NACCO INDUSTRIES INC, DEF 14A, 1996-03-29

NACCO INDUSTRIES INC
DEF 14A, 1996-03-29
INDUSTRIAL TRUCKS, TRACTORS, TRAILORS & STACKERS

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<PAGE> 1

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

Filed by the registrant /X/

Filed by a party other than the registrant / /

Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

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

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

Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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

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

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

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

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

(1) Amount previously paid:
Not Applicable

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

(3) Filing party:
Not Applicable

(4) Date filed:
Not Applicable
<PAGE> 2
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 8, 1996, 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) Acting upon a proposal to approve the Supplemental Annual Incentive
Compensation Plan.

(3) Acting upon a proposal to approve the Executive Long-Term Incentive
Compensation Plan.

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

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

The Board of Directors has fixed the close of business on March 15, 1996 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 29, 1996

THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1995 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 29, 1996

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 8, 1996 (the "Annual Meeting"). This Proxy Statement and the related
form(s) of proxy are being mailed to stockholders commencing on or about March
29, 1996.

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,
1996 will be entitled to vote at the Annual Meeting. On that date, the Company
had outstanding and entitled to vote 7,274,163 shares of Class A Common Stock,
par value $1.00 per share ("Class A Common"), and 1,708,786 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 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."

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<PAGE> 4

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 four 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 36 of this Proxy Statement.
Information concerning the second proposal, "Approval of the Supplemental Annual
Incentive Compensation Plan", is found on pages 37 to 40 of this Proxy
Statement. Information concerning the third proposal, "Approval of the Executive
Long-Term Incentive Compensation Plan", is found on pages 40 to 44 of this Proxy
Statement. Information concerning the fourth proposal, "Confirmation of
Appointment of Independent Certified Public Accountants", is found on page 44 of
this Proxy Statement.

1. ELECTION OF DIRECTORS

It is intended that shares represented by proxies in the enclosed form(s)
will be voted for the election of the nominees named in the following table to
serve as directors for a term of one year and until their successors are
elected, unless contrary instructions are received. All of the nominees listed
below presently serve as directors of the Company and were elected at the
Company's 1995 annual meeting of stockholders. If an unexpected occurrence
should make it necessary, in the judgment of the proxy holders, to substitute
some other person for any of the nominees, such shares will be voted for such
other person as the proxy holders may select.

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<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 53 Chairman and Chief Executive Officer of Brown-For- 1993
man Corporation (a diversified producer and mar-
keter of consumer products). From prior to 1991 to
1994, President of Brown-Forman Corporation. Also
director of Brown-Forman Corporation, Hilliard Ly-
ons Trust Company, LG&E Energy Corp. and Louisville
Gas and Electric Company.
JOHN J. DWYER 78 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
Oglebay Norton Company.
ROBERT M. GATES 52 Consultant, author and lecturer. From 1991 to 1993, 1993
Director of Central Intelligence for the United
States. From prior to 1991 to November 1991,
Assistant to the President of the United States and
Deputy for National Security Affairs, National
Security Council. Also director of TRW Inc. and
Varity Corporation.
LEON J. HENDRIX, JR. 54 Principal, Clayton, Dubilier & Rice, Inc. (private 1995
investment firm). From September 1992 through Octo-
ber 1993, Executive Vice President and Chief
Operating Officer, and from prior to 1991 to Septem-
ber 1992, Executive Vice President, of Reliance
Electric Company. Also director of Cambrex Corp.,
Keithley Instruments, Inc., Remington Arms Co. and
Wesco Distribution, Inc.
DENNIS W. LaBARRE 53 Partner in the law firm of Jones, Day, Reavis & 1982
Pogue.
ALFRED M. RANKIN, JR. 54 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
1991 to 1991, President and Chief Operating Officer
of the Company. Also director of The BFGoodrich
Company, The Standard Products Company and The
Vanguard Group.
IAN M. ROSS 68 President Emeritus of AT&T Bell Laboratories (the 1995
research and development subsidiary of AT&T). From
prior to 1991 to July 1991, President of AT&T Bell
Laboratories. Also director of The BFGoodrich
Company and Thomas & Betts Corporation.
</TABLE>

5
<PAGE> 6

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BENEFICIAL OWNERSHIP OF CLASS A COMMON AND CLASS B COMMON.

Set forth in the following table is the indicated information as of
December 31, 1995 with respect to (1) each person who is known to the Company to
be the beneficial owner of more than five percent of the Class A Common, (2)
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) the beneficial ownership of Class A
Common and Class B Common by the directors, the Chief Executive Officer and the
Company's four most highly compensated executive officers other than the Chief
Executive Officer (the "Named Executive Officers") and all executive officers
and directors as a group. Beneficial ownership of Class A Common and Class B
Common has been determined for this purpose in accordance with Rules 13d-3 and
13d-5 of the Securities and Exchange Commission ("SEC") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which provide, among
other things, that (a) a person is deemed to be the beneficial owner of Class A
Common or Class B Common if such person, directly or indirectly, has or shares
voting power or investment power with respect to such stock or has the right to
acquire such ownership within sixty days, and (b) when two or more persons 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.

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<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 A 620,291 14,000(6) 634,291 8.74%
3151 River Road Class B 225,247 7,000(6) 232,247(3) 13.59%
Chagrin Falls, OH 44022
FRANK E. TAPLIN, JR. Class A 459,425 14,000(6) 473,425(11) 6.52%
55 Armour Road Class B 284,728 7,000(6) 291,728(3) 17.07%
Princeton, NJ 08540
THOMAS E. TAPLIN Class A 547,000 14,000(6) 561,000 7.73%
950 South Cherry St., Class B 310,000 7,000(6) 317,000(3) 18.54%
#704
Denver, CO 80222
OWSLEY BROWN II Class A 1,495 -- 1,495(11) --
Class B -- -- -- --
JOHN J. DWYER Class A 1,428 -- 1,428(11) --
Class B -- -- -- --
ROBERT M. GATES Class A 614 -- 614(11) --
Class B -- -- -- --
LEON J. HENDRIX, JR. Class A 1,152 -- 1,152(11) --
Class B -- -- -- --
DENNIS W. LaBARRE Class A 1,428 -- 1,428(11) --
Class B 100 -- 100 --
ALFRED M. RANKIN, JR. Class A 105,890 91,553(7) 222,443(8) 3.05%
Class B 79,798 16,000(7) 95,798(3) 5.60%
IAN M. ROSS Class A 554 -- 554(11) --
Class B -- -- -- --
JOHN C. SAWHILL Class A 5,047 -- 5,047(11) --
Class B -- -- -- --
BRITTON T. TAPLIN Class A 14,431 -- 14,431(11) 0.20%
Class B 27,495 -- 27,495(3) 1.61%
REGINALD R. EKLUND Class A 1,000 -- 1,000 --
Class B -- -- -- --
CLIFFORD R. MIERCORT Class A -- -- -- --
Class B -- 1,000 1,000 --
FRANK B. O'BRIEN Class A 5,215 1,100 10,315(8)(9) 0.14%
Class B 1,000 -- 1,000 --
VICTORIA L. RICKEY Class A -- -- -- --
Class B -- -- -- --
All executive officers Class A 608,073 118,321 757,194(8)(9)(10)(11) 10.39%
and directors as a group Class B 398,546 29,145 427,691(3) 25.02%
(37 persons)
</TABLE>

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- ---------------
(1) The shares included in notes (8) and (11) were deemed to be outstanding as
of December 31, 1995, for purposes of calculating the percentage owned at
such date pursuant to Rule 13d-3 under the Exchange Act.

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

(3) A Schedule 13D filed with the SEC with respect to Class B Common on March
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 and amended on March 21, 1996 by
Amendment No. 2 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 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 90.25% of the
Class B Common outstanding on December 31, 1995, or 63.35% of

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<PAGE> 10

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, 1995, Theodore D. Taplin filed a Form 4 with the
SEC reporting a sale in September 1994 of Class A Common. On January 11,
1996, Ian M. Ross filed a Form 4 reporting a purchase in September 1995 of
Class A Common. On February 5, 1996, Caroline T. Ruschell filed a Form 5
reporting a gift made in March 1994 of Class A Common. On March 11, 1996,
Susan S. Panella filed a Form 4 reporting a sale in June 1995 of Class A
Common.

(4) A Schedule 13G filed with the SEC with respect to Class A Common on
February 12, 1996, reported that BAT Industries p.l.c., an English
corporation, may be deemed to be the indirect beneficial owner of 489,400
shares of Class A Common, or 6.74% of the Class A Common outstanding on
December 31, 1995, by indirectly owning 100% of the issued and outstanding
shares of Farmers Group, Inc., a Nevada corporation ("Farmers"). These
489,400 shares of Class A Common include shares held by various
subsidiaries of Farmers, by insurance exchanges for which Farmers acts as
attorney-in-fact and by benefit plans for employees of Farmers and its
subsidiaries for which Farmers has investment discretion.

