1997 Annual Incentive Compensation Plan - NACCO INDUSTRIES INC - 3-27-1997 by NC-Agreements

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									Exhibit 10(xx) NACCO INDUSTRIES, INC. 1997 ANNUAL INCENTIVE COMPENSATION PLAN 1. PURPOSE OF THE PLAN The purpose of the NACCO Industries, Inc. 1997 Annual Incentive Compensation Plan (the "Plan") is to further the profits and growth of NACCO Industries, Inc. (the "Company") by enabling the Company to attract and retain key employees of the Company by offering annual incentive compensation to those key employees who will be in a position to help the Company to meet its financial and business objectives. 2. DEFINITIONS (a) "Award" means cash paid to a Participant under the Plan for the Award Term in an amount determined in accordance with Section 4. (b) "Award Term" means the period from January 1, 1997 through December 31, 1997. (c) "Base Amount" means for any Participant a dollar amount, which shall be equal to the salary midpoint for the Salary Points assigned to the Participant by the Committee for the Award Term multiplied by 60% of the shortterm incentive compensation target percent for those Salary Points. Attached hereto as EXHIBIT A is a schedule listing the Base Amount for each Participant for the Award Term. (d) "Committee" means the Nominating, Organization and Compensation Committee of the Company's Board of Directors or any other committee appointed by the Company's Board of Directors to administer this Plan in accordance with Section 3, so long as any such committee consists of not less than two directors of the Company and so long as each member of the Committee is not an employee of the Company or any of its subsidiaries. (e) "Participant" means any salaried employee of the Company who in the judgment of the Committee occupies a key position in which his efforts may significantly contribute to the profits or growth of the Company; provided, however, that the Committee may select any employee who is expected to contribute, or who has contributed, significantly to the Company's profitability to participate in the Plan and receive an Award hereunder; and further provided, however, that following the end of the Award Term the Committee may make one or more discretionary Awards to employees of the Company who are not Participants. Directors of the Company who are also employees of the Company are eligible

to participate in the Plan. Employees of the Company's subsidiaries shall not be eligible to participate in the Plan. The Committee shall have the power to add Participants at any later date in the Award Term if individuals subsequently become eligible to participate in the Plan. Each Participant shall be notified that he is eligible to receive an Award for such term and the amount of his Base Amount. If a Participant receives a change in Salary Points, salary midpoint and/or short-term incentive compensation target percent, such change and any resulting change in his Base Amount will be reflected on an amended EXHIBIT A. Unless otherwise determined by the Committee, a Participant must be both employed by the Company and a Participant on December 31 of the Award Term, and the amount of any Award to a Participant who was not also employed by the Company and a Participant on the first day of the Award Term shall be not more than the pro-rated amount based upon the number of days actually employed by the Company in the Award Term. Attached hereto as EXHIBIT A is a schedule listing the Participants for the Award Term. (f) "Salary Points" means the salary points assigned to a Participant by the Committee pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee. 3. ADMINISTRATION

to participate in the Plan. Employees of the Company's subsidiaries shall not be eligible to participate in the Plan. The Committee shall have the power to add Participants at any later date in the Award Term if individuals subsequently become eligible to participate in the Plan. Each Participant shall be notified that he is eligible to receive an Award for such term and the amount of his Base Amount. If a Participant receives a change in Salary Points, salary midpoint and/or short-term incentive compensation target percent, such change and any resulting change in his Base Amount will be reflected on an amended EXHIBIT A. Unless otherwise determined by the Committee, a Participant must be both employed by the Company and a Participant on December 31 of the Award Term, and the amount of any Award to a Participant who was not also employed by the Company and a Participant on the first day of the Award Term shall be not more than the pro-rated amount based upon the number of days actually employed by the Company in the Award Term. Attached hereto as EXHIBIT A is a schedule listing the Participants for the Award Term. (f) "Salary Points" means the salary points assigned to a Participant by the Committee pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee. 3. ADMINISTRATION This Plan shall be administered by the Committee. The Committee shall have complete authority to interpret all provisions of this Plan consistent with law, to prescribe the form of any instrument evidencing any Award granted or paid under this Plan, to adopt, amend and rescind general and special rules and regulations for its administration, and to make all other determinations necessary or advisable for the administration of this Plan. A majority of the Committee shall constitute a quorum, and the action of members of the Committee present at any meeting at which a quorum is present or acts unanimously approved in writing, shall be the act of the Committee. All acts and decisions of the Committee with respect to any questions arising in connection with the administration and interpretation of this Plan, including the severability of any or all of the provisions hereof, shall be conclusive, final and binding upon the Company and all present and former Participants, all other employees of the Company, and their respective descendants, successors and assigns. No member of the Committee shall be liable for any such act or decision made in good faith. 4. AWARDS The Committee may, from time to time and upon such conditions as it may determine, authorize Awards for Participants, which Awards shall be not inconsistent with, and shall be subject to all of the requirements of, the following provisions: 2

(a) PERFORMANCE TARGETS. The Committee shall determine performance target descriptions, weightings and targets for the Award Term, which shall be attached hereto as EXHIBIT B. The Committee shall have the power to add, delete and amend target descriptions, weightings and targets during the Award Term, which shall be reflected on an amended EXHIBIT B. No performance targets used in this Plan shall be used in the Company's Supplemental Annual Incentive Compensation Plan in the same year. (b) AWARDS. Following the end of the Award Term, the Committee shall compare the actual performance against the performance targets for each of the performance target descriptions. Based thereupon, the Committee shall determine the total payout percentage under the Plan (the "Payout Percentage"). The Committee shall then determine the Award for each Participant, which shall be equal to the Participant's Base Amount, multiplied by the Payout Percentage, and further adjusted by such other factors, including an individual performance factor for each Participant, as the Committee shall determine are appropriate; provided, however, that no Award may be made to any Participant which exceeds 150% of his Base Amount. Promptly following the approval of the final Awards, the Company shall pay the amount of such Awards to the Participants in cash, subject to all withholdings and deductions pursuant to Section 5; provided, however, that no Award shall be payable to a Participant except as determined by the Committee. 5. WITHHOLDING TAXES Any Award paid to a Participant under this Plan, shall be subject to standard federal, state and local income tax,

(a) PERFORMANCE TARGETS. The Committee shall determine performance target descriptions, weightings and targets for the Award Term, which shall be attached hereto as EXHIBIT B. The Committee shall have the power to add, delete and amend target descriptions, weightings and targets during the Award Term, which shall be reflected on an amended EXHIBIT B. No performance targets used in this Plan shall be used in the Company's Supplemental Annual Incentive Compensation Plan in the same year. (b) AWARDS. Following the end of the Award Term, the Committee shall compare the actual performance against the performance targets for each of the performance target descriptions. Based thereupon, the Committee shall determine the total payout percentage under the Plan (the "Payout Percentage"). The Committee shall then determine the Award for each Participant, which shall be equal to the Participant's Base Amount, multiplied by the Payout Percentage, and further adjusted by such other factors, including an individual performance factor for each Participant, as the Committee shall determine are appropriate; provided, however, that no Award may be made to any Participant which exceeds 150% of his Base Amount. Promptly following the approval of the final Awards, the Company shall pay the amount of such Awards to the Participants in cash, subject to all withholdings and deductions pursuant to Section 5; provided, however, that no Award shall be payable to a Participant except as determined by the Committee. 5. WITHHOLDING TAXES Any Award paid to a Participant under this Plan, shall be subject to standard federal, state and local income tax, social security and other standard withholdings and deductions. 6. AMENDMENT AND TERMINATION The Committee may alter or amend this Plan from time to time or terminate it in its entirety; provided, however, that no such action shall, without the consent of a Participant, affect the rights in an outstanding Award of such Participant. 7. GENERAL PROVISIONS (a) NO RIGHT OF EMPLOYMENT. Neither the adoption or operation of this Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of the Company, or shall in any way affect the right and power of the Company 3

to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Company might have done if this Plan had not been adopted. (b) GOVERNING LAW. The provisions of this Plan shall be governed by and construed in accordance with the laws of the State of Delaware. (c) MISCELLANEOUS. Headings are given to the sections of this Plan solely as a convenience to facilitate reference. Such headings, numbering and paragraphing shall not in any case be deemed in any way material or relevant to the construction of this Plan or any provisions thereof. The use of the masculine gender shall also include within its meaning the feminine. The use of the singular shall also include within its meaning the plural, and vice versa. 8. EFFECTIVE DATE This Plan shall become effective as of January 1, 1997. 4

Exhibit 10(xxi)

to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Company might have done if this Plan had not been adopted. (b) GOVERNING LAW. The provisions of this Plan shall be governed by and construed in accordance with the laws of the State of Delaware. (c) MISCELLANEOUS. Headings are given to the sections of this Plan solely as a convenience to facilitate reference. Such headings, numbering and paragraphing shall not in any case be deemed in any way material or relevant to the construction of this Plan or any provisions thereof. The use of the masculine gender shall also include within its meaning the feminine. The use of the singular shall also include within its meaning the plural, and vice versa. 8. EFFECTIVE DATE This Plan shall become effective as of January 1, 1997. 4

Exhibit 10(xxi) NACCO INDUSTRIES, INC. 1997 SUPPLEMENTAL ANNUAL INCENTIVE COMPENSATION PLAN GUIDELINES 1. GUIDELINES These 1997 Supplemental Annual Incentive Compensation Plan Guidelines ("Guidelines") have been approved by the Committee for the administration of the NACCO Industries, Inc. Supplemental Annual Incentive Compensation Plan (the "Plan") for Awards granted to Participants for the Award Term. 2. DEFINITIONS (a) "Adjusted ROE" means the Company's adjusted return on equity, calculated as follows: Net Income (before extraordinary items) + Amortization of Goodwill Weighted Average (Stockholders' Equity + Accumulated Amortization of Goodwill + UMWA Adjustment) where: (i) NET INCOME (BEFORE EXTRAORDINARY ITEMS) is defined as consolidated net income for the Company and its subsidiaries for the Award Term before extraordinary items, but including any extraordinary items related to refinancing (net of tax), as such terms are defined by general accepted accounting principles ("GAAP"). (ii) AMORTIZATION OF GOODWILL is defined as the consolidated amortization expense related to the intangible asset goodwill for the Company and its subsidiaries for the Award Term. (iii) WEIGHTED AVERAGE STOCKHOLDERS' EQUITY is calculated by adding the consolidated stockholders' equity for the Company, as defined by GAAP, at the beginning of the Award Term and the end of each month of the Award Term, and dividing by thirteen. (iv) WEIGHTED AVERAGE ACCUMULATED AMORTIZATION OF GOODWILL is calculated by adding consolidated accumulated amortization of goodwill, as defined by GAAP, at the beginning of the Award Term and the end of each month of the Award Term, and dividing by thirteen.

Exhibit 10(xxi) NACCO INDUSTRIES, INC. 1997 SUPPLEMENTAL ANNUAL INCENTIVE COMPENSATION PLAN GUIDELINES 1. GUIDELINES These 1997 Supplemental Annual Incentive Compensation Plan Guidelines ("Guidelines") have been approved by the Committee for the administration of the NACCO Industries, Inc. Supplemental Annual Incentive Compensation Plan (the "Plan") for Awards granted to Participants for the Award Term. 2. DEFINITIONS (a) "Adjusted ROE" means the Company's adjusted return on equity, calculated as follows: Net Income (before extraordinary items) + Amortization of Goodwill Weighted Average (Stockholders' Equity + Accumulated Amortization of Goodwill + UMWA Adjustment) where: (i) NET INCOME (BEFORE EXTRAORDINARY ITEMS) is defined as consolidated net income for the Company and its subsidiaries for the Award Term before extraordinary items, but including any extraordinary items related to refinancing (net of tax), as such terms are defined by general accepted accounting principles ("GAAP"). (ii) AMORTIZATION OF GOODWILL is defined as the consolidated amortization expense related to the intangible asset goodwill for the Company and its subsidiaries for the Award Term. (iii) WEIGHTED AVERAGE STOCKHOLDERS' EQUITY is calculated by adding the consolidated stockholders' equity for the Company, as defined by GAAP, at the beginning of the Award Term and the end of each month of the Award Term, and dividing by thirteen. (iv) WEIGHTED AVERAGE ACCUMULATED AMORTIZATION OF GOODWILL is calculated by adding consolidated accumulated amortization of goodwill, as defined by GAAP, at the beginning of the Award Term and the end of each month of the Award Term, and dividing by thirteen.

(v) WEIGHTED AVERAGE UMWA ADJUSTMENT is calculated by adding the balance in the Obligation to United Mine Workers of America Combined Benefit Fund, net of tax, for the Company at the beginning of the Award Term and the end of each month of the Award Term, and dividing by thirteen. (b) "Award" means cash paid to a Participant under the Plan for the Award Term. The amount of an Award shall be not greater than a Participant's Base Amount, multiplied by the ROE Factor. (c) "Award Term" means the period from January 1, 1997 through December 31, 1997. (d) "Base Amount" means for any Participant a dollar amount, which shall be equal to the salary midpoint for the Salary Points assigned to the Participant by the Committee for the Award Term multiplied by 40% of the shortterm incentive compensation target percent for those Salary Points. Attached hereto as EXHIBIT A is a schedule listing the Base Amount for each Participant for the Award Term. (e) "Committee" means the Committee appointed under the terms of the Plan. (f) "Participant" means any salaried employee of the Company who in the judgment of the Committee occupies a

(v) WEIGHTED AVERAGE UMWA ADJUSTMENT is calculated by adding the balance in the Obligation to United Mine Workers of America Combined Benefit Fund, net of tax, for the Company at the beginning of the Award Term and the end of each month of the Award Term, and dividing by thirteen. (b) "Award" means cash paid to a Participant under the Plan for the Award Term. The amount of an Award shall be not greater than a Participant's Base Amount, multiplied by the ROE Factor. (c) "Award Term" means the period from January 1, 1997 through December 31, 1997. (d) "Base Amount" means for any Participant a dollar amount, which shall be equal to the salary midpoint for the Salary Points assigned to the Participant by the Committee for the Award Term multiplied by 40% of the shortterm incentive compensation target percent for those Salary Points. Attached hereto as EXHIBIT A is a schedule listing the Base Amount for each Participant for the Award Term. (e) "Committee" means the Committee appointed under the terms of the Plan. (f) "Participant" means any salaried employee of the Company who in the judgment of the Committee occupies a key position in which his efforts may significantly contribute to the profits or growth of the Company. Directors of the Company who are also employees of the Company are eligible to participate in the Plan. Employees of the Company's subsidiaries shall not be eligible to participate in the Plan. A Participant must be both employed by the Company and a Participant on December 31 of the Award Term, and the amount of any Award to a Participant who was not also employed by the Company and a Participant on the first day of the Award Term shall be not more than the pro-rated amount based upon the number of days actually employed by the Company in the Award Term. Attached hereto as EXHIBIT A is a schedule listing the Participants for the Award Term. (g) "ROE Factor" means a percentage based on Adjusted ROE for the Award Term. Attached hereto as EXHIBIT B is a formula calculating the ROE Factor based on Adjusted ROE for the Award Term. (h) "Salary Points" means the salary points assigned to a Participant by the Committee pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee. 2 3. AWARDS 3.1 AWARDS (a) PARTICIPANTS. EXHIBIT A lists the Participants and the Salary Points, the salary midpoint, the shortterm incentive compensation percent and the Base Amount for each Participant for the Award Term. The Committee shall have the power to add Participants at any later date in the Award Term if individuals subsequently become eligible to participate in the Plan. Each Participant shall be notified that he is eligible to receive an Award for such term and the amount of his Base Amount. If a Participant, other than a Participant who is, or is determined by the Committee to be likely to become, a "covered employee" as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, receives a change in Salary Points, salary midpoint and/or short-term incentive compensation target percent, such change and any resulting change in his Base Amount will be reflected on an amended EXHIBIT A. (b) Not later than the ninetieth day of the following calendar year, the Committee shall approve: (i) the ROE Factor for the Award Term and a preliminary calculation of the amount of each Award based upon the application of the ROE Factor to the Base Amount; and (ii) a final calculation of the amount of each Award to be paid to each Participant for the prior year, which amount shall be not greater than the amount determined in accordance with Section 3(b)(i). The Committee shall have the power to decrease, but not to increase, the amount of any Award below the amount determined in accordance with Section 3(b)(i). (c) Promptly following the approval of Awards for the Participants pursuant to Section 3(b)(ii), the Company

3. AWARDS 3.1 AWARDS (a) PARTICIPANTS. EXHIBIT A lists the Participants and the Salary Points, the salary midpoint, the shortterm incentive compensation percent and the Base Amount for each Participant for the Award Term. The Committee shall have the power to add Participants at any later date in the Award Term if individuals subsequently become eligible to participate in the Plan. Each Participant shall be notified that he is eligible to receive an Award for such term and the amount of his Base Amount. If a Participant, other than a Participant who is, or is determined by the Committee to be likely to become, a "covered employee" as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, receives a change in Salary Points, salary midpoint and/or short-term incentive compensation target percent, such change and any resulting change in his Base Amount will be reflected on an amended EXHIBIT A. (b) Not later than the ninetieth day of the following calendar year, the Committee shall approve: (i) the ROE Factor for the Award Term and a preliminary calculation of the amount of each Award based upon the application of the ROE Factor to the Base Amount; and (ii) a final calculation of the amount of each Award to be paid to each Participant for the prior year, which amount shall be not greater than the amount determined in accordance with Section 3(b)(i). The Committee shall have the power to decrease, but not to increase, the amount of any Award below the amount determined in accordance with Section 3(b)(i). (c) Promptly following the approval of Awards for the Participants pursuant to Section 3(b)(ii), the Company shall pay the amount of such Awards to the Participants in cash, subject to all withholdings and deductions pursuant to Section 4; provided, however, that no Award shall be payable to a Participant except as determined by the Committee. (d) No Award may be paid for any year to a Participant in excess of $800,000. 4. WITHHOLDING TAXES Any Award paid to a Participant under this Plan, shall be subject to standard federal, state and local income tax, social security and other standard withholdings and deductions. 3

5. AMENDMENT The Committee may alter or amend these Guidelines from time to time; provided, however, that no such action shall, without the consent of a Participant, affect the rights in an outstanding Award of such Participant; and further provided, however, that no amendment to these Guidelines may be made which would cause any amount paid to a Participant who is, or is determined to be likely to become, a "covered employee" to be includable as "applicable employee remuneration" of such Participant, as such terms are defined in Section 162(m) of the Internal Revenue Code of 1986, as amended. 4

Exhibit 10 (xliii) AMENDMENT NO. 3 TO CREDIT AGREEMENT Amendment, dated as of September 16, 1996 to the Credit Agreement dated as of September 27, 1991, as may be amended from time to time (the "Agreement") among The North American Coal Corporation (the

5. AMENDMENT The Committee may alter or amend these Guidelines from time to time; provided, however, that no such action shall, without the consent of a Participant, affect the rights in an outstanding Award of such Participant; and further provided, however, that no amendment to these Guidelines may be made which would cause any amount paid to a Participant who is, or is determined to be likely to become, a "covered employee" to be includable as "applicable employee remuneration" of such Participant, as such terms are defined in Section 162(m) of the Internal Revenue Code of 1986, as amended. 4

Exhibit 10 (xliii) AMENDMENT NO. 3 TO CREDIT AGREEMENT Amendment, dated as of September 16, 1996 to the Credit Agreement dated as of September 27, 1991, as may be amended from time to time (the "Agreement") among The North American Coal Corporation (the "Borrower"), the Banks listed therein and Morgan Guaranty Trust Company of New York, as Agent (the "Agent"). The parties hereto desire to amend the Agreement subject to the terms and conditions of this Amendment, as hereinafter provided. Accordingly, the parties hereto agree as follows: 1. DEFINITIONS. Except as otherwise defined herein, capitalized terms used herein have the respective meanings assigned to them in the Agreement. 2. AMENDMENT: CHANGE TO DEFINITION OF TERMINATION DATE. The definition of "Termination Date" in Section 1.01 of the Agreement is hereby amended by deleting the date "September 27, 2001". 3. Agreement as Amended. Except as expressly amended hereby, the Agreement shall continue in full force and effect in accordance with the terms thereof. 4. Governing Law. This Amendment, and the Agreement as amended hereby, shall be construed in accordance with and governed by the laws of the State of New York. 5. Severability. In case any one or more of the provisions contained in this Amendment would be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 6. Counterparts; Effective Date. This amendment may be executed in any number of counterparts, each of which shall constitute an original but all of which when taken together shall constitute one and the same instrument. This Amendment shall become effective as of the date first above written upon receipt by the Bank of counterparts hereof executed by each of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers as of the day and year first above written. THE NORTH AMERICAN COAL CORPORATION
By: /s/ Charles B. Friley -------------------------------------------------Title: Vice President and Chief Financial Officer

Exhibit 10 (xliii) AMENDMENT NO. 3 TO CREDIT AGREEMENT Amendment, dated as of September 16, 1996 to the Credit Agreement dated as of September 27, 1991, as may be amended from time to time (the "Agreement") among The North American Coal Corporation (the "Borrower"), the Banks listed therein and Morgan Guaranty Trust Company of New York, as Agent (the "Agent"). The parties hereto desire to amend the Agreement subject to the terms and conditions of this Amendment, as hereinafter provided. Accordingly, the parties hereto agree as follows: 1. DEFINITIONS. Except as otherwise defined herein, capitalized terms used herein have the respective meanings assigned to them in the Agreement. 2. AMENDMENT: CHANGE TO DEFINITION OF TERMINATION DATE. The definition of "Termination Date" in Section 1.01 of the Agreement is hereby amended by deleting the date "September 27, 2001". 3. Agreement as Amended. Except as expressly amended hereby, the Agreement shall continue in full force and effect in accordance with the terms thereof. 4. Governing Law. This Amendment, and the Agreement as amended hereby, shall be construed in accordance with and governed by the laws of the State of New York. 5. Severability. In case any one or more of the provisions contained in this Amendment would be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 6. Counterparts; Effective Date. This amendment may be executed in any number of counterparts, each of which shall constitute an original but all of which when taken together shall constitute one and the same instrument. This Amendment shall become effective as of the date first above written upon receipt by the Bank of counterparts hereof executed by each of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers as of the day and year first above written. THE NORTH AMERICAN COAL CORPORATION
By: /s/ Charles B. Friley -------------------------------------------------Title: Vice President and Chief Financial Officer

MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent and a Bank
By: /s/ Patricia P. Lunka -------------------------------------------------Title: Vice President

CITIBANK, N.A.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers as of the day and year first above written. THE NORTH AMERICAN COAL CORPORATION
By: /s/ Charles B. Friley -------------------------------------------------Title: Vice President and Chief Financial Officer

MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent and a Bank
By: /s/ Patricia P. Lunka -------------------------------------------------Title: Vice President

CITIBANK, N.A.
By: /s/ Marjorie Futornick -------------------------------------------------Title: Vice President

WELLS FARGO
By: /s/ Ken Taylor -------------------------------------------------Title: Assistant Vice President

KEY BANK, N.A.
By: /s/ Marianne Meil -------------------------------------------------Title: Vice President

Exhibit 10(xliv) AMENDMENT NO. 1 TO THE NORTH AMERICAN COAL CORPORATION DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1996) The North American Coal Corporation hereby adopts this Amendment No. 1 to The North American Coal Corporation Deferred Compensation Plan for Management Employees (As Amended and Restated Effective January 1, 1996) (the "Plan"). The provisions of this Amendment shall be effective January 1, 1997. Words and phrases used herein with initial capital letters which are defined in the Plan are used herein as so defined. SECTION 1 Section 2.9(ii) of the Plan is hereby amended in its entirety to read as follows:

Exhibit 10(xliv) AMENDMENT NO. 1 TO THE NORTH AMERICAN COAL CORPORATION DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1996) The North American Coal Corporation hereby adopts this Amendment No. 1 to The North American Coal Corporation Deferred Compensation Plan for Management Employees (As Amended and Restated Effective January 1, 1996) (the "Plan"). The provisions of this Amendment shall be effective January 1, 1997. Words and phrases used herein with initial capital letters which are defined in the Plan are used herein as so defined. SECTION 1 Section 2.9(ii) of the Plan is hereby amended in its entirety to read as follows: "(ii) is in salary grade 14 or above" EXECUTED this 9th day of December, 1996. THE NORTH AMERICAN COAL CORPORATION
By: /s/ Thomas A. Koza

Title:

--------------------------------------------Vice President - Law and Administration, and Secretary

Exhibit 10(xlv) THE NORTH AMERICAN COAL CORPORATION 1997 INCENTIVE COMPENSATION PLAN DECEMBER, 1996

1997 INCENTIVE COMPENSATION PLAN SUMMARY The Incentive Compensation Plan (Plan) offers a strongly competitive incentive opportunity to senior managers when all performance objectives under their control or influence are achieved. This is accomplished through a structure containing the following elements: - Each participant is assigned an individual incentive target, stated as a percentage of salary midpoint, that establishes the incentive amount they will receive when performance objectives are met.

Exhibit 10(xlv) THE NORTH AMERICAN COAL CORPORATION 1997 INCENTIVE COMPENSATION PLAN DECEMBER, 1996

1997 INCENTIVE COMPENSATION PLAN SUMMARY The Incentive Compensation Plan (Plan) offers a strongly competitive incentive opportunity to senior managers when all performance objectives under their control or influence are achieved. This is accomplished through a structure containing the following elements: - Each participant is assigned an individual incentive target, stated as a percentage of salary midpoint, that establishes the incentive amount they will receive when performance objectives are met. - The individual target amount is allocated among the following performance components: - North American Coal (NAC) corporate performance. - Bellaire Corporation cash flow. - Business unit results. - Individual achievement. - Percentage weightings are assigned to each component based on the participant's accountabilities and their impact on each component. - One or more performance objectives will be established at the beginning of the year for each performance component. - A performance range, which defines the acceptable level of results, from threshold to maximum, is created around each performance objective. - A payout range is defined which provides for incentive payments up to 150 percent of the incentive target, except to the extent the committee elects to increase the actual pool by up to 10%, as described below. - A performance/payout schedule combines the two ranges into a matrix that defines the level of payout that will result from each level of performance. - After audited financials are available, awards will be calculated based on actual results against the established objectives. - A final individual performance adjustment may be made, within a range of + or - 10 percent of the calculated award, based on a judgment of the participant's overall performance. 1

1997 INCENTIVE COMPENSATION PLAN SUMMARY The Incentive Compensation Plan (Plan) offers a strongly competitive incentive opportunity to senior managers when all performance objectives under their control or influence are achieved. This is accomplished through a structure containing the following elements: - Each participant is assigned an individual incentive target, stated as a percentage of salary midpoint, that establishes the incentive amount they will receive when performance objectives are met. - The individual target amount is allocated among the following performance components: - North American Coal (NAC) corporate performance. - Bellaire Corporation cash flow. - Business unit results. - Individual achievement. - Percentage weightings are assigned to each component based on the participant's accountabilities and their impact on each component. - One or more performance objectives will be established at the beginning of the year for each performance component. - A performance range, which defines the acceptable level of results, from threshold to maximum, is created around each performance objective. - A payout range is defined which provides for incentive payments up to 150 percent of the incentive target, except to the extent the committee elects to increase the actual pool by up to 10%, as described below. - A performance/payout schedule combines the two ranges into a matrix that defines the level of payout that will result from each level of performance. - After audited financials are available, awards will be calculated based on actual results against the established objectives. - A final individual performance adjustment may be made, within a range of + or - 10 percent of the calculated award, based on a judgment of the participant's overall performance. 1

1997 INCENTIVE COMPENSATION PLAN This incentive compensation plan will allow management and the Board to establish, in advance, the performance expectations and related incentive potential that NAC's executives will work with for the year. At year-end, the structure channels judgment of the managements team's performance along predetermined lines that should convey a sense of fairness in the determination of rewards. PLAN STRUCTURE INDIVIDUAL INCENTIVE TARGETS The fundamental building block of the proposed Plan structure is the individual incentive target. Each participant is

1997 INCENTIVE COMPENSATION PLAN This incentive compensation plan will allow management and the Board to establish, in advance, the performance expectations and related incentive potential that NAC's executives will work with for the year. At year-end, the structure channels judgment of the managements team's performance along predetermined lines that should convey a sense of fairness in the determination of rewards. PLAN STRUCTURE INDIVIDUAL INCENTIVE TARGETS The fundamental building block of the proposed Plan structure is the individual incentive target. Each participant is assigned a target, stated as a percentage of base salary, which will be paid when all relevant performance objectives are achieved. The Plan provides for payments above or below the target to reflect acceptable variances from performance objectives. PERFORMANCE GOALS Four sets of goals are proposed: INTENTIONALLY LEFT BLANK INCENTIVE AWARD RANGE Actual performance results attained probably will not be exactly equal to the established performance goals. Therefore, the Plan is designed to provide payouts ranging up to 150 percent of the target award if actual results fall within a predetermined range of acceptable performance. 2

1997 INCENTIVE COMPENSATION PLAN The award range is defined as follows:
AWARD LEVEL Maximum Target % OF TARGET 150% 100% DESCRIPTION Highest level of incentive paid. Competitive incentive opportunity for achieving all important goals. Incentive paid when acceptable standards. results meet minimum

Threshold

50%

Below threshold

0%

Performance does not merit incentive payment.

COMPONENT WEIGHTINGS Participants' potential incentive awards will be allocated between performance components based on their individual impact on results. The allocations allow for awards to be earned based on the achievement of the performance objectives over which each executive has the most control. Weightings will be stated as a percentage and total 100 percent for each participant. The weightings will be established each year to reflect current organizational accountabilities and the relative importance of the various performance components. Our recommended weightings are as follows: INTENTIONALLY LEFT BLANK When there is more than one goal for a performance component, further percentage weightings may be assigned, within the overall weightings, to reflect the relative priority of each goal. For

1997 INCENTIVE COMPENSATION PLAN The award range is defined as follows:
AWARD LEVEL Maximum Target % OF TARGET 150% 100% DESCRIPTION Highest level of incentive paid. Competitive incentive opportunity for achieving all important goals. Incentive paid when acceptable standards. results meet minimum

Threshold

50%

Below threshold

0%

Performance does not merit incentive payment.

