<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
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 10, 1995, at 9:00 A.M., at 5875
Landerbrook Drive, Mayfield Heights, Ohio, for the purpose of:
(1) Electing ten 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, 1995 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, 1995
THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1994 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
NACCO INDUSTRIES, INC.
5875 LANDERBROOK DRIVE
MAYFIELD HEIGHTS, OHIO 44124-4017
PROXY STATEMENT -- MARCH 31, 1995
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 10, 1995 (the "Annual Meeting"). This Proxy Statement and the
related form(s) of proxy are being mailed to stockholders commencing on or about
March 31, 1995.
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 by a later
executed proxy. Attendance at the Annual Meeting will not automatically revoke a
proxy, but a stockholder attending the Annual Meeting may request a ballot and
vote in person, thereby revoking a prior granted proxy.
Stockholders of the Company of record at the close of business on March 15,
1995 will be entitled to vote at the Annual Meeting. On that date, the Company
had outstanding and entitled to vote 7,244,500 shares of Class A Common Stock,
par value $1.00 per share ("Class A Common"), and 1,719,694 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 ten 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
3
<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 37 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, except for Leon J. Hendrix, Jr. and Ian M. Ross, presently serve as
directors of the Company and were elected at the Company's 1994 annual meeting
of stockholders. E. Bradley Jones, who has been a director of the Company since
1985, is not standing for reelection. 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.
4
<PAGE> 5
<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 52 President and Chief Executive Officer of Brown-For- 1993
man Corporation (a diversified producer and mar-
keter of consumer products). From prior to 1990 to
1993, President of Brown-Forman Corporation. Also
director of Brown-Forman Corporation, Hilliard Ly-
ons Trust Company, Hyster-Yale Materials Handling,
Inc., LG&E Energy Corp. and Louisville Gas and Elec-
tric Company.
JOHN J. DWYER 77 Retired President of Oglebay Norton Company (a 1988
diversified company engaged in Great Lakes marine
transportation, iron ore, industrial sands,
refractories and mineral products). Also director of
Hyster-Yale Materials Handling, Inc. and Oglebay
Norton Company.
ROBERT M. GATES 51 Consultant, author and lecturer. From 1991 to 1993, 1993
Director of Central Intelligence for the United
States. From prior to 1990 to November 1991,
Assistant to the President of the United States and
Deputy for National Security Affairs, National
Security Council. Also director of Hyster-Yale
Materials Handling, Inc., TRW Inc. and Varity
Corporation.
LEON J. HENDRIX, JR. 53 Principal, Clayton, Dubilier & Rice, Inc. (private --
investment firm). From September 1992 through Octo-
ber 1993, Executive Vice President and Chief
Operating Officer, and from prior to 1990 to Septem-
ber 1992, Executive Vice President, of Reliance
Electric Company. Also director of Keithley
Instruments, Inc., Remington Arms Co. and Wesco
Distribution, Inc.
DENNIS W. LaBARRE 52 Partner in the law firm of Jones, Day, Reavis & 1982
Pogue. Also director of Hyster-Yale Materials
Handling, Inc.
ALFRED M. RANKIN, JR. 53 Chairman, President and Chief Executive Officer of 1972
the Company. From 1991 to 1994, President and Chief
Executive Officer of the Company and from prior to
1990 to 1991, President and Chief Operating Officer
of the Company. Also director of The BFGoodrich
Company, Hyster-Yale Materials Handling, Inc., The
Standard Products Company and The Vanguard Group.
</TABLE>
5
<PAGE> 6
<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>
IAN M. ROSS 67 President Emeritus of AT&T Bell Laboratories (the --
research and development subsidiary of AT&T). From
prior to 1990 to July 1991, President of AT&T Bell
Laboratories. Also director of The BFGoodrich
Company and Thomas & Betts Corporation.
JOHN C. SAWHILL 58 President and Chief Executive Officer of The Nature 1990
Conservancy (a non-profit conservation organiza-
tion). From prior to 1990 to 1990, Director of
McKinsey & Company, Inc. (management consulting
firm). Also director of Hyster-Yale Materials Han-
dling, Inc., Pacific Gas & Electric Co. and The Van-
guard Group. Previously director of the Company,
1978 to 1980.
BRITTON T. TAPLIN 38 Partner in Western Skies, Inc. (a developer of 1992
medical office and healthcare-related facilities).
From prior to 1990 to 1992, Project Coordinator of
Western Skies, Inc. Also director of Hyster-Yale
Materials Handling, Inc.
FRANK E. TAPLIN, JR. 79 Trustee of the Environmental Defense Fund; former 1946
President and Chief Executive Officer of the
Metropolitan Opera; former Vice Chairman of Lincoln
Center for the Performing Arts; Trustee Emeritus of
the Institute for Advance Study; member of the
American Philosophical Society; former Chairman of
Scurry-Rainbow Oil Ltd. Also director of Hyster-Yale
Materials Handling, Inc.
</TABLE>
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, 1994, 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, 1995, 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, 1995, with respect to the beneficial
ownership of Class A Common and Class B Common by the directors, the nominees
for director, 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, directors and nominees
for director 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")
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<PAGE> 7
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 agree 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
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, Class B (3) (3) 1,542,757 89.56%
et al (3)
c/o Society National Bank
900 Euclid Avenue
Cleveland, Ohio 44101
FMR Corp. Class A 229,603 -- 1,161,769(4) 16.00%
82 Devonshire Street
Boston, MA 02109
CLARA TAPLIN RANKIN Class A 624,091 14,000(5) 638,091 8.79%
3151 River Road Class B 329,247 7,000(5) 336,247(3) 19.52%
Chagrin Falls, OH 44022
FRANK E. TAPLIN, JR. Class A 464,807 14,000(5) 478,807 6.60%
55 Armour Road Class B 284,728 7,000(5) 291,728(3) 16.94%
Princeton, NJ 08540
THOMAS E. TAPLIN Class A 560,000 14,000(5) 574,000 7.91%
950 South Cherry St., Class B 310,000 7,000(5) 317,000(3) 18.40%
#704
Denver, CO 80222
OWSLEY BROWN II Class A 1,282 -- 1,282 --
Class B -- -- -- --
JOHN J. DWYER Class A 1,215 -- 1,215 --
Class B -- -- -- --
ROBERT M. GATES Class A 401 -- 401 --
Class B -- -- -- --
LEON J. HENDRIX, JR. Class A -- -- -- --
Class B -- -- -- --
</TABLE>
7
<PAGE> 8
<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>
E. BRADLEY JONES Class A 1,115 -- 1,115(4) --
Class B 200 -- 200 --
DENNIS W. LaBARRE Class A 1,215 -- 1,215 --
Class B 100 -- 100 --
ALFRED M. RANKIN, JR. Class A 93,844 91,553(6) 210,397(7) 2.90%
Class B 58,998 16,000(6) 74,998(3) 4.35%
IAN M. ROSS Class A -- -- -- --
Class B -- -- -- --
JOHN C. SAWHILL Class A 4,509 -- 4,509 --
Class B -- -- -- --
BRITTON T. TAPLIN Class A 18,236 -- 18,236 0.25%
Class B 27,495 -- 27,495(3) 1.60%
REGINALD R. EKLUND Class A 1,000 -- 1,000 --
Class B -- -- -- --
GEORGE C. NEBEL Class A -- -- -- --
Class B -- -- -- --
CLIFFORD R. MIERCORT Class A -- -- -- --
Class B -- 1,000 1,000 --
FRANK B. O'BRIEN Class A 2,796 600 7,396(7)(8) 0.10%
Class B 1,000 -- 1,000 --
All executive officers, Class A 604,473 112,803 748,076(7)(8) 10.30%
directors and nominees Class B 381,466 25,625 407,091(3) 23.63%
for director as a group
(38 persons)
<FN>
---------------
(1) The shares included in note (7) were deemed to be outstanding as of January
15, 1995, for purposes of calculating the percentage owned at such date
pursuant to Rule 13d-3 under the Exchange Act.