(5) 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, and amended on February 14, 1996
by Amendment No. 4 (the "FMR Schedule 13G") reported that Fidelity
Management & Research Company ("Research"), a wholly owned subsidiary of
FMR Corp. ("FMR"), is the beneficial owner of 859,350 shares of Class A
Common or 11.84% of the Class A Common outstanding on December 31, 1995 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 156,403 shares of Class A
Common or 2.16% of the Class A Common outstanding on December 31, 1995 as a
result of its serving as investment manager of several institutional
accounts. Each of Trust and its

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parent, FMR, has dispositive power over the 156,403 shares beneficially
owned by Trust, and Trust has the power to vote or direct the voting of
such 156,403 shares, while FMR has the power to vote or direct the voting
of 139,003 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 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. The FMR Schedule 13G reported that FIL is a corporation
independent of FMR and its affiliates. In addition, the FMR Schedule 13G
reported that while Mr. Johnson has dispositive power over the 1,016,553
shares of Class A Common, the power to vote or direct the voting of
1,015,753 of such shares (the 859,350 shares beneficially owned by Research
plus the 156,403 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 1,015,753 shares. Each of FIL and FMR has voting
and dispositive power over the 800 shares beneficially owned by FIL.

(6) 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).

(7) Represents shares in certain trusts of which Mr. Rankin, Jr. became a
trustee on February 9, 1994 and March 10, 1994.

(8) Includes the following shares which such persons have, or had, within 60
days after December 31, 1995, the right to acquire upon the exercise of
stock options: Mr. Rankin, 25,000 shares of Class A Common; Mr. O'Brien,
4,000 shares of Class A Common; and all executive officers and directors of
the Company as a group, 30,800 shares of Class A Common.

(9) Includes 1,700 shares of Class A Common held by Mr. O'Brien as custodian
for his minor children as to which Mr. O'Brien disclaims beneficial
ownership.

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

(11) Includes the following shares which the directors of the Company have, or
had, within 60 days after December 31, 1995, the right to acquire pursuant
to the

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<PAGE> 12

Company's Non-Employee Director's Equity Compensation Plan for payment of
director's fees: each non-employee director of the Company other than Mr.
Sawhill, 52 shares of Class A Common; Mr. Sawhill, 131 shares of Class A
Common; and all executive officers and directors as a group, 547 shares of
Class A Common.

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 1,905,590 shares
or 26.17% of Class A Common and 964,268 shares or 56.41% of Class B Common
outstanding on December 31, 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
1,952,485 shares or 26.79% of Class A Common and 976,938 shares or 57.15% of
Class B Common outstanding on December 31, 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 48.08% 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 1995, the members of the Audit Committee were Owsley Brown
II (through May 10, 1995), Robert M. Gates (Chairman, beginning May 10, 1995),
Leon J. Hendrix, Jr. (beginning May 10, 1995), E. Bradley Jones (Chairman,
through May 10, 1995), Dennis W. LaBarre, John C. Sawhill and Britton T. Taplin
and the members of the Nominating and Compensation Committee were John J. Dwyer
(Chairman), Robert M. Gates, Dennis W. LaBarre, Ian M. Ross (beginning May 10,
1995) and John C. Sawhill. The other standing committees of the Board of
Directors are the Executive Committee, which during 1995 was comprised of John
J. Dwyer, E. Bradley Jones (through May 10, 1995), Dennis W. LaBarre, Alfred M.
Rankin, Jr. (Chairman) and John C. Sawhill (beginning May 10, 1995), and the
Finance Committee, which during 1995 was comprised of Owsley Brown II (through
May 10, 1995), Leon J. Hendrix, Jr. (beginning May 10, 1995), Dennis W. LaBarre,
Alfred M. Rankin, Jr., John C. Sawhill (Chairman) and Britton T. Taplin
(beginning May 10, 1995).

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<PAGE> 13

The Audit Committee held five meetings in 1995. 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.

The Nominating and Compensation Committee held four meetings in 1995. 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 1995. 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 1995. 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 six meetings in 1995. 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 1995, except for
Ian M. Ross and Frank E. Taplin, Jr.

COMPENSATION OF DIRECTORS

Each director who is not an officer of the Company or its subsidiaries
receives a retainer of $30,000 for each calendar year for service on the Board
of Directors and on subsidiary boards of directors. In addition, each such
director receives $500 for attending each meeting of the Board of Directors and
each meeting of a committee thereof, as well as for each meeting of a subsidiary
board of directors or committee

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thereof on which such director serves. Such fees for attendance at board
meetings and committee meetings may not exceed $1,000 per day. In addition, the
chairman of each committee of the Board of Directors and the subsidiary boards
of directors receives $4,000 for each calendar year for service as committee
chairman. Under the Company's Non-Employee Directors' Equity Compensation Plan
(the "Non-Employee Directors' Plan"), each director who is not an officer of the
Company or its subsidiaries receives 50% of his annual retainer ($15,000) in
shares of Class A Common. These shares may not be assigned, pledged,
hypothecated or otherwise transferred by the director, voluntarily or
involuntarily, other than (a) by will or the laws of descent and distribution,
(b) pursuant to a qualifying domestic relations order, or (c) to a trust for the
benefit of the director, or his spouse, children or grandchildren. The foregoing
restrictions on transfer lapse upon the earliest to occur of (i) the date which
is ten years after the last day of the calendar quarter for which such shares
were earned, (ii) the date of the death or permanent disability of the director,
(iii) five years (or earlier with the approval of the Board of Directors) from
the date of the retirement of the director from the Board of Directors of the
Company and (iv) the date that a director is both retired from the Board of
Directors of the Company and has reached 70 years of age. In addition, each
director has the right under the Non-Employee Directors' Plan to receive shares
of Class A Common in lieu of cash for up to 100% of the balance of his annual
retainer, meeting attendance fees and any committee chairman's fee. These shares
would not be subject to the foregoing restrictions.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth the annual, long-term and all other
compensation for services in all capacities to the Company of the five persons
who were, as of December 31, 1995, 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").

14
<PAGE> 15

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPEN-
SATION
PAYOUTS
ANNUAL COMPENSATION ------------
-------------------------------- LTIP ALL OTHER
FISCAL SALARY BONUS PAYOUTS COMPENSATION
NAME & PRINCIPAL POSITION YEAR ($) ($) ($)(4) ($)
- -------------------------------------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. 1995 $663,700(1) $1,098,171(2)(3) -- $217,547(5)(6)
Chairman, President and 1994 $625,400(1) $ 947,192(2)(3) -- $478,089(5)(6)
Chief Executive Officer 1993 $599,900(1) $ 149,600(2)(3) -- $ 40,025(5)
of the Company
Reginald R. Eklund 1995 $373,100(1) $ 118,264(7) -- $ 77,767(8)
President and Chief 1994 $349,900(1) $ 157,001(7) -- $ 38,494(8)
Executive Officer of NMHG 1993 $333,500(1) $ 96,274(7) -- $ 24,384(8)
Clifford R. Miercort 1995 $307,747(1) $ 124,700(9) -- $ 34,329(10)
President and Chief 1994 $287,740(1) $ 143,836(9) -- $ 31,634(10)
Executive Officer of 1993 $268,023(1) $ 116,650(9) -- $ 19,436(10)
North American Coal
Frank B. O'Brien 1995 $269,500(1) $ 377,544(11)(12) -- $ 62,342(13)
Senior Vice President -- 1994 $247,700(1) $ 314,210(11)(12) -- $ 43,491(13)
Corporate Development 1993 $217,200(1) $ 42,300(11)(12) -- $ 13,855(13)
and Chief Financial Officer
of the Company
Victoria L. Rickey (14) 1995 $239,169(1) $ 105,383(15) -- $ 29,936(16)
Vice President, Managing 1994 -- -- -- --
Director of NMHG Europe 1993 -- -- -- --
</TABLE>

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

(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 1995, 1994 and 1993 include payments of
cash in lieu of perquisites of $66,700, $65,400 and $62,900, respectively.
For Mr. Eklund, the amounts listed for 1995, 1994 and 1993 include payments
of cash in lieu of perquisites of $41,100, $39,900 and $38,500,
respectively. For Mr. Miercort, the amounts listed for 1995, 1994 and 1993
include payments of cash in lieu of perquisites of $28,913, $27,570 and
$24,690, respectively. For Mr. O'Brien, the amounts listed for 1995, 1994
and 1993 include payments of cash in lieu of perquisites of $29,500,
$27,700 and $21,200, respectively. For Ms. Rickey, the amount listed for
1995 includes payments of cash for overseas allowance of $40,587.

(2) For Mr. Rankin, the amounts listed for 1995, 1994 and 1993 include payments
of cash of $256,455, $304,383 and $149,600 pursuant to the NACCO
Industries, Inc. Annual Incentive Compensation Plan.