COMPONENT WEIGHTINGS Participants' potential incentive awards will be allocated between performance components based on their individual impact on results. The allocations allow for awards to be earned based on the achievement of the performance objectives over which each executive has the most control. Weightings will be stated as a percentage and total 100 percent for each participant. The weightings will be established each year to reflect current organizational accountabilities and the relative importance of the various performance components. Our recommended weightings are as follows: INTENTIONALLY LEFT BLANK When there is more than one goal for a performance component, further percentage weightings may be assigned, within the overall weightings, to reflect the relative priority of each goal. For 3

1997 INCENTIVE COMPENSATION PLAN example, if the individual component has a 40 percent weighting and there are five individual goals, each individual goal might be assigned a priority weighting of 20 percent. 4

1997 INCENTIVE COMPENSATION PLAN PERFORMANCE RANGE A range of performance acceptable for incentive payment will be established around each performance objective. For quantitative goals, the range may be set as a percentage of the objective. For goals that cannot be quantified, the range will be defined in narrative form as clearly as possible. The following general definitions will apply. The percentage ranges indicated are only guidelines; specific percentage ranges or narrative descriptions should be determined for each goal in line with the definitions.
PERFORMANCE LEVEL Threshold PERCENTAGE GUIDELINE 75% DEFINITION Minimum acceptable results justifying payment of incentives. Results meet high performance demands justifying fully competitive rewards. Highest foreseeable level of perform

Objective

100%

Maximum

125%

1997 INCENTIVE COMPENSATION PLAN example, if the individual component has a 40 percent weighting and there are five individual goals, each individual goal might be assigned a priority weighting of 20 percent. 4

1997 INCENTIVE COMPENSATION PLAN PERFORMANCE RANGE A range of performance acceptable for incentive payment will be established around each performance objective. For quantitative goals, the range may be set as a percentage of the objective. For goals that cannot be quantified, the range will be defined in narrative form as clearly as possible. The following general definitions will apply. The percentage ranges indicated are only guidelines; specific percentage ranges or narrative descriptions should be determined for each goal in line with the definitions.
PERFORMANCE LEVEL Threshold PERCENTAGE GUIDELINE 75% DEFINITION Minimum acceptable results justifying payment of incentives. Results meet high performance demands justifying fully competitive rewards. Highest foreseeable level of perform

Objective

100%

Maximum

125%

PERFORMANCE/PAYOUT SCHEDULE Combining the payout and performance ranges yields a performance/ payout schedule as in the following example:
PERFORMANCE Threshold Objective Maximum DEFINITION Just bonusable On plan Heavy stretch RESULTS 75% 100% 125% LEVELS Threshold Target Maximum PAYOUT 50% 100% 150%

This schedule is applied separately to the results of each established performance element to determine the incentive amount earned in accordance with assigned weightings. Performance that falls between the defined levels would result in proportionally adjusted payouts which may be calculated mathematically or determined judgmentally. CORPORATE PERFORMANCE THRESHOLD No incentive awards will be earned under the Plan in any year unless the threshold level under the corporate performance component is achieved. Once the corporate performance threshold is 5

1997 INCENTIVE COMPENSATION PLAN attained, each performance objective is separate and distinct. This means that partial awards can be earned for the attainment of one performance objective even if another is not sufficient to generate a payout.

1997 INCENTIVE COMPENSATION PLAN PERFORMANCE RANGE A range of performance acceptable for incentive payment will be established around each performance objective. For quantitative goals, the range may be set as a percentage of the objective. For goals that cannot be quantified, the range will be defined in narrative form as clearly as possible. The following general definitions will apply. The percentage ranges indicated are only guidelines; specific percentage ranges or narrative descriptions should be determined for each goal in line with the definitions.
PERFORMANCE LEVEL Threshold PERCENTAGE GUIDELINE 75% DEFINITION Minimum acceptable results justifying payment of incentives. Results meet high performance demands justifying fully competitive rewards. Highest foreseeable level of perform

Objective

100%

Maximum

125%

PERFORMANCE/PAYOUT SCHEDULE Combining the payout and performance ranges yields a performance/ payout schedule as in the following example:
PERFORMANCE Threshold Objective Maximum DEFINITION Just bonusable On plan Heavy stretch RESULTS 75% 100% 125% LEVELS Threshold Target Maximum PAYOUT 50% 100% 150%

This schedule is applied separately to the results of each established performance element to determine the incentive amount earned in accordance with assigned weightings. Performance that falls between the defined levels would result in proportionally adjusted payouts which may be calculated mathematically or determined judgmentally. CORPORATE PERFORMANCE THRESHOLD No incentive awards will be earned under the Plan in any year unless the threshold level under the corporate performance component is achieved. Once the corporate performance threshold is 5

1997 INCENTIVE COMPENSATION PLAN attained, each performance objective is separate and distinct. This means that partial awards can be earned for the attainment of one performance objective even if another is not sufficient to generate a payout. INDIVIDUAL ADJUSTMENT FACTOR Each individual award, as calculated above, may be adjusted upward or downward by as much as 10 percent of the total award based on managements' perceptions of each individual's overall performance. PARTIAL AWARDS

1997 INCENTIVE COMPENSATION PLAN attained, each performance objective is separate and distinct. This means that partial awards can be earned for the attainment of one performance objective even if another is not sufficient to generate a payout. INDIVIDUAL ADJUSTMENT FACTOR Each individual award, as calculated above, may be adjusted upward or downward by as much as 10 percent of the total award based on managements' perceptions of each individual's overall performance. PARTIAL AWARDS Executives who are hired or promoted during the year to positions eligible for participation in the Plan may be included in the Plan on a pro ratio basis. COMMITTEE DISCRETION It is the intent of the Plan that the total incentive compensation, as determined above, will be the final total corporate incentive compensation to be paid. However, the committee, in its sole discretion, may increase or decrease by up to ten percent the total incentive compensation or may approve an incentive compensation payment where there would normally be no payments due to corporate performance which is below the criteria established for the year. 1997 PERFORMANCE TARGETS See Plan Summary. 6

Exhibit 10(xlvi) November 15, 1996 The North American Coal Corporation 13140 Coit Road Suite 400 Dallas, Texas 75240 Dear Sirs: Reference is made to the Credit Agreement (the "Agreement") dated as of September 27, 1991, among The North American Coal Corporation (the "Company"), the banks listed therein and Morgan Guaranty Trust Company of New York, as Agent. The defined terms used herein shall have the respective meanings set forth in the Agreement. Pursuant to Section 5.11 of the Agreement, the Company is prohibited from using the proceeds of any Loan, directly or indirectly, for the purpose of buying or carrying "margin stock". The Company has requested that the Banks waive the provisions of such Section 5.11 to permit the Company to advance to NACCO the proceeds of Loans borrowed by the Company, to be used by NACCO to purchase its Class A common stock pursuant to a Dutch auction self-tender offer to be launched by NACCO on or about November 18, 1996 and in connection with a latter open market purchase program by NACCO. The Banks hereby consent to the use of proceeds described in the preceeding sentence and, solely to the extent necessary to permit the advances to NACCO referred to above, waive the provisions of Section 5.11 of the Agreement. The Company hereby represents and warrants that on the date hereof (i) there exists no default, nor any other event which upon notice or lapse of time or both would constitute a default, under the Agreement and (ii) the Company is in compliance with all of the terms and conditions of the Agreement. This waiver and consent shall be

Exhibit 10(xlvi) November 15, 1996 The North American Coal Corporation 13140 Coit Road Suite 400 Dallas, Texas 75240 Dear Sirs: Reference is made to the Credit Agreement (the "Agreement") dated as of September 27, 1991, among The North American Coal Corporation (the "Company"), the banks listed therein and Morgan Guaranty Trust Company of New York, as Agent. The defined terms used herein shall have the respective meanings set forth in the Agreement. Pursuant to Section 5.11 of the Agreement, the Company is prohibited from using the proceeds of any Loan, directly or indirectly, for the purpose of buying or carrying "margin stock". The Company has requested that the Banks waive the provisions of such Section 5.11 to permit the Company to advance to NACCO the proceeds of Loans borrowed by the Company, to be used by NACCO to purchase its Class A common stock pursuant to a Dutch auction self-tender offer to be launched by NACCO on or about November 18, 1996 and in connection with a latter open market purchase program by NACCO. The Banks hereby consent to the use of proceeds described in the preceeding sentence and, solely to the extent necessary to permit the advances to NACCO referred to above, waive the provisions of Section 5.11 of the Agreement. The Company hereby represents and warrants that on the date hereof (i) there exists no default, nor any other event which upon notice or lapse of time or both would constitute a default, under the Agreement and (ii) the Company is in compliance with all of the terms and conditions of the Agreement. This waiver and consent shall be effective only in this specific instance and for the sole purposes described above and shall not be effective for any other purpose or in regard to any other transaction.

This waiver and consent shall become effective upon receipt by the Agent of a counterpart of this letter from the Required Bank bearing the signature of the Company. MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ John M. Mikolay --------------------------Title: Vice President

CITIBANK, N.A.
By: /s/ Marjorie Futornick --------------------------Title: Vice President

WELLS FARGO BANK (TEXAS), N.A. By: Title: KEY BANK NATIONAL ASSOCIATION

This waiver and consent shall become effective upon receipt by the Agent of a counterpart of this letter from the Required Bank bearing the signature of the Company. MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ John M. Mikolay --------------------------Title: Vice President

CITIBANK, N.A.
By: /s/ Marjorie Futornick --------------------------Title: Vice President

WELLS FARGO BANK (TEXAS), N.A. By: Title: KEY BANK NATIONAL ASSOCIATION
By: /s/ Marianne Meil --------------------------Title: Vice President

THE NORTH AMERICAN COAL CORPORATION
By: /s/ Charles A. Bittenbender --------------------------Title: Assistant Secretary

Exhibit 10(lxiii) ANNUAL INCENTIVE COMPENSATION PLAN 1997 GENERAL NACCO Materials Handling Group, Inc., (the "Company") has established an Annual Incentive Compensation Plan ("Plan") as part of a competitive compensation program for the officers and key management employees of the Company and its Subsidiaries. PLAN OBJECTIVE The Company desires to attract and retain talented employees to enable the Company to meet its financial and business objectives. The objective of the Plan is to provide an opportunity to earn annual incentive compensation to those employees whose performance has a significant impact on the Company's short-term and long-term profitability.

Exhibit 10(lxiii) ANNUAL INCENTIVE COMPENSATION PLAN 1997 GENERAL NACCO Materials Handling Group, Inc., (the "Company") has established an Annual Incentive Compensation Plan ("Plan") as part of a competitive compensation program for the officers and key management employees of the Company and its Subsidiaries. PLAN OBJECTIVE The Company desires to attract and retain talented employees to enable the Company to meet its financial and business objectives. The objective of the Plan is to provide an opportunity to earn annual incentive compensation to those employees whose performance has a significant impact on the Company's short-term and long-term profitability. ADMINISTRATION AND PARTICIPATION The Plan is administered by the Nominating, Organization and Compensation Committee of the Board of Directors of the Company (the "Committee"). The Committee: a. May amend, modify or discontinue the Plan. 1

b. Will approve participation in the Plan. Generally, participants will include all employees in NACCO Materials Handling Group salary grades 22 and above. However, the Committee may select any employee who has contributed significantly to the Company's profitability to participate in the Plan and receive an annual incentive compensation award. c. Will determine the annual performance criteria which generate the incentive compensation pool. d. Will determine the total amount of both the target and actual annual incentive compensation pool. e. Will approve individual incentive compensation awards to officers and employees in NACCO Materials Handling Group above salary grade 29. f. May delegate to the Chief Executive Officer of the Company the approval of incentive compensation awards to NACCO Materials Handling Group employees in salary grade 29 and below. g. May consider at the end of each year the award of a discretionary bonus amount to non-participants as an addition to the regular incentive compensation pool on a special one-time basis to motivate individuals not eligible to participate in the Plan. h. May approve a pro-rate incentive compensation award for participants in the Plan whose employment is terminated (1) due to death, disability, retirement or facility closure, such award to be determined pursuant to the provisions of subparagraphs (e) and (f) above, or (2) under other 2

circumstances at the recommendation of the Chief Executive Officer of the Company.

b. Will approve participation in the Plan. Generally, participants will include all employees in NACCO Materials Handling Group salary grades 22 and above. However, the Committee may select any employee who has contributed significantly to the Company's profitability to participate in the Plan and receive an annual incentive compensation award. c. Will determine the annual performance criteria which generate the incentive compensation pool. d. Will determine the total amount of both the target and actual annual incentive compensation pool. e. Will approve individual incentive compensation awards to officers and employees in NACCO Materials Handling Group above salary grade 29. f. May delegate to the Chief Executive Officer of the Company the approval of incentive compensation awards to NACCO Materials Handling Group employees in salary grade 29 and below. g. May consider at the end of each year the award of a discretionary bonus amount to non-participants as an addition to the regular incentive compensation pool on a special one-time basis to motivate individuals not eligible to participate in the Plan. h. May approve a pro-rate incentive compensation award for participants in the Plan whose employment is terminated (1) due to death, disability, retirement or facility closure, such award to be determined pursuant to the provisions of subparagraphs (e) and (f) above, or (2) under other 2

circumstances at the recommendation of the Chief Executive Officer of the Company. DETERMINATION OF CORPORATE INCENTIVE COMPENSATION POOL Each participant in the Plan will have an individual target incentive compensation percentage which is determined by the participant's salary grade. This percentage is multiplied by the mid-point of the participant's salary grade to determine his individual target incentive compensation award. The total of the target incentive compensation awards of all participants equals the target corporate incentive compensation pool ("Target Pool"). The Target Pool is approved each year by the Committee. The actual corporate incentive compensation pool ("Actual Pool") is determined at the end of each year based on the Company's actual performance against specific criteria established in the beginning of the year by the Committee. The Target Pool is adjusted upwards or downwards by corporate performance adjustment factors to determine the Actual Pool. In no event will the Actual Pool exceed 150% of the Target Pool, except to the extent that the Committee elects to increase the Actual Pool by up to 110%, as described below. The Target and Actual Pools may consist of the sum of two or more subpools, provided the subpools have individual objectives. 3

It is the intent of the Plan that the Actual Pool, as determined above, will be the final total corporate incentive compensation pool. However, the Committee, in its sole discretion, may increase or decrease by up to 10% the Actual Pool or may approve an incentive compensation pool where there would normally be no pool due to Company performance which is below the criteria established for the year. The Actual and Target Pools exclude the Marketing Incentive Plan for regional parts, service, sales and national account managers. However, total compensation or employees covered by the Marketing Incentive Plan will be based on competitive levels. DETERMINATION OF INDIVIDUAL INCENTIVE COMPENSATION AWARDS

circumstances at the recommendation of the Chief Executive Officer of the Company. DETERMINATION OF CORPORATE INCENTIVE COMPENSATION POOL Each participant in the Plan will have an individual target incentive compensation percentage which is determined by the participant's salary grade. This percentage is multiplied by the mid-point of the participant's salary grade to determine his individual target incentive compensation award. The total of the target incentive compensation awards of all participants equals the target corporate incentive compensation pool ("Target Pool"). The Target Pool is approved each year by the Committee. The actual corporate incentive compensation pool ("Actual Pool") is determined at the end of each year based on the Company's actual performance against specific criteria established in the beginning of the year by the Committee. The Target Pool is adjusted upwards or downwards by corporate performance adjustment factors to determine the Actual Pool. In no event will the Actual Pool exceed 150% of the Target Pool, except to the extent that the Committee elects to increase the Actual Pool by up to 110%, as described below. The Target and Actual Pools may consist of the sum of two or more subpools, provided the subpools have individual objectives. 3

It is the intent of the Plan that the Actual Pool, as determined above, will be the final total corporate incentive compensation pool. However, the Committee, in its sole discretion, may increase or decrease by up to 10% the Actual Pool or may approve an incentive compensation pool where there would normally be no pool due to Company performance which is below the criteria established for the year. The Actual and Target Pools exclude the Marketing Incentive Plan for regional parts, service, sales and national account managers. However, total compensation or employees covered by the Marketing Incentive Plan will be based on competitive levels. DETERMINATION OF INDIVIDUAL INCENTIVE COMPENSATION AWARDS Salary grades and the corresponding target incentive percentages for each participant in the Plan will be established at the beginning of each year and approved by the Committee. Individual target incentive compensation will then be adjusted by the appropriate pool or subpool factor. Such adjusted individual incentive compensation will then be further modified based on the team performance to which an individual belongs compared to the team goals for the year. The total of all individual incentive compensation awards must not exceed the Actual Pool for the Year. Attached are examples of actual pool and individual award calculations. 4

a. Example calculation for determination actual pool: INTENTIONALLY LEFT BLANK 5

b. Example calculation for determination of individual incentive compensation award: INTENTIONALLY LEFT BLANK 6

It is the intent of the Plan that the Actual Pool, as determined above, will be the final total corporate incentive compensation pool. However, the Committee, in its sole discretion, may increase or decrease by up to 10% the Actual Pool or may approve an incentive compensation pool where there would normally be no pool due to Company performance which is below the criteria established for the year. The Actual and Target Pools exclude the Marketing Incentive Plan for regional parts, service, sales and national account managers. However, total compensation or employees covered by the Marketing Incentive Plan will be based on competitive levels. DETERMINATION OF INDIVIDUAL INCENTIVE COMPENSATION AWARDS Salary grades and the corresponding target incentive percentages for each participant in the Plan will be established at the beginning of each year and approved by the Committee. Individual target incentive compensation will then be adjusted by the appropriate pool or subpool factor. Such adjusted individual incentive compensation will then be further modified based on the team performance to which an individual belongs compared to the team goals for the year. The total of all individual incentive compensation awards must not exceed the Actual Pool for the Year. Attached are examples of actual pool and individual award calculations. 4

a. Example calculation for determination actual pool: INTENTIONALLY LEFT BLANK 5

b. Example calculation for determination of individual incentive compensation award: INTENTIONALLY LEFT BLANK 6

Exhibit 10 (lxxvi) AMENDMENT TO CREDIT AGREEMENT AMENDMENT dated as of December 16, 1996 to the Amended and Restated Credit Agreement dated as of June 4, 1996 (the "Credit Agreement") among NACCO Materials Handling Group, Inc. (the "Borrower"), the BANKS party thereto (the "Banks"), the Co-Arrangers and Co-Agents listed therein and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). WITNESSETH: WHEREAS, the Borrower has asked the Banks to permit the Borrower to use the proceeds of loans made to it under the Credit Agreement to make loans and/or pay dividends for the purpose of enabling NACCO Industries, Inc. to purchase its own common stock; and WHEREAS, the undersigned Banks are willing to permit such use of proceeds, PROVIDED that, so long as Sections 5.14 and 5.15 of the Credit Agreement remain in effect, the sum of (i) the aggregate amount of Restricted Payments declared or made pursuant to Section 5.14(c) and (ii) the aggregate outstanding principal amount of loans made to NACCO Industries, Inc. pursuant to Section 5.15 to enable it to purchase its own common stock shall not exceed $25,000,000;

a. Example calculation for determination actual pool: INTENTIONALLY LEFT BLANK 5

b. Example calculation for determination of individual incentive compensation award: INTENTIONALLY LEFT BLANK 6

Exhibit 10 (lxxvi) AMENDMENT TO CREDIT AGREEMENT AMENDMENT dated as of December 16, 1996 to the Amended and Restated Credit Agreement dated as of June 4, 1996 (the "Credit Agreement") among NACCO Materials Handling Group, Inc. (the "Borrower"), the BANKS party thereto (the "Banks"), the Co-Arrangers and Co-Agents listed therein and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). WITNESSETH: WHEREAS, the Borrower has asked the Banks to permit the Borrower to use the proceeds of loans made to it under the Credit Agreement to make loans and/or pay dividends for the purpose of enabling NACCO Industries, Inc. to purchase its own common stock; and WHEREAS, the undersigned Banks are willing to permit such use of proceeds, PROVIDED that, so long as Sections 5.14 and 5.15 of the Credit Agreement remain in effect, the sum of (i) the aggregate amount of Restricted Payments declared or made pursuant to Section 5.14(c) and (ii) the aggregate outstanding principal amount of loans made to NACCO Industries, Inc. pursuant to Section 5.15 to enable it to purchase its own common stock shall not exceed $25,000,000; NOW, THEREFORE, the undersigned parties agree as follows: Section 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Credit Agreement" and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby. Section 2. Use of Proceeds. The last sentence of Section 5.8 of the Credit Agreement is amended to read as follows: None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any "margin stock" within the meaning of Regulation U; PROVIDED that the Borrower may use such proceeds to make loans and/or pay dividends for the purpose of enabling NACCO Industries, Inc. to purchase its own common stock.

Section 3. Restricted Payments. Section 5.14(c) of the Credit Agreement is amended to read as follows: (c) Restricted Payments not otherwise permitted pursuant to the preceding clauses (a) and (b); provided that the sum of (i) the aggregate amount of all Restricted Payments declared or made after September 30, 1994 pursuant to this clause (c) and (ii) the aggregate outstanding principal amount of all loans made by the Borrower and its

b. Example calculation for determination of individual incentive compensation award: INTENTIONALLY LEFT BLANK 6

Exhibit 10 (lxxvi) AMENDMENT TO CREDIT AGREEMENT AMENDMENT dated as of December 16, 1996 to the Amended and Restated Credit Agreement dated as of June 4, 1996 (the "Credit Agreement") among NACCO Materials Handling Group, Inc. (the "Borrower"), the BANKS party thereto (the "Banks"), the Co-Arrangers and Co-Agents listed therein and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). WITNESSETH: WHEREAS, the Borrower has asked the Banks to permit the Borrower to use the proceeds of loans made to it under the Credit Agreement to make loans and/or pay dividends for the purpose of enabling NACCO Industries, Inc. to purchase its own common stock; and WHEREAS, the undersigned Banks are willing to permit such use of proceeds, PROVIDED that, so long as Sections 5.14 and 5.15 of the Credit Agreement remain in effect, the sum of (i) the aggregate amount of Restricted Payments declared or made pursuant to Section 5.14(c) and (ii) the aggregate outstanding principal amount of loans made to NACCO Industries, Inc. pursuant to Section 5.15 to enable it to purchase its own common stock shall not exceed $25,000,000; NOW, THEREFORE, the undersigned parties agree as follows: Section 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Credit Agreement" and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby. Section 2. Use of Proceeds. The last sentence of Section 5.8 of the Credit Agreement is amended to read as follows: None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any "margin stock" within the meaning of Regulation U; PROVIDED that the Borrower may use such proceeds to make loans and/or pay dividends for the purpose of enabling NACCO Industries, Inc. to purchase its own common stock.

Section 3. Restricted Payments. Section 5.14(c) of the Credit Agreement is amended to read as follows: (c) Restricted Payments not otherwise permitted pursuant to the preceding clauses (a) and (b); provided that the sum of (i) the aggregate amount of all Restricted Payments declared or made after September 30, 1994 pursuant to this clause (c) and (ii) the aggregate outstanding principal amount of all loans made by the Borrower and its Subsidiaries to Affiliates of the Borrower pursuant to Section 5.15(h) shall not at any time exceed $25,000,000. Section 4. Investments. Section 5.15 of the Credit Agreement is amended by deleting the word "and" at the end of clause (g), redesignating clause (h) as clause (i), changing the reference to "clause (h)" in clauses (e) and (g) to refer instead to "clause (i)", and adding the following new clause (h) immediately after clause (g):

Exhibit 10 (lxxvi) AMENDMENT TO CREDIT AGREEMENT AMENDMENT dated as of December 16, 1996 to the Amended and Restated Credit Agreement dated as of June 4, 1996 (the "Credit Agreement") among NACCO Materials Handling Group, Inc. (the "Borrower"), the BANKS party thereto (the "Banks"), the Co-Arrangers and Co-Agents listed therein and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). WITNESSETH: WHEREAS, the Borrower has asked the Banks to permit the Borrower to use the proceeds of loans made to it under the Credit Agreement to make loans and/or pay dividends for the purpose of enabling NACCO Industries, Inc. to purchase its own common stock; and WHEREAS, the undersigned Banks are willing to permit such use of proceeds, PROVIDED that, so long as Sections 5.14 and 5.15 of the Credit Agreement remain in effect, the sum of (i) the aggregate amount of Restricted Payments declared or made pursuant to Section 5.14(c) and (ii) the aggregate outstanding principal amount of loans made to NACCO Industries, Inc. pursuant to Section 5.15 to enable it to purchase its own common stock shall not exceed $25,000,000; NOW, THEREFORE, the undersigned parties agree as follows: Section 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Credit Agreement" and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby. Section 2. Use of Proceeds. The last sentence of Section 5.8 of the Credit Agreement is amended to read as follows: None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any "margin stock" within the meaning of Regulation U; PROVIDED that the Borrower may use such proceeds to make loans and/or pay dividends for the purpose of enabling NACCO Industries, Inc. to purchase its own common stock.

Section 3. Restricted Payments. Section 5.14(c) of the Credit Agreement is amended to read as follows: (c) Restricted Payments not otherwise permitted pursuant to the preceding clauses (a) and (b); provided that the sum of (i) the aggregate amount of all Restricted Payments declared or made after September 30, 1994 pursuant to this clause (c) and (ii) the aggregate outstanding principal amount of all loans made by the Borrower and its Subsidiaries to Affiliates of the Borrower pursuant to Section 5.15(h) shall not at any time exceed $25,000,000. Section 4. Investments. Section 5.15 of the Credit Agreement is amended by deleting the word "and" at the end of clause (g), redesignating clause (h) as clause (i), changing the reference to "clause (h)" in clauses (e) and (g) to refer instead to "clause (i)", and adding the following new clause (h) immediately after clause (g): (h) loans to Affiliates of the Borrower; PROVIDED that the sum of (i) the aggregate amount of all Restricted Payments declared or made after September 30, 1994 pursuant to Section 5.14(c) and (ii) the aggregate outstanding principal amount of all loans made by the Borrower and its Subsidiaries to Affiliates of the Borrower pursuant to this clause (h) shall not at any time exceed $25,000,000; and Section 5. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of

Section 3. Restricted Payments. Section 5.14(c) of the Credit Agreement is amended to read as follows: (c) Restricted Payments not otherwise permitted pursuant to the preceding clauses (a) and (b); provided that the sum of (i) the aggregate amount of all Restricted Payments declared or made after September 30, 1994 pursuant to this clause (c) and (ii) the aggregate outstanding principal amount of all loans made by the Borrower and its Subsidiaries to Affiliates of the Borrower pursuant to Section 5.15(h) shall not at any time exceed $25,000,000. Section 4. Investments. Section 5.15 of the Credit Agreement is amended by deleting the word "and" at the end of clause (g), redesignating clause (h) as clause (i), changing the reference to "clause (h)" in clauses (e) and (g) to refer instead to "clause (i)", and adding the following new clause (h) immediately after clause (g): (h) loans to Affiliates of the Borrower; PROVIDED that the sum of (i) the aggregate amount of all Restricted Payments declared or made after September 30, 1994 pursuant to Section 5.14(c) and (ii) the aggregate outstanding principal amount of all loans made by the Borrower and its Subsidiaries to Affiliates of the Borrower pursuant to this clause (h) shall not at any time exceed $25,000,000; and Section 5. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. Section 6. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Section 7. Effectiveness. This Amendment shall become effective when the Agent shall have received from each of the Borrower and the Required Banks a counterpart hereof signed by such party or facsimile or other written confirmation (in form satisfactory to the Agent) that such party has signed a counterpart hereof. IN WITNESS WHEREOF, the undersigned parties have caused this Amendment to be duly executed as of the date first above written. NACCO MATERIALS HANDLING GROUP, INC.
By: /s/ Jeffrey Mattern ---------------------------Name: Jeffrey Mattern Title: Vice President and Treasurer

2

MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Patricia P. Lunka ---------------------------Name: Patricia P. Lunka Title: Vice President

BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: /s/ Richard E. Bryson ---------------------------Name: Richard E. Bryson Title: Managing Director

MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Patricia P. Lunka ---------------------------Name: Patricia P. Lunka Title: Vice President

BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: /s/ Richard E. Bryson ---------------------------Name: Richard E. Bryson Title: Managing Director

CITIBANK, N.A.
By: /s/ Marjorie Futornick ---------------------------Name: Marjorie Futornick Title: Vice President

THE BANK OF NOVA SCOTIA
By: /s/ A.S. Norsworthy ---------------------------Name: A.S. Norsworthy Title: Sr. Team Leader-Loan Operations

THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ L. Gene Beube ---------------------------Name: L. Gene Beube Title: Senior Vice President

THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By: /s/ Richard E. Stahl ---------------------------Name: Richard E. Stahl Title: Sr. Vice President & Joint General Manager

ROYAL BANK OF CANADA
By: /s/ Preston D. Jones ---------------------------Name: Preston D. Jones Title: Senior Manager Corporate Banking

UNION BANK OF CALIFORNIA, N.A.

By: /s/ Alison Amonette ---------------------------Name: Alison Amonette Title: Vice President

KEY BANK OF WASHINGTON
By: /s/ James A. Taylor III ---------------------------Name: James A. Taylor III Title: Commercial Banking Officer

UNITED STATES NATIONAL BANK OF OREGON
By: /s/ Chris J. Karlin ---------------------------Name: Chris J. Karlin Title: Vice President

WELLS FARGO BANK, N.A.
By: /s/ ---------------------------Name: Title: Vice President

BANK OF SCOTLAND
By: /s/ Annie Chin Tat ---------------------------Name: Annie Chin Tat Title: Assistant Vice President

THE CHASE MANHATTAN BANK (formerly known as Chemical Bank)
By: /s/ Timothy J. Stearns ---------------------------Name: Timothy J. Stearns Title: Credit Executive

CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ David Bouhl, F.V.P. ---------------------------Name: David Bouhl, F.V.P. Title: Head of Corporate Banking Chicago

MELLON BANK, N.A.
By: /s/ Mark E. Johnston ---------------------------Name: Mark E. Johnston

Name: Mark E. Johnston Title: AVP

THE SUMITOMO BANK, LTD.
By: /s/ John H. Kemper ---------------------------Name: John H. Kemper Title: Senior Vice President

ISTITUTO BANCARIO SAN PAOLO DI TORINO S.P.A.
By: /s/ Jim Girolam ---------------------------Name: Jim Girolam Title: G. Manager, V.P.

