NACCO INDUSTRIES INC, DEF 14A, 1997-03-28

NACCO INDUSTRIES INC
DEF 14A, 1997-03-28
INDUSTRIAL TRUCKS, TRACTORS, TRAILORS & STACKERS

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SCHEDULE 14A
(RULE 14a)
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:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>

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

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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: .......

(2) Aggregate number of securities to which transaction applies: ..........

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............

(4) Proposed maximum aggregate value of transaction: ......................

(5) Total fee paid: .......................................................

[ ] Fee paid previously with preliminary materials.

[ ] 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: ...............................................

(2) Form, Schedule or Registration Statement No.: .........................

(3) Filing Party: .........................................................

(4) Date Filed: ...........................................................

================================================================================
<PAGE> 2

[NACCO, Industries, Inc. logo]
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 14, 1997, at 9:00 A.M., at 5875
Landerbrook Drive, Mayfield Heights, Ohio, for the purpose of:

(1) Electing eleven directors for the ensuing year.

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

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

The Board of Directors has fixed the close of business on March 14, 1997 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 28, 1997

THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1996 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. LOGO]
5875 LANDERBROOK DRIVE
MAYFIELD HEIGHTS, OHIO 44124-4017

PROXY STATEMENT -- MARCH 28, 1997

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 14, 1997 (the "Annual Meeting"). This Proxy Statement and the
related form(s) of proxy are being mailed to stockholders commencing on or about
March 28, 1997.

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 record at the close of business on March 14, 1997 will be
entitled to vote at the Annual Meeting. On that date, the Company had
outstanding and entitled to vote 6,512,154 shares of Class A Common Stock, par
value $1.00 per share ("Class A Common"), and 1,691,226 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 eleven
directorships to be filled and one vote on each other matter brought before the
Annual Meeting. Each share of Class B Common is entitled to ten votes for each
such nominee and ten votes on each other matter brought before the Annual
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."

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.

In accordance with Delaware law and the Company's By-Laws, the Company may,
by a vote of the stockholders, adjourn the Annual Meeting to a later date or
dates, without changing the record date. If the Company were to determine that
an adjournment were desirable, the appointed proxies would use the discretionary
authority granted pursuant to the proxy cards to vote in favor of such an
adjournment.

2
<PAGE> 4

BUSINESS TO BE TRANSACTED

The Board of Directors will present two proposals to the stockholders of
the Company at the Annual Meeting. Information concerning the first proposal,
"Election of Directors", is found on pages 3 to 24 of this Proxy Statement.
Information concerning the second proposal, "Confirmation of Appointment of
Independent Certified Public Accountants", is found on page 25 of this Proxy
Statement.

1. ELECTION OF DIRECTORS

It is intended that shares represented by proxies in the enclosed form(s)
will be voted for the election of the nominees named in the following table to
serve as directors for a term of one year and until their successors are
elected, unless contrary instructions are received. All of the nominees listed
below, except for John F. Turben, presently serve as directors of the Company
and, except for David F. Taplin and John F. Turben, were elected at the
Company's 1996 annual meeting of stockholders. Frank E. Taplin, Jr., who served
as a director of the Company and its predecessor from January 1946 to February
1997, is not standing for reelection. If an unexpected occurrence should make it
necessary, in the judgment of the proxy holders, to substitute some other person
for any of the nominees, such shares will be voted for such other person as the
proxy holders may select.

<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 54 Chairman and Chief Executive Officer of 1993
Brown-Forman Corporation (a diversified producer
and marketer of consumer products). From prior to
1992 to 1994, President of Brown-Forman
Corporation. Also director of Brown-Forman
Corporation, Hilliard Lyons Trust Company, LG&E
Energy Corp. and Louisville Gas and Electric
Company.
John J. Dwyer 79 Retired President of Oglebay Norton Company (a 1988
diversified company engaged in Great Lakes marine
transportation, industrial sands, refractories
and mineral products). Also director of Oglebay
Norton Company.
Robert M. Gates 53 Consultant, author and lecturer. From prior to 1993
1992 to 1993, Director of Central Intelligence
for the United States. Former Assistant to the
President of the United States and Deputy for
National Security Affairs, National Security
Council. Also director of LucasVarity plc and TRW
Inc., and trustee of Fidelity Funds.
Leon J. Hendrix, Jr. 55 Principal, Clayton, Dubilier & Rice, Inc. 1995
(private investment firm). From September 1992
through October 1993, Executive Vice President
and Chief Operating Officer, and from prior to
1992 to September 1992, Executive Vice President,
of Reliance Electric Company. Also director of
Cambrex Corp., Keithley Instruments, Inc.,
Remington Arms Co., Riverwood Holding, Inc. and
Wesco Distribution, Inc.
Dennis W. LaBarre 54 Partner in the law firm of Jones, Day, Reavis & 1982
Pogue.
Alfred M. Rankin, Jr. 55 Chairman, President and Chief Executive Officer 1972
of the Company. From prior to 1992 to 1994,
President and Chief Executive Officer of the
Company. Also director of The BFGoodrich Company,
The Standard Products Company and The Vanguard
Group.
</TABLE>

3
<PAGE> 5

BENEFICIAL OWNERSHIP OF CLASS A COMMON AND CLASS B COMMON.

Set forth in the following table is the indicated information as of
December 31, 1996 (except as otherwise indicated), 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 and
nominees, 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 holding, voting or 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.