15
<PAGE> 16

(3) For Mr. Rankin, the amount listed for 1995 includes $841,716, which was
distributed in the form of 9,641 shares of Class A Common and a cash
payment in the amount of $294,637. The amount listed for 1994 includes
$642,809, which was distributed in the form of 7,546 shares of Class A
Common and a cash payment in the amount of $225,024. The foregoing cash
payments are intended to be the approximate amounts required to be withheld
by the Company and paid to applicable federal, state and local income
taxing authorities based upon statutorily determined withholding rates.
These amounts were distributed under the NACCO Industries, Inc. Executive
Long-Term Incentive Compensation Plan (the "NACCO Long-Term Plan"). Under
current executive compensation 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 shares of Class A Common,
the transfer of which is restricted for ten years. As of April 1995, the
Nominating and Compensation Committee took steps under the NACCO Long-Term
Plan so that the performance measurement period for awards would be longer
than one year. Under the disclosure requirements of the SEC, future awards
will be characterized as "long-term". See notes (1), (2) and (3) under
"Long-Term Incentive Plans" on pages 19 to 21 for a further description of
the NACCO Long-Term Plan. Mr. Rankin received no award under the NACCO
Long-Term Plan for 1993.

(4) See note (3) above and note (12) below.

(5) For Mr. Rankin, the amounts listed for 1995, 1994 and 1993 include $3,750,
$7,500 and $8,994, 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") during 1993 and 1994 have been
transferred to the NMHG Profit Sharing Plan); and $37,294, $39,834 and
$31,031, respectively, consisting of amounts credited and interest under
The NACCO Materials Handling Group, Inc. Unfunded Benefit Plan (the "NMHG
Unfunded Benefit Plan")(amounts previously credited under The North
American Coal Corporation Deferred Compensation Plan for Management
Employees (the "North American Coal Deferred Compensation Plan") have been
transferred to the NMHG Unfunded Benefit 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. Amounts previously accrued as a defined benefit were
converted to present value and were credited to Mr. Rankin's new account.
For 1995, the amount

16
<PAGE> 17

listed includes 1995 credits and interest of $176,503 to such plan by the
Company. 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) For Mr. Eklund, these amounts were paid in cash pursuant to the NACCO
Materials Handling Group, Inc. Annual Incentive Compensation Plan.

(8) For Mr. Eklund, the amounts listed include for 1995, 1994 and 1993,
$10,295, $13,270 and $15,370, respectively, consisting of contributions by
NMHG under the NMHG Profit Sharing Plan; and for 1995, 1994 and 1993,
$67,472, $25,224 and $9,014, respectively, consisting of credits and
interest under the NMHG Unfunded Benefit Plan.

(9) For Mr. Miercort, these amounts were paid in cash pursuant to The North
American Coal Corporation Annual Incentive Compensation Plan.

(10) For Mr. Miercort, the amounts listed for 1995, 1994 and 1993 include
$7,500, $7,500 and $8,994, respectively, consisting of matching
contributions by North American Coal under the North American Coal Savings
Plan; and $26,829, $24,134 and $10,442, respectively, consisting of amounts
credited and interest under the North American Coal Deferred Compensation
Plan.

(11) For Mr. O'Brien, the amounts listed for 1995, 1994 and 1993 include
payments of cash of $95,294, $108,126 and $42,300 pursuant to the NACCO
Industries, Inc. Annual Incentive Compensation Plan.

(12) For Mr. O'Brien, the amount listed for 1995 includes $282,250, which was
distributed in the form of 3,233 shares of Class A Common and a cash
payment in the amount of $98,794. The amount listed for 1994 includes
$206,084, which was distributed in the form of 2,419 shares of Class A
Common and a cash payment in the amount of $72,156. The foregoing cash
payments are intended to be the approximate amounts required to be withheld
by the Company and paid to applicable federal, state and local income
taxing authorities based upon statutorily determined withholding rates.
These amounts were distributed under the NACCO Long-Term Plan. Under
current executive compensation 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 shares of Class A Common,
the transfer of which is restricted for ten years. See note (3) above and
notes (1), (2) and (3) under "Long-Term Incentive Plans" on pages 19 to 21
for a further description of the NACCO Long-

17
<PAGE> 18

Term Plan. Mr. O'Brien received no award under the NACCO Long-Term Plan for
1993.

(13) For Mr. O'Brien, the amounts listed for 1995, 1994 and 1993 include
$20,760, $24,049 and $8,994, respectively, consisting of contributions by
the Company under the NMHG Profit Sharing Plan (amounts previously credited
under the North American Coal Savings Plan during 1993 and 1994 have been
transferred to the NMHG Profit Sharing Plan); and $41,582, $19,442 and
$4,861, respectively, consisting of amounts credited and interest under the
NMHG Unfunded Benefit Plan (amounts previously credited under North
American Coal Deferred Compensation Plan have been transferred to the NMHG
Unfunded Benefit Plan).

(14) Ms. Rickey commenced employment with NMHG effective January 14, 1995.

(15) For Ms. Rickey, this amount was paid in cash pursuant to the NACCO
Materials Handling Group, Inc. Annual Incentive Compensation Plan.

(16) For Ms. Rickey, the amount listed for 1995 includes $2,367 consisting of a
matching contribution by NMHG under the NMHG Profit Sharing Plan; $27,014
for moving expenses; and $555 for use of a company car.

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, 1995 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.

18
<PAGE> 19

STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES

The following table sets forth information for the fiscal year ended
December 31, 1995 with respect to the exercised and unexercised options to
purchase the Company's Class A Common and Class B Common granted to the Named
Executive Officers in prior years under the Stock Option Plans.

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

<TABLE>
<CAPTION>
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE (#) (1) AT FISCAL YEAR-END($)
EXERCISE REALIZED ------------------------------ ------------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. -- -- 25,000 -- $498,438 --
Reginald R. Eklund -- -- -- -- -- --
Clifford R. Miercort -- -- -- -- -- --
Frank B. O'Brien -- -- 4,000 -- $94,000 --
Victoria L. Rickey -- -- -- -- -- --
</TABLE>

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

(1) Shares of Class A Common.

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.

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

<TABLE>
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF SHARES, OTHER PERIOD NON-STOCK PRICE-BASED PLANS
UNITS OR UNTIL -----------------------------------------
OTHER RIGHTS MATURATION OR THRESHOLD TARGET MAXIMUM
NAME ($ OR #) PAYOUT ($ OR #) ($ OR #) ($ OR #)
- ------------------------ ----------------- --------------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. $ 607,400(1) 36 months(1) $0(1) $ 0(1) $ 559,930(1)(3)
$ 607,400(2) 21 months(2) $0(2) $ 607,400(2)(3) $1,214,800(2)(3)
$ 607,400(2) 45 months(2) $0(2) $ 0(2) $ 728,880(2)(3)
Reginald R. Eklund(4) -- -- -- -- --
Clifford R. Miercort(5) $ 166,554 4 years $0 $ 166,554 (5)
Frank B. O'Brien $ 203,700(1) 36 months(1) $0(1) $ 0(1) $ 187,760(1)(3)
$ 203,700(2) 21 months(2) $0(2) $ 203,700(2)(3) $ 407,400(2)(3)
$ 203,700(2) 45 months(2) $0(2) $ 0(2) $ 244,440(2)(3)
Victoria L. Rickey (4) 57,850 10 years $0 $ 849,000 (4)
</TABLE>

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

(1) Under the NACCO Industries, Inc. Executive Long-Term Incentive Compensation
Plan (the "NACCO Long-Term Plan"), participants, including Messrs. Rankin
and O'Brien, have been eligible for awards paid partly in shares of Class A
Common and partly in cash for performance against a target which is based
upon

19
<PAGE> 20

the Company's consolidated return on equity over one-year and multiple-year
periods. Effective January 1, 1995, participants were granted
dollar-denominated target awards and received final awards in 1996 ("base
period awards") based upon the Company's consolidated return on equity for
1995 against a pre-established target. Participants are also eligible to
receive a supplemental payout on such awards in 1998 ("consistent
performance awards") based upon the Company's consolidated return on equity
performance for the 36-month period beginning January 1, 1995 against the
same pre-established target. No consistent performance award is payable if
the Company's consolidated return on equity performance is at or below
target. The maximum payout of the consistent performance award cannot exceed
60 percent of the base period award, plus an annual inflation factor.
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
1997.

(2) Effective April 1, 1995, participants, including Messrs. Rankin and O'Brien,
were granted dollar-denominated target awards and will receive distributions
of (a) a payout on such target awards in 1997 based upon the Company's
consolidated return on equity performance for the 21-month period beginning
April 1, 1995 against a pre-established target and (b) a payout on such
target awards in 1999 based upon the Company's average consolidated return
on equity performance for the 45-month period beginning April 1, 1995
against the same pre-established long-term return on equity performance
target. The base period award can equal up to 200% of the target award and
the consistent performance award can equal up to 60% of the base period
award. No consistent performance award is payable if the Company's
consolidated return on equity performance is at or below target. The maximum
payout of the consistent performance award cannot exceed 60 percent of the
base period award, plus an annual inflation factor. 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 1996 (in the case of the
base period award) and 1998 (in the case of the consistent performance
award).