3

Exhibit 10(lxxxix) THE HAMILTON BEACH/PROCTOR-SILEX, INC. UNFUNDED BENEFIT PLAN (As Amended and Restated Effective January 1, 1997)

HAMILTON BEACH/PROCTOR-SILEX, INC. UNFUNDED BENEFIT PLAN Hamilton Beach/Proctor-Silex, Inc. (the "Company") does hereby amend and completely restate the Hamilton Beach/Proctor-Silex, Inc. Unfunded Benefit Plan to read as follows, effective January 1, 1997. ARTICLE I PREFACE SECTION 1.1. EFFECTIVE DATE. The original effective date of this Plan was March 10, 1993. The effective date of this amendment and restatement is January 1, 1997. SECTION 1.2. PURPOSE OF THE PLAN. The purpose of this Plan is to provide for certain Employees of the Company benefits they would have received (a) under the Cash Balance Plan but for (i) the dollar limitation on Compensation taken into account as a result of Section 401(a)(17) of the Code, and (ii) the limitations imposed under Section 415 of the Code, and/or (b) under the Savings Plan but for the limitations imposed under Section 402(g), 401(m), 401(a)(17), 401(k)(3) or 415 of the Code. SECTION 1.3. GOVERNING LAW. This Plan shall be regulated, construed and administered under the laws of the State of Ohio, except when preempted by federal law. SECTION 1.4. GENDER AND NUMBER. For purposes of interpreting the provisions of this Plan, the masculine gender shall be deemed to include the feminine, the feminine gender shall be deemed to include the masculine, and the singular shall include the plural unless otherwise clearly required by the context.

Exhibit 10(lxxxix) THE HAMILTON BEACH/PROCTOR-SILEX, INC. UNFUNDED BENEFIT PLAN (As Amended and Restated Effective January 1, 1997)

HAMILTON BEACH/PROCTOR-SILEX, INC. UNFUNDED BENEFIT PLAN Hamilton Beach/Proctor-Silex, Inc. (the "Company") does hereby amend and completely restate the Hamilton Beach/Proctor-Silex, Inc. Unfunded Benefit Plan to read as follows, effective January 1, 1997. ARTICLE I PREFACE SECTION 1.1. EFFECTIVE DATE. The original effective date of this Plan was March 10, 1993. The effective date of this amendment and restatement is January 1, 1997. SECTION 1.2. PURPOSE OF THE PLAN. The purpose of this Plan is to provide for certain Employees of the Company benefits they would have received (a) under the Cash Balance Plan but for (i) the dollar limitation on Compensation taken into account as a result of Section 401(a)(17) of the Code, and (ii) the limitations imposed under Section 415 of the Code, and/or (b) under the Savings Plan but for the limitations imposed under Section 402(g), 401(m), 401(a)(17), 401(k)(3) or 415 of the Code. SECTION 1.3. GOVERNING LAW. This Plan shall be regulated, construed and administered under the laws of the State of Ohio, except when preempted by federal law. SECTION 1.4. GENDER AND NUMBER. For purposes of interpreting the provisions of this Plan, the masculine gender shall be deemed to include the feminine, the feminine gender shall be deemed to include the masculine, and the singular shall include the plural unless otherwise clearly required by the context. SECTION 1.5. CONSTRUCTION OF PLAN. The Plan provides benefits for Employees who are Participants in two separate Qualified Plans. References throughout this Plan to a "Qualified Plan" shall be deemed to refer to the particular Qualified Plan in which the Participant participates. ARTICLE II DEFINITIONS Except as otherwise provided in this Plan, terms defined in the Qualified Plans as they may be amended from time to time shall have the same meanings when used herein, unless a different meaning is clearly required by the context of this Plan. In addition, the following words and phrases shall have the following respective meanings for purposes of this Plan. SECTION 2.1. ACCOUNT shall mean the record maintained in accordance with Section 3.5 by the Company as the sum of the Participant's Excess Profit Sharing Sub-Account, Excess 401(k) Sub-Account and Excess Matching Sub-Account.

SECTION 2.2. ADJUSTED ROE. (a) For purposes of this Section, the following terms shall have the following meanings:

HAMILTON BEACH/PROCTOR-SILEX, INC. UNFUNDED BENEFIT PLAN Hamilton Beach/Proctor-Silex, Inc. (the "Company") does hereby amend and completely restate the Hamilton Beach/Proctor-Silex, Inc. Unfunded Benefit Plan to read as follows, effective January 1, 1997. ARTICLE I PREFACE SECTION 1.1. EFFECTIVE DATE. The original effective date of this Plan was March 10, 1993. The effective date of this amendment and restatement is January 1, 1997. SECTION 1.2. PURPOSE OF THE PLAN. The purpose of this Plan is to provide for certain Employees of the Company benefits they would have received (a) under the Cash Balance Plan but for (i) the dollar limitation on Compensation taken into account as a result of Section 401(a)(17) of the Code, and (ii) the limitations imposed under Section 415 of the Code, and/or (b) under the Savings Plan but for the limitations imposed under Section 402(g), 401(m), 401(a)(17), 401(k)(3) or 415 of the Code. SECTION 1.3. GOVERNING LAW. This Plan shall be regulated, construed and administered under the laws of the State of Ohio, except when preempted by federal law. SECTION 1.4. GENDER AND NUMBER. For purposes of interpreting the provisions of this Plan, the masculine gender shall be deemed to include the feminine, the feminine gender shall be deemed to include the masculine, and the singular shall include the plural unless otherwise clearly required by the context. SECTION 1.5. CONSTRUCTION OF PLAN. The Plan provides benefits for Employees who are Participants in two separate Qualified Plans. References throughout this Plan to a "Qualified Plan" shall be deemed to refer to the particular Qualified Plan in which the Participant participates. ARTICLE II DEFINITIONS Except as otherwise provided in this Plan, terms defined in the Qualified Plans as they may be amended from time to time shall have the same meanings when used herein, unless a different meaning is clearly required by the context of this Plan. In addition, the following words and phrases shall have the following respective meanings for purposes of this Plan. SECTION 2.1. ACCOUNT shall mean the record maintained in accordance with Section 3.5 by the Company as the sum of the Participant's Excess Profit Sharing Sub-Account, Excess 401(k) Sub-Account and Excess Matching Sub-Account.

SECTION 2.2. ADJUSTED ROE. (a) For purposes of this Section, the following terms shall have the following meanings: (i) "NET INCOME (BEFORE EXTRAORDINARY ITEMS)" is defined as consolidated net income, as defined by general accepted accounting principals ("GAAP"), for the Company for the subject year before extraordinary items, but including any extraordinary items related to refinancings (net of tax); (ii) "AMORTIZATION OF GOODWILL" is defined as the consolidated amortization expense related to the intangible asset goodwill for the Company for the subject year; (iii) "WEIGHTED AVERAGE STOCKHOLDERS' EQUITY" is calculated by adding the consolidated stockholders' equity for the Company, as defined by GAAP, at the beginning of the subject year and the end of each month of the subject year and dividing by thirteen;

SECTION 2.2. ADJUSTED ROE. (a) For purposes of this Section, the following terms shall have the following meanings: (i) "NET INCOME (BEFORE EXTRAORDINARY ITEMS)" is defined as consolidated net income, as defined by general accepted accounting principals ("GAAP"), for the Company for the subject year before extraordinary items, but including any extraordinary items related to refinancings (net of tax); (ii) "AMORTIZATION OF GOODWILL" is defined as the consolidated amortization expense related to the intangible asset goodwill for the Company for the subject year; (iii) "WEIGHTED AVERAGE STOCKHOLDERS' EQUITY" is calculated by adding the consolidated stockholders' equity for the Company, as defined by GAAP, at the beginning of the subject year and the end of each month of the subject year and dividing by thirteen; (iv) "WEIGHTED AVERAGE ACCUMULATED AMORTIZATION OF GOODWILL" is calculated by adding consolidated accumulated amortization of goodwill, as defined by GAAP, at the beginning of the subject year and the end of each month of the subject year and dividing by thirteen. (b) "Adjusted ROE" shall mean the average return on equity of the Company calculated for the applicable time period, based on A divided by B, where:
A = Net Income (before extraordinary items) + Amortization of Goodwill; and Weighted Average (Shareholders' Equity + Accumulated Amortization of Goodwill)

B

=

Adjusted ROE shall be determined at least annually by the Company. SECTION 2.3. BENEFICIARY shall mean the person or persons designated by the Participant as his Beneficiary under this Plan, in accordance with the provisions of Article VII hereof. SECTION 2.4. CASH BALANCE EMPLOYEE shall mean a participant in the Cash Balance Plan. SECTION 2.5. CASH BALANCE PLAN shall mean Part II of the Combined Defined Benefit Plan for NACCO Industries, Inc. and Its Subsidiaries (commonly known as the "Hamilton Beach/Proctor-Silex, Inc. Profit Sharing Retirement Plan") (or any successor thereto), as the same may be amended from time to time. Benefits under the Cash Balance Plan were permanently frozen effective for Plan Years beginning on or after January 1, 1997. 2

SECTION 2.6. COMPANY shall mean Hamilton Beach/Proctor-Silex, Inc. SECTION 2.7. COMPENSATION. For purposes of Sections 3.2 and 3.3 of the Plan, the term "Compensation" shall have the same meaning as under the Savings Plan, except that Compensation shall be deemed to include (a) the amount of compensation deferred by the Participant under Section 3.3 of this Plan and (b) amounts in excess of the limitation imposed by Code Section 401(a)(17). SECTION 2.8. EXCESS RETIREMENT BENEFIT shall mean an Excess Pension Benefit, an Excess Profit Sharing Benefit, an Excess 401(k) Benefit or an Excess Matching Benefit (as described in Article III) which is payable to or with respect to a Participant under this Plan. SECTION 2.9. FIXED INCOME FUND shall mean the Stable Asset Fund under the Savings Plan or any equivalent fixed income fund thereunder which is designated by the NACCO Retirement Funds Investment Committee as the successor to the Stable Asset Fund.

SECTION 2.6. COMPANY shall mean Hamilton Beach/Proctor-Silex, Inc. SECTION 2.7. COMPENSATION. For purposes of Sections 3.2 and 3.3 of the Plan, the term "Compensation" shall have the same meaning as under the Savings Plan, except that Compensation shall be deemed to include (a) the amount of compensation deferred by the Participant under Section 3.3 of this Plan and (b) amounts in excess of the limitation imposed by Code Section 401(a)(17). SECTION 2.8. EXCESS RETIREMENT BENEFIT shall mean an Excess Pension Benefit, an Excess Profit Sharing Benefit, an Excess 401(k) Benefit or an Excess Matching Benefit (as described in Article III) which is payable to or with respect to a Participant under this Plan. SECTION 2.9. FIXED INCOME FUND shall mean the Stable Asset Fund under the Savings Plan or any equivalent fixed income fund thereunder which is designated by the NACCO Retirement Funds Investment Committee as the successor to the Stable Asset Fund. SECTION 2.10. 401(k) EMPLOYEE shall mean a participant in the Savings Plan who is eligible for Before-Tax and Matching Employer Contributions thereunder. SECTION 2.11. INSOLVENT. For purposes of this Plan, the Company shall be considered Insolvent at such time as it (a) is unable to pay its debts as they mature, or (b) is subject to a pending voluntary or involuntary proceeding as a debtor under the United States Bankruptcy Code. SECTION 2.12. PARTICIPANT. For purposes of Section 3.1 of the Plan, the term "Participant" shall mean a Cash Balance Employee whose benefit under the Cash Balance Plan is limited by the application of Section 401 (a)(17) or 415 of the Code. For purposes of Section 3.2 of the Plan, the term "Participant" shall mean a Profit Sharing Employee whose Post-1996 Profit Sharing Contributions are limited by the application of Section 401(a) (17) or 415 of the Code and who is classified in job grades 17 and above. For purposes of Section 3.3 of the Plan, the term "Participant" shall mean a 401(k) Employee (a) who is unable to make all of the Before-Tax Contributions that he has elected to make to the Savings Plan, or who is unable to receive the maximum amount of Post-1994 Matching Employer Contributions under the Savings Plan, because of the limitations imposed under Section 402(g), 401(a)(17), 401(k)(3) or 401(m) of the Code and (b) who is classified in job grades 17 and above. SECTION 2.13. PLAN shall mean the Hamilton Beach/Proctor-Silex, Inc. Unfunded Benefit Plan as herein set forth or as duly amended. SECTION 2.14. PLAN ADMINISTRATOR shall mean the Company. 3

SECTION 2.15. PLAN YEAR shall mean the calendar year. SECTION 2.16. PROFIT SHARING EMPLOYEE shall mean a participant in the Savings Plan who is eligible for Post-1996 Profit Sharing Contributions. SECTION 2.17. QUALIFIED PLAN shall mean (a) for Cash Balance Employees, the Cash Balance Plan, (b) for Profit Sharing Employees, the profit-sharing portion of the Savings Plan and (c) for 401(k) Employees, the Before-Tax Contributions and Matching Employer Contributions portion of the Savings Plan. SECTION 2.18. SAVINGS PLAN shall mean the Hamilton Beach/Proctor-Silex, Inc. Employees' Retirement Savings Plan (401(k)), as the same may be amended from time to time, or any successor thereto. SECTION 2.19. UNFORESEEABLE EMERGENCY shall mean an event which results (or will result) in severe financial hardship to the Participant as a consequence of an unexpected illness or accident or loss of the Participant's property due to casualty or other similar extraordinary or unforeseen circumstances out of the control of the Participant.

SECTION 2.15. PLAN YEAR shall mean the calendar year. SECTION 2.16. PROFIT SHARING EMPLOYEE shall mean a participant in the Savings Plan who is eligible for Post-1996 Profit Sharing Contributions. SECTION 2.17. QUALIFIED PLAN shall mean (a) for Cash Balance Employees, the Cash Balance Plan, (b) for Profit Sharing Employees, the profit-sharing portion of the Savings Plan and (c) for 401(k) Employees, the Before-Tax Contributions and Matching Employer Contributions portion of the Savings Plan. SECTION 2.18. SAVINGS PLAN shall mean the Hamilton Beach/Proctor-Silex, Inc. Employees' Retirement Savings Plan (401(k)), as the same may be amended from time to time, or any successor thereto. SECTION 2.19. UNFORESEEABLE EMERGENCY shall mean an event which results (or will result) in severe financial hardship to the Participant as a consequence of an unexpected illness or accident or loss of the Participant's property due to casualty or other similar extraordinary or unforeseen circumstances out of the control of the Participant. SECTION 2.20. VALUATION DATE shall mean the last business day of each Plan Year. ARTICLE III EXCESS RETIREMENT BENEFITS SECTION 3.1. EXCESS PENSION BENEFITS. The Excess Pension Benefit payable to a Participant who is a Cash Balance Employee shall be a monthly benefit equal to the excess, if any, of (a) the amount of the monthly benefit that would be payable to such Participant under the Cash Balance Plan (in the form actually paid) if such Plan did not contain the limitations imposed under Sections 401(a)(17) and 415 of the Code and, effective as of January 1, 1995, the definition of Compensation under such Plan included any amounts deferred under Section 3.3 of this Plan, OVER (b) the amount of the monthly benefit that is actually payable to the Participant under the Cash Balance Plan. SECTION 3.2. EXCESS PROFIT SHARING BENEFITS. At the time described in Section 3.5(a), the Company shall credit to a Sub-Account (the "Excess Profit Sharing Sub-Account") established for each Participant who is a Profit Sharing Employee, an amount equal to the excess, if any, of (a) the amount of the Company's Post-1996 Profit Sharing Contribution which would have been made to the profit sharing portion of the Savings Plan on behalf of the Participant if (i) such Plan did not contain the limitations imposed under Sections 401(a)(17) and 415 of the Code and (ii) the term "Compensation" (as defined in Section 2.7 hereof) were used for purposes of determining the amount of profit sharing contributions under the Savings Plan, OVER (b) the amount of the 4

Company's Post-1996 Profit Sharing Contribution which is actually made to the Savings Plan on behalf of the Participant for such Plan Year. SECTION 3.3. EXCESS 401(K) BENEFITS. (a) AMOUNT OF EXCESS 401(K) BENEFITS. Each 401(k) Employee who is a Participant under the terms of this Plan, may, prior to the first day of any Plan Year, by completing a Notice of Election to Defer Compensation or other form approved by the Company ("Deferral Election Form"), direct the Company: (i) to reduce his Compensation (as that term is defined in Section 2.7 hereof) by the difference between (A) a certain percentage, in 1% increments, with a maximum of 15%, of his Compensation for the calendar year, and (B) the maximum Before-Tax Contributions actually permitted to be contributed for him to the Savings Plan by reason of the application of the limitations imposed under Sections 402(g), 401(a)(17), or 401(k)(3) of the Code; (ii) to credit the deferrals to the Sub-Account described in Section 3.5(a) at the times described therein.

Company's Post-1996 Profit Sharing Contribution which is actually made to the Savings Plan on behalf of the Participant for such Plan Year. SECTION 3.3. EXCESS 401(K) BENEFITS. (a) AMOUNT OF EXCESS 401(K) BENEFITS. Each 401(k) Employee who is a Participant under the terms of this Plan, may, prior to the first day of any Plan Year, by completing a Notice of Election to Defer Compensation or other form approved by the Company ("Deferral Election Form"), direct the Company: (i) to reduce his Compensation (as that term is defined in Section 2.7 hereof) by the difference between (A) a certain percentage, in 1% increments, with a maximum of 15%, of his Compensation for the calendar year, and (B) the maximum Before-Tax Contributions actually permitted to be contributed for him to the Savings Plan by reason of the application of the limitations imposed under Sections 402(g), 401(a)(17), or 401(k)(3) of the Code; (ii) to credit the deferrals to the Sub-Account described in Section 3.5(a) at the times described therein. (b) DEFERRAL PERIOD. The deferral election described in Subsection (a) above shall also contain such Participant's election regarding the time of the commencement of payment of his Excess 401(k) Sub-Account. In the Deferral Election Form, such Participant may elect to commence payment of his Excess 401(k) Sub-Account on (i) the date on which he ceases to be an Employee of a Controlled Group Member, (ii) the date on which he attains an age specified in the Deferral Election Form, or (iii) the earlier or later of such dates. (c) EFFECT AND DURATION OF DEFERRAL ELECTION. Any direction by a 401(k) Employee who is a Participant in this Plan to make deferrals of Excess 401(k) Benefits hereunder shall be effective with respect to Compensation otherwise payable to the Participant, and the Participant shall not be eligible to receive such Excess 401(k) Benefits. Instead, such amounts shall be credited to the Participant's Sub-Account as provided in Section 3.5(a). Any directions made in accordance with Subsections (a) or (b) above shall be irrevocable and shall remain in effect for subsequent Plan Years unless for subsequent Plan Years the directions are changed or terminated by the Participant, on the appropriate form provided by the Plan Administrator, prior to the first day of such subsequent Plan Year. Notwithstanding the foregoing, a Participant's direction to make deferrals of Excess 401(k) Benefits shall automatically terminate on the earlier of the date on which (i) the Participant ceases employment with the Company, (ii) the Company is deemed Insolvent, (iii) the Participant is no longer eligible to make deferrals of Excess 401(k) Benefits hereunder, or (iv) the Plan is terminated. 5

(d) Notwithstanding the foregoing, any Participant whose eligibility to make Before-Tax Contributions to the Savings Plan has been suspended because he has taken a hardship withdrawal from the Savings Plan shall not be eligible to make deferrals of Excess 401(k) Benefits under this Plan for the period of his suspension from the Savings Plan. SECTION 3.4. EXCESS MATCHING BENEFITS. (a) IN GENERAL. A 401(k) Employee shall have credited to his Excess Matching Sub-Account an amount equal to the Post-1994 Matching Employer Contributions that he is prevented from receiving under the Savings Plan because of the limitations imposed under Code Sections 402(g), 401(a)(17), 401(k)(3) and 401(m) (collectively, the "Excess Matching Benefits"). (b) TIME OF PAYMENT. The Excess Matching Benefits shall be paid (or commence to be paid) at the time specified in the Deferral Election Form for the payment of the Excess 401(k) Benefits to which the Excess Matching Benefits relate. SECTION 3.5. PARTICIPANT'S ACCOUNTS. The Company shall establish and maintain on its books an Account for each Participant which shall contain the following entries:

(d) Notwithstanding the foregoing, any Participant whose eligibility to make Before-Tax Contributions to the Savings Plan has been suspended because he has taken a hardship withdrawal from the Savings Plan shall not be eligible to make deferrals of Excess 401(k) Benefits under this Plan for the period of his suspension from the Savings Plan. SECTION 3.4. EXCESS MATCHING BENEFITS. (a) IN GENERAL. A 401(k) Employee shall have credited to his Excess Matching Sub-Account an amount equal to the Post-1994 Matching Employer Contributions that he is prevented from receiving under the Savings Plan because of the limitations imposed under Code Sections 402(g), 401(a)(17), 401(k)(3) and 401(m) (collectively, the "Excess Matching Benefits"). (b) TIME OF PAYMENT. The Excess Matching Benefits shall be paid (or commence to be paid) at the time specified in the Deferral Election Form for the payment of the Excess 401(k) Benefits to which the Excess Matching Benefits relate. SECTION 3.5. PARTICIPANT'S ACCOUNTS. The Company shall establish and maintain on its books an Account for each Participant which shall contain the following entries: (a) Credits to an Excess Profit Sharing Sub-Account for the Excess Profit Sharing Benefits described in Section 3.2, which shall be credited to the Sub-Account at the time the Profit Sharing Contributions are otherwise credited to Participants' Accounts under the Savings Plan; (b) Credits to an Excess 401(k) Sub-Account for the Excess 401(k) Benefits described in Section 3.3, which shall be credited to the Sub-Account when a 401(k) Employee is prevented from making a Before-Tax Contribution under the Savings Plan; (c) Credits to an Excess Matching Sub-Account for the Excess Matching Benefits described in Section 3.4, which shall be credited to the Sub-Account when a 401(k) Employee is prevented from receiving Post-1994 Matching Employer Contributions under the Savings Plan; (d) Credits to such Sub-Accounts for the earnings described in Article IV, which shall continue until the vested portions of such Sub-Accounts have been distributed to the Participant or his Beneficiary; and (e) Debits for any distributions made from such Sub-Accounts. To the extent determined necessary by the Company, the Company may also establish a "notional account" in the name of each Cash Balance Employee to reflect the Excess Pension benefits payable to such Employees. 6

SECTION 3.6. EFFECT ON OTHER BENEFITS. Benefits payable to or with respect to a Participant under the Qualified Plans or any other Company-sponsored (qualified or nonqualified) plan, if any, are in addition to those provided under this Plan. ARTICLE IV EARNINGS SECTION 4.1. FOR ACTIVE PROFIT SHARING EMPLOYEES. Except as provided in Section 4.3, at the end of each calendar month during a Plan Year, the Excess Profit Sharing Sub-Account of each Participant shall be credited with an amount determined by multiplying such Participant's average Excess Profit Sharing SubAccount balance during such month by the blended rate earned during such month by the Fixed Income Fund under the Savings Plan. Notwithstanding the foregoing, in the event that the Adjusted ROE determined for such Plan Year exceeds the rate credited to the Participant's Excess Profit Sharing Sub-Account under the preceding sentence, such Sub-Account shall retroactively be credited with the difference between (a) the amount determined under the preceding sentence, and (b) the amount determined by multiplying the Participant's average Sub-Account balance during each month of such Plan Year by the Adjusted ROE determined for such Plan

SECTION 3.6. EFFECT ON OTHER BENEFITS. Benefits payable to or with respect to a Participant under the Qualified Plans or any other Company-sponsored (qualified or nonqualified) plan, if any, are in addition to those provided under this Plan. ARTICLE IV EARNINGS SECTION 4.1. FOR ACTIVE PROFIT SHARING EMPLOYEES. Except as provided in Section 4.3, at the end of each calendar month during a Plan Year, the Excess Profit Sharing Sub-Account of each Participant shall be credited with an amount determined by multiplying such Participant's average Excess Profit Sharing SubAccount balance during such month by the blended rate earned during such month by the Fixed Income Fund under the Savings Plan. Notwithstanding the foregoing, in the event that the Adjusted ROE determined for such Plan Year exceeds the rate credited to the Participant's Excess Profit Sharing Sub-Account under the preceding sentence, such Sub-Account shall retroactively be credited with the difference between (a) the amount determined under the preceding sentence, and (b) the amount determined by multiplying the Participant's average Sub-Account balance during each month of such Plan Year by the Adjusted ROE determined for such Plan Year, compounded monthly. SECTION 4.2. FOR ACTIVE 401(K) EMPLOYEES. (a) For purposes of determining the earnings to be credited to 401(k) Employee's Account, such Account shall be divided into two additional Sub-Accounts, the "7% SubAccount" and the "Additional Sub-Account." The 7% Sub-Account shall contain Excess 401(k) Benefits and Excess Matching Benefits attributable to amounts deferred by the 401(k) Employee of up to 7% of his Compensation, plus any earnings attributable thereto. The Additional Sub-Account shall contain the Excess 401 (k) Benefits and Excess Matching Benefits attributable to amounts deferred by the 401(k) Employee in excess of 7% of his Compensation, plus any earnings attributable thereto. (b) Except as provided in Section 4.3, at the end of each calendar month during a Plan Year, the 7% SubAccount of each 401(k) Employee shall be credited with an amount determined by multiplying such Participant's average 7% Sub-Account balance during such month by the blended rate earned during such month by the Fixed Income Fund. Notwithstanding the foregoing, in the event that the Adjusted ROE determined for such Plan Year exceeds the rate credited to the Participant's 7% Sub-Account under the preceding sentence, the Participant's 7% Sub-Account shall retroactively be credited with the difference between (i) the amount determined under the preceding sentence, and (ii) the amount determined by multiplying the Participant's average 7% Sub-Account balance during each month of such Plan Year by the Adjusted ROE determined for such Plan Year, compounded monthly. 7

(c) At the end of each calendar month during a Plan Year, the Additional Sub-Account of each Participant shall be credited with an amount determined by multiplying such Participant's average Additional Sub-Account balance during such month by the blended rate earned during such month by the Fixed Income Fund. SECTION 4.3. FOR TERMINATED EMPLOYEES. The Sub-Accounts of a Participant who has terminated employment with the Controlled Group shall be credited with earnings as described in Section 4.1 or 4.2, as modified by this Section 4.3, until the vested portion of each Sub-Account has been distributed in full. The Adjusted ROE calculation described in the second sentence of Section 4.1 and in the second sentence of Section 4.2(b) shall be made during the month in which the Participant terminates employment and shall be based on the year-to-date Adjusted ROE for the month ending prior to the date the Participant terminated employment, as calculated by the Company. For any subsequent month, the Adjusted ROE calculation described in the second sentence of Section 4.1 and in the second sentence of Section 4.2(b), shall not apply. The Fixed Income Fund calculation described in the first sentence of Section 4.1 and 4.2 (a) and in Section 4.2(c) for the month in which the Participant receives a distribution from his Sub-Account shall be based on the blended rate earned during the preceding month by the Fixed Income Fund.