(2) Less than 0.10%, except as otherwise indicated.
(3) A Schedule 13D filed with the SEC with respect to Class B Common on March
29, 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, and amended on March 28, 1995 by Amendment No. 1 to the
amended and restated Schedule 13D (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 R. Butler, Clara T. Rankin, Thomas T. Rankin,
Matthew
8
<PAGE> 9
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 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 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 89.56% of the Class
B Common outstanding on January 15, 1995, or 63.01% 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 February
8, 1994, Theodore D. Taplin filed a Form 4 with the SEC reporting a sale in
September 1993 of Class A Common. On February 14, 1994, Thomas T. Rankin
filed a Form 5 with the SEC reporting sales in August and November 1993 of
Class A Common. On February 14, 1994, Matthew M. Rankin filed a Form 5 with
the SEC reporting sales by his father in August and November 1993 of Class A
Common, as to which Class A Common he has disclaimed beneficial ownership.
On March 10, 1994, Caroline T. Ruschell filed a Form 4 with the SEC
reporting sales in August 1993 and January 1994 of Class A Common. On May 6,
1994,
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<PAGE> 10
Matthew M. Rankin filed an amended Form 5 with the SEC reporting a sale by
his father in May 1993 of Class A Common, as to which Class A Common he has
disclaimed beneficial ownership. On May 31, 1994, Ronald A. Rosati filed a
Form 3 with the SEC reporting that he had become an officer of Hamilton
Beach/Proctor-Silex on May 11, 1994. On May 31, 1994, Frank G. Muller filed
a Form 3 with the SEC reporting that he had become an officer of NMHG on May
11, 1994. On June 2, 1994, Jack J. Pountney filed a Form 3 with the SEC
reporting that he had become an officer of Hamilton Beach/Proctor-Silex on
May 11, 1994. On June 13, 1994, the Trust created under the Agreement dated
January 11, 1965 for the benefit of Alfred M. Rankin filed a Form 3 with the
SEC reporting that on January 23, 1994 it had become a member of a "group"
deemed to own more than 10% of the Class B Common. On June 24, 1994, Martha
S. Kelly filed a Form 4 with the SEC reporting a sale in May 1994 of Class A
Common. On June 24, 1994, Caroline T. Ruschell filed a Form 4 with the SEC
reporting a sale in May 1994 of Class A Common. On September 23, 1994,
Theodore D. Taplin filed a Form 4 with the SEC reporting a sale in August
1994 of Class A Common. On February 14, 1995, Beatrice B. Taplin filed a
Form 5 with the SEC reporting a sale by her husband in August 1994 of Class
A Common, as to which Class A Common she has disclaimed beneficial
ownership.
(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, and amended on February
13, 1995 by Amendment No. 3 (the "Schedule 13G") reported that Fidelity
Management & Research Company ("Research"), a wholly owned subsidiary of FMR
Corp. ("FMR"), is the beneficial owner of 914,766 shares of Class A Common
or 12.60% of the Class A Common outstanding on December 31, 1994 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 246,203 shares of Class A Common or 3.39%
of the Class A Common outstanding on December 31, 1994 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 246,203 shares
beneficially owned by Trust, and Trust has the power to vote or direct the
voting of such 246,203 shares, while FMR has the power to vote or direct the
voting of 228,803 of such shares. The Schedule 13G also reported that
Fidelity International Limited ("FIL") is the beneficial owner of 800 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
10
<PAGE> 11
3rd, Chairman of FMR and FIL, and members of his family owns shares of FIL
voting stock with the right to cast approximately 47.22% of the total votes
which may be cast by all holders of FIL voting stock. While the Schedule 13G
reported that FIL is a corporation independent of FMR and its affiliates,
the Schedule 13G also indicated that each of FIL and FMR has voting and
dispositive power over the 800 shares beneficially owned by FIL. In
addition, the Schedule 13G reported that while Mr. Johnson has dispositive
power over the 1,161,769 shares of Class A Common, the power to vote or
direct the voting of 1,160,969 of such shares (the 914,766 shares
beneficially owned by Research plus the 246,203 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 1,160,969 shares. 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. The Class B Common held
by the foregoing trust is subject to the Stockholders' Agreement described
in note (3).
(6) Represents shares in certain trusts of which Mr. Rankin, Jr. became a
trustee on February 9, 1994 and March 10, 1994.
(7) Includes the following shares which such persons have, or had, within 60
days after January 15, 1995, the right to acquire upon the exercise of stock
options: Mr. Rankin, Jr., 25,000 shares of Class A Common; Mr. O'Brien,
4,000 shares of Class A Common; and all executive officers, directors and
nominees for director of the Company as a group, 30,800 shares of Class A
Common.
(8) Includes the following shares as to which such persons disclaim beneficial
ownership: Mr. O'Brien, 1,200 shares of Class A Common owned by members of
his family; and all executive officers, directors and nominees for director
of the Company as a group, 1,450 shares of Class A Common and 125 shares of
Class B Common owned by members of the families of certain executive
officers.