(3) The shares of Class A Common issued under the NACCO Long-Term Plan are fully
vested but may not be transferred until the earlier of (a) December 31, 2005
(in the case of target awards granted effective January 1, 1995) or December
31, 2006 (in the case of target awards granted effective April 1, 1995), (b)
the participant's death or disability, or (c) five years after retirement. A
participant may also request at any time after three years that the
Nominating and Compensation Committee authorize the lapse of restrictions on
up to 20% of

20
<PAGE> 21

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 a final award is currently taxable as income to the
participant, the balance of the final 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.

(4) Mr. Eklund and Ms. Rickey are participants 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.

(5) 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 ten-year

21
<PAGE> 22

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.

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 1996. 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.

22
<PAGE> 23

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 1995 were John J. Dwyer
(Chairman), Robert M. Gates, Dennis W. LaBarre, Ian M. Ross (beginning May 10,
1995) 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. Mr. Rankin 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

23
<PAGE> 24

designed to provide significant rewards for achieving or surpassing annual
operating and financial performance objectives, as well as to align the
compensation interests of executive officers with the long-term interests of
stockholders by basing a substantial portion of the incentive compensation
package upon return on equity performance and book value appreciation rather
than on cyclical movements in stock price. Finally, target levels of perquisites
for executive officers are converted into fixed dollar amounts and paid in cash,
an approach which recognizes that perquisites are largely just another form of
compensation, 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 NACCO Long-Term 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 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 1995 and 1994, however, when the Company had 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 regulations promulgated thereunder, the Compensation
Committee has taken steps under the NACCO Long-Term Plan for 1994 and 1995 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. In addition, in connection with the Annual Meeting,
the Company is asking its stockholders to consider approval of a Supplemental
Annual Incentive Compensation Plan, and to consider re-approving the NACCO
Long-Term Plan, as amended and restated, so that payouts on

24
<PAGE> 25

awards made under these Plans for 1996 and thereafter will not count towards the
one million dollar cap. See "Approval of the Supplemental Annual Incentive
Compensation Plan" at pages 37 to 40 and "Approval of the Executive Long-Term
Incentive Compensation Plan" at pages 40 to 44 of this Proxy Statement. 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 -- 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 363 parent organizations and 602
independent operating units. From those studies, using job descriptions of
similar scope and complexity, 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

25
<PAGE> 26

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 1995, the
Compensation Committee adopted target performance levels for consolidated return
on equity for the Company, and various performance criteria for the Company's
subsidiaries such as return on equity in properly capitalized tangible assets,
market share, sales development 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 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 20 to 65% 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 1995, 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).

26
<PAGE> 27

The long-term incentive compensation plan for the parent holding company
uses the Company's consolidated return on equity as a measure of incentive
compensation. In general, each year participants are granted target base period
awards based on performance periods of up to two years and consistent
performance awards based on performance periods of up to five years. The
consolidated return on equity targets are established by the Compensation
Committee, and are set at levels 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 are adjusted as of the end of the base
period based upon the Company's consolidated return on equity. Participants also
are granted dollar-denominated target consistent performance awards and will
receive a payout on such awards based upon the Company's consolidated return on
equity performance for the consistent performance period against a
pre-established target. These consistent performance awards are intended to
supplement the base period awards granted to participants. No consistent
performance award is payable if the Company's consolidated return on equity
performance is at or below target.

Approximately sixty-five percent of all of the foregoing awards will be
distributed in shares of Class A Common, the transfer of which is restricted for
ten years, with the number of shares awarded being based on the average closing
price of Class A Common on the New York Stock Exchange at the end of each week
during the last year of the appropriate performance period. 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 the end of the base period, he is
effectively required to invest the noncash portion of the payout in the Company
for a ten-year period. This is because the shares distributed may not be
transferred for ten years following the year the original target awards are
established. 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.

27
<PAGE> 28

The subsidiaries' long-term incentive compensation plans are linked to
future performance of the particular business unit. Similar to the parent
holding 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 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,
which became effective on January 1, 1990, vest at the rate of 10% for each year
following the effective date of the initial award and are fully vested on
December 31, 1999 and are paid in cash during the first calendar quarter of
2000.

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.

28
<PAGE> 29

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 1995 the Company achieved
record sales for the fourth consecutive year; in addition, fourth quarter 1995
results reflected the eighth consecutive quarter of improved comparable quarter
revenues and net income. These results continue to be much improved over prior
years when earnings, and accordingly incentive compensation levels, were
significantly lower. The Committee believes that these results are reflective of
the solid foundation laid under Mr. Rankin's leadership over the past four and
one-half years that he has served as chief executive officer of the Company. In
addition, during 1995 the Company continued to make significant progress toward
its strategic objectives, including the overall strengthening of its management
teams and the repositioning of the Company's businesses for enhanced long-term
competitive advantage. Finally, the financial strength of the Company was
enhanced by further reductions of debt, including the retirement of the
remaining high cost Hyster-Yale 12 3/8% Subordinated
Debentures, 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 four-tenths percent in
1995 over his 1994 base salary. With respect to incentive compensation, Mr.
Rankin's 1995 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 Company's overall strategic plans. In
1995, there was substantial improvement in the Company's consolidated return on
equity, a primary component by which the Board of Directors measures management
performance, which the Compensation Committee recognized as the result of the
strategic foundations put in place over the past several years. The Compensation
Committee established Mr. Rankin's short-term incentive compensation
participation for 1995 at 50% of his Salary Midpoint. Although the actual
performance of the Company in terms of consolidated return on equity was above
targeted levels of performance, the overall actual performance of certain
subsidiaries in terms of net income, market share and other strategic factors
was somewhat below targeted levels of performance. Therefore, the overall
performance against target, and accordingly the annual incentive awards to all
plan participants, including Mr. Rankin, was 92.25% of annual incentive target
awards. The long-term

29
<PAGE> 30

award targeted for Mr. Rankin in 1995 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 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 1995
which was 138.57% of his targeted amount, or 151.39% of his Salary Midpoint.

JOHN J. DWYER, CHAIRMAN
ROBERT M. GATES
DENNIS W. LABARRE

IAN M. ROSS
JOHN C. SAWHILL
ALFRED M. RANKIN, JR.*
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 1995 on a variety of matters, and it is anticipated that such
firm will provide such services in 1996.

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.

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.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Julie C. Hui, Controller of NMHG, received a non-interest bearing loan of
$200,000 from NMHG during 1995 pursuant to NMHG's relocation policy. This loan
was repaid in full during 1995.

30
<PAGE> 31

Geoffrey D. Lewis, Vice President, General Counsel and Secretary of NMHG,
received a non-interest bearing loan of $190,000 from NMHG during 1995 pursuant
to NMHG's relocation policy. This loan was repaid in full during 1995.

Richard E. Posey, President and Chief Executive Officer of Hamilton
Beach/Proctor-Silex, received a non-interest bearing loan of $147,000 from
Hamilton Beach/Proctor-Silex during 1995 pursuant to the Hamilton
Beach/Proctor-Silex relocation policy. This loan was repaid in full during 1996.

Paul C. Smith, Senior Vice President -- Sales of Hamilton
Beach/Proctor-Silex, received a non-interest bearing loan of $537,000 from
Hamilton Beach/Proctor-Silex during 1995 pursuant to the Hamilton
Beach/Proctor-Silex relocation policy. As of March 20, 1996, the full amount of
this loan remained outstanding.

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, 1991 (base point December
31, 1990) and ending December 31, 1995.

31
<PAGE> 32
NACCO INDUSTRIES, INC.
1991-1995 STOCK PRICE PERFORMANCE
Graph 1

S&P 500 Diversified
YEAR NACCO S&P 500 Machinery
- ----- ------- ------- --------------------
1990 $100.00 $100.00 $100.00
1991 $159.34 $130.37 $118.87
1992 $175.90 $140.32 $121.29
1993 $177.38 $154.41 $179.59
1994 $168.63 $156.54 $174.82
1995 $195.92 $213.94 $215.75

Assumes $100 invested at December 31, 1990 with dividends reinvested

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 of the daily closing
stock price (portrayed by the data presented in bold type) compared with the
corresponding information from Graph 1 which is based upon the change in the
stock price for each fiscal year for the same period as in Graph 1.

