NACCO INDUSTRIES INC, DEF 14A, 1994-03-31

NACCO INDUSTRIES INC
DEF 14A, 1994-03-31
INDUSTRIAL TRUCKS, TRACTORS, TRAILORS & STACKERS

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934

Filed by the registrant /X/

Filed by a party other than the registrant / /

Check the appropriate box:

/ / Preliminary proxy statement

/X/ Definitive proxy statement

/ / Definitive additional materials

/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

NACCO INDUSTRIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

CHARLES A. BITTENBENDER, VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
(NAME OF PERSON(S) FILING PROXY STATEMENT)

Payment of filing fee (Check the appropriate box):

/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).

/ / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:
Not Applicable

(2) Aggregate number of securities to which transaction applies:
Not Applicable

(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
Not Applicable

(4) Proposed maximum aggregate value of transaction:
Not Applicable

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:
Not Applicable

(2) Form, schedule or registration statement no.:
Not Applicable

(3) Filing party:
Not Applicable

(4) Date filed:
Not Applicable
<PAGE> 2

[logo NACCO Industries, Inc.]
5875 LANDERBROOK DRIVE
MAYFIELD HEIGHTS, OHIO 44124-4017

NOTICE OF ANNUAL MEETING

The Annual Meeting of stockholders of NACCO Industries, Inc. (the
"Company") will be held on Wednesday, May 11, 1994, at 9:00 A.M., at 5875
Landerbrook Drive, Mayfield Heights, Ohio, for the purpose of:

(1) Electing nine directors for the ensuing year.

(2) Confirming the appointment of the independent certified public
accountants of the Company for the current fiscal year.

(3) Transacting such other business as may properly come before the
meeting.

The Board of Directors has fixed the close of business on March 15, 1994 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting or any adjournment thereof.

CHARLES A. BITTENBENDER
Secretary

March 31, 1994

THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1993 IS BEING
MAILED TO STOCKHOLDERS CONCURRENTLY HEREWITH. THE ANNUAL REPORT CONTAINS
FINANCIAL AND OTHER INFORMATION ABOUT THE COMPANY, BUT IS NOT INCORPORATED INTO
THE PROXY STATEMENT AND IS NOT DEEMED TO BE A PART OF THE PROXY SOLICITING
MATERIAL.
---------------

PLEASE PROMPTLY FILL OUT, SIGN, DATE AND MAIL THE ENCLOSED FORM(S) OF PROXY
IF YOU DO NOT EXPECT TO BE PRESENT AT THE ANNUAL MEETING. IF YOU HOLD SHARES OF
BOTH CLASS A COMMON STOCK AND CLASS B COMMON STOCK, TWO FORMS OF PROXY ARE
ENCLOSED AND BOTH SHOULD BE FILLED OUT AND RETURNED. A SELF-ADDRESSED ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
<PAGE> 3

[logo NACCO INDUSTRIES, INC.]

5875 LANDERBROOK DRIVE
MAYFIELD HEIGHTS, OHIO 44124-4017

PROXY STATEMENT -- MARCH 31, 1994

This Proxy Statement is furnished in connection with the solicitation by
the directors of NACCO Industries, Inc., a Delaware corporation (the "Company"),
of proxies to be used at the annual meeting of stockholders of the Company to be
held on May 11, 1994 (the "Annual Meeting"). This Proxy Statement and the
related form(s) of proxy are being mailed to stockholders commencing on or about
March 31, 1994.

If the enclosed form(s) of proxy are executed and returned, the shares
represented by them will be voted as directed on all matters properly coming
before the Annual Meeting for a vote. The proxies may be revoked at any time
prior to their exercise by giving notice to the Company in writing or in open
meeting.

Stockholders of the Company of record at the close of business on March 15,
1994 will be entitled to vote at the Annual Meeting. On that date, the Company
had outstanding and entitled to vote 7,179,585 shares of Class A Common Stock,
par value $1.00 per share ("Class A Common"), and 1,760,993 shares of Class B
Common Stock, par value $1.00 per share ("Class B Common"). Each share of Class
A Common is entitled to one vote for a nominee for each of the nine
directorships to be filled and one vote on each other matter brought before the
meeting. Each share of Class B Common is entitled to ten votes for such nominee
and ten votes on each other matter brought before the meeting.

At the Annual Meeting, in accordance with Delaware law and the Company's
By-Laws, the inspectors of election appointed by the Board of Directors for the
Annual Meeting shall determine the presence of a quorum and shall tabulate the
results of stockholder voting. As provided by Delaware law and the Company's
By-Laws, the holders of a majority of the Company's stock, issued and
outstanding, and entitled to vote at the Annual Meeting and present in person or
by proxy at the Annual Meeting, shall constitute a quorum for such meeting. The
inspectors of election intend to treat properly executed proxies marked
"abstain" as "present" for purposes of determining whether a quorum has been
achieved at the Annual Meeting. Such inspectors shall

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<PAGE> 4

also treat proxies held in "street name" by brokers that are not voted on all
proposals to come before the Annual Meeting ("broker non-votes") as "present."

Class A Common and Class B Common will vote as a single class on all
matters anticipated to be brought before the Annual Meeting. In accordance with
Delaware law, nominees for election as directors receiving the greatest number
of votes will be elected directors. In accordance with Delaware law and the
Company's By-Laws, the holders of a majority of the Company's stock which has
voting power present in person or by proxy, and which is actually voted, shall
decide any other proposal which is brought before the Annual Meeting. As a
result, abstentions in respect of any proposal and broker non-votes will not be
counted for purposes of determining whether such proposal has received the
requisite approval by the Company's stockholders.

BUSINESS TO BE TRANSACTED

The Board of Directors will present two proposals to the stockholders of
the Company at the Annual Meeting. Information concerning the first proposal,
"Election of Directors," is found on pages 4 to 6 of this Proxy Statement.
Information concerning the second proposal, "Confirmation of Appointment of
Independent Certified Public Accountants," is found on page 34 of this Proxy
Statement.

1. ELECTION OF DIRECTORS

It is intended that shares represented by proxies in the enclosed form(s)
will be voted for the election of the nominees named in the following table to
serve as directors for a term of one year and until their successors are
elected, unless contrary instructions are received. All of the nominees listed
below presently serve as directors of the Company and, except for Owsley Brown
II, were elected at the Company's 1993 annual meeting of stockholders. Ward
Smith, who has been a director of the Company since 1980, and Richard B. Tullis,
who has been a director of the Company since 1990, are not standing for
reelection. In addition, Alfred M. Rankin, a director of the Company since 1946,
is deceased. If an unexpected occurrence should make it necessary, in the
judgment of the proxy holders, to substitute some other person for any of the
nominees, such shares will be voted for such other person as the proxy holders
may select.

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<TABLE>
<CAPTION>
Principal Occupation and Business
Experience During Last Five Years and Director
Name Age Other Directorships in Public Companies Since
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OWSLEY BROWN II 51 President and Chief Executive Officer of Brown-For- 1993
man Corporation. From prior to 1989 to 1993, Presi-
dent of Brown-Forman Corporation. Also director of
Brown-Forman Corporation, Hilliard Lyons Trust
Company, Hyster-Yale Materials Handling, Inc., LG&E
Energy Corp., and Louisville Gas and Electric
Company.
JOHN J. DWYER 76 Retired President of Oglebay Norton Company. Also 1988
director of Hyster-Yale Materials Handling, Inc. and
Oglebay Norton Company.
ROBERT M. GATES 50 Consultant, author and lecturer. From 1991 to 1993, 1993
Director of Central Intelligence for the United
States. From 1989 to November 1991, Assistant to the
President of the United States and Deputy for
National Security Affairs, National Security
Council. From prior to 1989 to 1989, Deputy Director
of Central Intelligence Agency. Also director of
Hyster-Yale Materials Handling, Inc. and Varity
Corporation.
E. BRADLEY JONES 66 Retired Chairman and Chief Executive Officer of LTV 1985
Steel Company. Also director of Birmingham Steel
Corporation, Cleveland-Cliffs Inc, Consolidated Rail
Corporation, Hyster-Yale Materials Handling, Inc.,
RPM, Inc. and TRW Inc., and trustee of Fidelity
Funds and First Union Real Estate Investments.
DENNIS W. LaBARRE 51 Partner in the law firm of Jones, Day, Reavis & 1982
Pogue. Also director of Hyster-Yale Materials
Handling, Inc.
ALFRED M. RANKIN, JR. 52 President and Chief Executive Officer of the Com- 1972
pany. From 1989 to 1991, President and Chief Operat-
ing Officer of the Company. From prior to 1989 to
1989, Vice Chairman and Chief Operating Officer of
Eaton Corporation (manufacturer of highly engi-
neered products for automotive, industrial and com-
mercial markets). Also director of The BFGoodrich
Company, Hyster-Yale Materials Handling, Inc., Reli-
ance Electric Company, The Standard Products Com-
pany and The Vanguard Group.
JOHN C. SAWHILL 57 President and Chief Executive Officer of The Nature 1990
Conservancy (a non-profit conservation organiza-
tion). From prior to 1989 to 1990, Director of
McKinsey & Company, Inc. (management consulting
firm). Also director of Hyster-Yale Materials
Handling, Inc., Pacific Gas & Electric Co. and The
Vanguard Group. Previously director of the Company,
1978 to 1980.
</TABLE>

5
<PAGE> 6

BENEFICIAL OWNERSHIP OF CLASS A COMMON AND CLASS B COMMON

Set forth in the following table is the indicated information (1) as of
December 31, 1993, with respect to each person, other than directors, who is
known to the Company to be the beneficial owner of more than five percent of the
Class A Common, (2) as of January 15, 1994, with respect to each person who is
known to the Company to be the beneficial owner of more than five percent of the
Class B Common, and (3) as of January 15, 1994, with respect to the beneficial
ownership of Class A Common and Class B Common by the directors, the Chief
Executive Officer and the Company's four most highly compensated executive
officers other than the Chief Executive Officer (the "Named Executive Officers")
and all executive officers and directors as a group. Beneficial ownership of
Class A Common and Class B Common has been determined for this purpose in
accordance with Rules 13d-3 and 13d-5 of the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which provide, among other things, that (a) a person is deemed to be the
beneficial owner of Class A Common or Class B Common if such person, directly or
indirectly, has or shares voting power or investment power with respect to such
stock or has the right to acquire such ownership within sixty days, and (b) when
two or more persons agreed to act together for the purpose of disposing of Class
B Common, the group formed thereby is deemed to be a person which has acquired
beneficial ownership of all Class B Common beneficially owned by each member of
the group. Accordingly, the amounts shown in the table do not purport to
represent beneficial ownership for any purpose other than compliance with SEC
reporting requirements. Further, beneficial ownership as determined in this

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manner does not necessarily bear on the economic incidence of ownership of Class
A Common or Class B Common.