</TABLE>
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 1,919,531 shares
or 26.44% of Class A Common and 1,047,468 shares or 60.81% of Class B Common
outstanding on January
11
<PAGE> 12
15, 1995. The combined beneficial ownership of all directors of the Company,
together with Clara Taplin Rankin, Thomas E. Taplin and all of the 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 1,960,167 shares or
27.00% of Class A Common and 1,060,338 shares or 61.56% of Class B Common
outstanding on January 15, 1995 (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 51.31% 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 1994, the members of the Audit Committee were Owsley Brown
II (beginning February 9, 1994), Robert M. Gates, E. Bradley Jones (Chairman),
Dennis W. LaBarre, John C. Sawhill, Britton T. Taplin (beginning August 10,
1994) and Richard B. Tullis (through May 11, 1994), and the members of the
Nominating and Compensation Committee were John J. Dwyer (Chairman), Robert M.
Gates, Dennis W. LaBarre, Alfred M. Rankin (through January 23, 1994) and John
C. Sawhill. The other standing committees of the Board of Directors are the
Executive Committee, which during 1994 was comprised of John J. Dwyer, E.
Bradley Jones, Dennis W. LaBarre, Alfred M. Rankin (through January 23, 1994),
Alfred M. Rankin, Jr. (Chairman, beginning May 11, 1994), Ward Smith (Chairman,
through May 11, 1994) and Richard B. Tullis (through May 11, 1994), and the
Finance Committee, which during 1994 was comprised of Owsley Brown II, Dennis W.
LaBarre, Alfred M. Rankin (through January 23, 1994), Alfred M. Rankin, Jr.,
John C. Sawhill (Chairman), Ward Smith (through May 11, 1994) and Richard B.
Tullis (through May 11, 1994).
The Audit Committee held four meetings in 1994. 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 auditors 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 auditors 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.
12
<PAGE> 13
The Nominating and Compensation Committee held five meetings in 1994. 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 four meetings in 1994. The Finance Committee
reviews the financing and risk management 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 no meetings in 1994. 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.
The Board of Directors held five meetings in 1994. 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 1994, except for
Owsley Brown II and Frank E. Taplin, Jr., and E. Bradley Jones who is not
standing for reelection.
COMPENSATION OF DIRECTORS
Each director who is not an officer of the Company or its subsidiaries
receives a retainer of $26,400 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 a portion of his
annual retainer equal to $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
13
<PAGE> 14
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, 1994, 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"). George C. Nebel
resigned as President and Chief Executive Officer of Hamilton
Beach/Proctor-Silex effective February 28, 1995.
14
<PAGE> 15
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-
TERM
ANNUAL COMPENSATION COMPEN-
-------------------------------------------- SATION
OTHER PAYOUTS ALL
ANNUAL -------- OTHER
COMPEN- LTIP COMPEN-
NAME & FISCAL SALARY BONUS SATION PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($)(4) ($)
------------------ ------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. 1994 $625,400(1) $947,192(2)(3) -- -- $478,089(5)(6)
Chairman, President 1993 $599,900(1) $149,600(2)(3) -- -- $ 40,025(5)
and Chief Executive 1992 $570,600(1) $226,264(2)(3) -- -- $ 37,370(5)
Officer of the Company
Reginald R. Eklund 1994 $349,900(1) $157,001(8) -- -- $ 38,494(11)
President and Chief 1993 $333,500(1)(7) $ 96,274(8) -- -- $ 24,384(11)
Executive Officer of 1992 $286,018(1)(7) $ 86,226(8) $12,419(9) $199,986(10) $ 30,117(11)
NMHG
George C. Nebel 1994 $367,935(1) $105,634(12) -- -- $153,394(13)(14)
President and Chief 1993 $348,300(1) $ 37,400(12) -- -- $ 0
Executive Officer of 1992 $331,740(1) $ 85,777(12) -- -- $ 9,846(14)
Hamilton Beach/Proctor-
Silex
Clifford R. Miercort 1994 $287,740(1) $143,836(15) -- -- $ 26,581(16)
President and Chief 1993 $268,023(1) $116,650(15) -- -- $ 19,114(16)
Executive Officer of 1992 $250,713(1) $137,173(15) -- -- $ 17,494(16)
North American Coal
Frank B. O'Brien 1994 $247,700(1) $314,210(17)(18) -- -- $ 43,491(19)
Senior Vice President - 1993 $217,200(1) $ 42,300(17)(18) -- -- $ 13,855(19)
Corporate Development 1992 $200,000(1) $ 68,018(17)(18) -- -- $ 12,835(19)
and Chief Financial
Officer of the Company
<FN>
---------------
(1) Under current disclosure requirements of the SEC certain of the amounts
listed are being reported as "Salary", although the Company considers them
as payments of cash in lieu of perquisites, which are at competitive levels
as determined by the Company's Nominating and Compensation Committee. For
Mr. Rankin, the amounts listed for 1994, 1993 and 1992 include payments of
cash in lieu of perquisites of $65,400, $62,900 and $59,600, respectively.
For Mr. Eklund, the amounts listed for 1994, 1993 and 1992 include payments
of cash in lieu of perquisites of $39,900, $38,500 and $26,014,
respectively. For Mr. Nebel, the amounts listed for 1994, 1993 and 1992
include payments of cash in lieu of perquisites of $42,927, $36,300 and
$34,740, respectively. For Mr. Miercort, the amounts listed for 1994, 1993
and 1992 include payments of cash in lieu of perquisites of $27,570,
$24,690 and $23,630, respectively. For Mr. O'Brien, the amounts listed for
1994, 1993 and 1992 include payments in lieu of perquisites of $27,700,
$21,200 and $20,200, respectively.
15
<PAGE> 16
(2) For Mr. Rankin, the amounts listed for 1994, 1993 and 1992 include payments
of cash of $304,383, $149,600 and $200,600 pursuant to the NACCO
Industries, Inc. Annual Incentive Compensation Plan.
(3) For Mr. Rankin, the amount listed for 1994 includes $642,809 distributed in
the form of 7,546 shares of Class A Common and a cash payment in the amount
of $225,024; the cash payment is intended to be the approximate amount
required to be withheld by the Company and paid to applicable federal,
state and local income taxing authorities based upon statutorily determined
withholding rates. The amount listed for 1992 includes $25,664 distributed
in the form of 490 shares of Class A Common. These amounts were distributed
under the NACCO Industries, Inc. Executive Long-Term Incentive Compensation
Plan (the "NACCO Long-Term Plan"). Under current disclosure requirements of
the SEC these distributions are required to be reported as "Bonus",
although the Company considers them to be long-term incentive compensation
payouts, since the amounts are distributed largely in the form of Class A
Common, the transfer of which is restricted for ten years. See note (1) to
the Long-Term Incentive Plans Table on pages 20 and 21 for a further
description of the NACCO Long-Term Plan. Mr. Rankin received no award under
the NACCO Long-Term Plan for 1993. 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.
