layoff of 50 or more employees.

     (e) “Participant” means any person who is classified by the Company as a salaried employee and in Hay Salary Job Grades 14 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; provided that they were first hired by the Company prior to August 31^st of an Award Term. 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. Notwithstanding the foregoing, in no event shall any person who is classified by the Company as commissioned personnel be included as a Participant in the Plan (including, without limitation, salespersons, regional general managers and manufacturers representatives).

     (f) “Retirement” means a termination of employment with the Company at or after age 60 and the completion of 10 or more years of service with the Company.

General Plan 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 Virginia.

     (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, 2005.

2005 Performance Targets

The performance targets for the Plan are attached as an Addendum to this document.

EX-10.5

Exhibit 10.5

THE KITCHEN COLLECTION, INC.
2005 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, 2005 through December 31, 2005.

     (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 Plan 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, 2005.

2005 Performance Targets

The performance targets for the Plan are attached as an Addendum to this document.