4
<PAGE> 6

AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP

<TABLE>
<CAPTION>
SOLE SHARED
VOTING AND VOTING OR PERCENT
TITLE OF INVESTMENT INVESTMENT AGGREGATE OF CLASS
NAME CLASS POWER POWER AMOUNT (1)(2)
- ------------------------------------------ ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C>
Clara Taplin Rankin, et al. (3) Class B (3) (3) 1,542,757 91.05%
c/o KeyCorp Shareholder
Services, Inc.
P.O. Box 6477
Cleveland, OH 44101
CTR Family Associates, Class B (3)(4) (3)(4) 472,371 27.88%
L.P., et al. (4)
Suite 300
5875 Landerbrook Drive
Mayfield Hts., OH 44124-4017
FMR Corp., et al. (5) Class A (5) (5) 742,753 11.44%
82 Devonshire Street
Boston, MA 02109
Clara Taplin Rankin Class A 570,508 14,000(6) 584,508 9.00%
3151 Chagrin River Road Class B -- 479,371(3)(4)(6) 479,371 28.29%
Chagrin Falls, OH 44022
Frank E. Taplin, Jr. Class A 380,493 14,000(6) 394,572 (7) 6.08%
55 Armour Road Class B 284,728 7,000(6) 291,728 (3) 17.22%
Princeton, NJ 08540
Thomas E. Taplin Class A 535,000 14,000(6) 549,000 8.46%
950 South Cherry St. #506 Class B 310,000 7,000(6) 317,000 (3) 18.71%
Denver, CO 80222
Owsley Brown II Class A 1,700 -- 1,779 (7) --
Class B -- -- -- --
John J. Dwyer Class A 1,633 -- 1,790 (7) --
Class B -- -- -- --
Robert M. Gates Class A 819 -- 898 (5)(7) --
Class B -- -- -- --
Leon J. Hendrix, Jr. Class A 1,679 -- 1,888 (7) --
Class B -- -- -- --
Dennis W. LaBarre Class A 1,633 -- 1,712 (7) --
Class B 100 -- 100 --
Alfred M. Rankin, Jr. Class A 114,581 107,553(8) 247,134 (7) 3.79%
Class B -- 472,371(3)(4) 472,371 27.88%
Ian M. Ross Class A 760 -- 838 (7) --
Class B -- -- -- --
John C. Sawhill Class A 5,512 -- 5,691 (7) --
Class B -- -- -- --
Britton T. Taplin Class A 12,715 -- 12,793 (7) 0.20%
Class B 27,495 -- 27,495 (3) 1.62%
David F. Taplin Class A 23,055 -- 23,055 0.36%
Class B 13,550 -- 13,550 (3) 0.80%
John F. Turben Class A -- -- -- (9) --
Class B -- -- -- --
Reginald R. Eklund Class A -- 1,000 1,000 --
Class B -- -- -- --
Richard E. Posey Class A -- -- -- --
Class B -- -- -- --
Clifford R. Miercort Class A -- -- -- --
Class B 1,000 -- 1,000 --
Frank B. O'Brien Class A 12,448 1,100 17,548 (7)(10) 0.27%
Class B 1,000 -- 1,000 --
All executive officers and Class A 184,316 142,042 358,096 (7)(10)(11) 5.49%
directors as a group (38 persons) Class B 45,270 480,544 525,814 (3)(4)(11) 31.03%
</TABLE>

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

(1) The shares included in note (7) were deemed to be outstanding as of December
31, 1996, for purposes of calculating the percentage owned at such date
pursuant to Rule 13d-3 under the Exchange Act.

5
<PAGE> 7

(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 15,
1991 by Amendment No. 2, on March 20, 1992 by Amendment No. 3 and on March
9, 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, on March 21, 1996 by Amendment No. 2 to
the amended and restated Schedule 13D, on November 25, 1996 by Amendment No.
3 to the amended and restated Schedule 13D, on January 10, 1997 by Amendment
No. 4 to the amended and restated Schedule 13D and on March 19, 1997 by
Amendment No. 5 to the amended and restated 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 Sichel, 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, CTR Family Associates, L.P. (the
"Partnership"), Rankin Management, Inc. ("RMI") and National City Bank, as
trustee of certain 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 KeyCorp Shareholder Services, Inc. (successor
to Society National Bank), as depository, to a Stockholders' Agreement,
dated as of March 15, 1990, as amended, covering the shares of Class B
Common beneficially owned by each of the Signatories (the "Stockholders'
Agreement"). The Stockholders' Agreement requires that each Signatory, prior
to any conversion of such Signatory's shares of Class B Common into Class A
Common or prior to any sale or transfer of Class B Common to any 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 91.05% of the Class B Common
outstanding on December 31, 1996, or 65.83% of the combined voting power of
all Class A Common and Class B Common outstanding on such date. Certain
Signatories own Class A Common, which is not subject to the Stockholders'
Agreement. Under the Stockholders' Agreement, the Company may, but is not
obligated to, buy any of the shares of Class B Common not purchased by the
Signatories following the trigger of the right of first refusal. The
Stockholders' Agreement does not restrict in any respect how a Signatory may
vote such Signatory's shares of Class B Common. The Class B Common shown in
the foregoing table as beneficially owned by named persons who are
Signatories is subject to the Stockholders' Agreement.

(4) A Schedule 13D filed with the SEC with respect to Class B Common on November
25, 1996, and amended on November 26, 1996 by Amendment No. 1 and on January
10, 1997 by Amendment No. 2, reported that the following individuals and
entities: Clara Taplin Rankin, Alfred M. Rankin, Jr., Thomas T. Rankin,
Claiborne R. Rankin, Roger F. Rankin, Bruce T. Rankin, Victoire G. Rankin,
RMI and the Partnership (collectively, the "Parties" and all the Parties
except the Partnership, the "Partners"), may be deemed as a group to have
acquired and to beneficially own 472,371 shares of Class B Common,
representing 27.88% of the outstanding Class B Common as of December 31,
1996. Although the Partnership holds the 472,371 shares of Class B Common,
which were contributed by the Partners, it does not have any power to vote
or to dispose of such shares of Class B Common. RMI has the sole power to
vote such shares and shares the power to dispose of such shares with the
other Partners. RMI exercises such powers by action of its board of
directors, which acts by majority vote and consists of Alfred M. Rankin,
Jr., Thomas T. Rankin, Claiborne R. Rankin and Roger F. Rankin, the
shareholders of RMI. Under the terms of the Limited Partnership Agreement of
CTR Family Associates, L.P. (the "Partnership Agreement"), the Partnership
may not dispose of Class B Common without the consent of RMI and the
approval of the holders of more than 75% of all Partnership interests. The
Shareholders'

6
<PAGE> 8

Agreement among the shareholders of RMI, the Articles of Incorporation of
RMI and the Partnership Agreement restrict the transfer of RMI shares and
Partnership interests by RMI's shareholders and the Partners and provide
such persons with a right of first refusal to acquire RMI shares or
Partnership interests which an RMI shareholder or a Partner desires to sell
and a call right to compel the sale of RMI shares or Partnership interests
by RMI shareholders or the Partners who are not members of a "Family Group,"
consisting of one of Clara Taplin Rankin's sons, his spouse and their
descendants. The Class B Common beneficially owned by each of the Partners
and the Partnership is also subject to the Stockholders' Agreement described
in note (3).