<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
Sole
Voting Shared
Title and Voting or Percent of
of Investment Investment Aggregate Class
Name Class Power Power Amount (1)(2)
- ------------------------------------ ------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
CLARA TAPLIN RANKIN, et al(3) Class B (3) (3) 1,542,757 87.38%
c/o Society National Bank
900 Euclid Avenue
Cleveland, OH 44101
FMR Corp. Class A 143,303 -- 951,829(4) 13.19%
82 Devonshire Street
Boston, MA 02109
CLARA TAPLIN RANKIN Class A 626,741 14,000(5) 640,741 8.88%
River Road Class B 328,568 7,000(5) 335,568(3) 19.01%
Chagrin Falls, OH 44022
FRANK E. TAPLIN, JR. Class A 467,290 14,000(5) 481,290 6.67%
55 Armour Road Class B 284,728 7,000(5) 291,728(3) 16.52%
Princeton, NJ 08540
THOMAS E. TAPLIN Class A 570,114 14,000(5) 584,114 8.09%
950 South Cherry St., #704 Class B 310,000 7,000(5) 317,000(3) 17.95%
Denver, CO 80222
OWSLEY BROWN II Class A 1,056 -- 1,056 --
Class B -- -- -- --
JOHN J. DWYER Class A 1,583 -- 1,583 --
Class B -- -- -- --
ROBERT M. GATES Class A 184 -- 184 --
Class B -- -- -- --
E. BRADLEY JONES Class A 898 -- 898(4) --
Class B 200 -- 200 --
DENNIS W. LaBARRE Class A 998 -- 998 --
Class B 100 -- 100 --
ALFRED M. RANKIN, JR. Class A 96,644 132,253(6) 253,897(7) 3.52%
Class B 47,998 66,000(6) 113,998(3) 6.46%
JOHN C. SAWHILL Class A 3,959 -- 3,959 --
Class B -- -- -- --
WARD SMITH Class A 12,900 -- 15,400(7) .21%
Class B 200 -- 200 --
BRITTON T. TAPLIN Class A 21,079 -- 21,079 .29%
Class B 28,495 -- 28,495(3) 1.61%
RICHARD B. TULLIS Class A 2,998 -- 2,998 --
Class B -- -- -- --
</TABLE>

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- ---------------

(1) The shares included in note (7) were deemed to be outstanding as of January
15, 1994, for purposes of calculating the percentage owned at such date
pursuant to Rule 13d-3 under the Exchange Act.

(2) Less than 0.1%, except as otherwise indicated.

(3) A Schedule 13D filed with the SEC with respect to Class B Common on March
24, 1990, and amended on April 11, 1990 by Amendment No. 1, on March 18,
1991 by Amendment No. 2, on March 23, 1992 by Amendment No. 3 and on March
10, 1993 by Amendment No. 4 and amended and restated on March 30, 1994 by
Amendment No. 5 (the "Schedule 13D"), reported that the following
individuals and entities, together in certain cases with related revocable
trusts and custodianships: Clara Taplin Rankin, Alfred M. Rankin, Jr.,
Victoire G. Rankin, Helen P. Rankin, Clara T. Rankin, Thomas T. Rankin,
Matthew M. Rankin, Claiborne R. Rankin, Chloe O. Rankin, Roger F. Rankin,
Bruce T. Rankin, Frank E. Taplin, Jr., Margaret E. Taplin, Martha S. Kelly,
Susan S. Panella, Jennifer T. Jerome, Caroline T. Ruschell, David F. Taplin,
Thomas E. Taplin, Beatrice B. Taplin, Thomas E. Taplin, Jr., Theodore D.
Taplin, Britton T. Taplin, Frank F. Taplin, and National City Bank, as
trustee of certain irrevocable trusts for the benefit of certain individuals
named above, their family members and others (collectively, together with
such individuals, revocable trusts and custodianships, the "Signatories"),
are parties with the Company and Society National Bank (successor by merger
to Ameritrust Company National Association), as depository, to a
Stockholders' Agreement, dated as of March 15, 1990, as amended, covering
the shares of Class B Common beneficially owned by each of the Signatories
(the "Stockholders' Agreement"). The Stockholders' Agreement requires that
each Signatory, prior to any conversion of such Signatory's shares of Class
B Common into Class A Common or prior to any sale or transfer of Class B
Common to any

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permitted transferee (under the terms of the Class B Common) who has not
become a Signatory, to offer such shares to all of the other Signatories on
a pro-rata basis. A Signatory may sell or transfer all shares not purchased
under the right of first refusal as long as they first are converted into
Class A Common prior to their sale or transfer. Accordingly, the Signatories
may be deemed to have acquired beneficial ownership of all of the Class B
Common subject to the Stockholders' Agreement, an aggregate of 1,542,757
shares, as a "group" as defined under the Exchange Act. The shares subject
to the Stockholders' Agreement constitute 87.38% of the Class B Common
outstanding on January 15, 1994, or 62.03% of the combined voting power of
all Class A Common and Class B Common outstanding on such date. Certain
Signatories own Class A Common, which is not subject to the Stockholders'
Agreement. Under the Stockholders' Agreement, the Company may, but is not
obligated to, buy any of the shares of Class B Common not purchased by the
Signatories following the trigger of the right of first refusal. The
Stockholders' Agreement does not restrict in any respect how a Signatory may
vote such Signatory's shares of Class B Common. The Class B Common shown in
the foregoing table as beneficially owned by named persons who are
Signatories is subject to the Stockholders' Agreement. On March 5, 1993,
Ward Smith filed a Form 4 with the SEC reporting a sale in January 1993 of
Class A Common. On April 27, 1993, Chloe O. Rankin filed a Form 4 with the
SEC reporting a sale by her husband in February 1993 of Class A Common as to
which Class A Common she has disclaimed beneficial ownership. On December
10, 1993, Victoire G. Rankin filed a Form 4 with the SEC reporting a
purchase by her husband in August 1993 of Class B Common as to which Class B
Common she has disclaimed beneficial ownership. On December 10, 1993, Helen
P. Rankin filed a Form 4 with the SEC reporting a purchase by her father in
August 1993 of Class B Common as to which Class B Common she has disclaimed
beneficial ownership. On December 10, 1993, Clara T. Rankin filed a Form 4
with the SEC reporting a purchase by her father in August 1993 of Class B
Common as to which Class B Common she has disclaimed beneficial ownership.
On January 28, 1994, Thomas E. Taplin, Jr. filed a Form 4 with the SEC
reporting a sale in November 1993 of Class A Common. On February 4, 1994,
Theodore D. Taplin filed a Form 4 with the SEC reporting a sale in June 1993
of Class A Common. On February 14, 1994, Martha S. Kelly filed a Form 4 with
the SEC reporting a sale in October 1993 of Class A Common. On March 7,
1994, Susan S. Panella filed a Form 4 with the SEC reporting a sale in May
1993 of Class A Common.

(4) A Schedule 13G filed with the SEC with respect to Class A Common on February
14, 1992 and amended on February 16, 1993 by Amendment No. 1 and amended and
restated on February 14, 1994 by Amendment No. 2 (the "Schedule 13G")

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<PAGE> 10

reported that Fidelity Management & Research Company ("Research"), a wholly
owned subsidiary of FMR Corp. ("FMR"), is the beneficial owner of 803,726
shares of Class A Common or 11.14% of the Class A Common outstanding on
December 31, 1993 as a result of acting as investment adviser to several
investment companies registered under the Investment Company Act of 1940.
The Schedule 13G also reported that Fidelity Management Trust Company
("Trust"), a wholly owned subsidiary of FMR, is the beneficial owner of
140,203 shares of Class A Common or 1.94% of the Class A Common outstanding
on December 31, 1993 as a result of its serving as investment manager of
several institutional accounts. Each of Trust and its parent, FMR, has
dispositive power over the 140,203 shares; Trust has the power to vote and
direct the voting of the 140,203 shares, while FMR has the power to vote or
direct the voting of 135,403 of such shares. The Schedule 13G also reported
that Fidelity International Limited ("FIL") is the beneficial owner of 7,900
shares of Class A Common as a result of its investment advisory and
management services to a number of non-U.S. investment companies, and a
partnership controlled by Edward C. Johnson 3d, Chairman of FMR and FIL, and
members of his family own shares of FIL voting stock with the right to cast
approximately 48.879% of the total votes which may be cast by all holders of
FIL voting stock. The Schedule 13G reported that FIL is a corporation
independent of FMR and its affiliates. In addition, the Schedule 13G
reported that while Mr. Johnson has dispositive power over the 951,829
shares of Class A Common, the power to vote or direct the voting of 943,929
of such shares (the 803,726 shares beneficially owned by Research plus the
140,203 shares beneficially owned by Trust) resides with Fidelity Funds. FMR
(through its control of Research) and Fidelity Funds each has power to
dispose of the 943,929 shares. Each of FIL and FMR has voting and
dispositive power over the 7,900 shares beneficially owned by FIL. While Mr.
Jones, a director of the Company, is a trustee of Fidelity Funds, he has not
exercised and does not presently intend to exercise any voting or investment
power over any of the shares of Class A Common beneficially owned by FMR,
Research, FIL or Trust.