32
<PAGE> 33
NACCO INDUSTRIES, INC.
1991-1995 STOCK PRICE PERFORMANCE
Graph 2

NACCO S&P 500
(12 month (12 month
YEAR NACCO S&P 500 Moving Average) Moving Average)
- ---- ----- ---------- --------- ----------
1990 $100.00 $100.00 $100.00 $100.00
1991 $159.34 $130.37 $91.53 $116.56
1992 $175.90 $140.32 $100.70 $132.84
1993 $177.38 $154.41 $104.81 $148.54
1994 $168.63 $156.54 $120.13 $155.72
1995 $195.92 $213.94 $124.27 $188.46

Assumes $100 invested at December 31, 1990 with dividends reinvested
12 month moving average data is based on the daily closing price

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 26 to 28. 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,
1986 (base point December 31, 1985) and ending December 31, 1995.

33
<PAGE> 34
NACCO INDUSTRIES, INC.
1986-1995 STOCK PRICE PERFORMANCE
Graph 3

NACCO S&P 500
---------- ----------
YEAR 12 month Moving Average 12 month Moving Average
- ---- ---------- ----------
1985 $100.00 $100.00
1986 $141.84 $128.84
1987 $142.34 $161.52
1988 $167.95 $154.74
1989 $252.59 $194.91
1990 $283.87 $208.71
1991 $259.83 $243.27
1992 $285.87 $277.25
1993 $297.53 $310.02
1994 $341.01 $325.00
1995 $352.75 $393.33

Assumes $100 invested at December 31, 1985 with dividends reinvested
12 month moving average data is based on the daily closing price

34
<PAGE> 35

The following table contains the annual returns expressed in percentages
for the indices set forth in the preceding graphs.

ANNUAL RETURNS OF INDICES INCLUDED ON STOCK PRICE PERFORMANCE GRAPHS

<TABLE>
<CAPTION>
YEAR-END CLOSING PRICE
---------------------------------------- AVERAGE OF DAILY
S&P 500 CLOSING PRICE
DIVERSIFIED -------------------------
YEAR NACCO S&P 500 MACHINERY NACCO S&P 500
- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
1986 41.84% 28.84%
1987 0.35% 25.36%
1988 17.99% -4.20%
1989 50.40% 25.96%
1990 12.38% 7.08%
1991 59.34% 30.37% 18.87% -8.47% 16.56%
1992 10.39% 7.63% 2.04% 10.02% 13.97%
1993 0.84% 10.04% 48.07% 4.08% 11.82%
1994 -4.94% 1.38% -2.66% 14.61% 4.83%
1995 16.18% 36.67% 23.41% 3.44% 21.02%
</TABLE>

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.

35
<PAGE> 36

NORTH AMERICAN COAL PENSION PLANS

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

<TABLE>
<CAPTION>
FINAL
AVERAGE YEARS OF SERVICE AT RETIREMENT
ANNUAL PAY ----------------------------------------------------------------------
AGE 65 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$125,000 $ 28,056 $ 37,408 $ 46,760 $ 56,112 $ 59,237
150,000 34,056 45,408 56,760 68,112 71,862
175,000 40,056 53,408 66,760 80,112 84,487
200,000 46,056 61,408 76,760 92,112 97,112
225,000 52,056 69,408 86,760 104,112 109,737
250,000 58,056 77,408 96,760 116,112 122,362
300,000 70,056 93,408 116,760 140,112 147,612
350,000 82,056 109,408 136,760 164,112 172,862
400,000 94,056 125,408 156,760 188,112 198,112
450,000 106,056 141,408 176,760 212,112 223,362
500,000 118,056 157,408 196,760 236,112 248,612
</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" and "Bonus" 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 1995 earnings of Mr. Miercort that would be taken
into account under the plans is $422,670.

As of December 31, 1995, the number of years of service under the North
American Coal plans for Mr. Miercort is 20 years. The benefits under the North
American Coal plans for Mr. Miercort are not subject to a Social Security
offset.

NMHG PENSION PLANS

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

36
<PAGE> 37

2. APPROVAL OF SUPPLEMENTAL ANNUAL INCENTIVE COMPENSATION PLAN

The Nominating and Compensation Committee wishes to preserve the federal
income tax deductibility of short-term incentive compensation awards paid to
executive officers of the Company who are also employees of the Company (and not
its subsidiaries). Accordingly, the Committee has recommended, and subject to
stockholder approval, the Board of Directors has adopted, a Supplemental Annual
Incentive Compensation Plan (the "Supplemental Annual Plan") which is designed
to preserve the deductibility of the short-term incentive compensation awards
that have been made thereunder for 1996 and may be made thereunder for future
years to the executive officers of the Company who are employees of the parent
holding company.

The Supplemental Annual Plan is not intended to provide new or additional
compensation or benefits to its participants. Under the Company's existing
Annual Incentive Compensation Plan (the "Existing Annual Plan"), the Nominating
and Compensation Committee adopts target performance levels at the beginning of
each year for a variety of annually determined factors such as return on equity,
net income, market share, sales development, return on tangible assets employed
and support costs of the Company and/or its subsidiaries for that year. The
performance targets which are established are wholly within the Nominating and
Compensation Committee's discretion and are based upon management's
recommendations as to the performance objectives of the various business units
for the year. The target awards for executive officers are established at
specified percentages of each individual's Salary Midpoint; these percentages
have ranged between 30% and 65% of Salary Midpoint, depending upon the executive
officer's position.

Under the Supplemental Annual Plan, the target awards for executives will
also be established at specified percentages of each individual's Salary
Midpoint. The amount of the final award will be determined by application of a
set formula to the executive's target award, which formula will be established
annually by the Nominating and Compensation Committee within the first 90 days
of the year on which final awards will be based. Final awards will be paid in
cash during the first 90 days of the following year.

In connection with the proposed adoption of the Supplemental Annual Plan,
the target compensation percentages under the Existing Annual Plan will be
reduced, so that when such percentages are combined with the target compensation
percentages under the Supplemental Annual Plan, they will not be greater than
the target percentages that were established under the Existing Annual Plan in
prior years. As a result, the final awards paid under the Supplemental Annual
Plan, when combined with the reduced final awards paid under the Existing Annual
Plan, will not be greater than (and may be less than if the performance goals
under the Supplemental Annual

37
<PAGE> 38

Plan are not met) the amounts of the final awards that would have been paid
under the Existing Annual Plan except to the extent that there has been an
increase in Salary Midpoints or target compensation percentages. A copy of the
Supplemental Annual Plan is attached hereto as Exhibit A. The following summary
of the Supplemental Annual Plan is qualified in its entirety by reference
thereto.

PURPOSE. The purpose of the Supplemental Annual Plan is to further the
profits and growth of the Company by enabling it to attract and retain key
employees of the Company by offering the opportunity to earn annual incentive
compensation to those key employees who will be in a position to make
significant contributions to such profits and growth, while at the same time
preserving the deductibility of the short-term incentive compensation awards
that have been made thereunder for 1996 and may be made thereunder for future
years to the executive officers of the Company who are employees of the Company.

ADMINISTRATION AND ELIGIBILITY. The Supplemental Annual Plan is
administered by the Nominating and Compensation Committee. Salaried employees of
the Company, including directors of the Company who are also employees of the
Company, who in the judgment of the Nominating and Compensation Committee occupy
key positions in which their efforts may significantly contribute to the profits
or growth of the Company, are eligible to participate in the Supplemental Annual
Plan. Currently, there are nine individuals who participate in the Supplemental
Annual Plan. Employees of subsidiaries of the Company are not eligible to
participate in the Existing Annual Plan or the Supplemental Annual Plan. The
Nominating and Compensation Committee will identify Plan participants for each
year not later than the 90th day of each year.

AWARDS. Not later than the 90th day of each year, the Nominating and
Compensation Committee will establish a target level of incentive opportunity
for each participant, stated as a percentage of the participant's Salary
Midpoint. In addition, threshold and maximum award levels will be established.
The threshold award level represents the minimum amount of incentive award that
would be paid to a participant, which may be zero if actual performance falls
below the minimum performance level. The maximum award level represents the
maximum amount of incentive award that may be paid to a participant for a plan
year, even if the maximum performance level is exceeded. Under no circumstances
will any participant receive an award under the Supplemental Annual Plan in any
calendar year exceeding $800,000.

The Nominating and Compensation Committee has the discretion to change the
formula each year and base it upon one or more of the following performance
measures: return on equity, net income, market share, sales development, return
on tangible assets employed or support costs of the Company and/or its
subsidiaries.

38
<PAGE> 39

Performance measures used in the Supplemental Annual Plan, however, will not be
used in the Existing Annual Plan for the same year. The Committee must certify
that the performance thresholds and any other material terms were met or
exceeded prior to payment of any final award. While the Nominating and
Compensation Committee may not increase the amounts payable under the formula,
it retains discretionary authority to reduce the amount of any award that would
otherwise be payable to a participant.

TARGET 1996 AWARDS. Final awards under the Supplemental Annual Plan for
1996 and thereafter are not currently determinable. Accordingly, the following
are target awards for 1996 for the Named Executive Officers, all executive
officers of the Company as a group and all non-executive officer employees of
the Company as a group who participate in the Supplemental Annual Plan. Final
awards for 1996 under the Supplemental Annual Plan may not exceed 150% of the
target awards.