(c) At the end of each calendar month during a Plan Year, the Additional Sub-Account of each Participant shall be credited with an amount determined by multiplying such Participant's average Additional Sub-Account balance during such month by the blended rate earned during such month by the Fixed Income Fund. SECTION 4.3. FOR TERMINATED EMPLOYEES. The Sub-Accounts of a Participant who has terminated employment with the Controlled Group shall be credited with earnings as described in Section 4.1 or 4.2, as modified by this Section 4.3, until the vested portion of each Sub-Account has been distributed in full. The Adjusted ROE calculation described in the second sentence of Section 4.1 and in the second sentence of Section 4.2(b) shall be made during the month in which the Participant terminates employment and shall be based on the year-to-date Adjusted ROE for the month ending prior to the date the Participant terminated employment, as calculated by the Company. For any subsequent month, the Adjusted ROE calculation described in the second sentence of Section 4.1 and in the second sentence of Section 4.2(b), shall not apply. The Fixed Income Fund calculation described in the first sentence of Section 4.1 and 4.2 (a) and in Section 4.2(c) for the month in which the Participant receives a distribution from his Sub-Account shall be based on the blended rate earned during the preceding month by the Fixed Income Fund. SECTION 4.3. CHANGES IN EARNINGS ASSUMPTIONS. The Committee (as defined in Section 9.5) may change the earnings rate credited to Accounts hereunder at any time upon at least 30 days advance notice to Participants. SECTION 4.4. LIMITATION ON EARNINGS ASSUMPTION. Notwithstanding any provision of the Plan to the contrary, in no event will the earnings rate credited to Accounts hereunder exceed 14%. ARTICLE V VESTING A Participant shall not become vested in his Excess Pension Benefit or Excess Profit Sharing Benefit until he becomes vested in the corresponding benefit under the applicable underlying Qualified Plan and the Excess Pension Benefit and/or Excess Profit Sharing Benefit of a Participant who is partially or fully vested under the applicable underlying Qualified Plan shall at all times be vested hereunder to the extent he is so vested. A Participant shall always be 100% vested in his Excess 401(k) Benefit and his Excess Matching Benefit hereunder. The non-vested portion of any Excess Retirement Benefit shall be forfeited and/or reinstated under this Plan in accordance with the vesting, forfeiture and service rules contained in the applicable underlying Qualified Plan. 8 ARTICLE VI DISTRIBUTION OF BENEFITS TO PARTICIPANTS SECTION 6.1. TIME AND MANNER OF PAYMENT. (a) EXCESS PENSION BENEFITS. (i) TIMING. A Participant who is a Cash Balance Employee is required to elect the time and manner of payment of his benefits under the Cash Balance Plan before he will be eligible to receive payment of his Excess Pension Benefit hereunder. The Excess Pension Benefit payable to a Participant shall be paid at the same time or times and in the same manner as the benefits payable to the Participant under the Cash Balance Plan. (ii) FORM. Notwithstanding the foregoing, in the event that the monthly payments of the Excess Pension Benefits payable to a Participant hereunder following the Participant's termination of the employment with the Controlled Group amount to less than Fifty Dollars ($50) per month, such Excess Pension Benefits shall be paid in the form of a single lump sum payment. Such lump sum amount shall be equal to the Actuarial Equivalent present value of such Excess Pension Benefits. (b) EXCESS PROFIT SHARING BENEFITS. The Excess Profit Sharing Benefit payable to a Participant shall be paid in the form of a single lump sum payment at the time the corresponding Post-1996 Profit Sharing

ARTICLE VI DISTRIBUTION OF BENEFITS TO PARTICIPANTS SECTION 6.1. TIME AND MANNER OF PAYMENT. (a) EXCESS PENSION BENEFITS. (i) TIMING. A Participant who is a Cash Balance Employee is required to elect the time and manner of payment of his benefits under the Cash Balance Plan before he will be eligible to receive payment of his Excess Pension Benefit hereunder. The Excess Pension Benefit payable to a Participant shall be paid at the same time or times and in the same manner as the benefits payable to the Participant under the Cash Balance Plan. (ii) FORM. Notwithstanding the foregoing, in the event that the monthly payments of the Excess Pension Benefits payable to a Participant hereunder following the Participant's termination of the employment with the Controlled Group amount to less than Fifty Dollars ($50) per month, such Excess Pension Benefits shall be paid in the form of a single lump sum payment. Such lump sum amount shall be equal to the Actuarial Equivalent present value of such Excess Pension Benefits. (b) EXCESS PROFIT SHARING BENEFITS. The Excess Profit Sharing Benefit payable to a Participant shall be paid in the form of a single lump sum payment at the time the corresponding Post-1996 Profit Sharing Contributions payable to the Participant under the Savings Plan commence to be paid. (c) EXCESS 401(K) AND MATCHING BENEFITS. (i) TIMING. A Participant's Account shall be paid (or commence to be paid) to the Participant at the time specified in the Participant's Deferral Election Form pursuant to Section 3.2(b). (ii) FORM. A Participant's Account shall be distributed in the form of ten annual installments with each installment being based on the value of the Participant's Account on the Valuation Date immediately preceding the date such installment is to be paid and being a fraction of such value in which the numerator is one and the denominator is the total number of remaining installments to be paid. Notwithstanding the foregoing, the Participant may elect to receive his Account in the form of a single lump sum payment or in annual installments for a period of less than 10 years by filing a notice in writing, signed by the Participant while he is alive and filed with the Plan Administrator at least one year prior to the time he had elected to commence receiving payment of the portion his Account to which his election applies. Any such election of the form of benefit may be changed at any time and from time to time, without the consent of any other person, by filing a later election in writing that is signed by a Participant and filed with the Plan 9

Administrator while such Participant is alive and at least one year prior to the time he had elected to commence receiving payment of his Account. (iii) UNFORESEEABLE EMERGENCY DISTRIBUTIONS. Notwithstanding the foregoing, the Company may at any time, upon written request of the Participant cause to be paid to such Participant an amount equal to all or any part of the Participant's Excess 401(k) Sub-Account and/or Excess Matching Sub-Account if the Company determines, in its absolute discretion based on such reasonable evidence that it shall require, that such a payment or payments is necessary for the purpose of alleviating the consequences of an Unforeseeable Emergency occurring with respect to the Participant. Payments of amounts because of an Unforeseeable Emergency shall be permitted only to the extent reasonably necessary to satisfy the emergency need. SECTION 6.2. SMALL SUB-ACCOUNTS. Notwithstanding the foregoing, in the event that the vested portion of a Participant's Account does not exceed $5,000 at the time of such Participant's termination of employment with the Controlled Group, such vested portion of his Account shall automatically be paid to him in a single lump sum payment as soon as practicable following his termination of employment. SECTION 6.3. LIABILITY FOR PAYMENT/EXPENSES. The Company shall be liable for the payment of the Excess Retirement Benefits which are payable hereunder to the Participants. Expenses of administering the

Administrator while such Participant is alive and at least one year prior to the time he had elected to commence receiving payment of his Account. (iii) UNFORESEEABLE EMERGENCY DISTRIBUTIONS. Notwithstanding the foregoing, the Company may at any time, upon written request of the Participant cause to be paid to such Participant an amount equal to all or any part of the Participant's Excess 401(k) Sub-Account and/or Excess Matching Sub-Account if the Company determines, in its absolute discretion based on such reasonable evidence that it shall require, that such a payment or payments is necessary for the purpose of alleviating the consequences of an Unforeseeable Emergency occurring with respect to the Participant. Payments of amounts because of an Unforeseeable Emergency shall be permitted only to the extent reasonably necessary to satisfy the emergency need. SECTION 6.2. SMALL SUB-ACCOUNTS. Notwithstanding the foregoing, in the event that the vested portion of a Participant's Account does not exceed $5,000 at the time of such Participant's termination of employment with the Controlled Group, such vested portion of his Account shall automatically be paid to him in a single lump sum payment as soon as practicable following his termination of employment. SECTION 6.3. LIABILITY FOR PAYMENT/EXPENSES. The Company shall be liable for the payment of the Excess Retirement Benefits which are payable hereunder to the Participants. Expenses of administering the Plan shall be paid by the Company. ARTICLE VII BENEFICIARIES SECTION 7.1. BENEFICIARY DESIGNATIONS. A designation of a Beneficiary hereunder may be made only by an instrument (in form acceptable to the Plan Administrator) signed by the Participant and filed with the Plan Administrator prior to the Participant's death. In the absence of such a designation and at any other time when there is no existing Beneficiary designated hereunder, the Beneficiary of a Participant for his Excess Pension Benefits and/or his Account shall be his Beneficiary under the Cash Balance Plan and the Savings Plan, respectively. A person designated by a Participant as his Beneficiary who or which ceases to exist shall not be entitled to any part of any payment thereafter to be made to the Participant's Beneficiary unless the Participant's designation specifically provided to the contrary. If two or more persons designated as a Participant's Beneficiary are in existence with respect to a single Excess Retirement Benefit the amount of any payment to the Beneficiary under this Plan shall be divided equally among such persons unless the Participant's designation specifically provides for a different allocation. SECTION 7.2. CHANGE IN BENEFICIARY. (a) Anything herein or in the Qualified Plans to the contrary notwithstanding, 10

a Participant may, at any time and from time to time, change a Beneficiary designation hereunder without the consent of any existing Beneficiary or any other person. A change in Beneficiary hereunder may be made regardless of whether such a change is also made under the applicable underlying Qualified Plan. In other words, the Beneficiary hereunder need not be the same as under the applicable underlying Qualified Plan. (b) Any change in Beneficiary shall be made by giving written notice thereof to the Plan Administrator and any change shall be effective only if received by the Plan Administrator prior to the death of the Participant. SECTION 7.3. DISTRIBUTIONS TO BENEFICIARIES. (a) AMOUNT OF BENEFITS. (i) AMOUNT OF EXCESS PENSION BENEFIT. The Excess Pension Benefit payable to a Beneficiary under this Plan shall be a monthly benefit equal to the excess, if any, of (A) the amount of the monthly benefit that would be payable to the Beneficiary last effectively designated by the Participant under the Cash Balance Plan (in the form actually paid) if such Plan did not contain the limitations imposed under Sections 401(a)(17) or 415 of the Code and the definition of Compensation under such Plan included any amounts deferred under this Plan OVER

a Participant may, at any time and from time to time, change a Beneficiary designation hereunder without the consent of any existing Beneficiary or any other person. A change in Beneficiary hereunder may be made regardless of whether such a change is also made under the applicable underlying Qualified Plan. In other words, the Beneficiary hereunder need not be the same as under the applicable underlying Qualified Plan. (b) Any change in Beneficiary shall be made by giving written notice thereof to the Plan Administrator and any change shall be effective only if received by the Plan Administrator prior to the death of the Participant. SECTION 7.3. DISTRIBUTIONS TO BENEFICIARIES. (a) AMOUNT OF BENEFITS. (i) AMOUNT OF EXCESS PENSION BENEFIT. The Excess Pension Benefit payable to a Beneficiary under this Plan shall be a monthly benefit equal to the excess, if any, of (A) the amount of the monthly benefit that would be payable to the Beneficiary last effectively designated by the Participant under the Cash Balance Plan (in the form actually paid) if such Plan did not contain the limitations imposed under Sections 401(a)(17) or 415 of the Code and the definition of Compensation under such Plan included any amounts deferred under this Plan OVER (B) the amount of the monthly benefit that is actually paid to such Beneficiary under such Plan. (ii) AMOUNT OF EXCESS PROFIT SHARING BENEFIT. The Excess Profit Sharing Benefit payable to a Participant's Beneficiary under this Plan shall be equal to such Participant's vested Excess Profit Sharing SubAccount balance on the date of the distribution of the Sub-Account to the Beneficiary. (iii) AMOUNT OF EXCESS 401(K) AND EXCESS MATCHING BENEFITS. The Excess 401(k) and Excess Matching Benefits payable to a Participant's Beneficiary under this Plan shall be equal to such Participant's Excess 401(k) and Excess Matching Sub-Account balances on the date of the distribution of the Sub-Accounts to the Beneficiary. (b) TIME AND MANNER OF PAYMENT. (i) EXCESS PENSION BENEFIT. The Excess Pension Benefit payable to a Beneficiary under this Plan shall be paid at the same time or times and in the same manner as the benefits payable to the Beneficiary last effectively designated by the Participant under the Cash Balance Plan; provided however, that the provisions of Subsection 6.1(a)(ii) shall apply to such 11

Benefit, treating the Beneficiary hereunder as if he were the Participant. (ii) EXCESS PROFIT SHARING BENEFIT/EXCESS 401(k) BENEFIT AND EXCESS MATCHING BENEFIT. The Excess Profit Sharing Benefit, Excess 401(k) Benefit and Excess Matching Benefit payable to a Beneficiary under this Plan shall be paid as soon as practicable following the death of the Participant in the form of a lump sum payment. (c) EFFECT OF DIFFERENT BENEFICIARIES UNDER THIS PLAN AND THE CASH BALANCE PLAN. In the event the Beneficiary designated hereunder for the Excess Pension Benefit is different than the Beneficiary under the Cash Balance Plan, (i) if the Beneficiary hereunder dies after the Participant but while the Beneficiary under the Cash Balance Plan is still living, any remaining payments hereunder shall be payable, as they come due, to the estate of the Beneficiary hereunder and (ii) if the Beneficiary hereunder predeceases the Beneficiary under the Cash Balance Plan and the Participant, the Beneficiary hereunder shall revert to the Beneficiary last effectively designated under the Cash Balance Plan unless and until the Participant again makes a change of Beneficiary pursuant to Section 7.2. ARTICLE VIII MISCELLANEOUS SECTION 8.1. LIABILITY OF COMPANY. Nothing in this Plan shall constitute the creation of a trust or other

Benefit, treating the Beneficiary hereunder as if he were the Participant. (ii) EXCESS PROFIT SHARING BENEFIT/EXCESS 401(k) BENEFIT AND EXCESS MATCHING BENEFIT. The Excess Profit Sharing Benefit, Excess 401(k) Benefit and Excess Matching Benefit payable to a Beneficiary under this Plan shall be paid as soon as practicable following the death of the Participant in the form of a lump sum payment. (c) EFFECT OF DIFFERENT BENEFICIARIES UNDER THIS PLAN AND THE CASH BALANCE PLAN. In the event the Beneficiary designated hereunder for the Excess Pension Benefit is different than the Beneficiary under the Cash Balance Plan, (i) if the Beneficiary hereunder dies after the Participant but while the Beneficiary under the Cash Balance Plan is still living, any remaining payments hereunder shall be payable, as they come due, to the estate of the Beneficiary hereunder and (ii) if the Beneficiary hereunder predeceases the Beneficiary under the Cash Balance Plan and the Participant, the Beneficiary hereunder shall revert to the Beneficiary last effectively designated under the Cash Balance Plan unless and until the Participant again makes a change of Beneficiary pursuant to Section 7.2. ARTICLE VIII MISCELLANEOUS SECTION 8.1. LIABILITY OF COMPANY. Nothing in this Plan shall constitute the creation of a trust or other fiduciary relationship between the Company and any Participant, Beneficiary or any other person. SECTION 8.2. LIMITATION ON RIGHTS OF PARTICIPANTS AND BENEFICIARIES - NO LIEN. The Plan is designed to be an unfunded, nonqualified plan. Nothing contained herein shall be deemed to create a trust or lien in favor of any Participant or Beneficiary on any assets of the Company. The Company shall have no obligation to purchase any assets that do not remain subject to the claims of the creditors of the Company for use in connection with the Plan. No Participant or Beneficiary or any other person shall have any preferred claim on, or any beneficial ownership interest in, any assets of the Company prior to the time that such assets are paid to the Participant or Beneficiary as provided herein. Each Participant and Beneficiary shall have the status of a general unsecured creditor of the Company. SECTION 8.3. NO GUARANTEE OF EMPLOYMENT. Nothing in this Plan shall be construed as guaranteeing future employment to Participants. A Participant continues to be an Employee of the Company solely at the will of the Company subject to discharge at any time, with or without cause. SECTION 8.4. PAYMENT TO GUARDIAN. If a benefit payable hereunder is payable to a minor, to a person declared 12

incompetent or to a person incapable of handling the disposition of his property, the Plan Administrator may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or person. The Plan Administrator may require such proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Company from all liability with respect to such benefit. SECTION 8.5. ASSIGNMENT. No right or interest under this Plan of any Participant or Beneficiary shall be assignable or transferable in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or subject to the debts or liabilities of the Participant or Beneficiary. SECTION 8.6. SEVERABILITY. If any provision of this Plan or the application thereof to any circumstance(s) or person(s) is held to be invalid by a court of competent jurisdiction, the remainder of the Plan and the application of such provision to other circumstances or persons shall not be affected thereby. ARTICLE IX ADMINISTRATION OF PLAN

incompetent or to a person incapable of handling the disposition of his property, the Plan Administrator may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or person. The Plan Administrator may require such proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Company from all liability with respect to such benefit. SECTION 8.5. ASSIGNMENT. No right or interest under this Plan of any Participant or Beneficiary shall be assignable or transferable in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or subject to the debts or liabilities of the Participant or Beneficiary. SECTION 8.6. SEVERABILITY. If any provision of this Plan or the application thereof to any circumstance(s) or person(s) is held to be invalid by a court of competent jurisdiction, the remainder of the Plan and the application of such provision to other circumstances or persons shall not be affected thereby. ARTICLE IX ADMINISTRATION OF PLAN SECTION 9.1. ADMINISTRATION. (a) IN GENERAL. The Plan shall be administered by the Plan Administrator. The Plan Administrator shall have sole and absolute discretion to interpret where necessary all provisions of the Plan (including, without limitation, by supplying omissions from, correcting deficiencies in, or resolving inconsistencies or ambiguities in, the language of the Plan), to determine the rights and status under the Plan of Participants, or other persons, to resolve questions or disputes arising under the Plan and to make any determinations with respect to the benefits payable under the Plan and the persons entitled thereto as may be necessary for the purposes of the Plan. Without limiting the generality of the foregoing, the Plan Administrator is hereby granted the authority (i) to determine whether a particular Employee is a Participant, and (ii) to determine if an Employee is entitled to Excess Retirement Benefits hereunder and, if so, the amount and duration of such Benefits. The Plan Administrator's determination of the rights of any Employee or former Employee hereunder shall be final and binding on all persons, subject only to the provisions of Sections 9.3 and 9.4 hereof. (b) DELEGATION OF DUTIES. The Plan Administrator may delegate any of its administrative duties, including, without limitation, duties with respect to the processing, review, investigation, approval and payment of Excess Retirement Benefits, to a named administrator or administrators. 13

SECTION 9.2. REGULATIONS. The Plan Administrator shall promulgate any rules and regulations it deems necessary in order to carry out the purposes of the Plan or to interpret the provisions of the Plan; provided, however, that no rule, regulation or interpretation shall be contrary to the provisions of the Plan. The rules, regulations and interpretations made by the Plan Administrator shall, subject only to the provisions of Sections 9.3 and 9.4 hereof, be final and binding on all persons. SECTION 9.3. CLAIMS PROCEDURES. The Plan Administrator shall determine the rights of any Employee or former Employee to any Excess Retirement Benefits hereunder. Any Employee or former Employee who believes that he has not received the Excess Retirement Benefits to which he is entitled under the Plan may file a claim in writing with the Plan Administrator. The Plan Administrator shall, no later than 90 days after the receipt of a claim (plus an additional period of 90 days if required for processing, provided that notice of the extension of time is given to the claimant within the first 90 day period), either allow or deny the claim in writing. If a claimant does not receive written notice of the Plan Administrator's decision on his claim within the above-mentioned period, the claim shall be deemed to have been denied in full. A written denial of a claim by the Plan Administrator, wholly or partially, shall be written in a manner calculated to be understood by the claimant and shall include: (a) the specific reasons for the denial; (b) specific reference to pertinent Plan provisions on which the denial is based;

SECTION 9.2. REGULATIONS. The Plan Administrator shall promulgate any rules and regulations it deems necessary in order to carry out the purposes of the Plan or to interpret the provisions of the Plan; provided, however, that no rule, regulation or interpretation shall be contrary to the provisions of the Plan. The rules, regulations and interpretations made by the Plan Administrator shall, subject only to the provisions of Sections 9.3 and 9.4 hereof, be final and binding on all persons. SECTION 9.3. CLAIMS PROCEDURES. The Plan Administrator shall determine the rights of any Employee or former Employee to any Excess Retirement Benefits hereunder. Any Employee or former Employee who believes that he has not received the Excess Retirement Benefits to which he is entitled under the Plan may file a claim in writing with the Plan Administrator. The Plan Administrator shall, no later than 90 days after the receipt of a claim (plus an additional period of 90 days if required for processing, provided that notice of the extension of time is given to the claimant within the first 90 day period), either allow or deny the claim in writing. If a claimant does not receive written notice of the Plan Administrator's decision on his claim within the above-mentioned period, the claim shall be deemed to have been denied in full. A written denial of a claim by the Plan Administrator, wholly or partially, shall be written in a manner calculated to be understood by the claimant and shall include: (a) the specific reasons for the denial; (b) specific reference to pertinent Plan provisions on which the denial is based; (c) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (d) an explanation of the claim review procedure. A claimant whose claim is denied (or his duly authorized representative) may within 60 days after receipt of denial of a claim file with the Plan Administrator a written request for a review of such claim. If the claimant does not file a request for review of his claim within such 60-day period, the claimant shall be deemed to have acquiesced in the original decision of the Plan Administrator on his claim. If such an appeal is so filed within such 60 day period, the Company (or its delegate) shall conduct a full and fair review of such claim. During such review, the claimant shall be given the opportunity to review documents that are pertinent to his claim and to submit issues and comments in writing. The Company shall mail or deliver to the claimant a written decision on the matter based on the facts and the 14

pertinent provisions of the Plan within 60 days after the receipt of the request for review (unless special circumstances require an extension of up to 60 additional days, in which case written notice of such extension shall be given to the claimant prior to the commencement of such extension). Such decision shall be written in a manner calculated to be understood by the claimant, shall state the specific reasons for the decision and the specific Plan provisions on which the decision was based and shall, to the extent permitted by law, be final and binding on all interested persons. If the decision on review is not furnished to the claimant within the abovementioned time period, the claim shall be deemed to have been denied on review. SECTION 9.4. REVOCABILITY OF PLAN ADMINISTRATOR/ COMPANY ACTION. Any action taken by the Plan Administrator or the Company with respect to the rights or benefits under the Plan of any Employee or former Employee shall be revocable by the Plan Administrator or the Company as to payments not yet made to such person, and acceptance of any Excess Retirement Benefits under the Plan constitutes acceptance of and agreement to the Plan Administrator's or the Company's making any appropriate adjustments in future payments to such person (or to recover from such person) any excess payment or underpayment previously made to him. SECTION 9.5. AMENDMENT. The Nominating, Organization and Compensation Committee of the Board of Directors of the Company (the "Committee") may at any time amend any or all of the provisions of this Plan, except that (a) no such amendment may adversely affect any Participant's vested Excess Retirement Benefit as of

pertinent provisions of the Plan within 60 days after the receipt of the request for review (unless special circumstances require an extension of up to 60 additional days, in which case written notice of such extension shall be given to the claimant prior to the commencement of such extension). Such decision shall be written in a manner calculated to be understood by the claimant, shall state the specific reasons for the decision and the specific Plan provisions on which the decision was based and shall, to the extent permitted by law, be final and binding on all interested persons. If the decision on review is not furnished to the claimant within the abovementioned time period, the claim shall be deemed to have been denied on review. SECTION 9.4. REVOCABILITY OF PLAN ADMINISTRATOR/ COMPANY ACTION. Any action taken by the Plan Administrator or the Company with respect to the rights or benefits under the Plan of any Employee or former Employee shall be revocable by the Plan Administrator or the Company as to payments not yet made to such person, and acceptance of any Excess Retirement Benefits under the Plan constitutes acceptance of and agreement to the Plan Administrator's or the Company's making any appropriate adjustments in future payments to such person (or to recover from such person) any excess payment or underpayment previously made to him. SECTION 9.5. AMENDMENT. The Nominating, Organization and Compensation Committee of the Board of Directors of the Company (the "Committee") may at any time amend any or all of the provisions of this Plan, except that (a) no such amendment may adversely affect any Participant's vested Excess Retirement Benefit as of the date of such amendment and (b) no such amendment may suspend the crediting of earnings on the balance of a Participant's Account, until the entire balance of such Account has been distributed, in either case, without the prior written consent of the affected Participant. Any amendment shall be in the form of a written instrument executed by an officer of the Company on the order of the Committee. Subject to the foregoing provisions of this Section, such amendment shall become effective as of the date specified in such instrument or, if no such date is specified, on the date of its execution. SECTION 9.6. TERMINATION. (a) The Committee, in its sole discretion, may terminate this Plan at any time and for any reason whatsoever, except that (i) no such termination may adversely affect any Participant's vested Excess Retirement Benefit as of the date of such termination and (ii) no such termination may suspend the crediting of earnings on the balance of a Participant's Account, until the entire balance of such Account has been distributed, in either case, without the prior written consent of the affected Participant. Any such termination shall be expressed in the form of a written instrument executed by an officer of the Company on the order of the Committee. Subject to the foregoing provisions of this Section, such termination shall become effective as of 15

the date specified in such instrument or, if no such date is specified, on the date of its execution. Written notice of any termination shall be given to the Participants as soon as practicable after the instrument is executed. (b) Notwithstanding anything in the Plan to the contrary, in the event of a termination of the Plan (or any portion thereof), the Company, in its sole and absolute discretion, shall have the right to change the time and form of distribution of Participants' Excess Retirement Benefits. Executed, this 23rd day of December, 1996, to be effective January 1, 1997. HAMILTON BEACH/PROCTOR-SILEX, INC.
By: /s/ George P. Manson --------------------------------Title: Vice-President, General Counsel & Secretary

16

THE HAMILTON BEACH/PROCTOR-SILEX, INC.

the date specified in such instrument or, if no such date is specified, on the date of its execution. Written notice of any termination shall be given to the Participants as soon as practicable after the instrument is executed. (b) Notwithstanding anything in the Plan to the contrary, in the event of a termination of the Plan (or any portion thereof), the Company, in its sole and absolute discretion, shall have the right to change the time and form of distribution of Participants' Excess Retirement Benefits. Executed, this 23rd day of December, 1996, to be effective January 1, 1997. HAMILTON BEACH/PROCTOR-SILEX, INC.
By: /s/ George P. Manson --------------------------------Title: Vice-President, General Counsel & Secretary

16

THE HAMILTON BEACH/PROCTOR-SILEX, INC. UNFUNDED BENEFIT PLAN Notice of Form of Benefit Payment 1. ELECTION OF FORM OF BENEFIT: Pursuant to the provisions of the Hamilton Beach/Proctor-Silex, Inc. Unfunded Benefit Plan (the "Plan"), I hereby elect that the portion of my Account attributable to my Excess 401 (k) Benefit and my Excess Matching Benefit be paid in one of the following forms: (Elect One):
_____ _____ A lump sum cash payment. Annual Installments over a period of ____ Years (must not exceed 9).

I understand that if I fail to make an election or if my election is for any reason not effective, the portion of my Account attributable to my Excess 401(k) Benefit and my Excess Matching Benefit will automatically be paid in the form of annual installments for a period of 10 years. 2. EFFECTIVE DATE: I understand that in order for this election to be effective, it must be received by the Plan Administrator at least one year prior to the date on which I elected to commence payment of the portion of my Account attributable to my Excess 401(k) Benefit and my Excess Matching Benefit. 3. ACKNOWLEDGEMENT: I acknowledge that I have reviewed the Plan and understand that my election will be subject to the terms and conditions contained in the Plan. I understand

that I may change this election by filing a new election form with my Employer at least one year prior to the date on which I elected to commence payment of the portion of my Account attributable to my Excess 401(k) Benefit and my Excess Matching Benefit. 4. CONSTRUCTION: Terms used in this Notice of Election with initial capital letters that are defined in the Plan shall have the meanings set forth in the Plan unless a different meaning is clearly required by the context.

THE HAMILTON BEACH/PROCTOR-SILEX, INC. UNFUNDED BENEFIT PLAN Notice of Form of Benefit Payment 1. ELECTION OF FORM OF BENEFIT: Pursuant to the provisions of the Hamilton Beach/Proctor-Silex, Inc. Unfunded Benefit Plan (the "Plan"), I hereby elect that the portion of my Account attributable to my Excess 401 (k) Benefit and my Excess Matching Benefit be paid in one of the following forms: (Elect One):
_____ _____ A lump sum cash payment. Annual Installments over a period of ____ Years (must not exceed 9).

I understand that if I fail to make an election or if my election is for any reason not effective, the portion of my Account attributable to my Excess 401(k) Benefit and my Excess Matching Benefit will automatically be paid in the form of annual installments for a period of 10 years. 2. EFFECTIVE DATE: I understand that in order for this election to be effective, it must be received by the Plan Administrator at least one year prior to the date on which I elected to commence payment of the portion of my Account attributable to my Excess 401(k) Benefit and my Excess Matching Benefit. 3. ACKNOWLEDGEMENT: I acknowledge that I have reviewed the Plan and understand that my election will be subject to the terms and conditions contained in the Plan. I understand

that I may change this election by filing a new election form with my Employer at least one year prior to the date on which I elected to commence payment of the portion of my Account attributable to my Excess 401(k) Benefit and my Excess Matching Benefit. 4. CONSTRUCTION: Terms used in this Notice of Election with initial capital letters that are defined in the Plan shall have the meanings set forth in the Plan unless a different meaning is clearly required by the context.
Executed this ----day of , 19 . ---------------------------------------------------------------Signature ----------------------------------------Print or Type Name

Received by Employer: Signature Date 2

that I may change this election by filing a new election form with my Employer at least one year prior to the date on which I elected to commence payment of the portion of my Account attributable to my Excess 401(k) Benefit and my Excess Matching Benefit. 4. CONSTRUCTION: Terms used in this Notice of Election with initial capital letters that are defined in the Plan shall have the meanings set forth in the Plan unless a different meaning is clearly required by the context.
Executed this ----day of , 19 . ---------------------------------------------------------------Signature ----------------------------------------Print or Type Name

Received by Employer: Signature Date 2

Exhibit 10(cxvii) HAMILTON BEACH/PROCTOR-SILEX, INC. ANNUAL INCENTIVE COMPENSATION PLAN GENERAL Hamilton Beach/Proctor-Silex, Inc. (the "Company") has established an Annual Incentive Compensation Plan (the "Plan") as part of a competitive compensation program for the Officers and key management employees of the Company and its Subsidiaries. PLAN OBJECTIVE The Company desires to attract and retain talented employees to enable the Company to meet its financial and business objectives. The objective of the Plan is to provide an opportunity to earn annual incentive compensation to those employees whose performance has a significant impact on the Company's short-term and long-term profitability. ADMINISTRATION AND PARTICIPATION The Plan is administered by the Nominating, Organization and Compensation Committee of the Board of Directors of the Company (the "Committee"). The Committee: a. May amend, modify, or discontinue the Plan. b. Will approve participation in the Plan. Generally, participants will include all employees in Hat Salary Jobs Grades 14 and above. Employees who voluntarily terminate their employment prior to year-end are not entitled to an award, and employees joining the Company after August of any year will not be entitled to an award. However, the Committee may select any employee who has contributed significantly to the Company's profitability to participate in the Plan and receive an annual incentive compensation award.

Exhibit 10(cxvii) HAMILTON BEACH/PROCTOR-SILEX, INC. ANNUAL INCENTIVE COMPENSATION PLAN GENERAL Hamilton Beach/Proctor-Silex, Inc. (the "Company") has established an Annual Incentive Compensation Plan (the "Plan") as part of a competitive compensation program for the Officers and key management employees of the Company and its Subsidiaries. PLAN OBJECTIVE The Company desires to attract and retain talented employees to enable the Company to meet its financial and business objectives. The objective of the Plan is to provide an opportunity to earn annual incentive compensation to those employees whose performance has a significant impact on the Company's short-term and long-term profitability. ADMINISTRATION AND PARTICIPATION The Plan is administered by the Nominating, Organization and Compensation Committee of the Board of Directors of the Company (the "Committee"). The Committee: a. May amend, modify, or discontinue the Plan. b. Will approve participation in the Plan. Generally, participants will include all employees in Hat Salary Jobs Grades 14 and above. Employees who voluntarily terminate their employment prior to year-end are not entitled to an award, and employees joining the Company after August of any year will not be entitled to an award. However, the Committee may select any employee who has contributed significantly to the Company's profitability to participate in the Plan and receive an annual incentive compensation award. c. Will determine the annual performance criteria which generates the incentive compensation pool. d. Will determine the total amount of both the target and actual annual incentive compensation pool. e. Will approve individual incentive compensation awards to Officers and employees above Hay Salary Job Grade 17. f. May delegate to the Chief Financial Officer of the Company the power to approve incentive compensation awards to employees in and below Hay Salary Job Grade 17. g. May consider at the end of each year the award of a discretionary bonus amount to non-participants as an addition to the regular incentive compensation poll on a special one-time basis to motivate individuals not eligible to participate in the Plan. h. May approve a pro rata incentive compensation award for participants in the Plan whose employment is terminated (1) due to death, disability, retirement or facility closure, such award to be determined pursuant to the provisions of subparagraphs e. and f. above or (2) under other circumstances at the recommendation of the Chief Financial Officer of the Company.