(5) Clara Taplin Rankin, Frank E. Taplin, Jr. and Thomas E. Taplin are
co-settlors of a trust holding an aggregate of 42,000 shares of Class A
Common and 21,000 shares of Class B Common, in which each retains a
reversionary interest with respect to 14,000 of such shares of Class A
Common and 7,000 of such shares of Class B Common. Class B Common held by
the foregoing trust is subject to the Stockholders' Agreement described in
note (3).

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<PAGE> 11

(6) Represents shares in a certain trust of which Mr. Rankin, Jr. became a
trustee on February 9, 1994, and a certain trust of which he became a
trustee on March 10, 1994, succeeding his father, Alfred M. Rankin, who died
on January 23, 1994.

(7) Includes the following shares which such persons have, or had, within 60
days after January 15, 1994, the right to acquire upon the exercise of stock
options: Mr. Smith, 2,500 shares of Class A Common; Mr. Rankin, Jr., 25,000
shares of Class A Common; and all executive officers and directors as a
group, 39,000 shares of Class A Common and 2,700 shares of Class B Common.

(8) Includes 178 shares of Class A Common owned on behalf of Mr. Eklund by the
Yale Materials Handling Corporation Profit Sharing Retirement Plan, as to
which Mr. Eklund exercises voting power.

(9) Includes 250 shares of Class A Common and 125 shares of Class B Common owned
by a member of the immediate family of an executive officer as to which such
executive officer disclaims beneficial ownership.

Frank E. Taplin, Jr. and Thomas E. Taplin are brothers, and Clara Taplin
Rankin is their sister. Britton T. Taplin is the son of Thomas E. Taplin. Clara
Taplin Rankin is the mother of Alfred M. Rankin, Jr. The combined beneficial
ownership of such persons shown in the foregoing table equals 1,981,121 shares
or 27.45% of Class A Common and 1,086,789 shares or 61.55% of Class B Common
outstanding on January 15, 1994 (including for such purposes shares which would
be outstanding if certain stock options were exercised). The combined beneficial
ownership of all directors of the Company, together with Clara Taplin Rankin,
Thomas E. Taplin and all executive officers of the Company whose beneficial
ownership of Class A Common and Class B Common (including shares which would be
held by such executive officers if they exercised certain stock options) must be
disclosed in the foregoing table in accordance with Rule 13d-3 under the
Exchange Act, equals 2,040,717 shares or 28.28% of Class A Common and 1,099,859
shares or 62.29% of Class B Common outstanding on January 15, 1994 (including
shares which would be outstanding if certain stock options were exercised by
such executive officers). Such shares of Class A Common and Class B Common
represent 52.42% of the combined voting power of all Class A Common and Class B
Common outstanding on such date (including those shares which would be
outstanding if the stock options referred to above were exercised).

DIRECTORS' MEETINGS AND COMMITTEES

The Board of Directors has an Audit Committee and a Nominating,
Organization and Compensation Committee (the "Nominating and Compensation
Committee"). During 1993, the members of the Audit Committee were Robert M.
Gates (beginning May 12, 1993), E. Bradley Jones (Chairman), Dennis W. LaBarre,
John C. Sawhill and

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<PAGE> 12

Richard B. Tullis, and the members of the Nominating and Compensation Committee
were John J. Dwyer (Chairman), Robert M. Gates (beginning May 12, 1993), James
A. Hughes (through May 12, 1993), Dennis W. LaBarre, Alfred M. Rankin and John
C. Sawhill. The other standing committees of the Board of Directors are the
Executive Committee, which during 1993 was comprised of John J. Dwyer, James A.
Hughes (through May 12, 1993), E. Bradley Jones, Dennis W. LaBarre, Alfred M.
Rankin, Alfred M. Rankin, Jr., Ward Smith (Chairman) and Richard B. Tullis, and
the Finance Committee, which during 1993 was comprised of Owsley Brown II
(beginning December 8, 1993), James A. Hughes (Chairman, through May 12, 1993),
Dennis W. LaBarre, Alfred M. Rankin, Alfred M. Rankin, Jr., John C. Sawhill
(Chairman, beginning May 12, 1993), Ward Smith and Richard B. Tullis.

The Audit Committee held five meetings in 1993. The Audit Committee
recommends to the Board of Directors, subject to stockholder approval, the
selection of the Company's independent certified public accountants. The Audit
Committee discusses with the internal auditor and the independent public
accountants the overall scope and specific plans for their respective audits.
The Audit Committee meets regularly with the Company's internal auditor and
independent public accountants to discuss the results of their respective
examinations, their evaluations of the Company's internal controls, and the
Company's financial reporting.

The Nominating and Compensation Committee held three meetings in 1993. The
Nominating and Compensation Committee reviews executive compensation, fixes
compensation of the executive officers and incentive compensation, recommends
the adoption of and administers all benefit plans, and grants stock options. The
Nominating and Compensation Committee also reviews and recommends to the Board
of Directors criteria for membership to the Board of Directors, reviews and
recommends to the Board of Directors the optimum number and qualifications of
directors believed to be desirable, has established and monitors a system to
receive suggestions for nominees to directorships of the Company, and identifies
and recommends to the Board of Directors specific candidates for membership to
the Board of Directors.

The Finance Committee held three meetings in 1993. The Finance Committee
reviews the financing and risk insurance strategies of the Company and its
principal subsidiaries and makes recommendations to the Board of Directors on
all matters concerning finance.

The Executive Committee held one meeting in 1993. The Executive Committee
may exercise all of the powers of the Board of Directors in the management and
control of the business of the Company during the intervals between meetings of
the Board of Directors.

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<PAGE> 13

The Board of Directors held five meetings in 1993. All of the incumbent
directors attended at least 75% percent of the total meetings held by the Board
of Directors and by the committees on which they served during 1993.

COMPENSATION OF DIRECTORS

Each director who is not an officer of the Company or its subsidiaries
receives a retainer of $24,000 for each calendar year for service on the Board
of Directors and on subsidiary boards of directors. In addition, each such
director receives $500 for attending each meeting of the Board of Directors and
each meeting of a committee thereof, as well as for each meeting of a subsidiary
board of directors or committee thereof on which such director serves. Such fees
for attendance at board meetings and committee meetings may not exceed $1,000
per day. In addition, the chairman of each committee of the Board of Directors
and the subsidiary boards of directors receives $4,000 for each calendar year
for service as committee chairman. Under the Company's Non-Employee Directors'
Equity Compensation Plan (the "Non-Employee Directors' Plan"), each director who
is not an officer of the Company or its subsidiaries receives 50% of his annual
retainer ($12,000) in shares of Class A Common. These shares may not be
assigned, pledged, hypothecated or otherwise transferred by the director,
voluntarily or involuntarily, other than (a) by will or the laws of descent and
distribution, (b) pursuant to a qualifying domestic relations order, or (c) to a
trust for the benefit of the director, or his spouse, children or grandchildren.
The foregoing restrictions on transfer lapse upon the earliest to occur of (i)
the date which is ten years after the last day of the calendar quarter for which
such shares were earned, (ii) the date of the death or permanent disability of
the director, (iii) five years (or earlier with the approval of the Board of
Directors) from the date of the retirement of the director from the Board of
Directors of the Company and (iv) the date that a director is both retired from
the Board of Directors of the Company and has reached 70 years of age. In
addition, each director has the right under the Non-Employee Directors' Plan to
receive shares of Class A Common in lieu of cash for up to 100% of the balance
of his annual retainer, meeting attendance fees and any committee chairman's
fee. These shares would not be subject to the foregoing restrictions.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth the annual, long-term and all other
compensation for services in all capacities to the Company of the five persons
who were, as of December 31, 1993, the Named Executive Officers of the Company
and its principal subsidiaries, NACCO Materials Handling Group, Inc. ("NMHG"),
The North American Coal Corporation ("North American Coal"), and Hamilton
Beach/Proctor-Silex, Inc. ("Hamilton Beach/Proctor-Silex"). NMHG is the
operating subsidiary of Hyster-Yale

13
<PAGE> 14

Materials Handling, Inc. ("Hyster-Yale"). For ease of reference NMHG and Hyster-
Yale will be referred to collectively as "NMHG."