(4) See note (3) above and note (18) below.
(5) For Mr. Rankin, the amounts listed for 1994, 1993 and 1992 include $7,500,
$8,994 and $8,728, respectively, consisting of matching contributions by
the Company under the NACCO Materials Handling Group, Inc. Profit Sharing
Plan (the "NMHG Profit Sharing Plan") (account balances previously credited
under The North American Coal Corporation Retirement Savings Plan (the
"North American Coal Savings Plan") have been transferred to the NMHG
Profit Sharing Plan); and $39,834, $31,031 and $28,642, respectively,
consisting of amounts credited and interest under The North American Coal
Corporation Deferred Compensation Plan for Management Employees (the "North
American Coal Deferred Compensation Plan").
(6) Effective January 1, 1994, The Retirement Benefit Plan for Alfred M.
Rankin, Jr. was converted from a defined benefit plan to a defined
contribution plan.
16
<PAGE> 17
Amounts previously accrued as a defined benefit were converted to present
value and were credited to Mr. Rankin's new account. For 1994, the amount
listed includes an additional amount of $255,000 which was credited as part
of the opening account balance, and a 1994 credit of $175,755 to such Plan
by the Company. Mr. Rankin receives no other pension benefit from the
Company.
(7) 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.
(8) For Mr. Eklund, these amounts were paid in cash pursuant to the NACCO
Materials Handling Group, Inc. Annual Incentive Compensation Plan.
(9) The amount listed for 1992 consists of annual interest paid on a $200,000
promissory note previously held by Mr. Eklund (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 (10) below.
(10) The amount listed was paid in cash to Mr. Eklund upon the pre-payment of
the Yale Promissory Note. See note (9) above.
(11) For Mr. Eklund, the amounts listed include for 1994, 1993 and 1992,
$13,270, $15,370 and $14,963, respectively, consisting of contributions by
NMHG under the NMHG Profit Sharing Plan; for 1992, $9,464 consisting of
deferred payments under the Yale Short-Term Incentive Compensation Deferral
Plan earned by Mr. Eklund for 1986; and for 1994, 1993 and 1992, $25,224,
$9,014 and $5,690, respectively, consisting of credits under the NACCO
Materials Handling Group, Inc. Unfunded Benefit Plan (the "NMHG Unfunded
Benefit Plan").
(12) For Mr. Nebel, these amounts were paid in cash pursuant to the Hamilton
Beach/Proctor-Silex, Inc. Annual Incentive Compensation Plan.
(13) For Mr. Nebel, the amount listed includes a cash payment in February 1995
of $114,062 in approximation of the book value appreciation which had been
allocated to his account under the Hamilton Beach/Proctor-Silex Long-Term
Incentive Compensation Plan (the "Hamilton Beach/Proctor-Silex Long-Term
Plan"), payment of which was approved by the Hamilton Beach/Proctor-Silex
Nominating, Organization and Compensation Committee. Mr. Nebel resigned as
President and Chief Executive Officer of Hamilton Beach/Proctor-Silex
effective
17
<PAGE> 18
February 28, 1995. Hamilton Beach/Proctor-Silex has no further obligations
to Mr. Nebel under the Hamilton Beach/Proctor-Silex Long-Term Plan.
(14) For Mr. Nebel, the amount listed for 1994 includes a cash payment in March
1995 of $39,332 in accordance with the terms of the Deferred Compensation
Plan for George C. Nebel. For 1992, the amount listed consists of
reimbursement by Hamilton Beach/Proctor-Silex of relocation expenses.
(15) For Mr. Miercort, these amounts were paid in cash pursuant to The North
American Coal Corporation Annual Incentive Compensation Plan.
(16) For Mr. Miercort, the amounts listed for 1994, 1993 and 1992 include
$7,500, $8,994 and $8,728, respectively, consisting of contributions by
North American Coal under the North American Coal Savings Plan; and
$19,081, $10,120 and $8,766, respectively, consisting of amounts credited
and interest under the North American Coal Deferred Compensation Plan.
(17) For Mr. O'Brien, the amounts listed for 1994, 1993 and 1992 include
payments of cash of $108,126, $42,300 and $59,900 pursuant to the NACCO
Industries, Inc. Annual Incentive Compensation Plan.
(18) For Mr. O'Brien, the amount listed for 1994 includes $206,084 distributed
in the form of 2,419 shares of Class A Common and a cash payment in the
amount of $72,156; the cash payment is intended to be the approximate
amount required to be withheld by the Company and paid to applicable
federal, state and local income taxing authorities based upon statutorily
determined withholding rates. The amount listed for 1992 includes $8,118
distributed in the form of 155 shares of Class A Common. These amounts were
distributed under the NACCO Long-Term Plan. Under current disclosure
requirements of the SEC these distributions are required to be reported as
"Bonus", although the Company considers them to be long-term incentive
compensation payouts, since these amounts are distributed largely in the
form of Class A Common, the transfer of which is restricted for ten years.
Mr. O'Brien received no award under the NACCO Long-Term Plan for 1993. See
note (3) above and note (1) to the Long-Term Incentive Plans Table on pages
20 and 21 for further descriptions of the NACCO Long-Term Plan.
(19) For Mr. O'Brien, the amounts listed for 1994, 1993 and 1992 include $7,500,
$8,994 and $8,728, respectively, consisting of matching contributions by
the Company under the NMHG Profit Sharing Plan (account balances previously
credited under the North American Coal Savings Plan have been transferred
to the NMHG Profit Sharing Plan); $5,935, $4,861 and $4,107, respectively,
consisting of amounts credited and interest under the North American Coal
Deferred Compensation Plan; $16,549, $0 and $0, consisting of contributions
by
18
<PAGE> 19
the Company under the NMHG Profit Sharing Plan; and $13,507, $0 and $0,
consisting of credits by the Company under the NMHG Unfunded Benefit Plan.
</TABLE>
STOCK OPTION GRANTS
The Company did not grant any stock options under the Company's 1975 Stock
Option Plan or 1981 Stock Option Plan (the "Stock Option Plans") during the
fiscal year ended December 31, 1994 to any person, including the Named Executive
Officers. The Company has not granted stock options since 1989 in the belief
that the likely value realized is unclear both in amount and in its relationship
to performance.
STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information for the fiscal year ended
December 31, 1994 with respect to the exercised and unexercised options to
purchase the Company's Class A Common and Class B Common granted to the Named
Executive Officers in prior years under the Stock Option Plans.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE (#) (1) AT FISCAL YEAR-END ($)
EXERCISE REALIZED ------------------------------ ------------------------------
NAME (#) (1) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. -- -- 25,000 -- $320,313 --
Reginald R. Eklund -- -- -- -- -- --
George C. Nebel -- -- -- -- -- --
Clifford R. Miercort -- -- -- -- -- --
Frank B. O'Brien -- -- 4,000 -- $65,500 --
<FN>
---------------
(1) Shares of Class A Common.
</TABLE>
LONG-TERM INCENTIVE PLANS
The following table sets forth information concerning awards to the Named
Executive Officers for the calendar year 1995, and estimated payouts in the
future, under long-term incentive plans of the Company and its principal
subsidiaries.
19
<PAGE> 20
<TABLE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR FOR FUTURE YEARS
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF SHARES, OTHER PERIOD NON-STOCK PRICE-BASED PLANS
UNITS OR UNTIL --------------------------------------------------
OTHER RIGHTS MATURATION OR THRESHOLD TARGET MAXIMUM
NAME ($ OR #) PAYOUT ($ OR #) ($ OR #) ($ OR #)
---------------------------- ------------------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. (1) (1) (1) (1) (1)
Reginald R. Eklund (2) -- -- -- -- --
George C. Nebel (3) -- -- -- -- --
Clifford R. Miercort (4) $161,368 5 years $0 $ 161,368 (4)
Frank B. O'Brien (5) (5) (5) (5) (5)
<FN>
---------------
(1) Under the NACCO Long-Term Plan for 1995, participants are granted dollar-
denominated target awards and receive distributions of (a) a payout of part
or none of such award in 1996 based upon the Company's consolidated adjusted
return on equity performance against a pre-established target (the "Base
Year Award"), and (b) a payout of part or none of such award (the
"Consistent Performance Award") in 1998 based upon the Company's average
consolidated adjusted return on equity performance for the three years
beginning with 1995 against the same pre-established long-term return on
equity performance target, which generally does not change from year to
year. There is no Consistent Performance Award if the Company's three-year
average consolidated adjusted return on equity is at or below target. The
Base Year Award can equal up to 200% of the target award and the Consistent
Performance Award can equal up to 66.5% of the Base Year Award. Sixty-five
percent of all payouts are distributed 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 1995 (in the case
of the Base Year Award) or 1997 (in the case of the Consistent Performance
Award). The shares of Class A Common are fully vested but may not be
transferred until the earlier of December 31, 2005, 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 certain medical or educational expenses. Because
the total value of an award is currently taxable as income to the
participant, the balance of the award is paid in cash in an amount which is
intended to be the approximate amount required to be withheld by the Company
and paid to applicable federal, state and local income taxing authorities
based upon statutorily determined withholding rates.
The target award for Mr. Rankin for 1995 recommended by the Company's
Nominating and Compensation Committee under the NACCO Long-Term Plan is
20
<PAGE> 21
$607,400. Under current SEC disclosure requirements any Base Year Award
would be considered as a short-term bonus and be reported under the "Bonus"
column of the Summary Compensation Table on page 15, although the Company
considers all distributions under the NACCO Long-Term Plan as long-term
incentive compensation, since the amounts under such plan are distributed
largely in the form of Class A Common, the transfer of which is restricted
for ten years, as described above.
There is no way to determine the actual maximum value of any award at the
end of the ten year term due to the variability of the value of the Class A
Common. The maximum number of shares of Class A Common which may be issued
under the NACCO Long-Term Plan is 300,000.
(2) Mr. Eklund is a participant in the NACCO Materials Handling Group, Inc.
Long-Term Incentive Compensation Plan (the "NMHG Long-Term Plan"). Under the
NMHG Long-Term Plan, participants are awarded "book value appreciation
units" which vest ten years from the date of award, 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 certain 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 from the base period price per
unit to the value of the book value unit at the end of the calendar quarter
immediately preceding the date of vesting, and vested book value units as to
which payment is made are canceled. Mr. Eklund was previously awarded 65,000
book value appreciation units effective on January 1, 1990, which units will
vest on December 31, 1999, 21,690 book value appreciation units effective on
January 1, 1993, which units will vest on December 31, 2002, and 100,403
book value appreciation units effective January 1, 1994, which units will
vest on December 31, 2003.
(3) Mr. Nebel was a participant in the Hamilton Beach/Proctor-Silex Long-Term
Plan until his resignation effective February 28, 1995. Under the Hamilton
Beach/Proctor-Silex Long-Term Plan, participants are awarded "book value
appreciation units" which vest ten years from the date of award, or earlier
in the
21
<PAGE> 22
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 Beach/Proctor-Silex 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 certain 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 from the base
period price per unit to the value of the book value unit at the end of the
calendar quarter immediately preceding the date of vesting, and vested book
value units as to which payment is made are canceled. Mr. Nebel was
previously awarded 84,321 book value appreciation units effective on January
1, 1993, which units would have vested on December 31, 2002, and 69,175 book
value appreciation units effective January 1, 1994, which units would have
vested on December 31, 2003. Effective with Mr. Nebel's resignation from the
company, the book value units previously issued to Mr. Nebel under the
Hamilton Beach/Proctor-Silex Long-Term Plan were canceled. See note (13) to
the Summary Compensation Table on page 17 and 18.
(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 American Coal Long-Term Plan") at a rate equal to a specified
percentage of his salary range midpoint, as determined by the North American
Coal Nominating, Organization and Compensation Committee. When the North
American Coal Long-Term Plan was adopted, the North American Coal
Nominating, Organization and Compensation Committee set net income
appreciation goals which are based upon achieving underlying year-by-year
targets for each year during the term of the Plan. These goals are adjusted
each year for inflation and to take into account any "new projects"
initiated in the interim. Once a plan year is completed, the actual net
income during that plan year is measured against the adjusted net income
goal for that plan year to determine the annual net income appreciation of
current and new projects (the "Annual Factor"). Similarly, actual cumulative
net income for the term of the Plan to date is measured against the
cumulative adjusted net income goals to date to determine the cumulative net
income appreciation of current and new projects (the "Cumulative Factor")
against the ten-year target.