(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, amended and
restated on February 14, 1994 by Amendment No. 2, amended on February 13,
1995 by Amendment No. 3, amended on February 14, 1996 by Amendment No. 4 and
amended on February 14, 1997 by Amendment No. 5 (the "FMR Schedule 13G")
reported that Fidelity Management & Research Company ("Fidelity"), a wholly
owned subsidiary of FMR Corp. ("FMR"), is the beneficial owner of 737,350
shares of Class A Common or 11.36% of the Class A Common outstanding on
December 31, 1996 as a result of acting as investment adviser to several
investment companies registered under the Investment Company Act of 1940
(the "Fidelity Funds"). The FMR Schedule 13G also reported that Fidelity
Management Trust Company ("Trust"), a wholly owned subsidiary of FMR, is the
beneficial owner of 5,403 shares of Class A Common or 0.08% of the Class A
Common outstanding on December 31, 1996 as a result of its serving as
investment manager of several institutional accounts. Each of Edward C.
Johnson 3d, the Chairman of FMR, and FMR, through its control of Trust, has
sole voting and dispositive power over such 5,403 shares of Class A Common.
Members of the Edward C. Johnson 3d family may be deemed, under the
Investment Company Act of 1940, to form a controlling group with respect to
FMR Corp. In addition, the FMR Schedule 13G reported that while each of Mr.
Johnson, FMR and Abigail P. Johnson, a Director of FMR, has dispositive
power over 742,753 shares of Class A Common (the 737,350 shares beneficially
owned by Fidelity plus the 5,403 shares beneficially owned by Trust), the
power to vote or direct the voting of the 737,350 shares owned by Fidelity
resides with the Fidelity Funds. According to the FMR Schedule 13G, each of
Mr. Johnson and FMR (through its control of Fidelity) has sole power to
dispose of such 737,350 shares. While Robert M. Gates, a director of the
Company, is a trustee of Fidelity Funds, he has not exercised and does not
presently intend to exercise any voting or investment power over any of the
shares of Class A Common beneficially owned by FMR, Fidelity or Trust.

(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) Includes the following shares which such persons have, or had, within 60
days after December 31, 1996, 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 as
a group, 30,800 shares of Class A Common. Also includes the following shares
which the directors and Mr. Frank E. Taplin, Jr., a former director and now
a director emeritus, have, or had, within 60 days after December 31, 1996,
the right to acquire pursuant to the Company's Non-Employee Directors'
Equity Compensation Plan for payment of director's fees: Mr. F. Taplin, Jr.,
79 shares of Class A Common; Mr. Brown, 79 shares of Class A Common; Mr.
Dwyer, 157 shares of Class A Common; Mr. Gates, 79 shares of Class A Common;
Mr. Hendrix, 209 shares of Class A Common; Mr. LaBarre, 79 shares of Class A
Common; Mr. Ross, 78 shares of Class A Common; Mr. Sawhill, 179 shares of
Class A Common; and Mr. B. Taplin, 78 shares of Class A Common; and all
executive officers and directors as a group, 938 shares of Class A Common.

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

7
<PAGE> 9

(9) Following December 31, 1996 and subsequent to his nomination to stand for
election as a director, Mr. Turben purchased 1,000 shares of Class A Common.

(10) 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.

(11) Includes 21,571 shares of Class A Common and 3,153 shares of Class B Common
owned by members of the immediate families of executive officers as to
which such executive officers disclaim beneficial ownership.

Frank E. Taplin, Jr. and Thomas E. Taplin are brothers, and Clara Taplin
Rankin is their sister. Britton T. Taplin is the son of Thomas E. Taplin, and
David F. Taplin is the son of Frank E. Taplin, Jr. Clara Taplin Rankin is the
mother of Alfred M. Rankin, Jr., and J.C. Butler, Jr., an executive officer of
the Company, is the son-in-law of Alfred M. Rankin, Jr. The combined beneficial
ownership of such persons shown in the foregoing table (including shares as to
which such persons had the right to acquire beneficial ownership within 60 days
after December 31, 1996) equals 1,833,813 shares or 28.14% of Class A Common and
1,132,172 shares or 66.82% of Class B Common outstanding on December 31, 1996
(including shares deemed to be outstanding for purposes of calculating the
percentage owned pursuant to Rule 13d-3 under the Exchange Act). The combined
beneficial ownership of all directors of the Company (including shares as to
which the directors had the right to acquire beneficial ownership within 60 days
after December 31, 1996), together with Clara Taplin Rankin, Frank E. Taplin,
Jr., 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 1,886,176 shares or 28.91% of Class A Common and
1,141,542 shares or 67.37% of Class B Common outstanding on December 31, 1996
(including shares deemed to be outstanding for purposes of calculating the
percentage owned pursuant to Rule 13d-3 under the Exchange Act). Such shares of
Class A Common and Class B Common represent 56.68% of the combined voting power
of all Class A Common and Class B Common outstanding on such date (including
shares deemed to be outstanding for purposes of calculating the percentage owned
pursuant to Rule 13d-3 under the Exchange Act).

There exists no arrangement or understanding between any director and any
other person pursuant to which such director was elected. Each director and
executive officer serves until his successor is elected and qualified.

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 1996, the members of the Audit Committee were Robert M.
Gates (Chairman), Leon J. Hendrix, Jr., 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, Ian M. Ross and John C. Sawhill.
The other standing committees of the Board of Directors are the Executive
Committee, which during 1996 was comprised of John J. Dwyer, Dennis W. LaBarre,
Alfred M. Rankin, Jr. (Chairman) and John C. Sawhill, and the Finance Committee,
which during 1996 was comprised of Leon J. Hendrix, Jr., Dennis W. LaBarre,
Alfred M. Rankin, Jr., John C. Sawhill (Chairman) and Britton T. Taplin.

The Audit Committee held four meetings in 1996. 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.

8
<PAGE> 10

The Nominating and Compensation Committee held five meetings in 1996. 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 1996. 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 two meetings in 1996. The Executive Committee
may exercise all of the powers of the Board of Directors in the management and
control of the business of the Company during the intervals between meetings of
the Board of Directors.

The Board of Directors held five meetings in 1996. 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 1996, except for
Leon J. Hendrix, 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 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 voluntary 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, 1996, 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").