SUPPLEMENTAL ANNUAL INCENTIVE COMPENSATION PLAN

<TABLE>
<CAPTION>
DOLLAR
NAME AND POSITION VALUE(S)
-------------------------------------------------------------- ----------
<S> <C>
Alfred M. Rankin, Jr. -- Chairman, President and $150,900
Chief Executive Officer of the Company
Reginald R. Eklund -- President $ 0(1)
and Chief Executive Officer of NMHG
Clifford R. Miercort -- President and Chief Executive $ 0(1)
Officer of North American Coal
Frank B. O'Brien -- Senior Vice President - Corporate $ 60,600
Development and Chief Financial Officer of the Company
Victoria L. Rickey -- Vice President, Managing Director of $ 0(1)
of NMHG Europe
Executive Group (4 persons) $260,300
Non-Executive Director Group (0 persons) $ 0(2)
Non-Executive Officer Employee Group (5 persons) $ 48,100
</TABLE>

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

(1) Messrs. Eklund and Miercort and Ms. Rickey are not eligible to participate
in the Supplemental Annual Plan because they are employees of the Company's
subsidiaries.

(2) Directors who are not employees of the Company are not eligible to
participate in the Supplemental Annual Plan.

39
<PAGE> 40

STOCKHOLDER VOTE. The Supplemental Annual Plan will require for its
approval the affirmative vote of the holders of a majority of the voting power
of outstanding Class A Common and Class B Common present in person or by proxy,
and which is actually voted, at the Annual Meeting. THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL TO APPROVE THE SUPPLEMENTAL
ANNUAL PLAN. It is intended that the shares represented by proxies in the
enclosed form will be voted for the proposal to approve the Supplemental Annual
Plan, unless contrary instructions are received. If the Supplemental Annual Plan
is not approved by the stockholders of the Company, no payments will be made
under the Plan with respect to 1996 and thereafter.

3. APPROVAL OF EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN

In 1991, the Board of Directors of the Company adopted, and in 1992 at
their annual meeting, the stockholders of the Company approved, the Executive
Long-Term Incentive Compensation Plan (the "NACCO Long-Term Plan") for executive
officers of the parent holding company. At the time that the NACCO Long-Term
Plan was adopted and approved, the federal tax laws imposed no limitations on
deductibility for compensation paid to the five most highly compensated
executive officers of the Company to the extent that such compensation exceeded
$1 million for the taxable year. Further, at such time, the executive
compensation disclosure requirements of the SEC for annual meeting proxy
statements imposed no requirement for reporting awards of long-term incentive
compensation in the table showing the compensation of the five most highly
compensated executive officers of the Company. Subsequent to the adoption of the
NACCO Long-Term Plan, Congress enacted Internal Revenue Code Section 162(m)
under the Omnibus Budget Reconciliation Act of 1993 which, as applied to such
Plan, would have disallowed a deduction to the Company for federal income tax
purposes for any final award of long-term incentive compensation to the extent
that such award, when combined with the salary and short-term incentive
compensation award paid to any of the Company's five most highly compensated
executive officers, would have exceeded $1 million. Further, the SEC adopted
revised executive compensation disclosure requirements for 1993 and subsequent
years which require that the amount of both short-term and long-term incentive
compensation awards paid to the Company's five most highly compensated executive
officers be reported in the summary compensation table of the Company's annual
meeting proxy statement and that, more importantly, awards can be characterized
as long-term only if the performance measurement period for the award involves a
period of longer than one year.

In response to these changes, the Nominating and Compensation Committee
took steps in 1994 under the NACCO Long-Term Plan to make sure that the final
awards

40
<PAGE> 41

paid are based on performance goals which meet the criteria for deductibility
under Section 162(m). Further, in 1995 the Nominating and Compensation Committee
took additional steps under the NACCO Long-Term Plan so that the performance
measurement period for final awards would be longer than one year. The
Nominating and Compensation Committee has approved a consolidation of the
foregoing changes by means of an amendment and restatement of the NACCO
Long-Term Plan (the "Amended and Restated NACCO Long-Term Plan"). A copy of the
Amended and Restated NACCO Long-Term Plan is attached hereto as Exhibit B. The
following summary of the Amended and Restated NACCO Long-Term Plan is qualified
in its entirety by reference thereto.

PURPOSE. The purpose of the Amended and Restated NACCO Long-Term Plan
continues to be the furthering of the long-term profits and growth of the
Company by enabling it to attract and retain key executive employees of the
Company by offering the opportunity to earn long-term incentive to those key
executive employees who will be in a position to make significant contributions
to such profits and growth.

ADMINISTRATION AND ELIGIBILITY. The Amended and Restated NACCO Long-Term
Plan will continue to be administered by the Nominating and Compensation
Committee. Employees of the Company, including directors of the Company who are
also employees of the Company, who in the judgment of the Nominating and
Compensation Committee occupy key executive positions within the Company, are
eligible to participate in the Amended and Restated NACCO Long-Term Plan.
Currently, there are nine individuals who participate in the Amended and
Restated NACCO Long-Term Plan. Employees of subsidiaries of the Company are not
eligible to participate in the Amended and Restated NACCO Long-Term Plan. The
Nominating and Compensation Committee will identify Plan participants for each
year prior to the 90th day of each year.

AWARDS. Each year, the Nominating and Compensation Committee establishes a
target level of incentive opportunity for each participant, stated as a
percentage of the participant's Salary Midpoint. In addition, threshold and
maximum award levels will be established. The threshold award level represents
the minimum amount of incentive award that would be paid to a participant, which
may be zero if actual performance falls below the minimum target performance
level, as was the case in 1993 when awards were zero because the minimum
performance level was not met. The maximum award level represents the maximum
amount of incentive award that may be paid to a participant for a performance
period, even if the maximum performance level is exceeded. Under no
circumstances will any participant receive a final award under the Amended and
Restated NACCO Long-Term Plan in any calendar year exceeding $2,250,000.

41
<PAGE> 42

Final awards under the Amended and Restated NACCO Long-Term Plan are made
to participants for performance periods of one or more years in amounts
determined pursuant to performance goals and a formula which will be based upon
the Company's average consolidated return on equity and established by the
Nominating and Compensation Committee not later than the 90th day of the
performance period on which the award is to be based. The Committee must certify
that the performance thresholds and any other material terms were met or
exceeded prior to payment of any final award. While the Nominating and
Compensation Committee may not increase the amounts payable under the formula,
it retains discretionary authority to reduce the amount of any award that would
otherwise be payable to a participant. Awards are allocated by the Nominating
and Compensation Committee between a cash component, to be paid in cash, and the
equity component, to be paid in shares of the Company's Class A Common ("Award
Shares"). The number of Award Shares issued to a participant in any award will
be determined by taking the amount of the stock component of the award and
dividing it by the average of the closing price per share of Class A Common on
the New York Stock Exchange on Friday (or if Friday is not a trading day, the
last trading day before such Friday) for each week of the latest calendar year
in the performance period. Award Shares are not subject to any forfeiture or
risk of forfeiture under any circumstances. Accordingly, when a participant
receives Award Shares as part of an award, he will immediately be entitled to
all of the rights of a stockholder, including voting, dividend and other
ownership rights, except that the transferability of the Award Shares is
restricted in a manner and to the extent prescribed by the Nominating and
Compensation Committee for a period of time, which will generally be ten years
from the end of the first year on which the performance period is based. A
maximum of 300,000 shares of Class A Common (subject to adjustments for stock
splits or similar changes) may be issued as Award Shares under the Amended and
Restated NACCO Long-Term Plan. Since 30,132 shares of Class A have been issued
under the NACCO Long-Term Plan, 269,868 shares of Class A Common remain
available for issuance under the Plan. The full amount of each final award,
including the value of the Award Shares, is fully taxable to the participant
when received.

TARGET 1996 AWARDS. Final awards under the Amended and Restated NACCO
Long-Term Plan for performance periods beginning in 1996 and thereafter are not
currently determinable. Accordingly, the following are target awards for 1996
for the Named Executive Officers, all executive officers of the Company as a
group and all

42
<PAGE> 43

non-executive officer employees of the Company as a group who participate in the
Amended and Restated NACCO Long-Term Plan.

EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN

<TABLE>
<CAPTION>
DOLLAR
NAME AND POSITION VALUE(S)
-------------------------------------------------------------- -----------
<S> <C>
Alfred M. Rankin, Jr. -- Chairman, President and $ 701,000
Chief Executive Officer of the Company
Reginald R. Eklund -- President and Chief Executive $ 0(1)
Officer of NMHG
Clifford R. Miercort -- President and Chief Executive $ 0(1)
Officer of North American Coal
Frank B. O'Brien -- Senior Vice President - Corporate $ 209,200
Development and Chief Financial Officer of the Company
Victoria L. Rickey -- Vice President, Managing Director of $ 0(1)
NMHG Europe
Executive Group (4 persons) $ 1,061,100
Non-Executive Director Group (0 persons) $ 0(2)
Non-Executive Officer Employee Group (5 persons) $ 107,200
</TABLE>

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

(1) Messrs. Eklund and Miercort and Ms. Rickey are not eligible to participate
in the Amended and Restated NACCO Long-Term Plan because they are employees
of the Company's subsidiaries.