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPEN-
------------------------------------------- SATION
OTHER PAYOUTS
ANNUAL ----------- ALL OTHER
COMPEN- LTIP COMPEN-
NAME & FISCAL SALARY BONUS SATION PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($)(1) ($) ($) ($)
- ---------------------------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. 1993 $537,000 $149,600 $62,900(3) $ 0(4) $ 40,025(5)
President and Chief 1992 $511,000 $200,600 $59,600(3) $ 25,664(4) $ 37,370(5)
Executive Officer 1991 $439,842(2) $176,800 $51,618(3) $ 6,362(4) $ 32,323(5)
of the Company
Ward Smith 1993 $350,700 $ 70,100 $42,100(6) -- $ 24,365(7)
Chairman of the Board 1992 $334,000 $ 94,500 $40,100(6) -- $ 24,645(7)
of the Company 1991 $357,766(2) $118,800 $45,160(6) -- $ 28,721(7)
Reginald R. Eklund 1993 $295,000 $ 96,274 $38,500(8) -- $ 24,384(10)
President and Chief 1992 $260,004(2) $ 86,226 $38,433(8) $199,986(9) $ 30,117(10)
Executive Officer of 1991 $250,000(2) $ 51,165 $27,205(8) -- $209,386(10)
NMHG
Clifford R. Miercort 1993 $243,333 $116,650 $24,690(11) -- $ 19,114(12)
President and Chief 1992 $227,083 $137,173 $23,630(11) -- $ 17,494(12)
Executive Officer of 1991 $210,083 $115,429 $ 6,476(11) -- $ 16,572(12)
North American Coal
George C. Nebel 1993 $312,000 $ 37,400 $36,300(13) -- $ 0(15)
President and Chief 1992 $297,000(2) $ 85,777 $34,740(13) $ 0(14) $ 9,846(15)
Executive Officer of 1991 $280,020(2) $181,515 $ 8,368(13) $153,100(14) $ 69,586(15)
Hamilton Beach/Proctor-Silex
</TABLE>

- ---------------

(1) For Mr. Rankin and Mr. Smith, these amounts were paid in cash pursuant to
the NACCO Industries, Inc. Annual Incentive Compensation Plan. For Mr.
Eklund, these amounts were paid in cash pursuant to the NACCO Materials
Handling Group, Inc. Annual Incentive Compensation Plan. For Mr. Miercort,
these amounts were paid in cash pursuant to The North American Coal
Corporation Annual Incentive Compensation Plan. For Mr. Nebel, these
amounts were paid in cash pursuant to the Hamilton Beach/Proctor-Silex,
Inc. Annual Incentive Compensation Plan.

(2) In May 1991, Mr. Rankin succeeded Mr. Smith as chief executive officer of
the Company. Prior to September 1992, Mr. Eklund was president and chief
operating officer of NMHG. Effective September 9, 1992, Mr. Eklund became
president and chief executive officer of NMHG. Mr. Nebel became an employee
of Hamilton

14
<PAGE> 15

Beach/Proctor-Silex effective January 1, 1991, when he was elected
president and chief operating officer. Effective January 1, 1992, he became
president and chief executive officer of Hamilton Beach/Proctor-Silex.

(3) For Mr. Rankin, the amounts listed consist of payments of cash in lieu of
perquisites at levels determined by the Company's Nominating and
Compensation Committee.

(4) For 1992 and 1991, paid in the form of 490 and 117 shares of Class A
Common, respectively, which shares were paid under the NACCO Industries,
Inc. Executive Long-Term Incentive Compensation Plan (the "NACCO Long-Term
Plan"). Mr. Rankin received no award under the NACCO Long-Term Plan for
1993. Transfer of these shares is restricted under the NACCO Long-Term
Plan. See note (1) to the Long-Term Incentive Plans Table on pages 18 and
19. In 1992, the Company recorded a one-time extraordinary charge to fully
accrue for costs imposed on the Company by the Coal Industry Retiree Health
Benefit Act of 1992. This legislation requires one of the Company's
subsidiaries to incur additional costs for medical expenses of United Mine
Worker retirees. The Company's Nominating and Compensation Committee
determined that it would be inappropriate to include this non-cash
accounting charge, which resulted from an Act of Congress, in determining
awards under the NACCO Long-Term Plan.

(5) The amounts listed were contributed by the Company to match before-tax
contributions made by Mr. Rankin under the Company-sponsored savings plans.
For Mr. Rankin, the amounts listed for 1993, 1992 and 1991 include: $8,994,
$8,728 and $8,475, respectively, consisting of contributions by the Company
under The North American Coal Corporation Retirement Savings Plan (formerly
known as The NACCO Industries, Inc. Savings Plan; hereinafter, the "North
American Coal Savings Plan"); and $31,031, $28,642 and $23,848,
respectively, consisting of allocations under The North American Coal
Corporation Deferred Compensation Plan for Management Employees (formerly
known as the NACCO Industries, Inc. Deferred Compensation Plan for
Management Employees; hereinafter, the "North American Coal Deferred
Compensation Plan").

(6) For Mr. Smith, the amounts listed consist of payments of cash in lieu of
perquisites at levels determined by the Company's Nominating and
Compensation Committee.

(7) The amounts listed were contributed by the Company to match before-tax
contributions made by Mr. Smith under the Company-sponsored savings plans.
For Mr. Smith, the amounts listed for 1993, 1992 and 1991 include: $8,994,
$8,728 and $8,475, respectively, consisting of contributions by the Company
under the North American Coal Savings Plan; and $15,371, $15,917, and

15
<PAGE> 16

$20,246, respectively, consisting of allocations under the North American
Coal Deferred Compensation Plan.

(8) For Mr. Eklund, the amount listed for 1993 consists of cash in lieu of
perquisites as determined by the NMHG Nominating, Organization and
Compensation Committee. The amount listed for 1992 consists of payments of
cash in lieu of perquisites totalling $26,014, as determined by the NMHG
Nominating, Organization and Compensation Committee, and annual interest of
$12,419 paid on a $200,000 promissory note previously held by him (the
"Yale Promissory Note"), which note bore interest at a rate equal to a
13-week U.S. Treasury Bill plus 2%, with a cap of 12%, compounded
quarterly, which was payable by Yale on February 28, 1995 and which note
represented the balance due to Mr. Eklund under the Yale Materials Handling
Corporation 1985 Employee Incentive Plan (the "Yale Incentive Plan") that
was terminated effective January 1, 1990. The principal and accrued
interest of the Yale Promissory Note were prepaid in 1992. See note (9)
below. The amount listed for 1991 consists of an annual interest payment on
the Yale Promissory Note of $21,360, and the use of a car, valued at
$5,845.

(9) The amount listed was paid in cash to Mr. Eklund upon the pre-payment of
the Yale Promissory Note. See note (8), above.

(10) For Mr. Eklund, the amounts listed include: for 1993, 1992 and 1991,
$15,370, $14,963 and $909, respectively, consisting of contributions by
NMHG under the NACCO Materials Handling Group, Inc. Profit Sharing Plan;
for 1992 and 1991, $9,464 and $23,402, respectively, consisting of deferred
payments under the Yale Short-Term Incentive Compensation Deferral Plan
earned by Mr. Eklund for 1986 and 1985; for 1993 and 1992, $9,014 and
$5,690, respectively, consisting of NMHG allocations under the NACCO
Materials Handling Group, Inc. Unfunded Benefit Plan; and for 1991,
$185,075 for reimbursement by NMHG of relocation expenses.

(11) For Mr. Miercort, the amounts listed for 1993 and 1992 consist of payments
of cash in lieu of perquisites at a level determined by the North American
Coal Nominating, Organization and Compensation Committee. For 1991, the
amount listed consists of payments of club dues.

(12) The amounts listed were contributed by North American Coal to match before-
tax contributions made by Mr. Miercort under the company-sponsored savings
plans. For Mr. Miercort, the amounts listed for 1993, 1992 and 1991
include: $8,994, $8,728 and $8,475, respectively, consisting of
contributions by North American Coal under the North American Coal Savings
Plan; and $10,120, $8,766 and $8,097, respectively, consisting of
allocations under the North American Coal Deferred Compensation Plan.

16
<PAGE> 17

(13) For Mr. Nebel, the amounts listed consist of payments of cash in lieu of
perquisites at levels determined by the Hamilton Beach/Proctor-Silex
Nominating, Organization and Compensation Committee.

(14) For 1991, the amount listed was paid in cash pursuant to the former
Hamilton Beach/Proctor-Silex, Inc. Long-Term Incentive Compensation Plan
(the "Former Hamilton Beach/Proctor-Silex Long-Term Plan") which was
terminated effective December 31, 1992. Mr. Nebel received no award under
the Former Hamilton Beach/Proctor-Silex Long-Term Plan for 1992.

(15) For Mr. Nebel, the amounts listed include: for 1992 and 1991, reimbursement
by Hamilton Beach/Proctor-Silex of $9,846 and $35,429, respectively, of
relocation expenses; and for 1991, $32,307 allocated by Hamilton
Beach/Proctor-Silex under the Hamilton Beach/Proctor-Silex, Inc. Deferred
Compensation Plan for George C. Nebel, and reimbursement by Hamilton
Beach/Proctor-Silex of $1,850 for tax preparation fees.

STOCK OPTION GRANTS

The Company did not grant any stock options under the Company's 1975 Stock
Option Plan or 1981 Stock Option Plan (the "Stock Option Plans") during the
fiscal year ended December 31, 1993 to any person, including the Named Executive
Officers.

STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES

The following table sets forth information for the fiscal year ended
December 31, 1993 with respect to the exercised and unexercised options to
purchase the Company's Class A Common and Class B Common granted to the Named
Executive Officers in prior years under the Stock Option Plans.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AT FISCAL YEAR-END IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE (#) (1) AT FISCAL YEAR-END ($)
EXERCISE REALIZED ------------------------------ ------------------------------
NAME (#) (1) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. -- -- 25,000 -- $398,438 --
Ward Smith -- -- 2,500 -- $48,750
Reginald R. Eklund (2) -- -- -- -- -- --
Clifford R. Miercort -- -- -- -- -- --
George C. Nebel (2) -- -- -- -- -- --
<FN>

- ---------------

(1) Shares of Class A Common.

(2) Mr. Eklund and Mr. Nebel do not participate in the Stock Option Plans.
</TABLE>
17
<PAGE> 18

LONG-TERM INCENTIVE PLANS

The following table sets forth information concerning awards to the Named
Executive Officers for the calendar year 1994, and estimated payouts in the
future, under long-term incentive plans of the Company and its principal
subsidiaries.

LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR FOR FUTURE YEARS

<TABLE>
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF SHARES, OTHER PERIOD NON-STOCK PRICE-BASED PLANS
UNITS OR UNTIL --------------------------------------------------
OTHER RIGHTS MATURATION OR THRESHOLD TARGET MAXIMUM
NAME ($ OR #) PAYOUT ($ OR #) ($ OR #) ($ OR #)
- ---------------------------- ------------------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. (1) $595,303 (1) $0 $ 595,303 (1)
Ward Smith (2) -- -- -- -- --
Reginald R. Eklund (3) 100,403 Units 10 years $0 $2,190,772 (3)
Clifford R. Miercort (4) $349,314 6 years $0 $ 349,314 (4)
George C. Nebel (5) 69,175 Units 10 years $0 $1,472,736 (5)
</TABLE>
- ---------------

(1) The amount listed represents the target amount recommended by the Company's
Nominating and Compensation Committee for Mr. Rankin for 1994 under the
NACCO Long-Term Plan and consists of $321,500 initially awarded by the
Nominating and Compensation Committee and $273,803 subsequently awarded by
such Committee based on the recommendation of the Company's outside
compensation consultants in order to make the potential amounts paid under
the NACCO Long-Term Plan more competitive with the potential amounts paid
under long-term incentive compensation plans in similar industries. Under
the NACCO Long-Term Plan, participants are awarded dollar-denominated awards
each year and receive payment of all, part or none of such award based upon
the Company's return on equity performance against a pre-established target.
The awards are paid primarily in shares of Class A Common, with the number
of shares based upon the average closing price of Class A Common on the New
York Stock Exchange at the end of each week during the previous year. The
shares of Class A Common are fully vested but may not be transferred until
the earlier of 10 years (December 31, 2004 for shares awarded for 1994), the
participant's death or disability, or five years after retirement. A
participant may also request at any time after three years that the
Company's Nominating and Compensation Committee authorize the lapse of
restrictions on up to 20% of shares issued under the NACCO Long-Term Plan
for the purchase of a principal residence or payments of medical or
educational expenses. Because the value of stock awarded is currently
taxable as income to the participant, a portion of the award may be

18
<PAGE> 19

paid in cash. The NACCO Long-Term Plan has no specified maximum payout,
except that the maximum number of shares of Class A Common which may be
issued under the NACCO Long-Term Plan is 300,000.

(2) Mr. Smith does not participate in the long-term incentive compensation plans
of either the Company or its subsidiaries.

(3) Effective on January 1, 1994, Mr. Eklund was awarded 100,403 "book value
appreciation units" under the NACCO Materials Handling Group, Inc. Long-Term
Incentive Compensation Plan (the "NMHG Long-Term Plan") at a specified "base
period price per unit." These book value appreciation units were awarded by
the NMHG Nominating, Organization and Compensation Committee to Mr. Eklund
upon the recommendation of the Company's outside compensation consultant in
order to make the potential amounts paid under the NMHG Long-Term Plan more
competitive with the potential amounts paid under long-term incentive
compensation plans in similar industries. Under the NMHG Long Term Plan,
those units will vest ten years from the date of award (December 31, 2003
for units awarded effective January 1, 1994), or earlier in the event of the
participant's death, permanent disability or retirement, or in the event of
any other termination of employment with the approval of the NMHG
Nominating, Organization and Compensation Committee. At any time following
the fifth anniversary of the date of an award, a participant may also
annually request that such Committee permit the vesting of up to (a) 20% of
the number of book value appreciation units for the purchase of a principal
residence for the individual or the payment of medical or educational
expenses of the individual, his spouse or dependents or (b) 10% of the
number of book value appreciation units for any other purpose, provided that
such request may only apply to an aggregate of 40% of the number of book
value appreciation units originally granted in an award. Upon vesting, the
participant is entitled to receive a payment in cash equal to the
appreciation in the book value per unit over the base period price per unit.
At target return on equity over ten years, Mr. Eklund's 100,403 book value
appreciation units awarded effective January 1, 1994 would entitle him to a
cash payment on December 31, 2003 of $2,190,772, which amount may be greater
or less, depending upon whether NMHG's book value has increased or decreased
in comparison to the target for book value growth over the period. The NMHG
Long-Term Plan has no specified maximum payout. Mr. Eklund was previously
awarded 65,000 book value appreciation units effective on January 1, 1990,
which units will vest on December 31, 1999, and 21,690 book value
appreciation units effective on January 1, 1993, which units will vest on
December 31, 2002.

(4) Effective on January 1, 1990, Mr. Miercort was awarded the right to
participate in The North American Coal Corporation Value Appreciation Plan
(the "North

19
<PAGE> 20

American Coal Long-Term Plan") at a rate equal to a specified percentage of
his salary range midpoint, as determined each year by the North American
Coal Nominating, Organization and Compensation Committee. The amount listed
represents the additional target amount awarded to Mr. Miercort effective
January 1, 1994 by the North American Coal Nominating, Organization and
Compensation Committee based upon the recommendation of the company's
outside compensation consultant in order to make the potential amount paid
under the North American Coal Long-Term Plan more competitive with the
potential amount paid under long-term incentive compensation plans in
similar industries. Each year under the North American Coal Long-Term Plan,
all or part of a target amount is credited to a participant's account based
upon (a) the expected after-tax annual net income less a capital charge
which is 10% of the book value of the company's "current projects" and "new
projects" over the term of the North American Coal Long-Term Plan, (b) the
cumulative after-tax net income less a capital charge of 10% of the book
value of the company's "current projects" and "new projects" over the term
of the North American Coal Long-Term Plan and (c) a discounted present value
of the expected cumulative value appreciation of all "new projects" each
year compared to target, as determined by the North American Coal
Nominating, Organization and Compensation Committee. Each year, the
participants' accounts are adjusted by the average monthly rate during the
year for 10-year U.S. Treasury Bonds. All amounts vest at the rate of 10%
each year, become fully vested on December 31, 1999, and are payable in cash
on the earlier of December 31, 1999, or the participant's death, disability
or retirement. Earlier payments are permitted in the event of hardship. The
North American Coal Long-Term Plan has no specified threshold or maximum
payouts.

(5) Effective on January 1, 1994, Mr. Nebel was awarded 69,175 "book value
appreciation units" under the Hamilton Beach/Proctor-Silex, Inc. Long-Term
Incentive Compensation Plan (the "Hamilton Beach/Proctor-Silex Long-Term
Plan") at a specified "base period price per unit." These book value
appreciation units were awarded to Mr. Nebel by the Hamilton
Beach/Proctor-Silex Nominating, Organization and Compensation Committee upon
the recommendation of the company's outside compensation consultants in
order to make the potential amount paid under the Hamilton
Beach/Proctor-Silex Long-Term Plan more competitive with the potential
amount paid under long-term incentive compensation plans in similar
industries. Under the Hamilton Beach/Proctor-Silex Long-Term Plan, those
units will vest ten years from the date of award (December 31, 2003 for
units awarded effective January 1, 1994), or earlier in the event of the
participant's death, permanent disability or retirement, or in the event of
any other termination of employment with the approval of the Hamilton

20
<PAGE> 21

Beach/Proctor-Silex Nominating, Organization and Compensation Committee. At
any time following the fifth anniversary of the date of an award, a
participant may annually request that such Committee permit the vesting of
up to (a) 20% of the number of book value appreciation units for the
purchase of a principal residence for the individual or the payment of
medical or educational expenses of the individual, his spouse or dependents
or (b) 10% of the number of book value appreciation units for any other
purpose, provided that such request may only apply to an aggregate of 40% of
the number of book value appreciation units originally granted in the award.
Upon vesting, the participant is entitled to receive a payment in cash equal
to the appreciation in the book value per unit over the base period price
per unit. At target return on equity over ten years, Mr. Nebel's 69,175 book
value appreciation units awarded effective January 1, 1994 would entitle him
to a cash payment on December 31, 2003 of $1,472,736, which amount may be
greater or less, depending upon whether Hamilton Beach/Proctor-Silex's book
value has increased or decreased in comparison to the target for book value
growth over the period. The Hamilton Beach/Proctor-Silex Long-Term Plan has
no specified maximum payout. Mr. Nebel was previously awarded 84,321 book
value appreciation units effective on January 1, 1993, which units will vest
on December 31, 2002.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Nominating and Compensation Committee of the Company's Board of
Directors and the Nominating, Organization and Compensation Committees of the
Company's subsidiary boards of directors (collectively, the "Compensation
Committee") have furnished the following report on executive compensation. The
members of the Nominating and Compensation Committee for 1993 were John J. Dwyer
(Chairman), Robert M. Gates (beginning May 12, 1993), James A. Hughes (through
May 12, 1993), Dennis W. LaBarre, Alfred M. Rankin and John C. Sawhill. The
members of the Nominating, Organization and Compensation Committees of the
Company's principal subsidiaries, NMHG, North American Coal and Hamilton
Beach/Proctor-Silex consist of these individuals, as well as Alfred M. Rankin,
Jr. and Ward Smith. Neither Mr. Rankin, Jr. nor Mr. Smith are members of the
Nominating and Compensation Committee of the Company, and their participation in
this report is limited to the portions of the report relating to the Company's
subsidiaries. In addition, Martin Naughton, a director of Hamilton
Beach/Proctor-Silex, is a member of the Hamilton Beach/Proctor-Silex Nominating,
Organization and Compensation Committee and his participation in this report is
limited to the portions of the report relating solely to Hamilton
Beach/Proctor-Silex.

21
<PAGE> 22

COMPENSATION POLICY

At the Company and its subsidiaries, the executive compensation program has
been restructured in recent years to more effectively support stockholders'
interests. At the core of this restructuring is a strong link between an
executive officer's compensation and individual performance and the performance
of the Company or the subsidiary for which the executive officer has
responsibility. Comprehensively defined target total compensation is established
for each executive officer position following rigorous evaluation standards to
ensure internal equity. Such total compensation is targeted explicitly in dollar
terms as the sum of base salary plus perquisites, short-term incentives and
long-term incentives. While the Company offers opportunities for its executive
officers to earn truly superior compensation for outstanding results, this link
includes significantly reduced compensation for weak results.