9
<PAGE> 11

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
PAYOUTS
ANNUAL COMPENSATION ------------
----------------------- LTIP ALL OTHER
FISCAL SALARY BONUS PAYOUTS COMPENSATION
NAME & PRINCIPAL POSITION YEAR ($) ($) ($) ($)
- ------------------------------------- ------ -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr. 1996 $704,700(1) $ 290,400(2) $677,162(3) $275,201(4)(5)
Chairman, President and 1995 $663,700(1) $1,098,171(2)(6) -- $255,313(4)(5)
Chief Executive Officer 1994 $625,400(1) $ 947,192(2)(6) -- $478,089(4)(5)
of the Company
Reginald R. Eklund 1996 $394,808(1) $ 109,785(7) -- $ 69,712(8)
President and Chief 1995 $373,100(1) $ 118,264(7) -- $ 77,767(8)
Executive Officer of 1994 $349,900(1) $ 157,001(7) -- $ 38,494(8)
NMHG
Richard E. Posey (9) 1996 $358,450(1) $ 170,500(10) -- $ 91,426(11)
President and Chief 1995 $121,086(1) $ 122,700(10) -- $ 13,568(11)
Executive Officer of 1994 -- -- -- --
Hamilton Beach/Proctor-Silex
Clifford R. Miercort 1996 $325,520(1) $ 170,717(12) -- $ 32,466(13)
President and Chief 1995 $307,747(1) $ 124,700(12) -- $ 34,329(13)
Executive Officer of 1994 $287,740(1) $ 143,836(12) -- $ 31,634(13)
North American Coal
Frank B. O'Brien (14) 1996 $290,300(1) $ 116,700(15) $227,071(16) $ 65,040(17)
Senior Vice President -- 1995 $269,500(1) $ 377,544(15)(18) -- $ 62,342(17)
Corporate Development 1994 $247,700(1) $ 314,210(15)(18) -- $ 43,491(17)
and Chief Financial Officer of the
Company
</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 1996, 1995 and 1994 include payments of
cash in lieu of perquisites of $69,700, $66,700 and $65,400, respectively.
For Mr. Eklund, the amounts listed for 1996, 1995 and 1994 include payments
of cash in lieu of perquisites of $44,800, $41,100 and $39,900,
respectively. For Mr. Posey, the amounts listed for 1996 and 1995 include
payments of cash in lieu of perquisites of $33,400 and $11,500,
respectively. For Mr. Miercort, the amounts listed for 1996, 1995 and 1994
include payments of cash in lieu of perquisites of $27,759, $28,913 and
$27,570, respectively. For Mr. O'Brien, the amounts listed for 1996, 1995
and 1994 include payments of cash in lieu of perquisites of $30,300,
$29,500 and $27,700, respectively.

(2) For Mr. Rankin, the amounts listed for 1996, 1995 and 1994 include payments
of cash of $290,400, $256,455 and $304,383 pursuant to the NACCO
Industries, Inc. Annual Incentive Compensation Plan.

(3) For Mr. Rankin, the amount listed for 1996 was distributed in the form of
7,912 shares of Class A Common and a cash payment in the amount of
$237,049. The foregoing cash payment is intended to be the approximate
amount required to be withheld by the Company and paid to applicable
federal, state and local income taxing authorities based upon statutorily
determined withholding rates. These amounts were distributed under the
NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (the
"NACCO Long-Term Plan").

(4) For Mr. Rankin, the amounts listed for 1996, 1995 and 1994 include $3,750,
$3,750 and $7,500, 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 1994 have been transferred to
the NMHG Profit Sharing Plan); and $44,806, $37,294 and $39,834,
respectively, consisting of amounts credited and interest under The NACCO
Materials Handling Group, Inc. Unfunded Benefit Plan (the "NMHG Unfunded
Benefit

10
<PAGE> 12

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).

(5) 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 1996, the amount listed includes credits and interest of $226,645 to
such plan by the Company. For 1995, the amount listed is an amended profit
sharing amount which includes credits and interest of $214,269 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.

(6) 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 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 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 note (3) above. See also note (1) under "Long-Term
Incentive Plans" on pages 13 to 14 for a further description of the NACCO
Long-Term Plan.

(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 1996, 1995 and 1994,
$17,639, $10,295 and $13,270, respectively, consisting of contributions by
NMHG under the NMHG Profit Sharing Plan; and for 1996, 1995 and 1994,
$52,073, $67,472 and $25,224, respectively, consisting of credits and
interest under the NMHG Unfunded Benefit Plan.

(9) Mr. Posey commenced employment with Hamilton Beach/Proctor-Silex effective
September 1, 1995.

(10) For Mr. Posey, the amount listed for 1996 was paid in cash pursuant to the
Hamilton Beach/Proctor-Silex, Inc. Annual Incentive Compensation Plan. In
1995, $62,700 was paid in cash pursuant to the Hamilton
Beach/Proctor-Silex, Inc. Annual Incentive Compensation Plan and $60,000
was paid as a signing bonus.

(11) For Mr. Posey, the amounts listed for 1996 and 1995 include $1,500 and
$375, respectively, consisting of matching contributions by Hamilton
Beach/Proctor-Silex under the Hamilton Beach/Proctor-Silex Employees'
Retirement Savings Plan; the amounts listed for 1996 and 1995 also include
$89,926 and $13,193, respectively, for reimbursement of moving expenses.

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

(13) For Mr. Miercort, the amounts listed for 1996, 1995 and 1994 include
$7,500, $7,500 and $7,500, respectively, consisting of matching
contributions by North American Coal under the North American Coal Savings
Plan; and $24,966, $26,829 and $24,134, respectively, consisting of amounts
credited and interest under the North American Coal Deferred Compensation
Plan.

(14) Mr. O'Brien resigned from the Company effective March 4, 1997.

(15) For Mr. O'Brien, the amounts listed for 1996, 1995 and 1994 include
payments of cash of $116,700, $95,294 and $108,126, respectively, pursuant
to the NACCO Industries, Inc. Annual Incentive Compensation Plan.

11
<PAGE> 13

(16) For Mr. O'Brien, the amount listed for 1996 was distributed in the form of
2,653 shares of Class A Common and a cash payment in the amount of $79,495.
The foregoing cash payment is intended to be the approximate amount
required to be withheld by the Company and paid to applicable federal,
state and local income taxing authorities based upon statutorily determined
withholding rates. These amounts were distributed under the NACCO Long-Term
Plan.