(2) Directors who are not employees of the Company are not eligible to
participate in the Amended and Restated NACCO Long-Term Plan.

For 1996, the Nominating and Compensation Committee has determined that
participants may receive (a) base period awards based upon the Company's
consolidated weighted average return on equity over the two-year period of 1996
and 1997, payable in 1998, (b) consistent performance awards based on the
Company's average consolidated return on equity performance over the four-year
period from 1996 through 1999, payable in 2000, and (c) consistent performance
awards based on the Company's average consolidated return on equity performance
over the five-year period from 1996 through 2000, payable in 2001. Base period
awards and consistent performance awards are payable partly in shares of Class A
Common and partly in cash. Base period awards may not exceed 150% of the target
awards and consistent

43
<PAGE> 44

performance awards may not exceed 50% of the target awards. Participants will
only receive one base period award and one consistent performance award in any
one calendar year. Total final awards received by participants under the Amended
and Restated NACCO Long-Term Plan in any calendar year may not exceed 200% of
the target award.

STOCKHOLDER VOTE. The Amended and Restated NACCO Long-Term Plan will
require for its approval the affirmative vote of the holders of a majority of
the voting power of outstanding Class A Common and Class B Common present in
person or by proxy, and which is actually voted, at the Annual Meeting. THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL TO APPROVE
THE AMENDED AND RESTATED NACCO LONG-TERM PLAN. It is intended that the shares
represented by proxies in the enclosed form will be voted for the proposal to
approve the Amended and Restated NACCO Long-Term Plan, unless contrary
instructions are received. If the Amended and Restated NACCO Long-Term Plan is
not approved by the stockholders of the Company, no payments will be made under
the Amended and Restated NACCO Long-Term Plan with respect to performance
periods commencing with January 1, 1996 and thereafter.

4. 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 1996. 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
November 29, 1996. 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,

44
<PAGE> 45

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, 1996.

SOLICITATION OF PROXIES

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

OTHER MATTERS

The directors know of no other matters which are likely to be brought
before the meeting, but if any such matters properly come before the meeting the
persons named in the enclosed proxy, or their substitutes, will vote the proxy
in accordance with their best judgment.
CHARLES A. BITTENBENDER
Secretary
Mayfield Heights, Ohio
March 29, 1996

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.

45
<PAGE> 46

EXHIBIT A

SUPPLEMENTAL ANNUAL INCENTIVE COMPENSATION PLAN

1. PURPOSE OF THE PLAN

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

2. DEFINITIONS

(a) "Award" means cash paid to a Participant under this Plan for any year
in an amount determined in a manner not inconsistent with the terms hereof.

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

(c) "Participant" means any salaried employee of the Company who in the
judgment of the Committee occupies a key position in which his efforts may
significantly contribute to the profits or growth of the Company. Employees of
the Company's subsidiaries shall not be eligible to participate in this Plan.

(d) "Section 162(m)" means Section 162(m) of the Internal Revenue Code of
1986, as amended, or any successor provision.

(e) "Target Award" means a dollar amount equal to the amount of cash to be
paid to a Participant under the Plan assuming that all performance targets are
met. The Target Award, together with the target amounts for the Participant
under the Company's other incentive compensation plans, shall be in an amount
which is competitive with similar target awards at other similarly situated
companies.

A-1
<PAGE> 47

3. ADMINISTRATION

This Plan shall be administered by the Committee. The Committee shall have
complete authority to interpret all provisions of this Plan consistent with law,
to prescribe the form of any instrument evidencing any Target Award or Award
under this Plan, to adopt, amend and rescind general and special rules and
regulations for its administration, and to make all other determinations
necessary or advisable for the administration of this Plan; provided, however,
that no such action may be taken by the Committee which would cause any amount
to be paid to a Participant who is, or is determined by the Committee to be
likely to become, a "covered employee" to be includable as "applicable employee
remuneration" of such Participant, as such terms are defined in Section 162(m).
A majority of the Committee shall constitute a quorum, and the action of members
of the Committee present at any meeting at which a quorum is present, or acts
unanimously approved in writing, shall be the act of the Committee. All acts and
decisions of the Committee with respect to any questions arising in connection
with the administration and interpretation of this Plan, including the
severability of any or all of the provisions hereof, shall be conclusive, final
and binding upon the Company and all present and former Participants, all other
employees of the Company, and their respective descendants, successors and
assigns. No member of the Committee shall be liable for any such act or decision
made in good faith.

4. ELIGIBILITY

Each Participant, including directors of the Company who are also salaried
employees of the Company, shall be eligible to participate in this Plan and
receive Awards in accordance with Section 5.

5. AWARDS

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

(a) Not later than the 90th day of each calendar year, the Committee shall
approve (i) a Target Award to be granted to each Participant and (ii) one or
more performance targets and formulas for determining the amount of each Award.
Performance targets shall be based upon the return on equity, return on tangible
assets employed, net income, market share, sales development or support costs of
the Company and/or its subsidiaries; provided, however, that performance targets
which

A-2
<PAGE> 48

are used in the Plan shall not be used in the Company's Annual Incentive
Compensation Plan in the same year.

(b) Not later than the 90th day of the following calendar year, the
Committee shall approve:

(i) a preliminary calculation of the amount of each Award based upon
the application of the formulas and actual performance to the Target Awards
previously determined in accordance with Section 5(a); and

(ii) a final calculation of the amount of each Award to be paid to
each Participant for the prior year, which amount shall be not greater than
the amount determined in accordance with Section 5(b)(i). The Committee
shall have the power to decrease, but not to increase, the amount of any
Award below the amount determined in accordance with Section 5(b)(i);
provided, however, that no Award, including any Award equal to a Target
Award, shall be payable under the Plan to any Participant except as
determined by the Committee.

(c) Promptly following the determination of Awards for the Participants
pursuant to Section 5(b)(ii), the Company shall pay the amount of such Awards to
the Participants in cash, subject to all withholdings and deductions pursuant to
Section 6.

(d) No Award may be paid for any year to a Participant in excess of
$800,000.

6. WITHHOLDING TAXES

Any Award paid to a Participant under this Plan, shall be subject to
standard federal, state and local income tax, social security and other standard
withholdings and deductions.

7. AMENDMENT AND TERMINATION

The Committee may alter or amend this Plan from time to time or terminate
it in its entirety; provided, however, that no such action shall, without the
consent of a Participant, affect the rights in an outstanding Award of such
Participant; and further provided, however, that no amendment may be made which
would cause any amount paid to a Participant who is, or is determined by the
Committee to be likely to become, a "covered employee" to be includable as
"applicable employee remuneration" of such Participant, as such terms are
defined in Section 162(m).

8. GENERAL PROVISIONS

(a) No Right of Employment. Neither the adoption or operation of this Plan,
nor any document describing or referring to this Plan, or any part thereof,
shall confer

A-3
<PAGE> 49

upon any employee any right to continue in the employ of the Company, or shall
in any way affect the right and power of the Company to terminate the employment
of any employee at any time with or without assigning a reason therefor to the
same extent as the Company might have done if this Plan had not been adopted.

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

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

9. APPROVAL BY STOCKHOLDERS

The Plan shall be submitted for approval by the stockholders of the
Company. If such approval has not been obtained by June 1, 1996, this Plan shall
be nullified and all grants of Target Awards shall be rescinded.

10. EFFECTIVE DATE

Subject to its approval by the stockholders of the Company, this Plan shall
become effective as of January 1, 1996.

A-4
<PAGE> 50

EXHIBIT B

EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN
(AMENDED AND RESTATED AS OF JANUARY 1, 1996)

1. PURPOSE OF THE PLAN

The purpose of this Executive Long-Term Incentive Compensation Plan (the
"Plan") is to further the long-term profits and growth of NACCO Industries, Inc.
(the "Company") by enabling the Company to attract and retain key executive
employees of the Company by offering the opportunity to earn long-term incentive
compensation to those key executive employees who will be in a position to make
significant contributions to such profits and growth. This incentive is in
addition to annual compensation and is intended to encourage enhancement of the
Company's stockholder value.

2. DEFINITIONS

(a) "Average Award Share Price" means the average of the closing price per
share of Class A Common Stock on the New York Stock Exchange on the Friday (or
if Friday is not a trading day, the last trading day before such Friday) for
each week of the relevant period.