22
<PAGE> 23
When the Plan was adopted, the Committee also set a goal for the cumulative
net income appreciation due to new projects over the term of the Plan. At
the end of each plan year, the present value of expected cumulative net
income appreciation of all new projects initiated during that year is
measured against the cumulative new project goal to determine the net income
appreciation due to the acquisition of new projects (the "New Project
Factor"). In addition, if it is determined in any plan year (an "Adjustment
Year") that a new project has provided significantly less net income
appreciation than originally expected, then the amount of any prior award
previously attributed to that project as the result of a prior year's New
Project Factor will reduce the New Project Factor in the Adjustment Year
(the "New Project Adjustment"). If the New Project Adjustment is large
enough, it is possible for participants to receive negative awards in a
given year.
At the start of each year during the ten-year term of the Plan, a target
award is set for each participant as a percentage of salary midpoint. The
amount shown for Mr. Miercort represents the target award which is based
upon his salary range midpoint for 1995. Following the end of the year, this
target amount is adjusted by the Annual Factor, the Cumulative Factor and
the New Project Factor. In addition, the New Project Adjustment is made, if
applicable. Target amounts as so adjusted are credited or debited to an
account for the benefit of the participant, which earns interest based upon
the average monthly rate of ten-year U.S. Treasury Bonds. All amounts in
these accounts vest at the rate of 10% each year, and become fully vested on
December 31, 1999. Vested amounts are payable in cash on the earlier of
December 31, 1999, or the participant's death, disability, retirement or
other reasons within the discretion of the North American Coal Nominating,
Organization and Compensation Committee. Earlier payments of vested amounts
may be permitted within the discretion of the North American Coal
Nominating, Organization and Compensation Committee in the event of a
financial hardship or unforeseen financial emergency.
(5) The target award for Mr. O'Brien for 1995 recommended by the Company's
Nominating and Compensation Committee under the NACCO Long-Term Plan is
$203,700. See note (1) above for a description of the NACCO Long-Term Plan.
</TABLE>
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 1994 were John J. Dwyer
(Chairman), Robert M. Gates, Dennis W. LaBarre, Alfred M. Rankin (through
January 23, 1994)
23
<PAGE> 24
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, retired Chairman of the Board of
the Company (through May 11, 1994). Mr. Rankin, Jr. is not a member of the
Nominating and Compensation Committee of the Company, and his 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.
COMPENSATION POLICY
The guiding principle of the executive compensation program of the Company
and its subsidiaries in recent years has been the maintenance of 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, the Compensation Committee
approves a mix of base salaries and incentive plans for each executive officer
such that base salary levels are at levels appropriate to allow incentive plans
to serve as significant motivating factors. Base salary and incentive
compensation levels for each officer are based upon the recommendations of the
Company's independent outside compensation consultant, which bases its
recommendations upon an analysis of similar positions at a broad range of
industries, as well as an understanding of the Company's philosophy, as
summarized above. 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
24
<PAGE> 25
just another form of compensation, albeit separate and distinct from salary and
incentive 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. If management ultimately determines that any changes in the federal
income tax laws 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 1992 and 1993 when the Company had lower financial results, payouts
under the incentive elements of the Company's compensation plans will reflect
these results. In years such as 1994, however, where the Company has improved
financial results, payouts under the incentive elements of the Company's
compensation plans will be greater. The Company believes that over time the
program will encourage executive officers to earn incentive pay significantly
greater than 100% of target by delivering outstanding managerial performance.
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. In response
to this law and the revised proposed regulations promulgated thereunder, the
Compensation Committee has taken steps under the NACCO Long-Term Plan for 1994
and thereafter so that payouts on awards made under the Plan for these years
should not count towards the one million dollar cap which the law imposes for
purposes of federal income tax deductibility. The Compensation Committee intends
to consider other changes in the Company's executive compensation programs,
where it makes sense to do so and is consistent with the Company's compensation
objectives, as may be necessary from time to time to preserve the deductibility
of compensation awards.
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
25
<PAGE> 26
- 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 a survey of a broad group of domestic industrial
organizations from all segments of industry ranging in size from under $150
million to over $5 billion in annual revenues. Organizations participate in the
survey based upon their voluntary submission of data to the independent
consultant as well as their ability to pass the consultant's quality assurance
controls. For 1995, participants included 387 parent organizations and 630
independent operating units. 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, there is no meaningful relationship between executive salary
levels of each subsidiary determined by the Compensation 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 1994, the
Compensation Committee adopted target performance levels for net income, return
on equity, market share, sales development, return on tangible assets employed
and support costs (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. Performance targets are established
within the Compensation Committee's discretion, and are generally based upon
management's recommendations as to the performance objectives of the particular
business for the year. 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
26
<PAGE> 27
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 long-term return on equity
performance targets for the business unit.
Long-Term Incentive Compensation. For 1994, 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 95% 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.
The consolidated adjusted return on equity target was established by the
Compensation Committee, and was set at a level believed to provide an
appropriate measure of stockholder protection. Target awards are set based on a
percentage of each executive officer's Salary Midpoint, and for 1994 were
adjusted as of year's end based upon the Company's consolidated adjusted return
on equity for 1994. For 1995, participants have been granted target awards and
may receive (a) payouts of part or none of the Base Year Award in the following
year based upon the Company's consolidated adjusted return on equity performance
against a pre-established target, and (b) payouts of part or none of the
Consistent Performance Award in 1998 based upon the Company's average
consolidated adjusted return on equity for the three-year period ending in 1997
against the same pre-established long-term return on equity performance target,
which generally does not change from year to year. Sixty-five percent of the
award is distributed in shares of Class A Common, the transfer of which is
restricted until December 31, 2005, with the number of shares awarded being
based on
27
<PAGE> 28
the average closing price of Class A Common on the New York Stock Exchange at
the end of each week during the appropriate 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 balance of the award is paid in cash and
is intended to be the approximate amount required to be withheld by the Company
and paid to applicable federal, state and local income taxing authorities based
upon statutorily determined withholding rates. The Compensation Committee
believes that these incentive compensation plan awards promote a long-term focus
on the profitability of the Company because although a recipient receives a
payout after one year in some cases, he is effectively required to invest that
payout in the Company for a ten-year period. This is because the shares
distributed may not be transferred for ten years. During the restriction period,
the ultimate value of a payout is subject to change based upon the value of the
Class A Common. The value is enhanced as the value of the Class A Common
appreciates (or is decreased as the value of the Class A Common is reduced), and
thus such awards provide the recipient with an incentive over the ten-year
period to increase the value of the Company, to be reflected in the increased
value of the Class A Common. However, in accordance with current SEC disclosure
requirements the Base Year Awards are deemed to be annual payments and are
consequently disclosed under the "Bonus" column of the Summary Compensation
Table on page 15, together with the short-term compensation awards described
above.