(17) For Mr. O'Brien, the amounts listed for 1996, 1995 and 1994 include
$20,500, $20,760, and $24,049, respectively, consisting of contributions by
the Company under the NMHG Profit Sharing Plan (amounts previously credited
under the North American Coal Savings Plan during 1994 have been
transferred to the NMHG Profit Sharing Plan); and $44,540, $41,582 and
$19,442, 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).

(18) 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. See also note (1)
under "Long-Term Incentive Plans" on pages 13 to 14 for a further
description of the NACCO Long-Term Plan.

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, 1996 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. There are no outstanding options to purchase shares of the
Company's Class B Common.

STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES

The following table sets forth information for the fiscal year ended
December 31, 1996 with respect to the exercised and unexercised options to
purchase the Company's Class A 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 -- $ 448,438 --
Reginald R. Eklund -- -- -- -- -- --
Richard E. Posey -- -- -- -- -- --
Clifford R. Miercort -- -- -- -- -- --
Frank B. O'Brien -- -- 4,000 -- $ 86,000 --
</TABLE>

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

(1) Shares of Class A Common.

12
<PAGE> 14

LONG-TERM INCENTIVE PLANS

The following table sets forth information concerning awards to the Named
Executive Officers during fiscal year 1996, 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>
NUMBER OF PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
SHARES OR OTHER NON-STOCK PRICE-BASED PLANS
UNITS OR PERIOD UNTIL ---------------------------------------
OTHER RIGHTS MATURATION THRESHOLD TARGET MAXIMUM
NAME ($ OR #) OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
- ------------------------------------------- ------------ --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Alfred M. Rankin, Jr.(1) $700,954 2 years $ 0 $ 700,954 $1,088,231
$700,954 4 years $ 0 $ 0 $ 388,574
$700,954 5 years $ 0 $ 0 $ 402,172
Reginald R. Eklund(2) -- -- -- -- --
Richard E. Posey(3) -- -- -- -- --
Clifford R. Miercort(4) $172,383 3 years $ 0 $ 172,383 --
Frank B. O'Brien(1) $209,200 2 years $ 0 $ 209,200 $ 324,783
$209,200 4 years $ 0 $ 0 $ 115,970
$209,200 5 years $ 0 $ 0 $ 120,029
</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, are eligible for awards paid partly in shares of Class A Common
and partly in cash for performance against a target which is based upon the
Company's consolidated return on equity over multiple-year periods.
Effective January 1, 1996, participants were granted dollar-denominated
target awards. Final awards, if any, will be received in 1998 ("base period
awards") based upon the Company's consolidated return on equity for the
period from January 1, 1996 through December 31, 1997 against a
pre-established target. Participants are also eligible to receive a
supplemental payout on such awards in 2000 ("consistent performance awards")
based upon the Company's consolidated return on equity performance for the
4-year period from January 1, 1996 through December 31, 1999 against the
same pre-established target. Participants are also eligible to receive a
further supplemental payout on such awards in 2001 ("supplemental consistent
performance awards") based upon the Company's consolidated return on equity
performance for the 5-year period from January 1, 1996 through December 31,
2000 against the same pre-established target. No consistent performance
award or supplemental consistent performance award is payable if the
Company's consolidated return on equity performance for the relevant period
is at or below target. The maximum payouts of the consistent performance
awards and supplemental consistent performance awards cannot exceed 50
percent of the base period target awards, 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 (in the case of the base period awards), 1999 (in the case of the
consistent performance awards) and 2000 (in the case of supplemental
consistent performance awards).

The shares of Class A Common issued as a portion of these awards under the
NACCO Long-Term Plan are fully vested but may not be transferred until the
earlier of (a) December 31, 2007, (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 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.

13
<PAGE> 15

(2) Mr. Eklund is a participant in the NACCO Materials Handling Group, Inc.
Long-Term Incentive Compensation Plan (the "NMHG Long-Term Plan"). Under the
NMHG Long-Term Plan, participants are awarded "book value appreciation
units" which vest ten years from the date of award, or earlier in the event
of the participant's death, permanent disability or retirement, or in the
event of any other termination of employment with the approval of the NMHG
Nominating, Organization and Compensation Committee. At any time following
the fifth anniversary of the date of an award, a participant may also
annually request that such Committee permit the vesting of up to (a) 20% of
the number of book value appreciation units for the purchase of a principal
residence for the individual or the payment of certain medical or
educational expenses of the individual, his spouse or dependents or (b) 10%
of the number of book value appreciation units for any other purpose,
provided that such request may only apply to an aggregate of 40% of the
number of book value appreciation units originally granted in an award. Upon
vesting, the participant is entitled to receive a payment in cash equal to
the appreciation in the book value per unit from the base period price per
unit to the value of the book value unit at the end of the calendar quarter
immediately preceding the date of vesting, and vested book value units as to
which payment is made are canceled. There are no threshold or maximum values
for an award. Mr. Eklund was previously awarded 65,000 book value
appreciation units effective on January 1, 1990, which units will vest on
December 31, 1999, 21,690 book value appreciation units effective on January
1, 1993, which units will vest on December 31, 2002, and 100,403 book value
appreciation units effective January 1, 1994, which units will vest on
December 31, 2003.

(3) Mr. Posey is a participant in the Hamilton Beach/Proctor-Silex, Inc.
Long-Term Incentive Compensation Plan (the "HBPS Long-Term Plan"). Under the
HBPS 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
Hamilton Beach/Proctor Silex, Inc. 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. There are no threshold
or maximum values for an award. Mr. Posey was previously awarded 166,240
book value appreciation units effective on October 1, 1995, which units will
vest on September 30, 2005.

(4) Effective on January 1, 1990, Mr. Miercort was awarded the right to
participate in The North American Coal Corporation Value Appreciation Plan
(the "North American Coal Long-Term Plan") at a rate equal to a specified
percentage of his salary range midpoint, as determined by the North American
Coal Nominating, Organization and Compensation Committee. When the North
American Coal Long-Term Plan was adopted, the North American Coal
Nominating, Organization and Compensation Committee set net income
appreciation goals which are based upon achieving underlying year-by-year
targets for each year during the ten-year 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

14
<PAGE> 16

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 1997. 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. There are no
threshold or maximum values for an award. 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.