DETERMINATION OF CORPORATE INCENTIVE COMPENSATION POOL Each participant in the Plan will have an individual target incentive compensation percentage which is determined by the participant's Salary Job Grade. This percentage is multiplied by the midpoint of the participant's Salary Job Grade to determine his individual target incentive compensation award. The total of the target incentive compensation awards of all participants equals the target corporate incentive compensation pool (the "Target

DETERMINATION OF CORPORATE INCENTIVE COMPENSATION POOL Each participant in the Plan will have an individual target incentive compensation percentage which is determined by the participant's Salary Job Grade. This percentage is multiplied by the midpoint of the participant's Salary Job Grade to determine his individual target incentive compensation award. The total of the target incentive compensation awards of all participants equals the target corporate incentive compensation pool (the "Target Pool"). The Target Pool is approved each year by the Committee. The actual corporate incentive compensation pool (the "Actual Pool") is determined at the end of each year based on the Company's actual performance against specific criteria established in the beginning of the year by the Committee. The Target Pool is adjusted upwards or downwards by corporate performance adjustment factor to determine the Actual Pool. In no event will the Actual Pool exceed 150% of the Target Pool, except to the extent that the Committee elects to increase the Actual Pool by up to 10%, as described below. It is the intent of the Plan that the Actual Pool, as determined above, will by the final total corporate incentive compensation pool. However, the Committee, in its sole discretion, may increase or decrease by up to 10% the Actual Pool or may approve an incentive compensation pool where there would normally be no poll due to Company performance which is below the criteria established for the year. The Actual and Target Pools exclude commission personnel as salespersons, regional general manager and manufacturing representatives. DETERMINATION OF INDIVIDUAL INCENTIVE COMPENSATION AWARDS Salary Job Grades and the corresponding target incentive percentage for each participant in the Plan will be established at the beginning of each year and approved by the Committee. Individual target incentive compensation will then be adjusted by the appropriate pool factor. Such adjusted individual incentive compensation will then be further modified based on a participant's performance as compared to his individual goals for the year. The total of all individual incentive compensation awards must not exceed the Actual Pool for the year. PERFORMANCE TARGETS - See Plan Summary.

EXHIBIT 11 NACCO INDUSTRIES, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE
1996 ---YEAR ENDED DECEMBER 1995 ---(AMOUNTS IN THOUSANDS, PER SHARE DATA) $65,506 32,333 (3,399) ------$94,440 =======

INCOME: Income before extraordinary items Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Net income PER SHARE AMOUNTS REPORTED TO STOCKHOLDERS -- Note 1 Income before extraordinary items Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Net income PRIMARY: Weighted average shares outstanding Dilutive stock options -- Note 2

$50,577 --------$50,577 =======

5.67 --------$ 5.67 ======= 8,920 11

$

$

7.31 3.61 (.38) ------$ 10.54 ======= 8,963 12

EXHIBIT 11 NACCO INDUSTRIES, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE
1996 ---YEAR ENDED DECEMBER 1995 ---(AMOUNTS IN THOUSANDS, PER SHARE DATA) $65,506 32,333 (3,399) ------$94,440 =======

INCOME: Income before extraordinary items Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Net income PER SHARE AMOUNTS REPORTED TO STOCKHOLDERS -- Note 1 Income before extraordinary items Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Net income PRIMARY: Weighted average shares outstanding Dilutive stock options -- Note 2 Totals Per share amounts Income before extraordinary items Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Net income FULLY DILUTED: Weighted average shares outstanding Dilutive stock options -- Note 2 Totals Per share amounts Income before extraordinary items Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Net income

$50,577 --------$50,577 =======

5.67 --------$ 5.67 ======= 8,920 11 ------8,931 ======= 5.66 --------$ 5.66 ======= 8,920 11 ------8,931 ======= 5.66 --------$ 5.66 ======= $ $

$

$

7.31 3.61 (.38) ------$ 10.54 ======= 8,963 12 ------8,975 ======= 7.30 3.60 (.38) ------$ 10.52 ======= 8,963 12 ------8,975 ======= 7.30 3.60 (.38) ------$ 10.52 ======= $ $

Note 1-- Per share earnings have been computed and reported to the stockholders pursuant to APB Opinion No. 15, which provides that "any reduction of less than 3% in the aggregate need not be considered as dilution in the computation and presentation of earnings per share data." Note 2-- Dilutive stock options are calculated based on the treasury stock method. For primary per share earnings the average market price is used. For fully diluted per share earnings the year-end market price, if higher than the average market price, is used.

EXHIBIT 13 ANNUAL REPORT ON FORM 10-K

EXHIBIT 13 ANNUAL REPORT ON FORM 10-K ITEM 8, ITEM 14(A)(1) AND (2), AND ITEM 14(d) FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES FINANCIAL STATEMENTS FINANCIAL STATEMENT SCHEDULES YEAR ENDED DECEMBER 31, 1996 NACCO INDUSTRIES, INC. MAYFIELD HEIGHTS, OHIO F-1

FORM 10-K ITEM 14(A)(1) AND (2) NACCO INDUSTRIES, INC. AND SUBSIDIARIES LIST FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES The following consolidated financial statements of NACCO Industries, Inc. and Subsidiaries are included in Item 8: Report of Independent Public Accountants--Year ended December 31, 1996, 1995 and 1994. Consolidated Statements of Income--Year ended December 31, 1996, 1995 and 1994. Consolidated Balance Sheets--December 31, 1996 and December 31, 1995. Consolidated Statements of Cash Flows--Year ended December 31, 1996, 1995 and 1994. Consolidated Statements of Stockholders' Equity--Year ended December 31, 1996, 1995 and 1994. Notes to Consolidated Financial Statements. NACCO Industries, Inc. Report of Management The following consolidated financial statement schedules of NACCO Industries, Inc. and Subsidiaries are included in Item 14(d): Schedule I Condensed Financial Information of the Parent Schedule II Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. F-2

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders of NACCO Industries, Inc.:

FORM 10-K ITEM 14(A)(1) AND (2) NACCO INDUSTRIES, INC. AND SUBSIDIARIES LIST FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES The following consolidated financial statements of NACCO Industries, Inc. and Subsidiaries are included in Item 8: Report of Independent Public Accountants--Year ended December 31, 1996, 1995 and 1994. Consolidated Statements of Income--Year ended December 31, 1996, 1995 and 1994. Consolidated Balance Sheets--December 31, 1996 and December 31, 1995. Consolidated Statements of Cash Flows--Year ended December 31, 1996, 1995 and 1994. Consolidated Statements of Stockholders' Equity--Year ended December 31, 1996, 1995 and 1994. Notes to Consolidated Financial Statements. NACCO Industries, Inc. Report of Management The following consolidated financial statement schedules of NACCO Industries, Inc. and Subsidiaries are included in Item 14(d): Schedule I Condensed Financial Information of the Parent Schedule II Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. F-2

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders of NACCO Industries, Inc.: We have audited the accompanying consolidated balance sheets of NACCO Industries, Inc. and Subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements and the schedules referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NACCO Industries, Inc. and Subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in Item 14(a)(1) and (2) and Item 14(d) of Form 10-K are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders of NACCO Industries, Inc.: We have audited the accompanying consolidated balance sheets of NACCO Industries, Inc. and Subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements and the schedules referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NACCO Industries, Inc. and Subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in Item 14(a)(1) and (2) and Item 14(d) of Form 10-K are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. Arthur Andersen LLP Cleveland, Ohio February 20, 1997 F-3

CONSOLIDATED STATEMENTS OF INCOME NACCO INDUSTRIES, INC. AND SUBSIDIARIES
YEAR ENDED DECEMBER 31 -----------------------------------------------1996 1995 1994 ------------------------(In millions, except per share data) $ 2,273.2 $ 2,204.5 $ 1,864.9 1,844.2 429.0 282.4 15.4 --------131.2 1,781.1 423.4 261.0 13.7 --------148.7 1,493.0 371.9 228.6 13.7 --------129.6

Revenues Cost of sales GROSS PROFIT Selling, general and administrative expenses Amortization of goodwill OPERATING PROFIT Other income (expense) Interest expense Other - net

(45.9) 1.0 --------(44.9)

(47.2) 2.0 --------(45.2)

(53.2) 2.1 --------(51.1)

CONSOLIDATED STATEMENTS OF INCOME NACCO INDUSTRIES, INC. AND SUBSIDIARIES
YEAR ENDED DECEMBER 31 -----------------------------------------------1996 1995 1994 ------------------------(In millions, except per share data) $ 2,273.2 $ 2,204.5 $ 1,864.9 1,844.2 429.0 282.4 15.4 --------131.2 1,781.1 423.4 261.0 13.7 --------148.7 1,493.0 371.9 228.6 13.7 --------129.6

Revenues Cost of sales GROSS PROFIT Selling, general and administrative expenses Amortization of goodwill OPERATING PROFIT Other income (expense) Interest expense Other - net

(45.9) 1.0 --------(44.9) --------86.3 34.3 --------52.0 (1.4) --------50.6 ----------$ 50.6 ========= $ 5.67

(47.2) 2.0 --------(45.2) --------103.5 34.7 --------68.8 (3.3) --------65.5 32.3 (3.4) --------$ 94.4 ========= $ 7.31

(53.2) 2.1 --------(51.1) --------78.5 30.7 --------47.8 (2.5) --------45.3 -(3.2) --------$ 42.1 ========= $ 5.06

INCOME BEFORE INCOME TAXES, MINORITY INTEREST AND EXTRAORDINARY ITEMS Provision for income taxes INCOME BEFORE MINORITY INTEREST AND EXTRAORDINARY ITEMS Minority interest INCOME BEFORE EXTRAORDINARY ITEMS Extraordinary items: Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax NET INCOME PER SHARE: Income Before Extraordinary Items Extraordinary items: Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Net Income

----------$ 5.67 =========

3.61 (.38) --------$ 10.54 =========

-(.36) --------$ 4.70 =========

See notes to consolidated financial statements. F-4

CONSOLIDATED BALANCE SHEETS NACCO INDUSTRIES, INC. AND SUBSIDIARIES
December 31 -------------------------1996 1995 --------------(In millions) ASSETS CURRENT ASSETS Cash and cash equivalents Accounts receivable, net of allowance of $12.5 and $11.3 Inventories Prepaid expenses and other

$

47.8 212.2 309.6 22.2

$

30.9 284.2 388.8 18.1

CONSOLIDATED BALANCE SHEETS NACCO INDUSTRIES, INC. AND SUBSIDIARIES
December 31 -------------------------1996 1995 --------------(In millions) ASSETS CURRENT ASSETS Cash and cash equivalents Accounts receivable, net of allowance of $12.5 and $11.3 Inventories Prepaid expenses and other

$

47.8 212.2 309.6 22.2 -------591.8 550.3

$

30.9 284.2 388.8 18.1 -------722.0 534.4

PROPERTY, PLANT AND EQUIPMENT, NET

DEFERRED CHARGES Goodwill, net Deferred costs and other Deferred income taxes

OTHER ASSETS TOTAL ASSETS

461.0 59.6 7.9 -------528.5 37.5 -------$1,708.1 ========

465.1 56.7 17.3 -------539.1 38.3 -------$1,833.8 ========

F-5

CONSOLIDATED BALANCE SHEETS NACCO INDUSTRIES, INC. AND SUBSIDIARIES
December 31 -------------------------1996 1995 --------------(In millions) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable Revolving credit agreements Current maturities of long-term debt Income taxes Accrued payroll Accrued warranty obligations Other current liabilities

$

186.3 45.8 21.4 5.9 30.8 21.5 104.3 -------416.0 333.3

$

250.7 95.7 19.9 4.7 29.8 17.7 105.2 -------523.7 320.2

LONG-TERM DEBT - not guaranteed by the parent company OBLIGATIONS OF PROJECT MINING SUBSIDIARIES not guaranteed by the parent company or its subsidiary, The North American Coal Corporation SELF-INSURANCE RESERVES AND OTHER MINORITY INTEREST STOCKHOLDERS' EQUITY Common stock: Class A, par value $1 per share, 6,492,059

341.5 223.9 14.1

346.5 229.3 44.0

CONSOLIDATED BALANCE SHEETS NACCO INDUSTRIES, INC. AND SUBSIDIARIES
December 31 -------------------------1996 1995 --------------(In millions) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable Revolving credit agreements Current maturities of long-term debt Income taxes Accrued payroll Accrued warranty obligations Other current liabilities

$

186.3 45.8 21.4 5.9 30.8 21.5 104.3 -------416.0 333.3

$

250.7 95.7 19.9 4.7 29.8 17.7 105.2 -------523.7 320.2

LONG-TERM DEBT - not guaranteed by the parent company OBLIGATIONS OF PROJECT MINING SUBSIDIARIES not guaranteed by the parent company or its subsidiary, The North American Coal Corporation SELF-INSURANCE RESERVES AND OTHER MINORITY INTEREST STOCKHOLDERS' EQUITY Common stock: Class A, par value $1 per share, 6,492,059 shares outstanding (1995 - 7,256,971 shares outstanding) Class B, par value $1 per share, convertible into Class A on a one-for-one basis, 1,694,336 shares outstanding (1995 - 1,709,453 shares outstanding) Capital in excess of par value Retained earnings Foreign currency translation adjustment and other

341.5 223.9 14.1

346.5 229.3 44.0

6.5

7.3

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

1.7 .1 359.2 11.8 -------379.3 -------$1,708.1 ========

1.7 3.6 350.3 7.2 -------370.1 -------$1,833.8 ========

See notes to consolidated financial statements. F-6

CONSOLIDATED STATEMENTS OF CASH FLOWS NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31 --------------------------------1996 1995 ----------(In millions) OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities: Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Depreciation, depletion and amortization $ 50.6 $ 94.4

--85.3

(32.3) 2.2 79.3

CONSOLIDATED STATEMENTS OF CASH FLOWS NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31 --------------------------------1996 1995 ----------(In millions) OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities: Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Depreciation, depletion and amortization Deferred income taxes Other non-cash items Working capital changes: Accounts receivable Inventories Other current assets Accounts payable and other liabilities NET CASH PROVIDED BY OPERATING ACTIVITIES INVESTING ACTIVITIES Expenditures for property, plant and equipment Proceeds from the sale of other assets Acquisitions of businesses Other-net NET CASH USED FOR INVESTING ACTIVITIES FINANCING ACTIVITIES Additions to long-term debt and revolving credit agreements Reductions of long-term debt and revolving credit agreements Additions to obligations of project mining subsidiaries Reductions of obligations of project mining subsidiaries Financing of other short-term obligations Stock repurchase Cash dividends paid Capital grants Other-net NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES Effect of exchange rate changes on cash $ 50.6 $ 94.4

--85.3 (3.2) (3.7) 90.0 87.3 (.6) (64.3) -----241.4 -----(79.4) 1.1 (45.1) .6 -----(122.8) ------

(32.3) 2.2 79.3 1.4 2.1 (38.6) (85.6) 2.4 6.8 -----32.1 -----(73.1) 1.3 (7.3) .7 -----(78.4) ------

115.9 (157.4) 68.8 (74.5) (10.6) (40.4) (6.7) 4.2 (2.8) -----(103.5) -----1.8 ------

328.2 (276.5) 93.0 (102.1) 10.8 -(6.4) 4.0 5.6 -----56.6 -----1.1 ------

CASH AND CASH EQUIVALENTS Increase (decrease) for the year Balance at the beginning of the year BALANCE AT THE END OF THE YEAR

16.9 30.9 -----$ 47.8 ======

11.4 19.5 -----$ 30.9 ======

See notes to consolidated financial statements. F-7

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31 --------------------------------------1996 1995 1994 ----------------

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31 --------------------------------------1996 1995 1994 ---------------(In millions) CLASS A COMMON STOCK Beginning balance Purchase of treasury shares Other $ 7.3 (.8) ------6.5 -----1.7 -----3.6 1.1 (4.6) -----.1 -----350.3 50.6 (35.0) $ 7.2 -.1 -----7.3 -----1.7 -----2.8 .8 ------3.6 -----262.3 94.4 -$ 7.2 -------7.2 -----1.7 -----2.5 .3 ------2.8 -----226.2 42.1 --

CLASS B COMMON STOCK CAPITAL IN EXCESS OF PAR VALUE Beginning balance Shares issued under stock option and compensation plans Purchase of treasury shares

RETAINED EARNINGS Beginning balance Net income Purchase of treasury shares Cash dividends on Class A and Class B common stock: 1996 $.743 per share 1995 $.710 per share 1994 $.675 per share

(6.7) (6.4) -----359.2 ----------350.3 -----5.4 1.8 -----7.2 -----$370.1 ====== (6.0) -----262.3 -----(2.1) 7.5 -----5.4 -----$279.4 ======

FOREIGN CURRENCY TRANSLATION ADJUSTMENT AND OTHER Beginning balance Foreign currency translation adjustment and other

TOTAL STOCKHOLDERS' EQUITY

7.2 4.6 -----11.8 -----$379.3 ======

See notes to consolidated financial statements. F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NACCO INDUSTRIES, INC. AND SUBSIDIARIES (TABULAR DOLLARS IN MILLIONS, EXCEPT PER SHARE AND PERCENTAGE DATA) NOTE 1--NATURE OF OPERATIONS The Company has four operating subsidiaries which function in distinct business environments; forklift truck manufacturing and service parts distribution, small electric appliance manufacturing, mining and retail. NACCO Materials Handling Group, Inc. ("NMHG"), 98 percent-owned by NACCO, designs, manufactures and markets forklift trucks and related service parts under the Hyster(R) and Yale(R) brand names. NMHG's manufacturing plants are located primarily in the United States and Europe. In addition, NMHG has manufacturing facilities in Japan through its 50-percent-owned Japanese joint venture, Sumitomo-NACCO ("S-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NACCO INDUSTRIES, INC. AND SUBSIDIARIES (TABULAR DOLLARS IN MILLIONS, EXCEPT PER SHARE AND PERCENTAGE DATA) NOTE 1--NATURE OF OPERATIONS The Company has four operating subsidiaries which function in distinct business environments; forklift truck manufacturing and service parts distribution, small electric appliance manufacturing, mining and retail. NACCO Materials Handling Group, Inc. ("NMHG"), 98 percent-owned by NACCO, designs, manufactures and markets forklift trucks and related service parts under the Hyster(R) and Yale(R) brand names. NMHG's manufacturing plants are located primarily in the United States and Europe. In addition, NMHG has manufacturing facilities in Japan through its 50-percent-owned Japanese joint venture, Sumitomo-NACCO ("SN"). While NMHG's market position is strongest in North America, it also has a significant presence in Europe and a growing position in Asia-Pacific. Hamilton Beach-Proctor-Silex, Inc. ("HB-PS") designs, manufactures and markets small electric appliances covering approximately 80 percent of the small kitchen electric appliance market. Effective October 18, 1996, HB-PS became a wholly owned subsidiary when NACCO purchased the remaining 20 percent minority interest from the previous minority shareholder. The effect of this transaction was not material to NACCO's financial position or results of operations. HB-PS manufactures the majority of its products at its plants located in North America and also sources some of its products from the Far East. The company primarily sells its products to retailers and distributors in North America. The North American Coal Corporation ("NACoal"), wholly owned by NACCO, mines and markets lignite for use primarily as fuel for power generation by electric utilities. The company operates four surface lignite mines, two in North Dakota and one each in Texas and Louisiana. Each of these lignite mines operates under long-term contracts to sell lignite at a price based on actual costs plus an agreed pretax profit per ton. In addition, NACoal provides dragline mining services at a limerock quarry in Florida. The Kitchen Collection, Inc. ("KCI"), wholly owned by NACCO, is a national specialty retailer of kitchenware and small electric appliances with stores located primarily in factory outlet malls KCI operates stores under the Kitchen Collection(R) and Hearthstone(TM) names and sells brand-name kitchenware, tableware, small electric appliances and related accessories. NOTE 2--ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the accounts of NACCO Industries, Inc. ("NACCO," the parent company) and its majority owned subsidiaries (NACCO Industries, Inc. and Subsidiaries - the "Company"). Intercompany accounts and transactions are eliminated. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities (if any) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS: Cash and cash equivalents include cash in banks and highly liquid investments with original maturities of three months or less. F-9

NOTE 2-- ACCOUNTING POLICIES - Continued INVENTORIES: Inventories are stated at the lower of cost or market. Cost is determined under the last-in, firstout (LIFO) method for manufacturing inventories in the United States and under the first-in, first-out (FIFO)

NOTE 2-- ACCOUNTING POLICIES - Continued INVENTORIES: Inventories are stated at the lower of cost or market. Cost is determined under the last-in, firstout (LIFO) method for manufacturing inventories in the United States and under the first-in, first-out (FIFO) method with respect to all other inventories. PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are recorded at cost. Depreciation, depletion and amortization are provided in amounts sufficient to amortize the cost of the assets (including assets recorded under capital leases) over their estimated useful lives using the straight-line method. The units-ofproduction method is used to amortize certain coal-related assets based on estimated recoverable tonnages. GOODWILL: Goodwill represents the excess purchase price paid over the fair value of the net assets acquired. The amortization of goodwill is determined on a straight-line basis over a 40-year period. Accumulated amortization of goodwill was $106.2 million and $90.8 million at December 31, 1996 and 1995, respectively. Management regularly evaluates its accounting for goodwill considering such factors as historical and future profitability and believes that the asset is realizable and the amortization period remains appropriate. REVENUE RECOGNITION: Revenues are recognized when customer orders are complete and shipped. Accruals for the cost of product warranties are maintained for anticipated future claims. ADVERTISING COSTS: Advertising costs are expensed as incurred and amounted to $33.6 million in 1996, $32.6 million in 1995 and $26.2 million in 1994. PRODUCT DEVELOPMENT COSTS: Expenses associated with the development of new products and changes to existing products are charged to expense as incurred. These costs amounted to $27.0 million, $27.5 million and $25.9 million in 1996, 1995 and 1994, respectively. FOREIGN CURRENCY: Assets and liabilities of foreign operations are translated into U.S. dollars at the fiscal year-end exchange rate. The related translation adjustments are recorded as a separate component of stockholders' equity. Revenues and expenses are translated using average exchange rates prevailing during the year. FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS: Financial instruments held by the Company include cash and cash equivalents, accounts receivable, accounts payable, revolving credit agreements, long-term debt, interest rate swap agreements and forward foreign currency exchange contracts. The fair values of these financial instruments have been determined using quoted market sources and management estimates. The Company does not hold or issue financial instruments or derivative financial instruments for trading purposes. The Company enters into forward foreign currency exchange contracts with terms of one to twelve months. These contracts hedge certain foreign currency denominated receivables and payables and foreign currency commitments. Gains and losses on these contracts are deferred and recognized as part of the cost of the underlying transaction being hedged. The Company also enters into interest rate swap agreements with terms ranging from three months to seven years. The difference between the floating interest rate and fixed interest rate which is to be paid or received is recognized in interest expense as the floating interest rate changes over the life of the agreement. EARNINGS PER SHARE: The calculation of net income per share is based on the weighted average number of shares outstanding during each period. F-10

NOTE 2-- ACCOUNTING POLICIES - Continued RECENTLY ISSUED ACCOUNTING STANDARD: In October 1996, the American Institute of Certified Public Accountants ("AICPA") issued Statement of Position 96-1 "Environmental Remediation Liabilities." This

NOTE 2-- ACCOUNTING POLICIES - Continued RECENTLY ISSUED ACCOUNTING STANDARD: In October 1996, the American Institute of Certified Public Accountants ("AICPA") issued Statement of Position 96-1 "Environmental Remediation Liabilities." This statement provides guidance on the recognition and measurement of environmental remediation liabilities incurred as a result of threatened litigation or actual assessment. The Company does not expect the adoption of this statement, which is required in fiscal 1997, to have a material impact on its financial position or results of operations. RECLASSIFICATIONS: Certain amounts in the prior periods' consolidated financial statements have been reclassified to conform to the current period's presentation. NOTE 3--EXTRAORDINARY ITEMS EXTRAORDINARY GAIN - UMWA OBLIGATION The extraordinary gain of $32.3 million recognized in 1995, net of $19.8 million in taxes, relates to a downward revision in the obligation to the United Mine Workers of America Combined Benefit Fund ("UMWA"). This obligation was recognized by The Bellaire Corporation ("Bellaire," a wholly owned non-operating subsidiary of NACCO) as an extraordinary charge in 1992 to accrue for the estimated costs associated with the Coal Industry Retiree Health Benefit Act of 1992 ("Coal Act"), which is discussed in more detail in Note 9 on page F-16. It is the Company's policy to periodically review the estimates and assumptions upon which various liability reserves are based. As a result of a review of the assumptions relating to the number of Company and industry covered beneficiaries ultimately assigned to Bellaire, and the trend of health care costs, the aggregate estimated costs associated with the Coal Act are expected to be lower than originally anticipated. Management believes that the liability, revised to $69.3 million, net of deferred taxes, in 1995, more accurately represents the future cost of this obligation. EXTRAORDINARY CHARGES - EARLY EXTINGUISHMENT OF DEBT The extraordinary charges recognized in 1995 and 1994 relate to the write-off of premiums and unamortized financing fees. The 1995 extraordinary charge includes a $1.3 million charge in the first quarter for unamortized financing fees when NMHG's former revolving credit facility and senior term loan were replaced by a new longterm revolving credit facility. The retirement of $78.5 million and $70.0 million face-value Hyster-Yale 12 3/8% debentures in 1995 and 1994, respectively, resulted in charges of $2.1 million in the third quarter of 1995 and $3.2 million in 1994 due to the write-off of premiums and unamoritized financing fees. These retirements were achieved using internally generated funds of NMHG and equity infusions from existing stockholders. F-11

NOTE 4--INVENTORIES Inventories are summarized as follows:
December 31 ----------------------1996 1995 ------------Manufacturing inventories: Finished goods and service parts NMHG HB-PS

$113.6 34.1 -----147.7 -----120.6 14.0 -----134.6

$117.4 43.3 -----160.7 -----182.0 15.7 -----197.7

Raw materials and work in process NMHG HB-PS

NOTE 4--INVENTORIES Inventories are summarized as follows:
December 31 ----------------------1996 1995 ------------Manufacturing inventories: Finished goods and service parts NMHG HB-PS

$113.6 34.1 -----147.7 -----120.6 14.0 -----134.6 -----(15.6) .3 -----(15.3) -----267.0 8.3 18.9 15.4 -----$309.6 ======

$117.4 43.3 -----160.7 -----182.0 15.7 -----197.7 -----(13.3) (.3) -----(13.6) -----344.8 10.6 19.1 14.3 -----$388.8 ======

Raw materials and work in process NMHG HB-PS

LIFO reserve NMHG HB-PS

Total manufacturing inventories Coal - NACoal Mining supplies - NACoal Retail inventories - KCI

The cost of manufacturing inventories has been determined by the LIFO method for 62 percent and 66 percent of such inventories at December 31, 1996 and 1995, respectively. NOTE 5--PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment includes the following:
December 31 -----------------------1996 1995 ------------Coal lands and real estate: NMHG HB-PS NACoal Project mining subsidiaries (Note 8) KCI NACCO and Other $ 6.6 1.6 16.1 77.9 -.2 ------102.4 ------289.3 123.7 20.7 438.4 7.4 4.8 ------884.3 ------$ 6.4 .8 15.3 77.1 .1 .3 ------100.0 ------250.6 111.7 18.2 428.2 7.3 4.1 ------820.1 -------

Plant and equipment: NMHG HB-PS NACoal Project mining subsidiaries (Note 8) KCI NACCO and Other

Property, plant and equipment at cost Less allowances for depreciation, depletion and amortization

------986.7 436.4 ------$ 550.3 =======

------920.1 385.7 ------$ 534.4 =======

F-12

NOTE 5--PROPERTY, PLANT AND EQUIPMENT - Continued Total depreciation, depletion and amortization expense on property, plant and equipment was $67.7 million, $63.9 million and $63.2 million during 1996, 1995 and 1994, respectively. Proven and probable coal reserves approximated 2.1 billion tons at December 31, 1996 and 1995. NOTE 6--REVOLVING CREDIT AGREEMENTS Financing arrangements are obtained and maintained at the subsidiary level. NACCO has not guaranteed the long-term debt or any borrowings of its subsidiaries. The following table summarizes the Company's available and outstanding borrowings. A detail of the agreements at each subsidiary follows this table.
December 31 ------------------------1996 1995 ------------Available borrowings: NMHG HB-PS NACoal KCI $ 385.7 185.0 50.0 5.0 ------$ 625.7 ======= $ 7.8 9.0 29.0 -------$ 45.8 ======= $ 133.9 96.0 21.0 5.0 ------$ 255.9 ======= 6.0% 5.8% 6.1% 6.0% $ 380.5 160.0 50.0 5.0 ------$ 595.5 ======= $ 78.6 17.1 --------$ 95.7 ======= $ 56.0 77.9 50.0 5.0 ------$ 188.9 ======= 6.5% 6.2% 6.6% 6.6%

Current portion of borrowings outstanding: NMHG HB-PS NACoal KCI

Unused availability: NMHG HB-PS NACoal KCI

Weighted average stated interest rate: NMHG HB-PS NACoal KCI

NMHG: NMHG's credit agreement provides for an unsecured revolving credit facility ("NMHG Facility") that permits advances up to $350.0 million. A portion of the outstanding balance is classified as long-term because it is not expected to be repaid during the subsequent fiscal year. The company entered into the NMHG Facility in 1995 to replace its former bank agreement and to refinance the majority of its previously outstanding long-term debt. The expiration date of the NMHG Facility (which was extended to June 2001 during 1996) may be