In accordance with the foregoing philosophy, base salaries are set at
levels appropriate to allow incentive plans to serve as significant motivating
factors for each executive officer. Incentive-based compensation plans are
designed to provide significant rewards for achieving or surpassing annual
operating and financial performance objectives, as well as to align the
compensation interests of executive officers with the long-term interests of
stockholders by basing a substantial portion of the incentive compensation
package upon return on equity performance and book value appreciation rather
than on cyclical movements in stock price. Finally, target levels of perquisites
for executive officers are converted into fixed dollar amounts and paid in cash,
an approach which recognizes that perquisites are largely just another form of
compensation.

The Company has not granted stock options since 1989, in the belief that
the likely value realized is unclear both in amount and in its relationship to
performance. However, management is reviewing federal income tax law changes
recently enacted. If management ultimately determines that such changes
significantly diminish or otherwise undercut the incentives intended to be
created by the Company's long-term incentive compensation plan, the Company may
reconsider its previously announced intention to not make further awards under
its Stock Option Plans.

In sum, the executive compensation program at the Company and its
subsidiaries is designed to reward executive officers with competitive total
compensation for achievement of specific corporate and individual goals, while
at the same time making them long-term stakeholders in the Company. In years
such as this year where the Company has modest financial results, payouts under
the incentive elements of the Company's compensation plans will reflect these
results; over time, however, the program should encourage executive officers to
earn incentive pay significantly greater than 100% of target by delivering
outstanding managerial performance.

22
<PAGE> 23

Under Section 162(m) of the Internal Revenue Code of 1986, as amended, a
public company will be denied deductions in certain circumstances for
compensation paid to the chief executive officer and the other four most highly
compensated executive officers to the extent that the compensation for any of
such individuals exceeds one million dollars for the taxable year. The
Compensation Committee has not formulated an overall policy with respect to the
deductibility of compensation under Section 162(m). The compensation paid or
awarded by the Company and its subsidiaries for 1993 was below the threshold set
by Section 162(m), and it is expected that aggregate compensation paid in 1994
also will be below such threshold. Since the Internal Revenue Service
regulations under Section 162(m) have not been finalized, there is still some
uncertainty as to the application of the regulations to future compensation
actions. However, after reviewing the legislation and the regulations proposed
to date, the Compensation Committee has taken steps under the NACCO Long-Term
Plan which should allow additional time to consider a definitive policy with
respect to Section 162(m) without the loss of deductibility for compensation
awards made or for compensation actions taken in 1994.

EXECUTIVE COMPENSATION AND COMPANY PERFORMANCE

The three main elements of the Company's executive compensation program --
base salary, short-term incentive compensation and long-term incentive
compensation -- are carefully reviewed by the Compensation Committee as to their
relationship to the performance of the Company and its subsidiaries.

BASE SALARY. To assist the Compensation Committee in fixing base salary
levels which are at adequately competitive levels, an independent outside
consultant analyzes the various industries in which the Company and its
principal subsidiaries operate. From those studies the consultant derives a mean
salary level for each executive officer position at the Company and its
principal subsidiaries and provides that information to the Compensation
Committee. All information provided to the Compensation Committee is on an
industry-wide basis as opposed to a comparison with individual companies that
may compete with the Company and its principal subsidiaries. The Compensation
Committee uses the mean, or salary midpoint ("Salary Midpoint"), for purposes of
determining the salary range for each executive officer. The Compensation
Committee then sets the salary for each executive officer, which is within the
salary range, and is dependent upon additional factors such as the executive
officer's performance.

Because the Compensation Committee uses Salary Midpoints based on industry-
wide studies which are specific to each subsidiary, there is no meaningful
relationship between executive salary levels of each subsidiary determined by
the Compensation

23
<PAGE> 24

Committee and the executive salary levels of the companies that make up the S&P
Diversified Machinery Index. That index, which is used by the Company as the
published industry index for comparison to the Company's stock price
performance, was chosen because NMHG is the largest subsidiary in terms of asset
value and revenues.

SHORT-TERM INCENTIVE COMPENSATION. At the beginning of each fiscal year,
the Compensation Committee adopts certain target performance levels for net
income, return on equity, cash flow, market share or other factors (depending on
the business unit) for that year. The short-term incentive plans for the Company
and its subsidiaries essentially follow the same basic pattern for award
determination. Target awards for executive officers are established at specified
percentages of each individual's Salary Midpoint. The actual incentive
compensation pool available for distribution is determined at the end of each
fiscal year based on actual performance by the business unit as measured against
specific target performance levels for the Company and each subsidiary
established at the beginning of the year by the Compensation Committee.

Final awards for each individual are based on the individual's target
award, adjusted for performance by the business unit against the established
targets and for performance by the individual against individual goals. The
Compensation Committee, in its discretion, may also increase or decrease awards
by up to 10%, and may approve the payment of awards where business unit
performance would otherwise not meet the minimum criteria set for payment of
awards. In no event will short-term incentive payments exceed 150% of the target
amount.

The short-term annual incentive plans of the Company and its subsidiaries
provide target compensation of 30 to 50% of Salary Midpoint, depending on the
executive officer's position and subsequent performance during the fiscal year.
Although it varies by business unit, target awards generally are tied to the
annual operating and financial targets for the particular business unit, and in
most cases, to longer-term objectives such as return on equity performance for
the business unit.

LONG-TERM INCENTIVE COMPENSATION. For 1993, the long-term incentive
compensation plans for the Company and its subsidiaries, established at target
performance levels by the Compensation Committee, were designed to provide the
equivalent of 20 to 45% of Salary Midpoint (unless the amount is currently
taxable, in which case the targets are adjusted accordingly).

The Company's long-term incentive compensation plan uses the Company's
consolidated adjusted return on equity as a measure of incentive compensation.
Target awards are set based on a percentage of each executive officer's Salary
Midpoint, and for 1993 were adjusted at year's end based upon returns on equity
for the current

24
<PAGE> 25

year. The award is paid primarily in shares of Class A Common, the transfer of
which is restricted for up to ten years, with the number of shares awarded being
based on the average closing price of Class A Common on the New York Stock
Exchange at the end of each week during the previous year. An average price
mechanism, rather than year-end price or price on the date of payment, is used
in determining the number of shares to be awarded because the Compensation
Committee believes that valuation at a single point in time in a year is likely
to lead to inappropriate results.

The subsidiaries' long-term incentive compensation plans are linked to
future performance of the particular business unit. Similar to the Company's
long-term incentive plan, each subsidiary plan establishes target awards based
on an executive officer's Salary Midpoint. Under the plans at NMHG and Hamilton
Beach/Proctor-Silex, the target award is set with the grant of "book value
appreciation units." The actual amount paid ten years after the date of original
grant depends upon the increase in the book value of the particular business
unit over the time period. The North American Coal long-term incentive
compensation plan provides for awards of the right to participate in the plan at
a rate equal to a specified percentage of the individual's Salary Midpoint. The
target amount allocated to a participant each year is adjusted at the end of the
year for actual after-tax net income performance for current mining projects and
actual expected net after-tax income performance for new mining projects, in
both cases compared to after-tax net income targets for current and new mining
projects, respectively, and such amount is credited to the participant's
account. Amounts so credited under the North American Coal plan vest at the rate
of 10% for each year following the effective date of the initial award and are
paid in cash on December 31, 1999.

The long-term incentive plans at the Company and its subsidiaries generally
require long-term commitment on the part of the Company's executive officers,
and cash withdrawals or stock sales are generally not permitted for a number of
years. Rather, the awarded amount is effectively invested in the enterprise for
an extended period to strengthen the tie between stockholders' and executive
officers' long-term interests. The ultimate compensation purpose of such
long-term incentive plans is to enable executive officers to accumulate capital
through future managerial performance which contributes to the future success of
the Company's businesses.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

The compensation awarded to the Company's chief executive officer reflects
the basic philosophy generally discussed above that compensation for all
employees should be based on Company and individual performance.

25
<PAGE> 26

The Compensation Committee considered that, under Mr. Rankin's leadership,
the Company has made substantial progress toward its strategic objectives,
including the overall strengthening of the management team, the assimilation of
acquired businesses, and the development and introduction of a variety of new
products at NMHG and Hamilton Beach/Proctor-Silex. In addition, the financial
strength of the Company has been enhanced by the reduction of debt and
significant progress in achieving the objective of debt-to-total capitalization
of 35%.

In recognition of these accomplishments, the Compensation Committee
increased Mr. Rankin's base salary approximately five percent in 1993 over his
1992 base salary. With respect to incentive compensation, because of the
underlying poor economic conditions of some of the primary markets of the
Company and its subsidiaries and because actual performance has not yet
reflected fully the benefits of the Company's improved strategic positioning,
actual awards for 1993 were below targeted levels. The Compensation Committee
established Mr. Rankin's short-term incentive compensation participation for
1993 at 50% of his Salary Midpoint. Because the actual performance of the
Company in terms of return on equity, and the performance of certain
subsidiaries, in terms of working capital, net income, market share and other
strategic factors, was below target level of performance, the pool available for
annual incentive awards was 57.1% of target level. Accordingly, for 1993 Mr.
Rankin received 57.1% of his annual incentive award target. The long-term award
targeted for Mr. Rankin in 1993 by the Compensation Committee was 59% of his
Salary Midpoint (adjusted from 45%, to take into consideration the fact that the
award is currently taxable to Mr. Rankin). Since the Company's return on equity
was below the minimum threshold return provided for by the NACCO Long-Term Plan,
Mr. Rankin did not receive a long-term incentive award for 1993.