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 1996 were John J. Dwyer
(Chairman), Robert M. Gates, Ian M. Ross and John C. Sawhill. The members of the
Nominating, Organization and Compensation Committees of the Company's principal
subsidiaries, NMHG, Hamilton Beach/Proctor-Silex and North American Coal consist
of these individuals, as well as Dennis W. LaBarre and Alfred M. Rankin, Jr.
Messrs. LaBarre and Rankin are not members of the Nominating and Compensation
Committee of the Company, and their participation in this report is limited to
the portions of the report relating to the Company's subsidiaries.

COMPENSATION POLICY

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

In accordance with the foregoing philosophy, the Compensation Committee
approves a mix of base salaries and incentive plans for each executive officer
such that base salary levels are at levels appropriate to allow incentive plans
to serve as significant motivating factors. Base salary and incentive
compensation levels for each officer are based upon the recommendations of the
Company's independent outside compensation consultant, which bases its
recommendations upon an analysis of similar positions at a broad range of
industries, as well as an understanding of the Company's philosophy, as
summarized above. Incentive-based compensation plans are designed to provide
significant rewards for achieving or surpassing annual operating and financial
performance objectives, as well as to align the compensation interests of
executive officers with the long-term interests of stockholders by basing a
substantial portion of the incentive compensation package

15
<PAGE> 17

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
when the Company has lower financial results, payouts under the incentive
elements of the Company's compensation plans will reflect these results. In
years when the Company has better 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 stockholders of the
Company approved the Supplemental Annual Incentive Compensation Plan (the
"Supplemental Short-Term Plan") and re-approved the Long-Term Plan in 1996. Both
plans were designed so that, together with steps taken by the Compensation
Committee in the administration of the Long-Term Plan, payouts on awards made
under the plans should not count towards the one million dollar cap which the
law imposes for purposes of federal income tax deductibility. The Compensation
Committee intends to consider other changes in the Company's executive
compensation programs where it makes sense to do so and is consistent with the
Company's compensation objectives, as may be necessary from time to time to
preserve the deductibility of compensation awards.

EXECUTIVE COMPENSATION AND COMPANY PERFORMANCE

The three main elements of the Company's executive compensation program --
base salary, short-term incentive compensation and long-term incentive
compensation -- 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 1996, participants included 385 parent organizations and 611
independent operating units. From those surveys of company positions of similar
scope and complexity, the consultant derives a median 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.

16
<PAGE> 18

Because the Compensation Committee uses Salary Midpoints based on studies
of domestic industrial organizations from all segments of industry, the Company
does not believe that there is a meaningful relationship between executive
salary levels of each subsidiary determined by the Compensation Committee and
the executive salary levels of the companies that make up the S&P Diversified
Machinery Index. That index, which is used by the Company as the published
industry index for comparison to the Company's stock price performance, was
chosen because NMHG is the Company's largest subsidiary in terms of asset value
and revenues.

Short-Term Incentive Compensation. At the beginning of 1996, the
Compensation Committee adopted target performance levels for consolidated return
on equity for the Company (upon which awards under the Company's Supplemental
Short-Term Plan are based), and various performance criteria for the Company's
subsidiaries such as net income, return on equity in properly capitalized
tangible assets, market share, sales development and support costs (depending on
the business unit) (upon which awards under the Company's Annual Incentive
Compensation Plan (the "Short-Term Plan") are based) 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.

Final awards for each individual under the short-term incentive plans of
the Company and its subsidiaries are based on the individual's target award,
adjusted for performance by the business unit against the established targets,
and for all such plans except the Supplemental Short-Term Plan for performance
by the individual against individual goals. The Compensation Committee, in its
discretion, may also increase or decrease awards under all such plans except the
Supplemental Short-Term Plan 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 1996, 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 10% to 95% of Salary Midpoint (unless the amount is currently
taxable, in which case the targets are adjusted accordingly).

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. 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. In general, each year participants are
granted dollar-denominated target base period awards based on performance
periods of two years and target consistent performance awards based on
performance periods of up to five years. 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. 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 for the relevant period
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

17
<PAGE> 19

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 may receive a payout after the end of the base period and
each consistent performance 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.

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 will be 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.

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 Nominating and Compensation Committee considered that in 1996, while
the Company achieved record sales for the fifth consecutive year, net income
decreased. The reduction in net income had a corresponding impact on annual
incentive compensation payouts for 1996. The 1996 financial results also had

18
<PAGE> 20

a negative impact on the Company's long-term incentive compensation payouts for
1996, but to a lesser extent, because the long-term incentive compensation plan
bases its payouts on adjusted return on equity against pre-established targets
for multiple years. Payouts under the long-term incentive compensation plan for
1996 were based in part on adjusted return on equity for 1995, which was above
target, and in part on adjusted return on equity for 1996, which was below
target. The Nominating and Compensation Committee also believes that the
Company's 1996 financial results were very positive when considered in relation
to the extremely difficult operating environment which negatively impacted each
of the Company's subsidiaries in 1996. The Committee believes that the results
continue to reflect the solid foundation which has been laid under Mr. Rankin's
leadership over the past five and one-half years that he has served as chief
executive officer of the Company. In addition, during 1996 the Company continued
to make significant progress toward its strategic objectives, including the
repositioning of the Company's businesses for enhanced long-term competitive
advantage. Process changes within NMHG are making it a more cost efficient lift
truck manufacturer at the same time that overall market share has increased.
Hamilton Beach/Proctor-Silex is building a new plant in Mexico which will make
it better able to compete with low-cost imports from China. North American Coal
is successfully extending the life of existing project mines to ensure a
continued flow of cash and earnings, while successfully pursuing new project
mining opportunities.

In recognition of these accomplishments, the Compensation Committee
increased Mr. Rankin's base salary approximately five and one-half percent in
1996 over his 1995 base salary. With respect to incentive compensation, Mr.
Rankin's 1996 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 results in comparison with its financial
objectives, as well as Mr. Rankin's contribution to the implementation of the
Company's overall strategic plans. The Compensation Committee established Mr.
Rankin's short-term incentive compensation participation for 1996 at 65% of his
Salary Midpoint. The actual performance of the Company in terms of consolidated
return on equity, and the 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 72.27% under the Company's Annual Incentive Compensation Plan and
84.00% under the Company's Supplemental Annual Incentive Compensation Plan, for
an aggregate annual incentive compensation plan performance against target of
76.96%. The long-term award targeted for Mr. Rankin in 1996 by the Nominating
and 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). Although the Company's consolidated return on equity for 1996 was
below target, this was offset in part by the Company's 1995 consolidated return
on equity which was above the same target. Accordingly, Mr. Rankin's award under
the NACCO Long-Term Plan for the 21-month period from April 1, 1995 through
December 31, 1996, which was paid in early 1997, was 107.71% of his targeted
amount. The below target performance for 1996 will be carried forward and will
impact awards under the NACCO Long-Term Plan in certain future years.