NOTE 5--PROPERTY, PLANT AND EQUIPMENT - Continued Total depreciation, depletion and amortization expense on property, plant and equipment was $67.7 million, $63.9 million and $63.2 million during 1996, 1995 and 1994, respectively. Proven and probable coal reserves approximated 2.1 billion tons at December 31, 1996 and 1995. NOTE 6--REVOLVING CREDIT AGREEMENTS Financing arrangements are obtained and maintained at the subsidiary level. NACCO has not guaranteed the long-term debt or any borrowings of its subsidiaries. The following table summarizes the Company's available and outstanding borrowings. A detail of the agreements at each subsidiary follows this table.
December 31 ------------------------1996 1995 ------------Available borrowings: NMHG HB-PS NACoal KCI $ 385.7 185.0 50.0 5.0 ------$ 625.7 ======= $ 7.8 9.0 29.0 -------$ 45.8 ======= $ 133.9 96.0 21.0 5.0 ------$ 255.9 ======= 6.0% 5.8% 6.1% 6.0% $ 380.5 160.0 50.0 5.0 ------$ 595.5 ======= $ 78.6 17.1 --------$ 95.7 ======= $ 56.0 77.9 50.0 5.0 ------$ 188.9 ======= 6.5% 6.2% 6.6% 6.6%

Current portion of borrowings outstanding: NMHG HB-PS NACoal KCI

Unused availability: NMHG HB-PS NACoal KCI

Weighted average stated interest rate: NMHG HB-PS NACoal KCI

NMHG: NMHG's credit agreement provides for an unsecured revolving credit facility ("NMHG Facility") that permits advances up to $350.0 million. A portion of the outstanding balance is classified as long-term because it is not expected to be repaid during the subsequent fiscal year. The company entered into the NMHG Facility in 1995 to replace its former bank agreement and to refinance the majority of its previously outstanding long-term debt. The expiration date of the NMHG Facility (which was extended to June 2001 during 1996) may be extended, on an annual basis, for one additional year upon the mutual consent of NMHG and the bank group. In addition, the NMHG Facility has performance-based pricing which sets interest rates based upon achievement of certain financial performance targets. The NMHG Facility currently provides for, at the company's option, EuroDollar Loans which bear interest at LIBOR plus 0.3 percent and Money Market Loans which bear interest at Auction Rates (as defined in the agreement) and requires a 0.2 percent fee on the available borrowings. NMHG also has separate facilities totaling $35.7 and $30.5 million at December 31, 1996 and 1995, respectively, of which $27.9 million and $26.5 million was available at December 31, 1996 and 1995, respectively. F-13

NOTE 6--REVOLVING CREDIT AGREEMENTS - Continued HB-PS: HB-PS's credit agreement provides for a revolving credit facility ("HB-PS Facility") that permits advances up to $160.0 million and is secured by substantially all assets of HB-PS. A portion of the outstanding balance is classified as long-term because it is not expected to be repaid during the subsequent fiscal year. The expiration date of the HB-PS Facility (which was extended to May 1999 during 1996) may be extended, on an annual basis, for one additional year upon the mutual consent of HB-PS and the bank group. In 1995 the HB-PS Facility was amended to provide a lower interest rate if HB-PS achieves a certain interest coverage ratio, and to allow for interest rates quoted under a competitive bid option. The HB-PS Facility currently provides for interest at LIBOR plus 0.3 percent and requires a 0.2 percent facility fee on the available borrowings. At December 31, 1996 and December 31, 1995, HB-PS also had $25.0 million available under separate facilities, of which $23.9 million and $25.0 million was available at December 31, 1996 and 1995, respectively. NACOAL: NACoal has in place a revolving credit facility ("NACoal Facility") that permits advances up to $50.0 million and requires a 0.2 percent commitment and facility fee. The expiration date of the NACoal Facility (which was extended to September 2001 during 1996) may be extended, on an annual basis, for one additional year upon the mutual consent of NACoal and the bank group. Borrowings bear interest at LIBOR plus 0.4 percent. KCI: KCI has in place a revolving credit facility ("KCI Facility") that permits advances up to $5.0 million and requires a 0.2 percent facility fee. The expiration date of the KCI Facility (which was extended to May 1999 during 1996) may be extended, on an annual basis, for one additional year upon the mutual consent of KCI and the bank group. Borrowings bear interest at the bank's prime rate, money market rate or LIBOR rate plus a base rate margin of 0.4 to 1.2 percent, as determined by certain performance measures. NOTE 7--LONG-TERM DEBT Subsidiary long-term debt, less current maturities, is as follows:
December 31 ---------------------1996 1995 ----------$244.0 $245.9 3.7 4.1 ----------247.7 250.0 80.0 .5 -----80.5 65.0 ------65.0

NMHG - Long-term portion of revolving credit agreement NMHG - Other

HB-PS - Long-term portion of revolving credit agreement HB-PS - Other

KCI - Term note with a stated interest rate of 6.8% and 6.9% at December 31, 1996 and 1995, respectively, payable 1999 to 2000 NACOAL - Other

5.0 .1 -----$333.3 ======

5.0 .2 -----$320.2 ======

The maturities of the subsidiary long-term debt for the next five years, including current maturities, are as follows: $1.2 million in 1997, $0.2 million in 1998, $2.5 million in 1999, $2.5 million in 2000 and $0 in 2001. Interest paid was $32.1 million, $38.4 million and $41.2 million during 1996, 1995 and 1994, respectively. F-14

NOTE 7--LONG-TERM DEBT - Continued The credit agreements for NMHG, HB-PS, NACoal and KCI contain certain covenants and restrictions.

NOTE 7--LONG-TERM DEBT - Continued The credit agreements for NMHG, HB-PS, NACoal and KCI contain certain covenants and restrictions. Covenants require, among other things, some or all of the following: maintenance of certain minimum amounts of net worth and certain specified ratios of working capital, debt to capitalization, interest coverage and fixed charge coverage. These ratios are calculated at the subsidiary level. Restrictions include limits on capital expenditures and dividends. At December 31, 1996, the subsidiaries were in compliance with all of the covenants in their credit agreements. NOTE 8--OBLIGATIONS OF PROJECT MINING SUBSIDIARIES NACoal's project mining subsidiaries have entered into long-term contracts with various utility customers to provide lignite at a sales price based on cost plus a profit per ton. The utility customers have arranged and guaranteed the financing for the development and operation of these subsidiary mines. The obligations of these project mining subsidiaries included in the Company's consolidated balance sheets do not affect the short- or long-term liquidity of the Company and are without recourse to NACCO or its NACoal subsidiary. Obligations of project mining subsidiaries, less current maturities, consist of the following at December 31:
1996 -----$136.6 184.2 1995 -----$146.4 176.4

Capitalized lease obligations Non-interest-bearing advances from customers Promissory notes with interest rates ranging from 5.8% to 8.7% during 1996 and 5.0% to 8.7% during 1995

20.7 -----$341.5 ======

23.7 -----$346.5 ======

The annual maturities of the promissory notes are: $6.2 million in 1997, $3.2 million in 1998, $3.1 million in 1999, $3.1 million in 2000 and $2.6 million in 2001. Advances from customers are used to develop, operate and provide for the ongoing working capital needs of certain project mining subsidiaries. Interest paid was $13.6 million, $14.3 million and $17.7 million during 1996, 1995 and 1994, respectively. The cost of coal, which is passed through to the utility customers, includes interest expense. The project mining subsidiaries' capital lease obligations for mining equipment have the following future minimum lease payments at December 31, 1996:
1997 1998 1999 2000 2001 Subsequent to 2001 Total minimum lease payments Amounts representing interest Present value of net minimum lease payments Current maturities $ 22.6 21.9 21.5 20.6 20.3 120.2 ------227.1 (78.9) -------

148.2 (11.6) ------$ 136.6 =======

Interest expense and amortization in excess of annual lease payments are deferred and recognized in years when annual lease payments exceed interest expense and amortization. F-15

NOTE 8--OBLIGATIONS OF PROJECT MINING SUBSIDIARIES - Continued Project mining assets recorded under capital leases are included in property, plant and equipment and consist of the following at December 31:
1996 ------$ 198.7 87.1 ------$ 111.6 ======= 1995 ------$ 201.0 78.3 ------$ 122.7 =======

Plant and equipment Less accumulated amortization

During 1996, 1995 and 1994, the project mining subsidiaries incurred capital lease obligations of $1.8 million, $18.0 million and $5.2 million, respectively, in connection with lease agreements to acquire plant and equipment. The above obligations are secured by substantially all owned assets of the respective project mining subsidiary and the assignment of all rights under its coal sales agreement. NOTE 9--SELF-INSURANCE RESERVES AND OTHER Self-insurance reserves and other consisted of the following at December 31:
1996 -------$ 53.1 61.5 ------114.6 109.3 ------$ 223.9 ======== 1995 -----$ 53.8 64.2 ------118.0 111.3 ------$ 229.3 ========

Present value of closed mine obligations Reserve for future interest on obligation to UMWA

Other self-insurance reserves

The closed mine obligations relate to Bellaire's former eastern U.S. underground mining operations and the Indian Head Mine, which ceased operations in 1992. Included in these obligations is the obligation to UMWA which resulted from the Coal Act. The Coal Act requires Bellaire to incur additional costs for retiree medical expenses of certain United Mine Worker retirees. Annual cash payments of up to $3.0 million after tax are expected relating to this obligation and could continue for as long as 40 to 50 years. The Company has recorded this obligation on an undiscounted basis. The reserve for future interest represents the portion of this reserve comprising interest costs. In addition, the closed mine obligations include reserves for land reclamation and site treatment at certain closed eastern underground and western surface mines, as well as reserves for workers compensation and black lung benefit costs. The other self-insurance reserves primarily include product liability reserves, employee retirement benefit obligations and other miscellaneous reserves. NOTE 10--LEASE COMMITMENTS Future minimum operating lease payments, excluding project mining subsidiaries, at December 31, 1996, are as follows:
1997 1998 1999 2000 2001 Thereafter $ 18.7 17.7 15.3 12.9 10.6 14.0 -----$ 89.2

NOTE 8--OBLIGATIONS OF PROJECT MINING SUBSIDIARIES - Continued Project mining assets recorded under capital leases are included in property, plant and equipment and consist of the following at December 31:
1996 ------$ 198.7 87.1 ------$ 111.6 ======= 1995 ------$ 201.0 78.3 ------$ 122.7 =======

Plant and equipment Less accumulated amortization

During 1996, 1995 and 1994, the project mining subsidiaries incurred capital lease obligations of $1.8 million, $18.0 million and $5.2 million, respectively, in connection with lease agreements to acquire plant and equipment. The above obligations are secured by substantially all owned assets of the respective project mining subsidiary and the assignment of all rights under its coal sales agreement. NOTE 9--SELF-INSURANCE RESERVES AND OTHER Self-insurance reserves and other consisted of the following at December 31:
1996 -------$ 53.1 61.5 ------114.6 109.3 ------$ 223.9 ======== 1995 -----$ 53.8 64.2 ------118.0 111.3 ------$ 229.3 ========

Present value of closed mine obligations Reserve for future interest on obligation to UMWA

Other self-insurance reserves

The closed mine obligations relate to Bellaire's former eastern U.S. underground mining operations and the Indian Head Mine, which ceased operations in 1992. Included in these obligations is the obligation to UMWA which resulted from the Coal Act. The Coal Act requires Bellaire to incur additional costs for retiree medical expenses of certain United Mine Worker retirees. Annual cash payments of up to $3.0 million after tax are expected relating to this obligation and could continue for as long as 40 to 50 years. The Company has recorded this obligation on an undiscounted basis. The reserve for future interest represents the portion of this reserve comprising interest costs. In addition, the closed mine obligations include reserves for land reclamation and site treatment at certain closed eastern underground and western surface mines, as well as reserves for workers compensation and black lung benefit costs. The other self-insurance reserves primarily include product liability reserves, employee retirement benefit obligations and other miscellaneous reserves. NOTE 10--LEASE COMMITMENTS Future minimum operating lease payments, excluding project mining subsidiaries, at December 31, 1996, are as follows:
1997 1998 1999 2000 2001 Thereafter $ 18.7 17.7 15.3 12.9 10.6 14.0 -----$ 89.2 ======

Rental expense for all operating leases, excluding project mining subsidiaries, amounted to $23.6 million, $20.7 million and $16.9 million during 1996, 1995 and 1994, respectively. F-16

NOTE 11--FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS A financial instrument is cash or a contract that imposes an obligation to deliver, or conveys a right to receive, cash or another financial instrument. The fair value of financial instruments approximated carrying values at December 31, 1996 and 1995. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable and derivatives. Concentration of credit risk on accounts receivable is mitigated by the large number of customers comprising the Company's customer base and their dispersion across many different industries and geographies. The Company enters into derivative contracts with high-quality institutions and limits the amount of credit exposure to any one institution. DERIVATIVE FINANCIAL INSTRUMENTS INTEREST RATE DERIVATIVES: The Company's operating subsidiaries enter into interest rate swap agreements ("swaps"). These swaps allow the subsidiaries to enter into long-term credit agreements that have performance-based, floating rates of interest and then exchange them for fixed rates, as opposed to entering into higher cost fixed-rate credit arrangements. The following table summarizes the notional amounts, related rates (including applicable margins) and remaining terms on swaps outstanding at December 31, 1996:
Notional Amount ----------$310.0 $ 75.0 $ 13.9 $ 5.0 Fixed Rate Paid ---------6.4% 6.3% 6.8% 8.1% Remaining Term ----------to 7 Yrs. to 3 Yrs. Yrs. to 4 Yrs.

NMHG HB-PS NACoal KC

1 2 6 3

FOREIGN CURRENCY DERIVATIVES: NMHG and HB-PS enter into forward foreign currency exchange contracts for purposes of hedging their exposure to foreign currency exchange rate fluctuations. These contracts hedge primarily firm commitments and, to a lesser degree, forecasted commitments relating to cash flows associated with sales and purchases denominated in foreign currencies. NMHG and HB-PS had forward foreign currency exchange contracts outstanding in the amounts of $61.1 million and $2.7 million, respectively, at December 31, 1996, primarily denominated in Japanese yen, Australian dollars, French francs and Canadian dollars. At December 31, 1995, NMHG and HB-PS had forward foreign currency exchange contracts outstanding in the amounts of $293.2 million and $3.8 million, respectively, primarily denominated in Japanese yen, British pounds sterling, French francs and Canadian dollars. The amount of deferred loss on these contracts at December 31, 1996 was not material. NOTE 12--CONTINGENCIES Various legal proceedings and claims have been or may be asserted against NACCO and certain subsidiaries relating to the conduct of its business, including product liability and environmental claims. These proceedings are incidental to their ordinary course of business. Management believes that it has meritorious defenses and will vigorously defend itself in these actions. Any costs that management estimates will be paid as a result of these claims are accrued when the liability is considered probable and the amount can be reasonably estimated. Although the ultimate disposition of these proceedings is not presently determinable, management believes, after consultation with its General Counsel, that the likelihood that material costs will be incurred in excess of accruals already recognized is remote. NMHG is subject to recourse or repurchase obligations under various financing arrangements for certain

NOTE 11--FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS A financial instrument is cash or a contract that imposes an obligation to deliver, or conveys a right to receive, cash or another financial instrument. The fair value of financial instruments approximated carrying values at December 31, 1996 and 1995. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable and derivatives. Concentration of credit risk on accounts receivable is mitigated by the large number of customers comprising the Company's customer base and their dispersion across many different industries and geographies. The Company enters into derivative contracts with high-quality institutions and limits the amount of credit exposure to any one institution. DERIVATIVE FINANCIAL INSTRUMENTS INTEREST RATE DERIVATIVES: The Company's operating subsidiaries enter into interest rate swap agreements ("swaps"). These swaps allow the subsidiaries to enter into long-term credit agreements that have performance-based, floating rates of interest and then exchange them for fixed rates, as opposed to entering into higher cost fixed-rate credit arrangements. The following table summarizes the notional amounts, related rates (including applicable margins) and remaining terms on swaps outstanding at December 31, 1996:
Notional Amount ----------$310.0 $ 75.0 $ 13.9 $ 5.0 Fixed Rate Paid ---------6.4% 6.3% 6.8% 8.1% Remaining Term ----------to 7 Yrs. to 3 Yrs. Yrs. to 4 Yrs.

NMHG HB-PS NACoal KC

1 2 6 3

FOREIGN CURRENCY DERIVATIVES: NMHG and HB-PS enter into forward foreign currency exchange contracts for purposes of hedging their exposure to foreign currency exchange rate fluctuations. These contracts hedge primarily firm commitments and, to a lesser degree, forecasted commitments relating to cash flows associated with sales and purchases denominated in foreign currencies. NMHG and HB-PS had forward foreign currency exchange contracts outstanding in the amounts of $61.1 million and $2.7 million, respectively, at December 31, 1996, primarily denominated in Japanese yen, Australian dollars, French francs and Canadian dollars. At December 31, 1995, NMHG and HB-PS had forward foreign currency exchange contracts outstanding in the amounts of $293.2 million and $3.8 million, respectively, primarily denominated in Japanese yen, British pounds sterling, French francs and Canadian dollars. The amount of deferred loss on these contracts at December 31, 1996 was not material. NOTE 12--CONTINGENCIES Various legal proceedings and claims have been or may be asserted against NACCO and certain subsidiaries relating to the conduct of its business, including product liability and environmental claims. These proceedings are incidental to their ordinary course of business. Management believes that it has meritorious defenses and will vigorously defend itself in these actions. Any costs that management estimates will be paid as a result of these claims are accrued when the liability is considered probable and the amount can be reasonably estimated. Although the ultimate disposition of these proceedings is not presently determinable, management believes, after consultation with its General Counsel, that the likelihood that material costs will be incurred in excess of accruals already recognized is remote. NMHG is subject to recourse or repurchase obligations under various financing arrangements for certain independently owned retail dealerships at December 31, 1996. Also, certain dealer loans are guaranteed by NMHG. When NMHG is the guarantor of the principal amount financed, a security interest is usually maintained in certain assets of parties for whom NMHG is guaranteeing debt. Total amounts subject to F-17

NOTE 12--CONTINGENCIES - Continued recourse or repurchase obligation at December 31, 1996 and 1995 were $125.6 million and $100.8 million, respectively. Losses anticipated under the terms of the recourse or repurchase obligations are not significant and have been reserved for in the consolidated financial statements. NOTE 13--COMMON STOCK The Class A common stock has one vote per share and the Class B common stock has 10 votes per share. The total number of authorized shares of Class A common stock and Class B common stock at December 31, 1996, was 25,000,000 shares and 6,756,176 shares, respectively. Treasury shares of Class A stock totaling 1,597,447 and 817,418 at December 31, 1996 and 1995, respectively, have been deducted from shares issued. STOCK REPURCHASE PROGRAM: In 1996, the board of directors authorized the repurchase of up to 1.5 million shares of the Company's Class A common stock. Pursuant to this authorization, the Company commenced an issuer tender offer (the "Offer") on November 18, 1996 for the purchase of up to 800,000 Class A common shares at prices of $43.50 to $50.00 per share. The Offer resulted in the repurchase of 800,000 shares on December 23, 1996, at $50.00 per share. The $40.4 million cost of this transaction, including fees and expenses, was financed using cash on hand and the Company's revolving credit facilities. In addition to the Offer, the Company is authorized to purchase up to 700,000 shares of Class A common stock through an open market share repurchase program over the next two fiscal years. The following table summarizes selected unaudited pro forma financial information assuming that the 800,000 share Offer had occurred at the beginning of each period presented:
1996 --------Operating results - ----------------Income before extraordinary items Net income Per share - --------Income before extraordinary items Extraordinary items Net income Average shares outstanding (in millions) 1995 --------1994 ---------

$ $

49.1 49.1

$ $

63.9 92.8

$ $

43.7 40.5

6.00 ---------$ 6.00 ========= 8.183

$

$

7.83 3.54 --------$ 11.37 ========= 8.163

$

5.36 (.39) --------$ 4.97 ========= 8.148

STOCK OPTIONS: The 1975 and 1981 stock option plans as amended provide for the granting to officers and other key employees options to purchase Class A and Class B common stock of the Company at a price not less than the market value of such stock at the date of grant. Options become exercisable over a four-year period and expire 10 years from the date of the grant. At December 31, 1996, 1995 and 1994, all stock options outstanding were exercisable. At December 31, 1996, 1995 and 1994, there were 80,701 Class A shares and 80,100 Class B shares available for grant. No options were granted or exercised during 1996 and 1995. In addition, no options were granted during 1994; however, 8,200 Class A shares and 2,700 Class B shares were exercised. At December 31, 1996, 1995 and 1994 there were options outstanding relating to 5,800 Class A shares with an option price of $32.00 that were granted on January 12, 1989, and 25,000 Class A shares at an option price of $35.56 granted on March 1, 1989. The Company does not intend to issue additional stock options. The Company applies AICPA Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting for stock options. Since there have been no options granted in fiscal years 1996 and 1995, no additional pro forma disclosures are required as provided in Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based Compensation." F-18

NOTE 14--INCOME TAXES The components of income before income taxes and provision for income taxes for the year ended December 31 are as follows:
1996 -----Income before income taxes and extraordinary items - -------------------------------------------------Domestic Foreign 1995 -----1994 ------

$ 73.0 13.3 -----$ 86.3 ======

$ 79.3 24.2 -----$103.5 ======

$ 57.1 21.4 -----$ 78.5 ======

Provision for income taxes - -------------------------Current tax expense: Federal State Foreign Total current Deferred tax expense (benefit): Federal State Foreign Total deferred

$ 29.0 6.2 5.6 -----40.8 -----(.3) (.9) (5.3) -----(6.5) -----$ 34.3 ======

$ 28.4 4.9 4.2 -----37.5 -----(3.3) (.8) 1.3 -----(2.8) -----$ 34.7 ======

$ 24.3 3.0 7.8 -----35.1 -----(1.1) (.1) (3.2) -----(4.4) -----$ 30.7 ======

Domestic income before income taxes has been reduced by all of the amortization of goodwill and substantially all interest expense. The Company made income tax payments of $40.2 million, $48.9 million and $29.0 million during 1996, 1995 and 1994, respectively. During the same period, income tax refunds totaled $3.3 million, $3.7 million and $1.2 million, respectively. At December 31, 1996, the Company had cumulative undistributed foreign earnings of $120.7 million, of which the Company intends to permanently reinvest $45.5 million. The Company has determined that it is not practicable to estimate the amount of taxes on these permanently reinvested earnings. It is the Company's policy to provide income taxes on cumulative undistributed foreign earnings where it is anticipated that a distribution of such earnings is likely to occur. The distributable foreign earnings of $75.2 million can be remitted without a material charge to earnings. The amount of withholding taxes imposed by foreign jurisdictions that would be payable upon remittance of all undistributed foreign earnings would be $6.3 million. These withholding taxes, subject to certain limitations, may be used to reduce U.S. income taxes. F-19

NOTE 14--INCOME TAXES - Continued A reconciliation of federal statutory and effective income tax for the year ended December 31 follows:
1996 ------$ 86.3 ======= $ 30.2 1995 ------$ 103.5 ======= $ 36.2 1994 ------$ 78.5 ======= $ 27.5

Income before taxes Statutory taxes at 35%

NOTE 14--INCOME TAXES The components of income before income taxes and provision for income taxes for the year ended December 31 are as follows:
1996 -----Income before income taxes and extraordinary items - -------------------------------------------------Domestic Foreign 1995 -----1994 ------

$ 73.0 13.3 -----$ 86.3 ======

$ 79.3 24.2 -----$103.5 ======

$ 57.1 21.4 -----$ 78.5 ======

Provision for income taxes - -------------------------Current tax expense: Federal State Foreign Total current Deferred tax expense (benefit): Federal State Foreign Total deferred

$ 29.0 6.2 5.6 -----40.8 -----(.3) (.9) (5.3) -----(6.5) -----$ 34.3 ======

$ 28.4 4.9 4.2 -----37.5 -----(3.3) (.8) 1.3 -----(2.8) -----$ 34.7 ======

$ 24.3 3.0 7.8 -----35.1 -----(1.1) (.1) (3.2) -----(4.4) -----$ 30.7 ======

Domestic income before income taxes has been reduced by all of the amortization of goodwill and substantially all interest expense. The Company made income tax payments of $40.2 million, $48.9 million and $29.0 million during 1996, 1995 and 1994, respectively. During the same period, income tax refunds totaled $3.3 million, $3.7 million and $1.2 million, respectively. At December 31, 1996, the Company had cumulative undistributed foreign earnings of $120.7 million, of which the Company intends to permanently reinvest $45.5 million. The Company has determined that it is not practicable to estimate the amount of taxes on these permanently reinvested earnings. It is the Company's policy to provide income taxes on cumulative undistributed foreign earnings where it is anticipated that a distribution of such earnings is likely to occur. The distributable foreign earnings of $75.2 million can be remitted without a material charge to earnings. The amount of withholding taxes imposed by foreign jurisdictions that would be payable upon remittance of all undistributed foreign earnings would be $6.3 million. These withholding taxes, subject to certain limitations, may be used to reduce U.S. income taxes. F-19

NOTE 14--INCOME TAXES - Continued A reconciliation of federal statutory and effective income tax for the year ended December 31 follows:
1996 ------$ 86.3 ======= $ 30.2 1995 ------$ 103.5 ======= $ 36.2 1994 ------$ 78.5 ======= $ 27.5

Income before taxes Statutory taxes at 35%

NOTE 14--INCOME TAXES - Continued A reconciliation of federal statutory and effective income tax for the year ended December 31 follows:
1996 ------$ 86.3 ======= $ 30.2 5.1 3.3 (1.2) (1.8) (1.6) (.5) (.4) 1.2 ------$ 34.3 ======= 39.7% ======= 1995 ------$ 103.5 ======= $ 36.2 5.1 2.7 (3.1) (1.1) (1.8) (2.3) (1.2) .2 ------$ 34.7 ======= 33.5% ======= 1994 ------$ 78.5 ======= $ 27.5 5.1 1.8 -(1.0) (1.6) .4 (.4) (1.1) ------$ 30.7 ======= 39.1% =======

Income before taxes Statutory taxes at 35% Amortization of goodwill State income taxes Tax audit settlements Export benefits Percentage depletion Foreign tax items Earnings reported net of taxes Other-net Provision for income taxes Effective rate

A detailed summary of the total deferred tax assets and liabilities in the Company's consolidated balance sheets at December 31 resulting from differences in the book and tax basis of assets and liabilities follows:
1996 ------Deferred tax assets - ------------------Accrued expenses and reserves Reserve for UMWA Employee benefits Net operating loss carryforwards Total deferred tax assets Deferred tax liabilities - -----------------------Depreciation & depletion Unrepatriated earnings Inventories Other Total deferred tax liabilities Net deferred tax asset 1995 -------

$

43.7 34.5 18.1 9.3 ------105.6 -------

$

38.6 35.9 18.3 5.4 ------98.2 -------

46.8 16.7 12.6 16.1 ------92.2 ------$ 13.4 =======

45.3 11.7 16.2 14.1 ------87.3 ------$ 10.9 =======

In 1996 and 1995 the Company reached agreements with various tax authorities resulting in non-recurring tax benefits of $1.2 million and $3.1 million, respectively. Additionally, the Company recognized a non-recurring tax benefit of $2.5 million in 1995 from the remittance of earnings of foreign subsidiaries subject to rates of tax in excess of the U.S. statutory rate. The Company and certain of its subsidiaries are currently under examination by various taxing authorities. The Company has not been informed of any material assessment resulting from these examinations and will vigorously contest any material assessment. Management believes that any potential adjustment would not materially affect future earnings. F-20

NOTE 15--RETIREMENT BENEFIT PLANS

NOTE 15--RETIREMENT BENEFIT PLANS DEFINED BENEFIT PLANS: The Company maintains various defined benefit pension plans covering most of its employees. These plans provide benefits based on years of service and average compensation during certain periods. The Company's policy is to make contributions to fund these plans within the range allowed by the applicable regulations. Contributions to the various plans were $12.6 million in 1996, $5.6 million in 1995 and $6.9 million in 1994. Plan assets consist primarily of publicly traded stocks, investment contracts and government and corporate bonds. Set forth below is a detail of consolidated worldwide net periodic pension expense and the assumptions used in accounting for the United States defined benefit plans for the year ended December 31. The United Kingdom plans used assumptions that are consistent with, but not identical to, those used by the United States plans.
1996 ------$ 8.0 11.4 (13.4) (1.3) 2.4 ------$ 7.1 ======= 8.0% 5.0% 9.0% 1995 ------$ 7.9 10.4 (21.2) -11.7 ------$ 8.8 ======= 7.5% 4.5-5.0% 9.0%

Service cost Interest cost on projected benefit obligation Actual loss (gain) on plan assets Curtailment gain Net amortization and deferral of actuarial losses (gains) Net periodic pension expense Assumptions: Weighted average discount rates Rate of increase in compensation levels Expected long-term rate of return on assets

The following sets forth the funded status of the defined benefit plans and amounts recognized in the consolidated balance sheets at December 31:
Partially Funded Plans ------------------------1996 1995 ------------Actuarial present value of benefit obligation: Vested accumulated benefit obligation Non-vested accumulated benefit obligation Total accumulated benefit obligation Value of future salary projections Total projected benefit obligation Fair value of plan assets Plan assets in excess of (less than) projected benefit obligation Amounts available to increase (reduce) future pension expense: Unamortized balance of the initial transition amount Unamortized cumulative actuarial loss (gain) Unamortized prior service cost Adjustment for minimum pension liability Pension asset (liability) recognized in consolidated balance sheets 93.6 6.1 ------99.7 15.5 ------115.2 107.6 ------(7.6) $ 90.0 5.8 ------95.8 25.5 ------121.3 91.7 ------(29.6) $ Fun --------1996 ------30.5 1.6 ------32.1 1.7 ------33.8 42.6 ------8.8 $

(1.6) (12.4) 2.0 (4.7) ------$ (24.3) =======

(2.0) 4.1 3.4 (8.8) ------$ (32.9) =======

(3.3) -1.3 -------$ 6.8 =======

F-21

NOTE 15--RETIREMENT BENEFIT PLANS - Continued DEFINED CONTRIBUTION PLANS: NACCO and its subsidiaries have defined contribution plans for