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 is adjusted at the end of each year for
the actual net income during that plan year to determine the annual net income
appreciation of current and new mining projects against previously set annual
targets. Similarly, the target amount is adjusted at the end of each year for
the actual cumulative net income for the term of the Plan to date to determine
the cumulative net income appreciation of current and new projects against
previously set targets. At the end of each plan year, the target amount is also
adjusted for the present value of expected cumulative net income appreciation of
all new
28
<PAGE> 29
projects initiated during that year to determine the net income appreciation due
to the acquisition of new projects against previously set targets. Finally, if
it is determined in any plan year that a new project has provided significantly
less net income appreciation than originally expected, then the amount of any
prior award previously attributed to that project will reduce the new project
adjustment in that year. If the new project adjustment is large enough, it is
possible for participants to receive negative awards in a given year. Amounts
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 fully vested and
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.
The Compensation Committee considered that in 1994 the Company achieved
record sales due to the solid foundation laid under Mr. Rankin's leadership over
prior years when earnings, and accordingly incentive compensation levels, were
significantly lower. In addition, during 1994, the Company made significant
progress toward its strategic objectives, including the overall strengthening of
its management teams, significantly improved earnings and the repositioning of
the Company's businesses for enhanced long-term competitive advantage. Finally,
the financial strength of the Company continues to be enhanced by further
reductions 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 six and one-half percent in
1994 over his 1993 base salary. With respect to incentive compensation, Mr.
Rankin's 1994 awards under the Company's short-term and long-term incentive
compensation plans were determined in the same manner as for all other
participants in those plans. The Compensation Committee considered the
achievement of the Company's financial objectives as well as Mr. Rankin's
contribution to the implementation of the Com-
29
<PAGE> 30
pany's overall strategic plans. Because there was substantial improvement in
1994 in most of the primary markets of the Company and its subsidiaries and
because the performance of the Company and its subsidiaries has begun to show
the benefits of the strategic foundations put in place over the past several
years, actual awards for 1994 were above targeted levels. The Compensation
Committee established Mr. Rankin's short-term incentive compensation
participation for 1994 at 50% of his Salary Midpoint. Because the actual
performance of the Company in terms of consolidated adjusted return on equity,
and the performance of certain subsidiaries, in terms of net income, market
share and other strategic factors, was above targeted levels of performance, the
pool available for annual incentive awards to all plan participants was 111.70%
of target level. Accordingly, for 1994 Mr. Rankin received 111.70% of his annual
incentive award target. The long-term award targeted for Mr. Rankin in 1994 by
the Compensation Committee was 109.25% of his Salary Midpoint (adjusted from
95%, to take into consideration the fact that the award is currently taxable to
Mr. Rankin). Since the Company's consolidated adjusted return on equity was
above the target return provided for by the NACCO Long-Term Plan, Mr. Rankin
received a long-term incentive award for 1994 which was 107.98% of his targeted
amount, or 117.97% of his Salary Midpoint.
JOHN J. DWYER, CHAIRMAN JOHN C. SAWHILL
ROBERT M. GATES ALFRED M. RANKIN, JR.*
DENNIS W. LABARRE MARTIN NAUGHTON**
* Mr. Rankin is a member 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, Reavis & Pogue. Such firm provided legal services on behalf of the
Company during 1994 on a variety of matters, and it is anticipated that such
firm will provide such services in 1995.
Alfred M. Rankin, Jr., a director of the Company and its principal
subsidiaries and a member of the compensation committees of the principal
subsidiaries of the Company (but not of the Company), is Chairman, President and
Chief Executive Officer of the Company.
30
<PAGE> 31
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 regulations 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, 1990 (base point December
31, 1989) and ending December 31, 1994.
31
<PAGE> 32
<TABLE>
1990-1994 STOCK PRICE PERFORMANCE
GRAPH 1
<CAPTION>
(In Dollars)
NACCO S&P 500 S&P Diversified Machinery
----- ------- -------------------------
<S> <C> <C> <C>
1989 $100 $100 $100
1990 $55 $97 $86
1991 $88 $126 $103
1992 $97 $136 $105
1993 $98 $150 $155
1994 $93 $152 $151
<FN>
Assumes $100 invested at December 31, 1989 with dividends reinvested
</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.
32
<PAGE> 33
<TABLE>
1990-1994 STOCK PRICE PERFORMANCE
GRAPH 2
<CAPTION>
(In Dollars)
NACCO S&P 500
NACCO S&P 500 (Monthly Average) (Monthly Average)
----- ------- ----------------- -----------------
<S> <C> <C> <C> <C>
1989 $100 $100 $100 $100
1990 $55 $97 $113 $107
1991 $88 $126 $103 $125
1992 $97 $136 $113 $142
1993 $98 $150 $118 $159
1994 $93 $152 $134 $166
<FN>
Assumes $100 invested at December 31, 1989 with dividends reinvested
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 values reflecting long-term
operating and financial achievement, not short-term stock price fluctuations, as
further described in the "Report of the Compensation Committee on Executive
Compensation - Executive Compensation and Company Performance - Long-Term
Incentive Compensation" on pages 27 to 29. 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,
1985 (base point December 31, 1984) and ending December 31, 1994.
33
<PAGE> 34
<TABLE>
1985-1994 STOCK PRICE PERFORMANCE
GRAPH 3
<CAPTION>
(In Dollars)
NACCO (Monthly Average) S&P 500 (Monthly Average)
----------------------- -------------------------
<S> <C> <C>
1984 $100 $100
1985 $120 $120
1986 $170 $158
1987 $173 $196
1988 $204 $189
1989 $305 $237
1990 $344 $254
1991 $316 $296
1992 $345 $337
1993 $359 $376
1994 $409 $394
<FN>
Assumes $100 invested at December 31, 1984 with dividends reinvested
Monthly average data is based on the high/low price for each month
</TABLE>
<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
<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>
1985 20.40% 20.32%
1986 40.96% 30.91%
1987 1.80% 24.24%
1988 17.87% -3.41%
1989 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%
1994 -4.95% 1.32% -2.66% 13.84% 4.73%
</TABLE>
34
<PAGE> 35
PENSION PLANS
NACCO INDUSTRIES PENSION PLANS
Effective as of December 31, 1993, the defined benefit plans (qualified and
nonqualified) of the Company were permanently frozen for all participants. As of
that date the annual pension benefit for Mr. O'Brien, based on compensation and
service through December 31, 1993, which would be payable on a straight life
annuity basis at normal retirement age (age 65), was $47,896.20. This frozen
accrued benefit is increased at the rate of 4% per year under the nonqualified
plan and is offset by a percentage of the benefits payable from Social Security.