JOHN J. DWYER, CHAIRMAN JOHN C, SAWHILL
ROBERT M. GATES DENNIS W. LABARRE*
IAN M. ROSS ALFRED M. RANKIN, JR.*

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

<PAGE> 21

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Dennis W. LaBarre, 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 a partner in the law firm of Jones, Day,
Reavis & Pogue. Such firm provided legal services on behalf of the Company and
its principal subsidiaries during 1996 on a variety of matters, and it is
anticipated that such firm will provide such services in 1997.

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.

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, 1992 (base point December
31, 1991) and ending December 31, 1996.

1992-1996 Stock Price Performance
Graph 1

<TABLE>
<CAPTION>
Measurement
Period
(Fiscal Year Diversified
Covered) NACCO S&P 500 Machinery
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 110.40 107.63 102.04
1993 111.32 118.44 151.09
1994 105.81 120.07 147.08
1995 122.95 164.10 181.51
1996 120.21 201.84 226.23
</TABLE>

Assumes $100 invested at December 31, 1991 with dividends reinvested

20
<PAGE> 22

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.

1992-1996 Stock Price Performance
Graph 2

Measurement NACCO S&P 500
Period (12 Month (12 Month
(Fiscal Year S&P Moving Moving
Covered) NACCO 500 Average) Average)
<S> <C> <C> <C> <C>
1991 100.00 100.00 100.00 100.00
1992 110.40 107.63 110.13 113.97
1993 111.32 118.44 114.59 127.45
1994 105.81 120.07 131.15 133.56
1995 122.95 164.10 135.77 161.64
1996 120.21 201.84 128.99 204.80
</TABLE>

Assumes $100 invested at December 31, 1991 with dividends reinvested
12 month moving average data is based on the daily closing price

21
<PAGE> 23

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 17 to 18. 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,
1987 (base point December 31, 1986) and ending December 31, 1996.

1987-1996 Stock Price Performance
Graph 3

<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered)
NACCO S&P 500
(12 Month (12 Month
Moving Moving
Average) Average)
<S> <C> <C>
1986 100.00 100.00
1987 87.09 107.98
1988 102.76 103.45
1989 154.62 130.42
1990 173.65 139.60
1991 158.91 162.75
1992 175.00 185.49
1993 182.09 207.43
1994 208.41 217.37
1995 215.75 263.07
1996 204.98 333.32
</TABLE>

Assumes $100 invested at December 31, 1986 with dividends reinvested
12 month moving average data is based on the daily closing price

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 0.00% 0.00%
1987 -12.91% 7.98%
1988 17.99% -4.20%
1989 50.47% 26.07%
1990 12.31% 7.04%
1991 59.33% 30.37% 18.87% -8.49% 16.58%
1992 10.40% 7.63% 2.04% 10.13% 13.97%
1993 0.83% 10.04% 48.07% 4.05% 11.83%
1994 -4.95% 1.38% -2.66% 14.45% 4.79%
1995 16.20% 36.67% 23.41% 3.52% 21.02%
1996 -2.23% 23.00% 24.64% -4.99% 26.70%
</TABLE>

22
<PAGE> 24

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 was increased at the rate of 4% per year under the nonqualified
plan and offset by a percentage of the benefits payable from Social Security.
This 4% increase was discontinued by the terms of the plan effective on the date
of Mr. O'Brien's termination of employment. Mr. Rankin does not participate in
any pension plans other than as disclosed in notes 4 and 5 to the Summary
Compensation Table on pages 10 and 11.

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 $ 27,932 $ 37,242 $ 46,553 $ 55,864 $ 58,989
150,000 33,932 45,242 58,553 67,864 71,614
175,000 39,932 53,242 66,553 79,864 84,239
200,000 45,932 61,242 76,553 91,864 96,864
225,000 51,932 69,242 86,553 103,864 109,489
250,000 57,932 77,242 96,553 115,864 122,114
300,000 69,932 93,242 116,553 139,864 147,364
350,000 81,932 109,242 136,553 163,864 172,614
400,000 93,932 125,242 156,553 187,864 197,864
450,000 105,932 141,242 176,553 211,864 223,114
500,000 117,932 157,242 196,553 235,864 248,364
550,000 129,932 173,242 216,553 259,864 273,614
600,000 141,932 189,242 236,553 283,864 298,864
</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 10, which are paid to the executive officers, other
than amounts which represent severance payments, relocation allowances and other
similar fringe benefits. The 1996 earnings of Mr. Miercort that would be taken
into account under the plans is $450,220.

As of December 31, 1996, the number of years of service under the North
American Coal plans for Mr. Miercort is 21 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 has never been covered by any defined benefit pension plan of
the Company or its subsidiaries and has no credited years of service under any
such plans.

HAMILTON BEACH/PROCTOR-SILEX PENSION PLANS

Mr. Posey is covered by the defined benefit cash balance plans (both
qualified and non-qualified) of Hamilton Beach/Proctor-Silex. Hamilton
Beach/Proctor-Silex credits an amount to a notional account for each covered
employee under the plans. The amount credited is not less than the sum of (1)
the employee's

23
<PAGE> 25

compensation multiplied by a percentage factor, plus (2) the employee's
compensation in excess of the Social Security Wage Base multiplied by a
percentage factor, determined under the following table:

<TABLE>
<CAPTION>
PERCENTAGE OF
COMPENSATION
COMPENSATION EXCEEDING SOC. SEC.
AGE PERCENTAGE WAGE BASE
- ----- ------------ -------------------
<S> <C> <C>
0-34 2.00% 2.00%
35-39 2.33% 2.33%
40-44 2.83% 2.83%
45-49 3.50% 3.50%
50-54 4.33% 4.33%
55-59 5.33% 5.33%
60+ 6.33% 5.70%
</TABLE>

For 1995 and 1996, Hamilton Beach/Proctor-Silex credited additional amounts
to the accounts of covered employees based, in part, on company profits.