NOTE 15--RETIREMENT BENEFIT PLANS - Continued DEFINED CONTRIBUTION PLANS: NACCO and its subsidiaries have defined contribution plans for substantially all employees. For NACCO and certain subsidiaries, employee contributions are matched by the Company based on plan provisions. In addition, NACCO and certain other subsidiaries have profit sharing plans whereby the subsidiary's contribution is determined annually based on its operating results. Total contributions to these plans were $8.8 million in 1996, $7.3 million in 1995 and $5.9 million in 1994. NOTE 16--BUSINESS SEGMENTS NACCO's four operating subsidiaries function in distinct business environments. Sales between subsidiaries, which are minimal, are eliminated in consolidation. NACCO and Other includes the accounts of the parent company and Bellaire. Information relating to the Company's operations at the subsidiary level is presented below. F-22

NOTE 16--BUSINESS SEGMENTS - Continued
1996 -------REVENUES NMHG HB-PS NACoal KCI NACCO and Other Eliminations $1,560.1 395.1 249.1 74.9 .3 (6.3) -------$2,273.2 ======== $ 11.5 3.8 .1 -------$ 15.4 ======== $ 72.5 24.3 40.3 3.1 (9.0) -------$ 131.2 ======== 84.0 28.1 40.3 3.2 (9.0) -------$ 146.6 ======== $ .5 1.5 -(.5) -------$ 1.5 ======== $ (25.0) (6.6) $ 1995 -------$1,510.1 381.4 248.0 69.6 .5 (5.1) -------$2,204.5 ======== 10.8 2.8 .1 -------$ 13.7 ======== $ 83.4 25.0 45.8 3.3 (8.8) -------$ 148.7 ======== $ 94.2 27.8 45.8 3.4 (8.8) -------$ 162.4 ======== .9 2.4 1.9 (3.3) -------$ 1.9 ======== $ (25.9) (7.2) $ $ 1994 -------$1,178.9 377.5 250.2 63.9 .6 (6.2) -------$1,864.9 ======== $ 10.8 2.8 .1 -------$ 13.7 ======== $ 64.6 25.3 44.3 5.4 (10.0) -------$ 129.6 ======== 75.4 28.1 44.3 5.5 (10.0) -------$ 143.3 ======== $ .8 3.0 1.1 (3.3) -------$ 1.6 ======== $ (30.8) (7.5) $

AMORTIZATION OF GOODWILL NMHG HB-PS KCI

OPERATING PROFIT NMHG HB-PS NACoal KCI NACCO and Other

OPERATING PROFIT EXCLUDING GOODWILL AMORTIZATION NMHG HB-PS NACoal KCI NACCO and Other

INTEREST INCOME NMHG NACoal NACCO and Other Eliminations

INTEREST EXPENSE NMHG HB-PS

NOTE 16--BUSINESS SEGMENTS - Continued
1996 -------REVENUES NMHG HB-PS NACoal KCI NACCO and Other Eliminations $1,560.1 395.1 249.1 74.9 .3 (6.3) -------$2,273.2 ======== $ 11.5 3.8 .1 -------$ 15.4 ======== 72.5 24.3 40.3 3.1 (9.0) -------$ 131.2 ======== 84.0 28.1 40.3 3.2 (9.0) -------$ 146.6 ======== $ .5 1.5 -(.5) -------$ 1.5 ======== (25.0) (6.6) (.2) (.5) (.5) .5 -------(32.3) (13.6) -------$ (45.9) ======== (2.0) (.3) 1.1 .7 -------$ (.5) ======== $ $ $ $ 1995 -------$1,510.1 381.4 248.0 69.6 .5 (5.1) -------$2,204.5 ======== 10.8 2.8 .1 -------$ 13.7 ======== 83.4 25.0 45.8 3.3 (8.8) -------$ 148.7 ======== $ 94.2 27.8 45.8 3.4 (8.8) -------$ 162.4 ======== .9 2.4 1.9 (3.3) -------$ 1.9 ======== (25.9) (7.2) (1.3) (.5) (1.6) 3.3 -------(33.2) (14.0) -------$ (47.2) ======== (.2) (.8) .5 .6 -------$ .1 ======== $ $ $ $ $ 1994 -------$1,178.9 377.5 250.2 63.9 .6 (6.2) -------$1,864.9 ======== 10.8 2.8 .1 -------$ 13.7 ======== 64.6 25.3 44.3 5.4 (10.0) -------$ 129.6 ======== 75.4 28.1 44.3 5.5 (10.0) -------$ 143.3 ======== .8 3.0 1.1 (3.3) -------$ 1.6 ======== (30.8) (7.5) (1.3) (.3) (2.3) 3.3 -------(38.9) (14.3) -------$ (53.2) ======== 1.2 (.3) (1.1) .7 -------$ .5 ======== $ $ $ $ $ $

AMORTIZATION OF GOODWILL NMHG HB-PS KCI

OPERATING PROFIT NMHG HB-PS NACoal KCI NACCO and Other

OPERATING PROFIT EXCLUDING GOODWILL AMORTIZATION NMHG HB-PS NACoal KCI NACCO and Other

INTEREST INCOME NMHG NACoal NACCO and Other Eliminations

INTEREST EXPENSE NMHG HB-PS NACoal KCI NACCO and Other Eliminations

Project mining subsidiaries

OTHER-NET, INCOME (EXPENSE) NMHG HB-PS NACoal NACCO and Other

F-23

NOTE 16-BUSINESS SEGMENTS - Continued
1996 -------NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS NMHG HB-PS NACoal KCI NACCO and Other Minority interest 1995 -------1994 --------

$

Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax

26.4 10.7 19.2 1.5 (5.8) (1.4) -------50.6 ---------$ 50.6 ======== $ 950.9 271.8 66.5 27.6 56.7 -------1,373.5 433.6 -------1,807.1 (99.0) -------$1,708.1 ======== $ 33.8 19.0 2.1 1.1 .2 -------56.2 29.1 -------$ 85.3 ======== 42.3 15.1 2.8 1.1 1.4 -------62.7 16.7 -------$ 79.4 ======== $

36.9 11.8 22.6 1.6 (4.1) (3.3) -------65.5 32.3 (3.4) -------$ 94.4 ======== $1,052.2 288.0 40.7 25.1 62.7 -------1,468.7 433.3 -------1,902.0 (68.2) -------$1,833.8 ======== 31.8 15.8 1.7 1.0 .2 -------50.5 28.8 -------$ 79.3 ======== 39.4 9.7 3.5 1.4 .1 -------54.1 19.0 -------$ 73.1 ======== $ $

$

$

18.7 10.2 21.0 3.1 (5.2) (2.5) -------45.3 -(3.2) -------$ 42.1 ======== 906.2 289.6 49.0 26.0 92.6 -------1,363.4 412.3 -------1,775.7 (81.4) -------$1,694.3 ======== 32.2 15.5 1.6 .9 .1 -------50.3 29.9 -------$ 80.2 ======== $ 25.9 13.4 .4 1.0 .2 -------40.9 11.7 -------$ 52.6 ======== $ $

TOTAL ASSETS NMHG HB-PS NACoal KCI NACCO and Other

Project mining subsidiaries

Consolidating eliminations

DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSE NMHG HB-PS NACoal KCI NACCO and Other

Project mining subsidiaries

CAPITAL EXPENDITURES NMHG HB-PS NACoal KCI NACCO and Other

Project mining subsidiaries

F-24

NOTE 16-BUSINESS SEGMENTS - Continued DATA BY GEOGRAPHIC AREA
United States Europe, Africa and Middle East

Other

Eliminations

Conso

NOTE 16-BUSINESS SEGMENTS - Continued DATA BY GEOGRAPHIC AREA
United States -----1996 - ---Sales to unaffiliated customers Transfers between geographic areas Total revenues Operating profit Total assets 1995 - ---Sales to unaffiliated customers Transfers between geographic areas Total revenues Operating profit Total assets 1994 - ---Sales to unaffiliated customers Transfers between geographic areas Total revenues Operating profit Total assets Europe, Africa and Middle East -----------

Other -----

Eliminations ------------

Conso -----

$ 1,560.6 ---------$ 1,560.6 ========= $ 93.5 ========= $ 1,312.1 =========

$

457.5

$

255.1

$

--

$ 2

129.8 --------$ 587.3 ========= $ 32.7 ========= $ 336.4 =========

53.2 --------$ 308.3 ========= $ 5.0 ========= $ 59.6 =========

(183.0) --------$ (183.0) ========= $ -========= $ -=========

--$ 2 === $ === $ 1 ===

$ 1,568.3 ---------$ 1,568.3 ========= $ 106.0 ========= $ 1,395.3 =========

$

426.9

$

209.3

$

--

$ 2

156.1 --------$ 583.0 ========= $ 34.8 ========= $ 374.4 =========

63.7 --------$ 273.0 ========= $ 7.9 ========= $ 64.1 =========

(219.8) --------$ (219.8) ========= $ -========= $ -=========

--$ 2 === $ === $ 1 ===

$ 1,445.0 ---------$ 1,445.0 ========= $ 104.3 ========= $ 1,343.6 =========

$

294.4

$

125.5

$

--

$ 1

130.6 --------$ 425.0 ========= $ 15.4 ========= $ 309.6 =========

49.2 --------$ 174.7 ========= $ 9.9 ========= $ 41.1 =========

(179.8) --------$ (179.8) ========= $ -========= $ -=========

--$ 1 === $ === $ 1 ===

NACCO parent company expense reduced United States operating profit by $8.9 million, $8.7 million and $9.9 million in 1996, 1995 and 1994, respectively. The Other category above includes Canada, Mexico, South America and Asia-Pacific. This category, however, does not include the operating results or assets of S-N, which is accounted for using the equity method. F-25

NOTE 17--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) A summary of the unaudited quarterly results of operations for the year ended December 31 is as follows:
First Quarter -------1996 - ---Revenues NMHG HB-PS NACoal KCI NACCO and Other Second Quarter -------Third Quarter -------Four Quar ----

$

420.8 67.9 59.1 12.9 .1

$

407.6 82.7 56.7 14.6 .1

$

349.5 109.0 61.2 19.5 --

$

3 1

NOTE 17--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) A summary of the unaudited quarterly results of operations for the year ended December 31 is as follows:
First Quarter -------1996 - ---Revenues NMHG HB-PS NACoal KCI NACCO and Other Eliminations Second Quarter -------Third Quarter -------Four Quar ----

Gross profit Operating profit NMHG HB-PS NACoal KCI NACCO and Other

420.8 67.9 59.1 12.9 .1 (1.3) -------559.5 -------106.7 -------26.0 (1.0) 9.8 (1.2) (2.5) -------31.1 -------12.9 --------$ 12.9 ======== 1.44 --------$ 1.44 ======== $

$

407.6 82.7 56.7 14.6 .1 (.8) -------560.9 -------107.6 -------24.7 4.7 7.8 (.6) (2.6) -------34.0 -------14.0 --------$ 14.0 ======== 1.56 --------$ 1.56 ======== $

$

349.5 109.0 61.2 19.5 -(2.2) -------537.0 -------98.7 -------9.4 7.0 10.5 1.0 (1.9) -------26.0 -------7.6 --------$ 7.6 ======== 0.85 --------$ 0.85 ======== $

$

$

3 1

---6 ---1 ----

-------

Income before extraordinary items Extraordinary items, net-of-tax Net income Per share: Income before extraordinary items Extraordinary items, net-of-tax Net income

---$ ==== $ ---$ ====

F-26

NOTE 17--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) - Continued
First Quarter -------1995 - ---Revenues NMHG HB-PS NACoal KCI NACCO and Other Eliminations Second Quarter -------Third Quarter -------F Q --

Gross profit Operating profit NMHG HB-PS NACoal KCI NACCO and Other

363.2 67.0 60.5 12.2 -(.5) -------502.4 -------100.2 -------23.2 1.4 11.7 (.5) (2.0) -------33.8 --------

$

370.2 79.7 55.3 13.5 .3 (1.4) -------517.6 -------99.1 -------21.3 3.6 9.2 (.4) (2.1) -------31.6 --------

$

349.2 110.3 62.5 18.1 -(1.8) -------538.3 -------100.7 -------14.6 9.5 10.8 .9 (2.1) -------33.7 --------

$

$

----

---

NOTE 17--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) - Continued
First Quarter -------1995 - ---Revenues NMHG HB-PS NACoal KCI NACCO and Other Eliminations Second Quarter -------Third Quarter -------F Q --

Gross profit Operating profit NMHG HB-PS NACoal KCI NACCO and Other

363.2 67.0 60.5 12.2 -(.5) -------502.4 -------100.2 -------23.2 1.4 11.7 (.5) (2.0) -------33.8 -------12.8 -(1.3) -------$ 11.5 ======== 1.43 -(.14) -------$ 1.29 ======== $

$

370.2 79.7 55.3 13.5 .3 (1.4) -------517.6 -------99.1 -------21.3 3.6 9.2 (.4) (2.1) -------31.6 -------14.7 ---------$ 14.7 ======== 1.64 ---------$ 1.64 ======== $

$

349.2 110.3 62.5 18.1 -(1.8) -------538.3 -------100.7 -------14.6 9.5 10.8 .9 (2.1) -------33.7 -------13.7 -(2.1) -------$ 11.6 ======== 1.53 -(.24) -------$ 1.29 ======== $

$

$

----

---

Income before extraordinary items Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Net income Per share: Income before extraordinary items Extraordinary gain, net-of-tax Extraordinary charges, net-of-tax Net income

-$ == $

-$ ==

F-27

NOTE 18--PARENT COMPANY CONDENSED BALANCE SHEETS The condensed balance sheets of NACCO, the parent company, at December 31 are as follows:
1996 ------ASSETS - -----Current assets Current intercompany accounts receivable, net Other assets Investment in subsidiaries NMHG HB-PS NACoal KCI Bellaire 1995 -------

$

.3 9.1 .5

$

.1 11.0 1.6

Property, plant and equipment, net Deferred income taxes Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY - -----------------------------------Current liabilities

361.0 117.8 15.1 13.3 .9 ------508.1 2.2 20.0 ------$ 540.2 =======

330.3 114.2 15.1 11.8 .9 ------472.3 1.1 22.2 ------$ 508.3 =======

$

8.8

$

9.9

NOTE 18--PARENT COMPANY CONDENSED BALANCE SHEETS The condensed balance sheets of NACCO, the parent company, at December 31 are as follows:
1996 ------ASSETS - -----Current assets Current intercompany accounts receivable, net Other assets Investment in subsidiaries NMHG HB-PS NACoal KCI Bellaire 1995 -------

$

.3 9.1 .5

$

.1 11.0 1.6

Property, plant and equipment, net Deferred income taxes Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY - -----------------------------------Current liabilities Reserve for future interest on UMWA obligation Note payable to Bellaire Notes payable to other subsidiaries Deferred income and other Stockholders' equity Total Liabilities and Stockholders' Equity

361.0 117.8 15.1 13.3 .9 ------508.1 2.2 20.0 ------$ 540.2 =======

330.3 114.2 15.1 11.8 .9 ------472.3 1.1 22.2 ------$ 508.3 =======

$

8.8 61.5 40.5 45.6 4.5 379.3 ------$ 540.2 =======

$

9.9 64.2 43.3 16.9 3.9 370.1 ------$ 508.3 =======

The credit agreements at NMHG, HB-PS and KCI allow the transfer of assets to NACCO under certain circumstances. The amount of NACCO's investment in NMHG, HB-PS and KCI that was restricted at December 31, 1996, totals approximately $455.3 million. There are no restrictions on the transfer of assets from NACoal. Dividends and advances from NACoal, HB-PS and KCI are the primary source of cash for NACCO. F-28

NACCO INDUSTRIES, INC. TO THE STOCKHOLDERS OF NACCO INDUSTRIES, INC. The management of NACCO Industries, Inc. is responsible for the preparation, content and integrity of the financial statements and related information contained within this report. The accompanying financial statements have been prepared in accordance with generally accepted accounting principles and include amounts that are based on informed judgments and estimates. The Company's code of conduct, communicated throughout the organization, requires adherence to high ethical standards in the conduct of the Company's business. NACCO Industries, Inc. and each of its subsidiaries maintains a system of internal controls designed to provide reasonable assurance as to the protection of assets and the integrity of the financial statements. These systems are augmented by the selection of qualified financial management personnel. In addition, an internal audit function periodically assesses the internal controls. Arthur Andersen LLP, independent certified public accountants, audits NACCO Industries, Inc. and its subsidiaries' financial statements. Its audits are conducted in accordance with generally accepted auditing

NACCO INDUSTRIES, INC. TO THE STOCKHOLDERS OF NACCO INDUSTRIES, INC. The management of NACCO Industries, Inc. is responsible for the preparation, content and integrity of the financial statements and related information contained within this report. The accompanying financial statements have been prepared in accordance with generally accepted accounting principles and include amounts that are based on informed judgments and estimates. The Company's code of conduct, communicated throughout the organization, requires adherence to high ethical standards in the conduct of the Company's business. NACCO Industries, Inc. and each of its subsidiaries maintains a system of internal controls designed to provide reasonable assurance as to the protection of assets and the integrity of the financial statements. These systems are augmented by the selection of qualified financial management personnel. In addition, an internal audit function periodically assesses the internal controls. Arthur Andersen LLP, independent certified public accountants, audits NACCO Industries, Inc. and its subsidiaries' financial statements. Its audits are conducted in accordance with generally accepted auditing standards and provide an objective and independent assessment that helps ensure fair presentation of the Company's operating results and financial position. The independent accountants have access to all financial records and related data of the Company, as well as to the minutes of stockholders' and directors' meetings. The Audit Committee of the Board of Directors, composed of independent directors, meets regularly with the independent auditors and internal auditors to review the scope of their audit reports and to discuss any action to be taken. The independent auditors and the internal auditors have free and direct access to the Audit Committee. The Audit Committee also reviews the financial reporting process and accounting policies of NACCO Industries, Inc. and each of its subsidiaries.
/s/ Alfred M. Rankin, Jr. ---------------------------Alfred M. Rankin, Jr. Chairman, President and Chief Executive Officer /s/ Kenneth C. Schilling -----------------------Kenneth C. Schilling Controller

F-29

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF THE PARENT NACCO INDUSTRIES, INC. AND SUBSIDIARIES PARENT COMPANY CONDENSED BALANCE SHEETS
December 31 -------------------------1996 1995 --------------(In thousands) $ 254 $ 99 9,135 561 11,035 1,595

Current assets Net amounts receivable from subsidiaries Other assets Investment in subsidiaries NMHG HB/PS NACoal KCI Bellaire

Property, plant and equipment, net

360,964 117,848 15,125 13,261 872 -------508,070 2,217

330,274 114,239 15,125 11,768 900 -------472,306 1,062

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF THE PARENT NACCO INDUSTRIES, INC. AND SUBSIDIARIES PARENT COMPANY CONDENSED BALANCE SHEETS
December 31 -------------------------1996 1995 --------------(In thousands) $ 254 $ 99 9,135 561 11,035 1,595

Current assets Net amounts receivable from subsidiaries Other assets Investment in subsidiaries NMHG HB/PS NACoal KCI Bellaire

Property, plant and equipment, net Deferred income taxes

360,964 117,848 15,125 13,261 872 -------508,070 2,217 19,990 -------$540,227 ======== $ 8,807 61,496 40,589 45,552 4,467 379,316 -------$540,227 ========

330,274 114,239 15,125 11,768 900 -------472,306 1,062 22,241 -------$508,338 ======== $ 9,946 64,248 43,259 16,889 3,869 370,127 -------$508,338 ========

Total Assets Current liabilities Reserve for future interest on UMWA obligation Note payable to Bellaire Notes payable to other subsidiaries Deferred income and other Stockholders' equity

Total Liabilities and Stockholders' Equity

See notes to parent company financial statements. F-30

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF THE PARENT NACCO INDUSTRIES, INC. AND SUBSIDIARIES PARENT COMPANY STATEMENTS OF INCOME
Year Ended December 31 ---------------------------------------------1996 1995 1994 ---------------------(In thousands) Income (expense): Intercompany interest income Intercompany interest expense Other - net $ 149 (482) 381 -------48 8,903 -------$ 198 (2,670) 2,090 -------(382) 8,713 -------$ 1,068 (3,510) 464 -------(1,978) 9,903 --------

Administrative and general expenses

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF THE PARENT NACCO INDUSTRIES, INC. AND SUBSIDIARIES PARENT COMPANY STATEMENTS OF INCOME
Year Ended December 31 ---------------------------------------------1996 1995 1994 ---------------------(In thousands) Income (expense): Intercompany interest income Intercompany interest expense Other - net $ 149 (482) 381 -------48 8,903 -------(8,855) (3,072) -------$ 198 (2,670) 2,090 -------(382) 8,713 -------(9,095) (4,502) -------$ 1,068 (3,510) 464 -------(1,978) 9,903 -------(11,881) (5,825) --------

Administrative and general expenses Loss before income taxes Income tax benefit

Net loss before equity in earnings of subsidiaries and extraordinary items Equity in earnings of subsidiaries before extraordinary items Extraordinary gain, net-of-tax Extraordinary charge, net-of-tax

(5,783)

(4,593)

(6,056)

56,360

70,099 32,333 (3,399) -------$ 94,440 ========

51,328

-------Net income $ 50,577 ========

(3,218) -------$ 42,054 ========

See Notes to parent company financial statements.

F-31

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF THE PARENT NACCO INDUSTRIES, INC. AND SUBSIDIARIES PARENT COMPANY STATEMENTS OF CASH FLOWS
Year -------------1996 -------( Operating activities Net income Equity in earnings of subsidiaries Extraordinary gain, net-of-tax Extraordinary charge, net-of-tax Parent company only net loss Deferred income taxes Income taxes net of intercompany tax payments Working capital changes Changes in current intercompany amounts Changes in reserve for future interest on UMWA obligation Items of income or expense not requiring cash outlays $ 50,577 (56,360) ---------(5,783) 1,897 (937) 752 1,900 (2,752) 10 -------(4,913)

Net cash provided by (used for) operating activities Investing Activities Capital contributions to subsidiaries NMHG Bellaire

(1,805) --

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF THE PARENT NACCO INDUSTRIES, INC. AND SUBSIDIARIES PARENT COMPANY STATEMENTS OF CASH FLOWS
Year -------------1996 -------( Operating activities Net income Equity in earnings of subsidiaries Extraordinary gain, net-of-tax Extraordinary charge, net-of-tax Parent company only net loss Deferred income taxes Income taxes net of intercompany tax payments Working capital changes Changes in current intercompany amounts Changes in reserve for future interest on UMWA obligation Items of income or expense not requiring cash outlays $ 50,577 (56,360) ---------(5,783) 1,897 (937) 752 1,900 (2,752) 10 -------(4,913)

Net cash provided by (used for) operating activities Investing Activities Capital contributions to subsidiaries NMHG Bellaire Dividends and advances received from subsidiaries, net Note payable to Bellaire Reduction of investment in Hyster-Yale 12 3/8% debentures Expenditures for equipment Net cash provided by (used for) investing activities Financing Activities Cash dividends Purchase of treasury stock Treasury stock sales under stock option and directors' compensation plans - net Other - net Net cash used for financing activities Cash and cash equivalents Increase (decrease) for the period Balance at the beginning of the period

(1,805) -55,854 (2,670) -(1,424) -------49,955

(6,671) (40,415) 1,119 1,163 -------(44,804) -------238 5 -------$ 243 ========

Balance at the end of the period

See Notes to parent company financial statements.

F-32

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF THE PARENT NACCO INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO PARENT COMPANY FINANCIAL STATEMENTS For The Year Ended December 31, 1996, 1995 and 1994 The notes to consolidated financial statements, included elsewhere in this Form 10-K, are hereby incorporated by reference into these notes to parent company financial statements. NOTE A - LONG-TERM OBLIGATIONS AND GUARANTEES NACCO Industries, Inc. ("NACCO" the parent company) is a holding company which owns four operating

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF THE PARENT NACCO INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO PARENT COMPANY FINANCIAL STATEMENTS For The Year Ended December 31, 1996, 1995 and 1994 The notes to consolidated financial statements, included elsewhere in this Form 10-K, are hereby incorporated by reference into these notes to parent company financial statements. NOTE A - LONG-TERM OBLIGATIONS AND GUARANTEES NACCO Industries, Inc. ("NACCO" the parent company) is a holding company which owns four operating subsidiaries. It is NACCO's policy not to guarantee the debt of such subsidiaries. NOTE B - CASH DIVIDENDS AND ADVANCES TO NACCO Dividends received from the subsidiaries were $27.2 million in 1996, $22.6 million in 1995 and $62.7 million in 1994. NOTE C - CAPITAL CONTRIBUTIONS TO SUBSIDIARIES The 1995 capital contribution to Bellaire of $69.3 million includes a note payable of $27.4 million and the assumption of a reserve for future interest on UMWA obligation, net of deferred taxes, of $41.9 million. NOTE D - UNRESTRICTED CASH The amount of unrestricted cash available to NACCO, included in Investment in and advances from subsidiaries, net was $30.1 million at December 31, 1996. F-33

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS NACCO INDUSTRIES, INC. AND SUBSIDIARIES YEARS ENDED DECEMBER 31, 1996, 1995 and 1994
- ------------------------------------------------------------------------------------------------------COL A. COL B. COL C. COL - ------------------------------------------------------------------------------------------------------Additions ----------------------------Balance at Charged to Charged to Beginning of Costs and Other Accounts Deduct Description Period Expenses --Describe --Desc - ------------------------------------------------------------------------------------------------------(In thousands) 1996 Reserves deducted from asset accounts: Allowance for doubtful accounts $ 4,439 $ 1,864 $ 6 (C) $ 1 Allowance for discounts, adjustments and returns $ 6,878 $ 15,183 $ 14 1995 Reserves deducted from asset accounts: Allowance for doubtful accounts Allowance for discounts, adjustments and returns 1994 Reserves deducted from asset accounts: Allowance for doubtful accounts Allowance for discounts, adjustments and returns

$ $

4,472 6,168

$

1,583

$ 148 (C)

$

1

$ 17,328

$ 16

$ $

5,731 5,397

$

1,240

$ 39 (C)

$

2

$ 17,878

$ 17

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS NACCO INDUSTRIES, INC. AND SUBSIDIARIES YEARS ENDED DECEMBER 31, 1996, 1995 and 1994
- ------------------------------------------------------------------------------------------------------COL A. COL B. COL C. COL - ------------------------------------------------------------------------------------------------------Additions ----------------------------Balance at Charged to Charged to Beginning of Costs and Other Accounts Deduct Description Period Expenses --Describe --Desc - ------------------------------------------------------------------------------------------------------(In thousands) 1996 Reserves deducted from asset accounts: Allowance for doubtful accounts $ 4,439 $ 1,864 $ 6 (C) $ 1 Allowance for discounts, adjustments and returns $ 6,878 $ 15,183 $ 14 1995 Reserves deducted from asset accounts: Allowance for doubtful accounts Allowance for discounts, adjustments and returns 1994 Reserves deducted from asset accounts: Allowance for doubtful accounts Allowance for discounts, adjustments and returns

$ $

4,472 6,168

$

1,583

$ 148 (C)

$

1

$ 17,328

$ 16

$ $

5,731 5,397

$

1,240

$ 39 (C)

$

2

$ 17,878

$ 17

Note A - Accounts receivable balances written off, net of recoveries. Note B - Payments. Note C - Subsidiary's foreign currency translation adjustments and other. Note D - Balances which are not required to be presented and those which are immaterial have been omitted. F-34

EXHIBIT 21 SUBSIDIARIES OF NACCO INDUSTRIES, INC. As of the date of the Annual Report on Form 10-K to which this is an Exhibit, the subsidiaries of NACCO Industries, Inc. were as follows:
NAME - ---Bellaire Corporation The Coteau Properties Company The Falkirk Mining Company Hamilton Beach/Proctor-Silex, Inc. Hamilton Beach/Proctor-Silex de Mexico, S.A. de C.V. Housewares Holding Company HB/PS El Paso Incorporated HBPS Foreign Sales Corp. HB-PS Holding Company, Inc. NMHG, Pty. Ltd. NACCO Materials Handling B.V. NACCO Materials Handling, S.r.l. Hyster Europe Limited NMHG (Scotland) Limited NMHG (N.I.) Ltd. NMHG Ltd. Hyster-Yale Materials Handling, Inc. The Kitchen Collection, Inc. INCORPORATION ------------Ohio Ohio Ohio Delaware (1) Mexico (1) Delaware (1) Delaware (1) Virgin Islands Delaware (1) Australia Netherlands Italy United Kingdom United Kingdom Northern Ireland United Kingdom Delaware (2) Delaware

EXHIBIT 21 SUBSIDIARIES OF NACCO INDUSTRIES, INC. As of the date of the Annual Report on Form 10-K to which this is an Exhibit, the subsidiaries of NACCO Industries, Inc. were as follows:
NAME - ---Bellaire Corporation The Coteau Properties Company The Falkirk Mining Company Hamilton Beach/Proctor-Silex, Inc. Hamilton Beach/Proctor-Silex de Mexico, S.A. de C.V. Housewares Holding Company HB/PS El Paso Incorporated HBPS Foreign Sales Corp. HB-PS Holding Company, Inc. NMHG, Pty. Ltd. NACCO Materials Handling B.V. NACCO Materials Handling, S.r.l. Hyster Europe Limited NMHG (Scotland) Limited NMHG (N.I.) Ltd. NMHG Ltd. Hyster-Yale Materials Handling, Inc. The Kitchen Collection, Inc. NACCO Materials Handling Group, Inc. The North American Coal Corporation North American Coal Royalty Company Powhatan Corporation Proctor-Silex Canada, Inc. Proctor-Silex, S.A. de C.V. The Sabine Mining Company Yale Europe Materials Handling Ltd. INCORPORATION ------------Ohio Ohio Ohio Delaware (1) Mexico (1) Delaware (1) Delaware (1) Virgin Islands Delaware (1) Australia Netherlands Italy United Kingdom United Kingdom Northern Ireland United Kingdom Delaware (2) Delaware Delaware Delaware Delaware Delaware Ontario (Canada) Mexico Texas United Kingdom

The Company has omitted the names of its subsidiaries which, considered in the aggregate as a single subsidiary, would not constitute a "significant subsidiary" within the meaning of Rule 1-02 contained in Regulation S-X. 1. NACCO owns 100% of the voting securities of Housewares Holding Company, Housewares Holding Company owns 100% of the voting securities of HB-PS Holding Company, Inc., HB-PS Holding Company, Inc. owns 100% of Hamilton Beach(/)Proctor-Silex, Inc., Hamilton Beach(/) Proctor-Silex, Inc. S.A. de C.V., Hamilton Beach/Proctor-Silex de Mexico, S.A. de C.V. and HB/PS El Paso Incorporated (except for directors' qualifying shares). 2. NACCO Industries, Inc. owns 98% of the voting securities of Hyster-Yale Materials Handling Group, Inc.