JOHN J. DWYER, CHAIRMAN ALFRED M. RANKIN, JR.*
ROBERT M. GATES WARD SMITH*
DENNIS W. LABARRE MARTIN NAUGHTON**
JOHN C. SAWHILL

* Messrs. Rankin and Smith are members of the compensation committees of the
Company's principal subsidiaries only.

** Mr. Naughton is a member of the Hamilton Beach/Proctor-Silex compensation
committee only.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Dennis W. LaBarre, a director and member of the compensation committees of
the Company and its principal subsidiaries, is a partner in the law firm of
Jones, Day,

26
<PAGE> 27

Reavis & Pogue. Such firm provided legal services on behalf of the Company
during 1993 on a variety of matters, and it is anticipated that such firm will
provide such services in 1994.

Alfred M. Rankin, Jr. and Ward Smith, who are directors of the Company and
members of the compensation committees of the principal subsidiaries of the
Company (but not of the Company), are President and Chief Executive Officer, and
Chairman of the Board, respectively, of the Company.

Martin Naughton, a director and member of the compensation committee of
Hamilton Beach/Proctor-Silex, is Chairman and Chief Executive of Glen Dimplex,
an unlimited corporation organized under the laws of the Republic of Ireland,
which indirectly owns 20% of Hamilton Beach/Proctor-Silex.

STOCK PRICE PERFORMANCE PRESENTATION

The following graphs compare the Company's total annual stock price
performance on Class A Common against the total stock price performance of the
S&P 500 Composite Stock Index and the S&P Diversified Machinery Composite Index
for the periods indicated. The graphs present the year-end value of a $100
investment, at the base point, for each index assuming the reinvestment of
dividends.

In accordance with the rules promulgated by the SEC, Graph 1 compares the
stock price performance based upon the difference between the stock price at the
beginning of each fiscal year and the stock price at the end of the fiscal year
for the five-year period commencing January 1, 1989 (base point December 31,
1988) and ending December 31, 1993.

27
<PAGE> 28
<TABLE>
1989-1993 STOCK PRICE PERFORMANCE

GRAPH 1

<CAPTION>
1988 1989 1990 1991 1992 1993
------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NACCO 100 179 99 157 174 175

S&P 500 100 132 128 166 179 197

S&P DIVERSIFIED MACH. 100 119 103 122 125 184

<FN>
Assumes $100 invested at December 31, 1988 with reinvestment of dividends.
</TABLE>
The Company believes that the measurement set forth in Graph 1, which is
based upon the stock price at a single point in time in each year, does not
adequately reflect the Company's stock price performance over the period because
of the numerous periodic fluctuations throughout the year in both the price of
the Company's stock and the level of the composite indices. The Company,
therefore, has provided Graph 2 which compares the returns for the Company and
the S&P 500 Composite Stock Index based on the average stock price for the year
computed on a monthly basis using the high and low price for each month
(portrayed by the data presented in bold type) compared with the corresponding
information from Graph 1 which is based upon the difference between the stock
price at the beginning of each fiscal year and the stock price at the end of the
fiscal year for the same period as in Graph 1.

28
<PAGE> 29
<TABLE>
1989-1993 STOCK PRICE PERFORMANCE

GRAPH 2

<CAPTION>
1988 1989 1990 1991 1992 1993
--------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NACCO 100 179 99 157 174 175

S&P 500 100 132 128 166 179 197

NACCO (MONTHLY AVG.) 100 150 169 155 170 176

S&P 500 (MONTHLY AVG.) 100 125 135 157 178 199

<FN>
Assumes $100 invested at December 31, 1988 with reinvestment of dividends.
Monthly average data is based on the high/low price for each month.
</TABLE>
The Company believes that although sustained operating and financial
performance will ultimately be reflected in stock price, the five-year period
portrayed in the foregoing graphs is too brief a period over which to measure
the results of significant strategic activities, and that corporate financial
and strategic performance will be reflected in stock price only when measured
over the long term. Accordingly, the long-term incentive compensation plans of
the Company and its subsidiaries are linked to long-term operating and financial
achievement, not stock price, as further described in the Report of the
Compensation Committee on Executive Compensation on pages 21 to 25. The Company,
therefore, has included Graph 3 which compares the 10-year returns for the
Company and the S&P 500 Composite Stock Index based on the average stock price
for the year computed using the same method as in Graph 2 for the 10-year period
commencing January 1, 1984 (base point December 31, 1983) and ending December
31, 1993.

29
<PAGE> 30
<TABLE>

1984-1993 STOCK PRICE PERFORMANCE

GRAPH 3
<CAPTION>
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NACCO (MONTHLY AVG.) 100 135 163 229 233 275 412 464 426 466 485

S&P 500 (MONTHLY AVG.) 100 106 127 167 207 200 251 270 314 357 398
<FN>
Assumes $100 invested at December 31, 1983 with reinvestment of dividends.
Monthly average data is based on the high/low price for each month.
</TABLE>
The following table contains the annual returns expressed in percentages
for the indices set forth in the preceding graphs.

ANNUAL RETURNS OF INDICES INCLUDED ON STOCK PRICE PERFORMANCE GRAPHS

<TABLE>
<CAPTION>
YEAR-END CLOSING PRICE
---------------------------------------- AVERAGE OF MONTHLY HIGH
S&P 500 AND LOW PRICE
DIVERSIFIED -------------------------
YEAR NACCO S&P 500 MACHINERY NACCO S&P 500
- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
1984 35.03% 5.91%
1985 20.40% 20.32%
1986 40.96% 30.91%
1987 1.80% 24.24%
1988 17.87% -3.41%
1989 78.50% 31.69% 19.00% 49.86% 25.42%
1990 -44.70% -3.10% -13.74% 12.60% 7.35%
1991 59.29% 30.47% 18.87% -8.16% 16.34%
1992 10.38% 7.62% 2.04% 9.38% 13.76%
1993 0.84% 10.08% 48.07% 4.05% 11.61%
</TABLE>

30
<PAGE> 31

PENSION PLANS

NACCO INDUSTRIES PENSION PLANS

The following table sets forth the estimated maximum annual benefits under
the Company's defined benefit pension plans (both qualified and non-qualified)
which would be payable on a straight life annuity basis, in various compensation
classifications upon retirement at age 65, after selected periods of service:

<TABLE>
<CAPTION>
FINAL
AVERAGE YEARS OF SERVICE AT RETIREMENT
ANNUAL PAY ----------------------------------------------------------------------
AGE 65 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$125,000 $ 28,421 $ 37,894 $ 47,368 $ 56,842 $ 59,967
150,000 34,796 46,394 57,993 69,592 73,342
175,000 41,171 54,894 68,618 82,342 86,717
200,000 47,546 63,394 69,243 95,092 100,092
225,000 53,921 71,894 89,868 107,842 113,467
250,000 60,296 80,394 100,493 120,592 126,842
300,000 73,046 97,394 121,743 146,092 153,592
350,000 85,796 114,394 142,993 171,592 180,342
400,000 98,546 131,394 164,243 197,092 207,092
450,000 111,296 148,394 185,493 222,592 233,842
500,000 124,046 165,394 206,743 248,092 260,592
550,000 136,796 182,394 227,993 273,592 287,342
600,000 149,546 199,394 249,243 299,092 314,092
650,000 162,296 216,394 270,493 324,592 340,842
700,000 175,046 233,394 291,743 350,092 367,592
750,000 187,796 250,394 312,993 375,592 394,342
800,000 200,546 267,394 334,243 401,092 421,092
</TABLE>

The benefits shown on the above table represent benefits that have been
subject to a Social Security offset (as required under the benefit formula) that
were accrued as of December 31, 1993. The benefits under the Company's defined
benefit pension plans were permanently frozen as of that date for all
participants other than Mr. Smith. Effective January 1, 1994, all participants
(other than Mr. Smith and Mr. Rankin) became eligible for profit sharing
benefits under the NACCO Materials Handling Group, Inc. Profit Sharing Plan. Mr.
Smith will continue accruing benefits under the foregoing formula until his
retirement, while Mr. Rankin will become eligible for other nonqualified profit
sharing benefits.

31
<PAGE> 32

For computing pension benefits under the Company's plans, "Final Average
Annual Pay" is based on the average annual earnings for the highest five
consecutive years during the last ten years prior to retirement. Earnings
include those amounts shown in the "salary", "bonus" and "other annual
compensation" columns of the Summary Compensation Table on page 14, which are
paid to the executive officers, other than amounts which are deferred under
nonqualified compensation plans and amounts which represent severance payments,
relocation allowances and other similar fringe benefits. The 1993 earnings of
Messrs. Rankin and Smith that would be taken into account under the plans are
$792,563 and $462,183, respectively.

As of December 31, 1993, the number of years of service under the Company's
plans for Messrs. Rankin and Smith are 4 years and 9 months and 7 years and 3
months, respectively. The benefits under the Company's plans which are payable
to Messrs. Rankin and Smith are not subject to a Social Security offset. As part
of the employment agreement described below, Mr. Smith has elected to receive a
lump sum payment equivalent to his lifetime pension benefit to be paid in
connection with his retirement in May 1994. The lump sum amount shall be
calculated using the Pension Benefit Guaranty Corporation ("PBGC") rate fixed
for the month following Mr. Smith's retirement. Based on the March 1994 PBGC
rate, Mr. Smith would receive a payment of $1,426,544 after his retirement.