(b) "Award" means an award paid to a Participant under this Plan for any
period of one or more years in an amount determined pursuant to a formula which
is established by the Committee not later than the 90th calendar day of the
performance period on which the Award is based. The Committee shall allocate the
amount of an Award between the cash component, to be paid in cash, and the
equity component, to be paid in Award Shares.

(c) "Award Shares" means shares of Class A Common Stock which are issued
pursuant to, and with such restrictions as are imposed by, the terms of this
Plan. Such shares may be shares of original issuance or treasury shares or a
combination of the foregoing.

(d) "Class A Common Stock" means the Company's Class A Common Stock, par
value $1.00 per share.

(e) "Committee" means the Nominating, Organization and Compensation
Committee of the Company's Board of Directors or any other committee appointed
by the Company's Board of Directors to administer this Plan in accordance with
Section 3, so

B-1
<PAGE> 51

long as any such committee consists of not less than two directors of the
Company and so long as each member of the Committee (i) is not an employee of
the Company or any of its subsidiaries and (ii) is a "disinterested person"
within the meaning of Rule 16b-3.

(f) "Participant" means any salaried employee of the Company who in the
judgment of the Committee occupies a key executive position in which his efforts
may significantly contribute to the profits or growth of the Company. Employees
of the Company's subsidiaries shall not be eligible to participate in this Plan.

(g) "Rule 16b-3" means Rule 16b-3 promulgated under the Securities Exchange
Act of 1934 (or any successor rule to the same effect), as in effect from time
to time.

(h) "Section 162(m)" means Section 162(m) of the Internal Revenue Code of
1986, as amended, or any successor provision.

(i) "Target Award" means a dollar amount equal to the Award to be paid to a
Participant under the Plan assuming that the performance targets are met.

3. ADMINISTRATION

This Plan shall be administered by the Committee. The Committee shall have
complete authority to interpret all provisions of this Plan consistent with law,
to prescribe the form of any instrument evidencing any Target Award or Award
granted under this Plan, to adopt, amend and rescind general and special rules
and regulations for its administration, and to make all other determinations
necessary or advisable for the administration of this Plan; provided, however,
that no such action may be taken by the Committee which would cause any Award to
be made to a Participant who is, or is determined by the Committee to be likely
to become, a "covered employee" to be includable as "applicable employee
remuneration" of such Participant, as such terms are defined in Section 162(m).
A majority of the Committee shall constitute a quorum, and the action of members
of the Committee present at any meeting at which a quorum is present, or acts
unanimously approved in writing, shall be the act of the Committee. All acts and
decisions of the Committee with respect to any questions arising in connection
with the administration and interpretation of this Plan, including the
severability of any or all of the provisions hereof, shall be conclusive, final
and binding upon the Company and all present and former Participants, all other
employees of the Company, and their respective descendants, successors and
assigns. No member of the Committee shall be liable for any such act or decision
made in good faith.

B-2
<PAGE> 52

4. ELIGIBILITY

Each Participant, including directors of the Company who are also salaried
employees of the Company, shall be eligible to participate in this Plan and
receive Awards in accordance with Section 5.

5. AWARDS

(a) Not later than the 90th day of each performance period, the Committee
shall approve (i) a Target Award to be granted to each Participant and (ii) a
formula for determining the amount of each Award, which formula is based upon
the Company's average return on equity for years covered by the performance
period. Each grant shall specify the allocation between the cash portion of the
Award and the equity portion of the Award.

(b) Not later than the 90th day following the end of each performance
period, the Committee shall approve:

(i) a preliminary calculation of the amount of each Award based upon
the application of the formula and actual performance to the Target Awards
previously determined in accordance with Section 5(a); and

(ii) a final calculation of the amount of each Award to be paid to
each Participant for the performance period, which amount shall be not
greater than the amount determined in accordance with Section 5(b)(i). The
Committee shall have the power to decrease, but not to increase, the amount
of any Award below the amount determined in accordance with Section
5(b)(i); provided, however, that no Award, including any Award equal to a
Target Award, shall be payable under the Plan to any Participant except as
determined by the Committee.

(c) Each Award shall be paid partly in cash and partly in Award Shares. The
number of Award Shares to be issued to a Participant shall be based upon the
number of shares of Class A Common Stock which can be purchased with the equity
portion of the Award at the Average Award Share Price. Awards shall be paid
subject to all withholdings and deductions pursuant to Section 6.
Notwithstanding any other provision of the Plan, the maximum amount paid to a
Participant in a single calendar year as a result of Awards under this Plan
shall not exceed $2,250,000.

B-3
<PAGE> 53

(d) Award Shares shall entitle such Participant to voting, dividend and
other ownership rights. Each Award shall provide that the transferability of the
Award Shares shall be prohibited or restricted in the manner and to the extent
prescribed by the Committee at the date of payment for a period of ten years, or
such other shorter or longer period as may be determined by the Committee from
time to time.

(e) Each payment of Award Shares shall be evidenced by an agreement
executed on behalf of the Company by an executive officer and delivered to and
accepted by such Participant; each such agreement shall contain such terms and
provisions, consistent with this Plan, as the Committee may approve, including,
without limitation, prohibitions and restrictions regarding the transferability
of Award Shares (other than a transfer (i) by will or the laws of descent and
distribution, (ii) pursuant to a domestic relations order meeting the definition
of a qualified domestic relations order under Section 206(d)(3)(B) of the
Employee Retirement Income Security Act of 1974, as amended, or (iii) to a trust
for the benefit of a Participant or his spouse, children or grandchildren,
provided that Award Shares transferred to such a trust shall continue to be
Award Shares subject to this Plan).

(f) Multiple Awards may be granted to a Participant; provided, however,
that no two Awards to a Participant may have identical performance periods.

6. WITHHOLDING TAXES

To the extent that the Company is required to withhold federal, state or
local taxes in connection with any Award paid to a Participant under this Plan,
and the amounts available to the Company for such withholding are insufficient,
it shall be a condition to the receipt of such Award that the Participant make
arrangements satisfactory to the Company for the payment of the balance of such
taxes required to be withheld, which arrangements (in the discretion of the
Committee) may include relinquishment of a portion of such Award. The Company
and a Participant may also make similar arrangements with respect to the payment
of any other taxes derived from or related to the Award with respect to which
withholding is not required.

7. AMENDMENT, TERMINATION AND ADJUSTMENTS

The Committee may alter or amend this Plan from time to time or terminate
it in its entirety; provided, however, that no such action shall, without the
consent of a Participant, affect the rights in an outstanding Award or any Award
Shares of such Participant; and further provided, however, that, without further
approval by the stockholders of the Company, no such action shall (i) increase
the maximum number of Award Shares to be issued under this Plan specified in
Section 8 (except that adjustments and additions expressly authorized by this
Section 7 shall not be limited

B-4
<PAGE> 54

by this clause (i), (ii) cause Rule 16b-3 to become inapplicable to this Plan or
(iii) cause any amount of an Award to a Participant who is, or is determined by
the Committee to be likely to become, a "covered employee" to be includable as
"applicable employee remuneration" of such Participant, as such terms are
defined in Section 162(m). The Committee may make or provide for such adjustment
in the total number of Award Shares to be issued under this Plan specified in
Section 8 as the Committee in its sole discretion, exercised in good faith, may
determine is equitably required to reflect (a) any stock dividend, stock split,
combination of shares, recapitalization or any other change in the capital
structure of the Company, (b) any merger, consolidation, spin-off, split-off,
spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase securities,
or (c) any other corporate transaction or event having an effect similar to any
of the foregoing. All Target Awards and Awards granted prior to any termination
of this Plan shall continue to be subject to the terms of this Plan. In the case
of termination of employment by reason of death, permanent disability or
retirement pursuant to the terms of the qualified pension plan applicable to the
Participant, or in the case of other special circumstances, of a Participant who
holds Award Shares as to which the prohibition or restriction on transfer has
not lapsed, or in case of a termination of the Plan pursuant to this Section 7,
the Committee may, in its sole discretion, accelerate the time at which such
prohibition or restriction on transfer will lapse.

8. AWARD SHARES SUBJECT TO PLAN

Subject to adjustment as provided in this Plan, the total number of shares
of Class A Common Stock which may be issued as Award Shares under this Plan
shall be 300,000.

9. APPROVAL BY STOCKHOLDERS

10. GENERAL PROVISIONS

(a) No Right of Employment. Neither the adoption or operation of this Plan,
nor any document describing or referring to this Plan, or any part thereof,
shall confer upon any employee any right to continue in the employ of the
Company, or shall in any way affect the right and power of the Company to
terminate the employment of

B-5
<PAGE> 55

any employee at any time with or without assigning a reason therefor to the same
extent as the Company might have done if this Plan had not been adopted.

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

11. EFFECTIVE DATE

Subject to its approval by the stockholders of the Company, this Plan shall
become effective as of January 1, 1996.

B-6
<PAGE> 56

<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.

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<PAGE> 57

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>