The notional account balances are credited with interest equal to 1% above
the one-year Treasury Bill rate (with a minimum of 5% and a maximum of 12%)
until benefit commencement. The notional account balances are paid in the form
of a lump sum or are converted to an annuity to provide monthly benefit
payments.

Effective as of December 31, 1996, the cash balance plans of Hamilton
Beach/Proctor-Silex were permanently frozen for all participants. The estimated
annual pension benefit for Mr. Posey under the cash balance plans, based on
compensation, service and interest credits through December 31, 1996, which
would be payable on a straight life annuity basis at age 65 is $759.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership of such securities with the SEC and The New
York Stock Exchange. Officers, directors and greater than ten percent beneficial
owners are required by applicable regulations to furnish the Company with copies
of all Section 16(a) forms they file.

Based upon its review of the copies of Section 16(a) forms received by it,
and upon written representations from reporting persons concerning the necessity
of filing a Form 5-Annual Statement of Changes in Beneficial Ownership, the
Company believes that, during 1996, all filing requirements applicable for
reporting persons were met, except as follows:

Susan Sichel filed one late report on Form 4 which identified one
transaction not reported on a timely basis; David F. Taplin filed one late
report on Form 4 which identified one transaction not reported on a timely
basis; Jennifer T. Jerome filed one late report on Form 4 which identified one
transaction not reported on a timely basis; Suzanne S. Taylor filed a late Form
3; George P. Manson, Jr. filed a late Form 3; Clara L. T. Rankin filed one late
report on Form 4 which identified one transaction not reported on a timely
basis; Margaret E. Taplin filed one late report on Form 4 which identified one
transaction not reported on a timely basis; following the conversion by its
terms of the Trust for the Benefit of the Grandchildren of Frank E. Taplin, Jr.
into individual trusts for the benefit of each of ten grandchildren, each of
such ten newly created trusts filed late Form 3s; following the conversion by
its terms of the Trust for the Benefit of the Grandchildren of Clara L. T.
Rankin into individual trusts for the benefit of each of ten grandchildren, each
of such ten newly created trusts filed late Form 3s.

24
<PAGE> 26

2. CONFIRMATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors of the Company recommends a vote for ratification of
the appointment of Arthur Andersen LLP as the independent certified public
accountants of the Company and its subsidiaries to audit the books and accounts
for the Company and its subsidiaries for the current fiscal year. 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 28, 1997. Such proposals should be submitted by certified mail, return
receipt requested, addressed to the Company, 5875 Landerbrook Drive, Mayfield
Heights, Ohio 44124-4017, Attention: Secretary. The Company's Nominating and
Compensation Committee will consider stockholder suggestions for nominees for
election to the Company's Board of Directors if such suggestions are in writing,
set forth the nominee's name, address and ownership of Class A Common and Class
B Common, and are accompanied by a resume of the nominee's education and
business experience (including directorships, employments and civic activities)
and a written consent by the nominee that such nominee is desirous of being
considered as a nominee and, if nominated and elected, such nominee will serve
as a director. Such suggestions should be submitted in the manner and to the
address set forth above and must be received at the Company's executive offices
on or before December 31, 1997.

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 28, 1997

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.

25
<PAGE> 27
<TABLE>
<S> <C>
PROXY NACCO INDUSTRIES, INC.
The undersigned appoints John J. Dwyer, Robert M. Gates
CLASS B and Alfred M. Rankin, Jr., and each of them, as proxies,
COMMON STOCK with full power of substitution, to vote and act for and
SOLICITED ON BEHALF in the name of the undersigned as fully as the
OF THE undersigned could vote and act if personally present at
BOARD OF DIRECTORS the annual meeting of stockholders of NACCO Industries,
Inc. to be held on May 14, 1997, and at any adjournment
FOR ANNUAL MEETING or adjournments thereof, as follows and in accordance
MAY 14, 1997 with their judgment upon any other matter properly
presented:
PLEASE SIGN, DATE 1. ELECTION OF DIRECTORS
AND RETURN YOUR VOTE FOR WITHHOLD AUTHORITY
PROXY PROMPTLY (except as marked to the contrary below) [ ] to vote for [ ]
IN THE ENCLOSED the election of the nominees listed below as
ENVELOPE WHICH directors.
REQUIRES NO
POSTAGE. Owsley Brown II, John J. Dwyer, Robert M. Gates, Leon
J. Hendrix, Jr., Dennis W. LaBarre, Alfred M. Rankin,
Jr., Ian M. Ross, John C. Sawhill, Britton T. Taplin,
David F. Taplin and John F. Turben.
(INSTRUCTION: To withhold authority to vote for any
individual nominee(s), write the name of
such nominee(s) in the space provided
below.)

---------------------------------------------------------
2. Proposal to confirm the appointment of Arthur
Andersen 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................., 1997

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

(Signature of Stockholder)

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

<PAGE> 28
<TABLE>
<S> <C>
PROXY NACCO INDUSTRIES, INC.
The undersigned appoints John J. Dwyer, Robert M. Gates
CLASS B and Alfred M. Rankin, Jr., and each of them, as proxies,
with full power of substitution, to vote and act for and
COMMON STOCK in the name of the undersigned as fully as the
SOLICITED ON BEHALF undersigned could vote and act if personally present at
OF THE the annual meeting of stockholders of NACCO Industries,
BOARD OF DIRECTORS Inc. to be held on May 14, 1997, and at any adjournment
FOR ANNUAL MEETING or adjournments thereof, as follows and in accordance
MAY 14, 1997 with their judgment upon any other matter properly
presented:
PLEASE SIGN, DATE 1. ELECTION OF DIRECTORS
AND RETURN YOUR VOTE FOR WITHHOLD AUTHORITY
PROXY PROMPTLY (except as marked to the contrary below) [ ] to vote for [ ]
IN THE ENCLOSED the election of the nominees listed below as
ENVELOPE WHICH directors.
REQUIRES NO
POSTAGE. Owsley Brown II, John J. Dwyer, Robert M. Gates, Leon
J. Hendrix, Jr., Dennis W. LaBarre, Alfred M. Rankin,
Jr., Ian M. Ross, John C. Sawhill, Britton T. Taplin,
David F. Taplin and John F. Turben.
(INSTRUCTION: To withhold authority to vote for any
individual nominee(s), write the name of
such nominee(s) in the space provided
below.)

---------------------------------------------------------
2. Proposal to confirm the appointment of Arthur
Andersen 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................., 1997

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

(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>