Mr. Rankin does not participate in any pension plans other than as disclosed in
Notes (5) and (6) to the Summary Compensation Table on pages 16 and 17.
HAMILTON BEACH/PROCTOR-SILEX PENSION PLANS
<TABLE>
Mr. Nebel was 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 the sum of (1)
the employee's total compensation (including bonuses and salary deferrals for
such year) multiplied by a percentage factor plus (2) the employee's
compensation in excess of Social Security Wage Base multiplied by a percentage
factor. For 1994, the percentage factors (which vary according to an employee's
age) are determined under the following table:
<CAPTION>
PERCENTAGE OF
PERCENTAGE OF COMPENSATION EXCEEDING
AGE COMPENSATION SOCIAL SECURITY WAGE BASE
------ ------------- -------------------------
<S> <C> <C>
0-34 2.40% 2.40%
35-39 2.80% 2.80%
40-44 3.40% 3.40%
45-49 4.20% 4.20%
50-54 5.20% 5.20%
55-59 6.40% 5.70%
60+ 7.60% 5.70%
</TABLE>
Each year until the employee's normal retirement date (generally age 65),
the notional account balances are credited with interest equal to 1% above the
one-year Treasury Bill rate (with a minimum of 5% and a maximum of 12%). The
notional account balances are paid in the form of a lump sum payment or
converted to an annuity to provide monthly benefit payments.
35
<PAGE> 36
Mr. Nebel resigned as President and Chief Executive Officer of Hamilton
Beach/Proctor-Silex effective February 28, 1995, prior to having vested.
Therefore, his estimated annual pension benefit under the cash balance plans is
$0.
NORTH AMERICAN COAL PENSION PLANS
<TABLE>
The following table sets forth the estimated maximum annual benefits under
the North American Coal 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:
<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 $ 28,177 $ 37,569 $ 46,961 $ 56,353 $ 59,478
150,000 34,177 45,569 56,961 68,353 72,103
175,000 40,177 53,569 66,961 80,353 84,728
200,000 46,177 61,569 76,961 92,353 97,353
225,000 52,177 69,569 86,961 104,353 109,976
250,000 58,177 77,569 96,961 116,353 122,603
300,000 70,177 93,569 116,961 140,353 147,853
350,000 82,177 109,569 136,961 164,353 173,103
400,000 94,177 125,569 156,961 188,353 198,353
450,000 106,177 141,569 176,961 212,353 223,603
</TABLE>
For computing pension benefits under the North American Coal 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 15, which are
paid to the executive officers, other than amounts which represent severance
payments, relocation allowances and other similar fringe benefits. The 1994
earnings of Mr. Miercort that would be taken into account under the plans is
$378,712.
As of December 31, 1994, the number of years of service under the North
American Coal plans for Mr. Miercort is 19 years. The benefits under the North
American Coal plans for Mr. Miercort are not subject to a Social Security
offset.
36
<PAGE> 37
NMHG PENSION PLANS
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.
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 LLP 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 1995. It is intended
that the shares represented by proxies in the enclosed form will be voted for
confirmation of Arthur Andersen LLP as the independent certified public
accountants, unless contrary instructions are received. It is expected that
representatives of Arthur Andersen LLP 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 2, 1995. 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, 1995.
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
37
<PAGE> 38
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, 1995
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.
38
<PAGE> 39
<TABLE>
<CAPTION>
<S> <C> <C>
NACCO INDUSTRIES, INC.
The undersigned appoints Frank E. Taplin, Jr., Thomas E.
Taplin and Alfred M. Rankin, Jr., 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
PROXY present at the annual meeting of stockholders of
NACCO Industries, Inc. to be held on May 10, 1995,
and at any adjournment or adjournments thereof, as
follows and in accordance with their judgment upon
any other matter properly presented:
CLASS A 1. ELECTION OF DIRECTORS
COMMON STOCK VOTE FOR WITHHOLD AUTHORITY
SOLICITED ON BEHALF (except as marked to the contrary below) / / to vote for / /
OF THE the election of the nominees listed below as directors.
BOARD OF DIRECTORS
Owsley Brown II, John J. Dwyer, Robert M. Gates, Leon
J. Hendrix, Jr., Dennis W. LaBarre, Alfred M.
FOR ANNUAL MEETING Rankin, Jr., Ian M. Ross, John C. Sawhill, Britton T.
MAY 10, 1995 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.)
PLEASE SIGN, DATE AND
RETURN YOUR PROXY
PROMPTLY
IN THE ENCLOSED ---------------------------------------------------------
ENVELOPE
WHICH REQUIRES NO 2. Proposal to confirm the appointment of Arthur
POSTAGE. Andersen LLP 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................., 1995
............................
............................
(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.
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
<S> <C>
NACCO INDUSTRIES, INC.
The undersigned appoints Frank E. Taplin, Jr., Thomas E.
Taplin and Alfred M. Rankin, Jr., and each of them, as
proxies, with full power of substitution, to vote and act
PROXY 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 10, 1995, and at
any adjournment or adjournments thereof, as follows and
in accordance with their judgment upon any other matter
CLASS B properly presented:
COMMON STOCK
SOLICITED ON BEHALF 1. ELECTION OF DIRECTORS
OF THE VOTE FOR WITHHOLD AUTHORITY
BOARD OF DIRECTORS (except as marked to the contrary below) / / to vote for / /
the election of the nominees listed below as directors.
Owsley Brown II, John J. Dwyer, Robert M. Gates, Leon
J. Hendrix, Jr., Dennis W. LaBarre, Alfred M.
FOR ANNUAL MEETING Rankin, Jr., Ian M. Ross, John C. Sawhill, Britton T.
MAY 10, 1995 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.)
PLEASE SIGN, DATE AND
RETURN YOUR PROXY
PROMPTLY
IN THE ENCLOSED ---------------------------------------------------------
ENVELOPE
WHICH REQUIRES NO
POSTAGE. 2. Proposal to confirm the appointment of Arthur
Andersen LLP 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................., 1995
............................
............................
(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.
</TABLE>