HAMILTON BEACH/PROCTOR-SILEX PENSION PLANS

Mr. Nebel is covered by the non-contributory defined benefit cash balance
plans (both qualified and non-qualified) of Hamilton Beach/Proctor-Silex. Each
year, effective as of January 1, 1992, Hamilton Beach/Proctor-Silex credits an
amount to a notional account for each covered employee equal to a percentage of
the employee's compensation (including bonuses and salary deferrals) for such
year, in accordance with an age-based formula that is integrated with Social
Security. The notional account balances are then credited with interest each
year until the employee's normal retirement date (generally, age 65) at a stated
rate of interest. The notional account balances are paid in the form of a lump
sum payment or converted to an annuity to provide monthly benefit payments.

The estimated annual pension benefit for Mr. Nebel under the cash balance
plans, based on compensation and service through December 31, 1993, which would
be payable on a straight life annuity basis at normal retirement age, is
$14,159.04.

NORTH AMERICAN COAL PENSION PLANS

The following table sets forth the estimated maximum annual benefits under
the North American Coal defined benefit pension plans (both qualified and
non-qualified)

32
<PAGE> 33

which would be payable on a straight life annuity basis, in various compensation
classifications upon retirement at age 65, after selected periods of service:

<TABLE>
<CAPTION>
FINAL
AVERAGE YEARS OF SERVICE AT RETIREMENT
ANNUAL PAY ----------------------------------------------------------------------
AGE 65 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$125,000 $ 28,296 $ 37,728 $ 47,161 $ 56,593 $ 59,718
150,000 34,296 45,728 57,161 68,593 72,343
175,000 40,296 53,728 67,161 80,593 84,968
200,000 46,296 61,728 77,161 92,593 97,593
225,000 52,296 69,728 87,161 104,593 110,218
250,000 58,296 77,728 97,161 116,593 122,843
300,000 70,296 93,728 117,161 140,593 148,093
350,000 82,296 109,728 137,161 164,593 173,343
400,000 94,296 125,728 157,161 188,593 198,593
450,000 106,296 141,728 177,161 212,593 223,843
500,000 118,296 157,728 197,161 236,593 249,093
550,000 130,296 173,728 217,161 260,593 274,343
600,000 142,296 189,728 237,161 284,593 299,593
650,000 154,296 205,728 257,161 308,593 324,843
700,000 166,296 221,728 277,161 332,593 350,093
</TABLE>

For computing pension benefits under the North American Coal plans, "Final
Average Annual Pay" is calculated the same way as described above for the
Company's plans. The 1993 earnings of Mr. Miercort that would be taken into
account under the plans is $342,218.

As of December 31, 1993, the number of years of service under the North
American Coal plans for Mr. Miercort is 18 years. The benefits under the North
American Coal plans for Mr. Miercort are not subject to a Social Security
offset.

Mr. Eklund has never been covered by any defined benefit pension plan of
the Company or its subsidiaries and has no credited years of service under any
such plans.

EMPLOYMENT AGREEMENT

In May 1991, Mr. Smith entered into a three-year employment agreement with
the Company, which may be extended for one year, until May 31, 1995, by mutual
agreement. The agreement terminates upon Mr. Smith's death or permanent
disability. Mr. Smith has indicated that he intends to retire upon the
termination of the initial employment term in May 1994. Under the agreement, Mr.
Smith is entitled to a salary

33
<PAGE> 34

at an annual rate equal to the Salary Midpoint for his salary grade (initially
$321,200), as determined by the Company's outside compensation consultant, and
to certain fringe benefits, such as medical benefits coverage and participation
in the Company's annual incentive plan (but not the NACCO Long-Term Plan). In
addition, under the agreement Mr. Smith and his spouse have a vested right to
continued medical benefits coverage for the remainder of their respective
lifetimes on the basis applicable to executive officers of the Company who
retire at the time of Mr. Smith's retirement, death or permanent disability.
Finally, as described above, under the agreement, Mr. Smith has elected to
receive the present value of his lifetime pension payments in a lump sum
distribution.

2. CONFIRMATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors of the Company recommends a vote for ratification of
the appointment of Arthur Andersen & Co. as the independent certified public
accountants of the Company and its subsidiaries to audit the books and accounts
for the Company and its subsidiaries for the current year 1994. It is intended
that the shares represented by proxies in the enclosed form will be voted for
confirmation of Arthur Andersen & Co. as the independent certified public
accountants, unless contrary instructions are received. It is expected that
representatives of Arthur Andersen & Co. will attend the Annual Meeting, with
the opportunity to make a statement if they so desire, and will be available to
answer appropriate questions.

SUBMISSION OF STOCKHOLDER PROPOSALS

Proposals of stockholders intended to be eligible for inclusion in the
Company's proxy statement and form of proxy relating to the Company's next
annual meeting must be received at the Company's executive offices on or before
December 1, 1994. Such proposals should be submitted by certified mail, return
receipt requested, addressed to the Company, 5875 Landerbrook Drive, Mayfield
Heights, Ohio 44124-4017, Attention: Secretary. The Company's Nominating and
Compensation Committee will consider stockholder suggestions for nominees for
election to the Company's Board of Directors if such suggestions are in writing,
set forth the nominee's name, address and ownership of Class A Common and Class
B Common, and are accompanied by a resume of the nominee's education and
business experience (including directorships, employments and civic activities)
and a written consent by the nominee that such nominee is desirous of being
considered as a nominee and, if nominated and elected, such nominee will serve
as a director. Such suggestions should be submitted in the manner and to the
address set forth above and must be received at the Company's executive offices
on or before December 31, 1994.

34
<PAGE> 35

SOLICITATION OF PROXIES

The Company will bear the costs of soliciting proxies from its
stockholders. In addition to the use of the mails, proxies may be solicited by
the directors, officers and employees of the Company by personal interview,
telephone or telegram. Such directors, officers and employees will not be
additionally compensated for such solicitation, but may be reimbursed for
out-of-pocket expenses incurred in connection therewith. Arrangements will also
be made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation material to the beneficial owners of Class A
Common and Class B Common held of record by such persons, and the Company will
reimburse such brokerage houses, custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred in connection therewith.

OTHER MATTERS

The directors know of no other matters which are likely to be brought
before the meeting, but if any such matters properly come before the meeting the
persons named in the enclosed proxy, or their substitutes, will vote the proxy
in accordance with their best judgment.

CHARLES A. BITTENBENDER
Secretary
Mayfield Heights, Ohio
March 31, 1994

IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO
NOT EXPECT TO ATTEND THE MEETING ARE URGED TO FILL OUT, DATE AND MAIL THE
ENCLOSED FORM(S) OF PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. STOCKHOLDERS WHO HOLD BOTH CLASS A COMMON AND CLASS
B COMMON SHOULD FILL OUT, SIGN, DATE AND RETURN BOTH FORMS OF PROXY.

35
<PAGE> 36
PROXY

CLASS A
COMMON STOCK
SOLICITED ON BEHALF
OF THE
BOARD OF DIRECTORS

FOR ANNUAL MEETING
MAY 11, 1994

PLEASE SIGN, DATE AND RE-
TURN YOUR PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE.

NACCO INDUSTRIES, INC.

The undersigned appoints Frank E. Taplin, Jr., Thomas E. Taplin, and
Ward Smith and each of them, as proxies, with full power of substitution, to
vote and act for and in the name of the undersigned as fully as the undersigned
could vote and act if personally present, at the annual meeting of stockholders
of NACCO Industries, Inc. to be held on May 11, 1994, and at any adjournment or
adjournments thereof, as follows and in accordance with their judgment upon any
other matter properly presented:

<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS
VOTE FOR WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) / / to vote for / /
</TABLE>

the election of the nominees listed below as directors.

Owsley Brown II, John J. Dwyer, Robert M. Gates, E. Bradley Jones,
Dennis W. LaBarre, Alfred M. Rankin, Jr., John C. Sawhill,
Britton T. Taplin and Frank E. Taplin, Jr.

(INSTRUCTION: To withhold authority to vote for any individual
nominee(s), write the name of such nominee(s) in
the space provided below.)

________________________________________________________________________

2. Proposal to confirm the appointment of Arthur Andersen & Co. as
independent certified public accountants.

FOR / / AGAINST / / ABSTAIN / /

PROXY NO. SHARES

THE SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS
DIRECTED OR, IF DIRECTIONS ARE NOT INDICATED, WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR ITEM 2.

Dated................., 1994

............................

............................
(Signature of Stockholder)

Please sign and date exactly
as name appears hereon. If
signing as attorney,
administrator, executor,
guardian or trustee, please
add your title as such.

<PAGE> 37
PROXY

CLASS B
COMMON STOCK
SOLICITED ON BEHALF
OF THE
BOARD OF DIRECTORS

FOR ANNUAL MEETING
MAY 11, 1994

PLEASE SIGN, DATE AND RE-
TURN YOUR PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE.

NACCO INDUSTRIES, INC.

<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS
VOTE FOR WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) / / to vote for / /
</TABLE>

the election of the nominees listed below as directors.

Owsley Brown II, John J. Dwyer, Robert M. Gates, E. Bradley Jones,
Dennis W. LaBarre, Alfred M. Rankin, Jr., John C. Sawhill,
Britton T. Taplin and Frank E. Taplin, Jr.

(INSTRUCTION: To withhold authority to vote for any individual
nominee(s), write the name of such nominee(s) in
the space provided below.)

________________________________________________________________________

2. Proposal to confirm the appointment of Arthur Andersen & Co. as
independent certified public accountants.

FOR / / AGAINST / / ABSTAIN / /

PROXY NO. SHARES

THE SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS
DIRECTED OR, IF DIRECTIONS ARE NOT INDICATED, WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR ITEM 2.

Dated................., 1994

............................

............................
(Signature of Stockholder)

Please sign and date exactly
as name appears hereon. If
signing as attorney,
administrator, executor,
guardian or trustee, please
add your title as such.