Exhibit 23(i) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS To The Board of Directors of NACCO Industries, Inc. As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the Company's previously filed Registration Statement (No. 33-3422) on Form S-4 and Registration Statement (No. 33-52660) on Form S-8. ARTHUR ANDERSEN LLP

Exhibit 23(i) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS To The Board of Directors of NACCO Industries, Inc. As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the Company's previously filed Registration Statement (No. 33-3422) on Form S-4 and Registration Statement (No. 33-52660) on Form S-8. ARTHUR ANDERSEN LLP Cleveland, Ohio March 27, 1997

Exhibit 24(i) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Owsley Brown II ---------------------------------------Owsley Brown II Date: March 12, 1997

Exhibit 24(ii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and

Exhibit 24(i) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Owsley Brown II ---------------------------------------Owsley Brown II Date: March 12, 1997

Exhibit 24(ii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ John J. Dwyer ----------------------------------------John J. Dwyer Date: March 12, 1997

Exhibit 24(iii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the

Exhibit 24(ii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ John J. Dwyer ----------------------------------------John J. Dwyer Date: March 12, 1997

Exhibit 24(iii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Robert M. Gates ---------------------------------Robert M. Gates Date: March 12, 1997

Exhibit 24(iv) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the

Exhibit 24(iii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Robert M. Gates ---------------------------------Robert M. Gates Date: March 12, 1997

Exhibit 24(iv) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Leon J. Hendrix, Jr. -----------------------------Leon J. Hendrix, Jr. Date: March 12, 1997

Exhibit 24(v) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the

Exhibit 24(iv) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Leon J. Hendrix, Jr. -----------------------------Leon J. Hendrix, Jr. Date: March 12, 1997

Exhibit 24(v) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Dennis W. LaBarre ----------------------------Dennis W. LaBarre Date: March 12, 1997

Exhibit 24(vi) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the

Exhibit 24(v) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Dennis W. LaBarre ----------------------------Dennis W. LaBarre Date: March 12, 1997

Exhibit 24(vi) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Ian M. Ross ---------------------Ian M. Ross Date: March 12, 1997

Exhibit 24(vii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the

Exhibit 24(vi) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Ian M. Ross ---------------------Ian M. Ross Date: March 12, 1997

Exhibit 24(vii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ John C. Sawhill ------------------------John C. Sawhill Date: March 12, 1997

Exhibit 24(viii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the

Exhibit 24(vii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ John C. Sawhill ------------------------John C. Sawhill Date: March 12, 1997

Exhibit 24(viii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Britton T. Taplin ----------------------------Britton T. Taplin Date: March 12, 1997

Exhibit 24(ix) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the

Exhibit 24(viii) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Britton T. Taplin ----------------------------Britton T. Taplin Date: March 12, 1997

Exhibit 24(ix) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ David F. Taplin -------------------------David F. Taplin Date: March 12, 1997

ARTICLE 5 MULTIPLIER: 1,000,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END

YEAR DEC 31 1996 JAN 01 1996 DEC 31 1996

Exhibit 24(ix) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of NACCO Industries, Inc. hereby constitutes and appoints Charles A. Bittenbender, Kenneth C. Schilling and Suzanne Schulze Taylor, and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as Director of NACCO Industries, Inc., a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1996, and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorneys-infact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ David F. Taplin -------------------------David F. Taplin Date: March 12, 1997

ARTICLE 5 MULTIPLIER: 1,000,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS COMMON PREFERRED MANDATORY PREFERRED OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

YEAR DEC 31 1996 JAN 01 1996 DEC 31 1996 48 0 212 13 310 592 550 436 1,708 416 0 8 0 0 371 1,708 2,273 2,273 1,844 2,142 0 0 46 86 34 51 0 0 0 51 6 0

ARTICLE 5 MULTIPLIER: 1,000,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS COMMON PREFERRED MANDATORY PREFERRED OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

YEAR DEC 31 1996 JAN 01 1996 DEC 31 1996 48 0 212 13 310 592 550 436 1,708 416 0 8 0 0 371 1,708 2,273 2,273 1,844 2,142 0 0 46 86 34 51 0 0 0 51 6 0

Exhibit 99(i) Audited Consolidated Financial Statements THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES As of December 31, 1996 and 1995
Report of Independent Public Accountants...............................1 Consolidated Balance Sheets............................................2 Consolidated Statements of Income......................................4 Consolidated Statements of Stockholder's Equity........................5 Consolidated Statements of Cash Flows..................................6 Notes to Consolidated Financial Statements.............................7

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of The North American Coal Corporation: We have audited the accompanying consolidated balance sheets of The North American Coal Corporation and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income,

Exhibit 99(i) Audited Consolidated Financial Statements THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES As of December 31, 1996 and 1995
Report of Independent Public Accountants...............................1 Consolidated Balance Sheets............................................2 Consolidated Statements of Income......................................4 Consolidated Statements of Stockholder's Equity........................5 Consolidated Statements of Cash Flows..................................6 Notes to Consolidated Financial Statements.............................7

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of The North American Coal Corporation: We have audited the accompanying consolidated balance sheets of The North American Coal Corporation and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income, stockholder's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The North American Coal Corporation and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. Arthur Andersen LLP Dallas, Texas, February 4, 1997

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THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, 1996 and 1995 (Amounts in Thousands)
1996 1995

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of The North American Coal Corporation: We have audited the accompanying consolidated balance sheets of The North American Coal Corporation and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income, stockholder's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The North American Coal Corporation and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. Arthur Andersen LLP Dallas, Texas, February 4, 1997

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THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, 1996 and 1995 (Amounts in Thousands)
1996 --------ASSETS CURRENT ASSETS: Cash and cash equivalents Note receivable from Parent Company Accounts receivable Inventories Other current assets 1995 ---------

$

4,310 41,952 27,753 27,204 1,892 --------103,111

$

4,700 14,939 23,156 29,736 2,002 --------74,533

OTHER ASSETS: Notes receivable Costs recoverable under sales contracts Other investments and receivables 2,621 4,895 16,485 --------24,001 94,017 451,774 7,346 3,217 5,785 13,804 --------22,806 93,052 439,862 6,485

PROPERTY, PLANT AND EQUIPMENT--at cost: Coal lands and real estate Plant and equipment Construction in progress

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THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, 1996 and 1995 (Amounts in Thousands)
1996 --------ASSETS CURRENT ASSETS: Cash and cash equivalents Note receivable from Parent Company Accounts receivable Inventories Other current assets 1995 ---------

$

4,310 41,952 27,753 27,204 1,892 --------103,111

$

4,700 14,939 23,156 29,736 2,002 --------74,533

OTHER ASSETS: Notes receivable Costs recoverable under sales contracts Other investments and receivables 2,621 4,895 16,485 --------24,001 94,017 451,774 7,346 --------553,137 (230,453) --------322,684 6,326 36,516 7,452 --------50,294 --------$ 500,090 ========= 3,217 5,785 13,804 --------22,806 93,052 439,862 6,485 --------539,399 (208,330) --------331,069 5,952 34,936 4,654 --------45,542 --------$ 473,950 =========

PROPERTY, PLANT AND EQUIPMENT--at cost: Coal lands and real estate Plant and equipment Construction in progress

Less allowance for depreciation, depletion and amortization

DEFERRED CHARGES: Advance royalties Deferred lease costs Other

The accompanying notes are an integral part of these statements. -21996 -------LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Accounts payable Payable to affiliated companies Accrued liabilities Borrowings under revolving credit agreement Current maturities of long-term obligations 1995 --------

$ 15,048 556 26,585 29,000 17,861 -------89,050

$ 19,769 948 25,596 16,489 -------62,802

NON-CURRENT LIABILITIES:

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, 1996 and 1995 (Amounts in Thousands)
1996 --------ASSETS CURRENT ASSETS: Cash and cash equivalents Note receivable from Parent Company Accounts receivable Inventories Other current assets 1995 ---------

$

4,310 41,952 27,753 27,204 1,892 --------103,111

$

4,700 14,939 23,156 29,736 2,002 --------74,533

OTHER ASSETS: Notes receivable Costs recoverable under sales contracts Other investments and receivables 2,621 4,895 16,485 --------24,001 94,017 451,774 7,346 --------553,137 (230,453) --------322,684 6,326 36,516 7,452 --------50,294 --------$ 500,090 ========= 3,217 5,785 13,804 --------22,806 93,052 439,862 6,485 --------539,399 (208,330) --------331,069 5,952 34,936 4,654 --------45,542 --------$ 473,950 =========

PROPERTY, PLANT AND EQUIPMENT--at cost: Coal lands and real estate Plant and equipment Construction in progress

Less allowance for depreciation, depletion and amortization

DEFERRED CHARGES: Advance royalties Deferred lease costs Other

The accompanying notes are an integral part of these statements. -21996 -------LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Accounts payable Payable to affiliated companies Accrued liabilities Borrowings under revolving credit agreement Current maturities of long-term obligations 1995 --------

$ 15,048 556 26,585 29,000 17,861 -------89,050 19,852 29,138 -------48,990

$ 19,769 948 25,596 16,489 -------62,802 19,156 24,955 -------44,111

NON-CURRENT LIABILITIES: Deferred income taxes Pension compensation and other accrued liabilities

LONG-TERM OBLIGATIONS:

1996 -------LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Accounts payable Payable to affiliated companies Accrued liabilities Borrowings under revolving credit agreement Current maturities of long-term obligations

1995 --------

$ 15,048 556 26,585 29,000 17,861 -------89,050 19,852 29,138 -------48,990

$ 19,769 948 25,596 16,489 -------62,802 19,156 24,955 -------44,111

NON-CURRENT LIABILITIES: Deferred income taxes Pension compensation and other accrued liabilities

LONG-TERM OBLIGATIONS: Subsidiaries' liabilities--(not guaranteed by the Company or the Parent Company): Advances from customers Notes payable Notes payable to affiliated company Capitalized lease obligations

MINORITY INTEREST STOCKHOLDER'S EQUITY: Common stock, par value $1 a share: authorized 750 shares; issued and outstanding 500 shares Capital in excess of par value Retained income

184,234 20,751 19 136,630 -------341,634 5,291

176,384 23,872 32 146,384 -------346,672 5,240

1 15,124 -------15,125 -------$500,090 ========

1 15,124 -------15,125 -------$473,950 ========

-3-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Years Ended December 31, 1996 and 1995 (Amounts in Thousands)
1996 -------27,597 ======== $245,046 4,004 4,752 -------253,802 -------166,696 31,162 10,961 13,832 -------222,651 -------31,151 1995 -------26,680 ======== $234,354 13,632 4,984 -------252,970 -------162,377 30,382 9,448 15,312 -------217,519 -------35,451

TONS OF COAL SOLD INCOME: Net sales Royalties, rental and other operating income Interest, gain on sale of assets and miscellaneous income

COSTS AND EXPENSES: Cost of sales Depreciation, depletion and amortization Selling, administrative and general expenses Interest expense of subsidiaries

Income before income taxes and minority interest

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Years Ended December 31, 1996 and 1995 (Amounts in Thousands)
1996 -------27,597 ======== $245,046 4,004 4,752 -------253,802 -------166,696 31,162 10,961 13,832 -------222,651 -------31,151 1995 -------26,680 ======== $234,354 13,632 4,984 -------252,970 -------162,377 30,382 9,448 15,312 -------217,519 -------35,451

TONS OF COAL SOLD INCOME: Net sales Royalties, rental and other operating income Interest, gain on sale of assets and miscellaneous income

COSTS AND EXPENSES: Cost of sales Depreciation, depletion and amortization Selling, administrative and general expenses Interest expense of subsidiaries

Income before income taxes and minority interest INCOME TAXES: Current Deferred

8,574 1,312 -------9,886 2,074 -------$ 19,191 ========

9,150 1,690 -------10,840 2,018 -------$ 22,593 ========

Minority interest in income of consolidated subsidiary

Net income

The accompanying notes are an integral part of these statements. -4-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY For the Years Ended December 31, 1996 and 1995 (Amounts in Thousands)
Capital In Excess of Par Value ------$15,124 ------$15,124

Balance at January 1, 1995 Net income Dividends Balance at December 31, 1995

Common Stock -----$ 1 -----$ 1

Retained Income ---$ 22,593 (22,593) -------$ -

Total -------$ 15,125 22,593 (22,593) -------$ 15,125

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY For the Years Ended December 31, 1996 and 1995 (Amounts in Thousands)
Capital In Excess of Par Value ------$15,124 ------$15,124 ------$15,124 =======

Balance at January 1, 1995 Net income Dividends Balance at December 31, 1995 Net income Dividends Balance at December 31, 1996

Common Stock -----$ 1 -----$ 1 -----$ 1 ======

Retained Income ---$ 22,593 (22,593) -------$ 19,191 (19,191) -------$ ========

Total -------$ 15,125 22,593 (22,593) -------$ 15,125 19,191 (19,191) -------$ 15,125 ========

The accompanying notes are an integral part of these statements. -5-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 1996 and 1995 (Amounts in Thousands)
OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization Gain on sale of assets Costs recovered under sales contracts Deferred lease costs Deferred income taxes Pensions and other accruals Other deferred costs 1996 -------$ 19,191 1995 --------$ 22,593

31,162 (84) 890 (1,580) 1,312 3,610 (2,495) -------52,006 (4,114) 2,532 (5,538) -------(7,120) -------44,886

30,382 (279) 1,160 (1,782) 1,690 1,280 208 --------55,252 113 (2,525) 10,920 --------8,508 --------63,760

Working capital changes: (Increase) decrease in accounts receivable and other assets (Increase) decrease in inventories Increase (decrease) in accounts payable and other liabilities

NET CASH PROVIDED BY OPERATING ACTIVITIES INVESTING ACTIVITIES: Expenditures for property, plant and equipment Proceeds from property disposals

(19,534) 171

(22,611) 552

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 1996 and 1995 (Amounts in Thousands)
OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization Gain on sale of assets Costs recovered under sales contracts Deferred lease costs Deferred income taxes Pensions and other accruals Other deferred costs 1996 -------$ 19,191 1995 --------$ 22,593

31,162 (84) 890 (1,580) 1,312 3,610 (2,495) -------52,006 (4,114) 2,532 (5,538) -------(7,120) -------44,886

30,382 (279) 1,160 (1,782) 1,690 1,280 208 --------55,252 113 (2,525) 10,920 --------8,508 --------63,760

Working capital changes: (Increase) decrease in accounts receivable and other assets (Increase) decrease in inventories Increase (decrease) in accounts payable and other liabilities

NET CASH PROVIDED BY OPERATING ACTIVITIES INVESTING ACTIVITIES: Expenditures for property, plant and equipment Proceeds from property disposals (Additions to) repayment of note receivable from Parent Company, net Receipt of notes receivable Advance royalties Other - net NET CASH USED BY INVESTING ACTIVITIES FINANCING ACTIVITIES: Additions to (repayment of) lines of credit, net Additions to advances from customers, net Additions to long-term obligations Repayment of long-term obligations Dividends NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

(19,534) 171 (27,013) 574 (428) (3,216) -------(49,446)

(22,611) 552 7,770 552 (610) (1,841) --------(16,188)

29,000 7,850 60,979 (74,468) (19,191) -------4,170 -------(390) 4,700 -------$ 4,310 ========

(16,717) 40,411 52,535 (102,070) (22,593) --------(48,434) --------(862) 5,562 --------$ 4,700 =========

CASH AND CASH EQUIVALENTS AT END OF YEAR

The accompanying notes are an integral part of these statements. -6-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular Amounts In Thousands)

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular Amounts In Thousands) December 31, 1996 and 1995 NOTE A--ORGANIZATION The North American Coal Corporation ("Company") is a wholly owned subsidiary of NACCO Industries, Inc. ("Parent Company"). The Company is the owner of The Coteau Properties Company ("Coteau"), The Falkirk Mining Company ("Falkirk"), The Sabine Mining Company ("Sabine"), Red River Mining Company, its joint venture, ("Red River Mining"), and North American Coal Royalty Company. The Company is principally engaged in lignite mining through the operation of surface mines in North Dakota, Texas and Louisiana. The Company also operates a dragline at a limestone quarry in Florida. Three of the Company's consolidated coal mining subsidiaries were organized to assume sales agreements with public utilities. All of the coal of these subsidiaries is sold to these public utilities pursuant to long-term contracts with terms up to 20 years and with extensions at the public utilities option. The sales prices provided by such contracts are based on cost, plus a profit per ton. As each mining subsidiary has a contract to provide coal to its customer, a significant portion of their revenue is derived from a single source. The financial position of the mining subsidiary and the Company could be materially impacted if the relationship with the customer was terminated or altered. In December 1996, the Company was the successful bidder for a long-term coal mining project in south Texas, the San Miguel Lignite Project. The Company will provide mining services to San Miguel Electric Cooperative, Inc.'s lignite mine in Texas under a contract for 10.5 years, beginning on July 1, 1997. The Company expects to deliver to San Miguel Electric Cooperative approximately 1.8 million tons in 1997 and approximately 3 million tons annually through 2007. NOTE B--ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its joint venture. Intercompany accounts have been eliminated. CASH AND CASH EQUIVALENTS: Cash equivalents are investments purchased with an original maturity of three months or less. INVENTORIES: Supply inventories are stated at average cost. Coal inventories are stated at the lower of cost or market. COSTS RECOVERABLE UNDER SALES CONTRACTS: The coal sales agreements ("Agreements") of three subsidiaries provided for selling prices which allowed a profit during the defined development period of the mines. Production costs incurred during the development period in excess of the established selling price, as set forth in the Agreements, were deferred and are being recovered as a cost of coal tonnage sold after the development period. Recoveries of these costs amounted to approximately $890,000 and $1,160,000 in 1996 and 1995, respectively, and are included in net sales in the accompanying consolidated statements of income. -7-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 and 1995 NOTE B--ACCOUNTING POLICIES --continued

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 and 1995 NOTE B--ACCOUNTING POLICIES --continued DEPRECIATION, DEPLETION AND AMORTIZATION: Depreciation, depletion and amortization are provided in amounts sufficient to amortize the cost of related assets (including assets recorded under capitalized lease obligations) over their estimated range of useful lives and are calculated by either the straight-line method or the units-of-production method based on estimated recoverable tonnage. RECLAMATION COSTS: Under certain federal and state regulations, the Company's subsidiaries are required to reclaim land disturbed as a result of mining. Reclamation of disturbed land is a continuous process throughout the term of the related Agreements. Current reclamation costs are being recovered as a cost of coal tonnage sold. Costs to complete reclamation after mining has been completed are reimbursed under the Agreements. PRIOR YEAR FINANCIAL STATEMENTS: Certain reclassifications have been made to the 1995 consolidated financial statements to conform to the 1996 presentation. FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS: The fair values of financial instruments have been determined through information obtained from quoted market sources and management estimates. The Company does not hold or issue financial instruments or derivative financial instruments for trading purposes. The Company enters into interest rate swap agreements with terms ranging from one to six years. The differential between the floating interest rate and the fixed interest rate which is to be paid or received is recognized in interest expense as the floating interest rate changes over the life of the agreement. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. LONG-LIVED ASSETS: During fiscal year 1996, the Company adopted SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This statement had no material effect on the Company's accompanying financial statements. CHANGE IN ACCOUNTING METHOD: In 1996, the mines converted to a new inventory/purchasing system. The conversion resulted in a change from the first-in, first-out method to the average cost method of the supply inventory valuation. As of December 31, 1996, average cost approximated first-in, first out. The cumulative effect is immaterial to the financial statements. CHANGE IN ACCOUNTING ESTIMATE: Due to the extension of Falkirk's contract with its customers, Falkirk extended the estimated useful lives of preproduction costs and fixed assets. -8-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 and 1995 NOTE C--ACCOUNTS RECEIVABLE Accounts receivable are summarized as follows:

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996 and 1995 NOTE C--ACCOUNTS RECEIVABLE Accounts receivable are summarized as follows:
December 31, ---------------------1996 1995 ------------$24,648 $18,783 2,327 778 ------$27,753 ======= 3,588 785 ------$23,156 =======

Accounts receivable Accounts receivable from affiliated companies Refundable income taxes

NOTE D--INVENTORIES Inventories are summarized as follows:
December 31, ---------------------1996 1995 ------------$ 8,328 $10,618 18,876 ------$27,204 ======= 19,118 ------$29,736 =======

Coal Mining supplies

NOTE E--ADVANCES FROM CUSTOMERS Advances from customers represent amounts advanced to Coteau and Falkirk from public utilities to develop, operate and provide working capital for the mines. These advances are secured by all owned assets and assignment of all rights under the Agreements of Coteau and Falkirk, are non interest-bearing, and are without recourse to the Company and the Parent Company. No repayment schedule has been established for the Falkirk advances due to the funding agreement with the customers. Estimated maturities for Coteau for the next five years, including current maturities which are included in accrued liabilities in the accompanying balance sheets, are as follows:
1997 1998 1999 2000 2001 Thereafter 9,079 9,750 9,750 9,750 9,750 72,175 -------$120,254 ======== $

-9-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 NOTE F--NOTES PAYABLE Notes payable, less current maturities, are summarized in the following table. Neither the Company nor the Parent Company have guaranteed these borrowings. The promissory note for Sabine represents borrowings which the public utility arranged for Sabine.
December 31, 1996 1995 ------------THE COTEAU PROPERTIES COMPANY Mortgage note with no interest. The note requires eight equal quarterly payments, beginning January 5, 1996, and is secured by the related coal lands. THE SABINE MINING COMPANY Secured note payable due February 20, 2003, with semi-annual payments and an interest rate of LIBOR plus .25% on the unpaid balance (interest rate of 5.75% at December 31, 1996). Under the terms of such agreement, substantially all assets are pledged and all rights under the Agreement are assigned. Promissory note payable to a bank under a revolving agreement providing for borrowings up to $10 million in 1996 and $25 million in 1995. Interest is based on the bank's daily cost of funds plus .45% (6.75% and 6.45% interest rate as of December 31, 1996 and 1995, respectively). Under the terms of such agreement, substantially all assets are pledged and all rights under the Agreement are assigned. Secured note payable due June 1, 2001, with semi-annual payments and a fixed interest rate of 8.65% per annum on the unpaid balance. Under the terms of such agreement, substantially all assets are pledged and all rights under the Agreement are assigned. OTHER

$

-

$ 3,000

11,786

-

5,298

16,172

3,500 167 ------$20,751 =======

4,500 200 ------$23,872 =======

Note maturities for the next five years, including current maturities, are as follows:
1997 1998 1999 2000 2001 Thereafter 6,310 3,310 3,143 3,143 2,643 8,512 ---------------$ 27,061 ================ $

-10-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 NOTE F--NOTES PAYABLE--continued Commitment fees paid to banks were approximately $18,000 and $46,000 in 1996 and 1995, respectively, and are included in interest expense in the accompanying consolidated statements of income. NOTE G--REVOLVING CREDIT AGREEMENT During 1996, the Company had a revolving credit agreement with a financial institution which is summarized as follows:
Amount of revolving credit agreement Amount available at December 31, 1996 Stated interest rate Interest rate at December 31, 1996 Commitment and facility fee Expiration date (with annual renewal option) .20% per September 27 $50,0 $21,0 LIBOR +

The Company's revolving credit agreement includes certain financial covenants. The Company was in compliance with such covenants at December 31, 1996. The Company enters into interest rate swap agreements which allow the Company to enter into long-term credit arrangements that have performance based, floating rates of interest and then swap them into fixed rates as opposed to entering into higher cost fixed-rate credit arrangements. These agreements are with major commercial banks; therefore, the risk of credit loss from nonperformance by the banks is minimal. The Company evaluates its exposure to floating rate debt on an ongoing basis. The following table summarizes the notional amount and related rate on the interest rate swap agreement outstanding at December 31, 1996:
Variable Rate Received -------5.75% Fixed Rate Paid ---6.85%

Notional Amount -------$13,929

NOTE H--POSTRETIREMENT PLANS The Company and its affiliates, representing the mining operations of the Parent Company, sponsor defined benefit pension plans which cover substantially all salaried employees of the Company and its subsidiaries. Benefits under the plans are based on years of service and average compensation during certain periods. The Company's funding policy is to contribute within the range allowed by the applicable regulations. Plan assets are primarily listed stocks and U.S. bonds. -11-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 The following is a detail of net periodic pension expense for all mining operations of the Parent Company:
December 31, ----------------------1996 1995 ------------$ 2,192 $ 1,805 2,808 2,414 (2,697) (6,891) (71) 4,538 ------------$ 2,232 $ 1,866 ======= =======

Service cost Interest cost on projected benefit obligation Actual return on plan assets Net amortization and deferral Net periodic pension expense

The following sets forth the funded status of the plans:
Actuarial present value of benefit obligation December 31, ------------------------1996 1995 --------------$ 20,086 $ 19,034 2,780 3,313 --------------22,866 22,347 14,948 17,738 --------------37,814 40,085 34,473 -------(3,341) 30,622 -------(9,463)

Vested accumulated benefit obligation Nonvested accumulated benefit obligation Total accumulated benefit obligation Value of future salary projections Total projected benefit obligation Fair value of plan assets Projected benefit obligation in excess of plan assets Amounts not recognized: Unrecognized net transition asset Unrecognized net gain Prior service cost Pension obligation recognized

(670) (15,288) 646 -------$(18,653) ========

(838) (6,578) 705 -------$(16,174) ========

-12-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 NOTE H--POSTRETIREMENT PLANS--continued Assumptions used in accounting for the defined benefit plans:
December 31, -----------------1996 1995 -------

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 NOTE H--POSTRETIREMENT PLANS--continued Assumptions used in accounting for the defined benefit plans:
December 31, -----------------1996 1995 ------8.00% 7.50% 5.00% 9.00% 4.50% 9.00%

Weighted average discount rates Rate of increase in compensation levels Expected long-term rate of return on assets

The Company and its subsidiaries participate in a defined contribution plan sponsored by the Company which covers substantially all salaried employees. The plan provides for employee contributions to be matched, by the respective company, up to a limit of 5% of the employee's salary. Company contributions to the plan were approximately $2,773,000 and $2,515,000 in 1996 and 1995, respectively. NOTE I--OTHER POSTRETIREMENT BENEFITS The expected cost of retirement benefits other than pensions is charged to expense during the years that the employees render service. Under the provisions of the Agreements of three subsidiaries, costs will be recovered as a cost of coal tonnage sold. Because SFAS 106 is not material to the Company's results of operations and financial condition, the detailed disclosures required by SFAS 106 have not been presented. Coteau and Sabine established Voluntary Employees' Beneficiary Association (VEBA) trusts in 1993 to provide for such future retirement benefits. Coteau and Sabine made cash contributions to the VEBA trusts of approximately $364,000 and $462,000 in 1996 and 1995, respectively. Contributions made to an IRS approved VEBA trust are irrevocable and must be used for employee benefits. NOTE J--COMMITMENTS Certain mining equipment leased by Coteau, Falkirk, and Sabine is capitalized for financial statement purposes. Under the provisions of the Agreements, the customer is required to pay, as part of the cost of coal purchased, an amount equal to the annual lease payments. Interest expense and amortization in excess of annual lease payments are deferred and are recognized in years when annual lease payments exceed interest expense and amortization. Interest paid on notes and capitalized lease obligations amounted to approximately $13,775,000 and $15,841,000 in 1996 and 1995, respectively. Assets recorded under capitalized lease obligations are included with property, plant and equipment and consist of the following: -13-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 NOTE J--COMMITMENTS--continued
December 31, --------------------------1996 1995 ----------------$ 198,744 $ 201,048 (87,077) --------$ 111,667 ========= (78,291) --------$ 122,757 =========

Plant and equipment Accumulated amortization

Capitalized lease obligations are renewable for additional periods at terms based upon fair market value of the leased items at the renewal dates. During 1996 and 1995, subsidiaries of the Company incurred capitalized lease obligations of approximately $1,839,000 and $17,985,000, respectively, in connection with lease agreements to acquire plant and equipment. Future minimum lease payments as of December 31, 1996, for all capitalized lease obligations are as follows:
1997 1998 1999 2000 2001 Thereafter Total minimum lease payments Amounts representing interest Present value of net minimum lease payments Current maturities $ 22,624 21,918 21,518 20,609 20,342 120,061 --------------227,072 (78,891) --------------148,181 (11,551) --------------$ 136,630 ===============

The Company is committed under non cancelable operating leases, The Parent Company is not obligated under operating lease agreements of the Company. Minimum lease payments as of December 31, 1996, as follows:
1997 1998 1999 2000 2001 Thereafter $ 2,710 1,788 1,225 1,074 1,074 4,295 ---------$ 12,166 ==========

-14-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 Rental expenses for all operating leases amounted to approximately $2,000,000 and $992,000 during 1996 and 1995, respectively. At December 31, 1996, the unexpended portion of capital expenditures authorized by the respective boards of directors, and customers where required, of the Company and its subsidiaries approximated $54,188,000, of which $49,361,000 is being financed under the arrangements with public utilities served by the subsidiaries. NOTE K--INCOME TAXES The Company and its subsidiaries are included in the consolidated federal income tax return filed by the Parent Company. The Company and each of its subsidiaries entered into a tax-sharing agreement with the Parent Company under which federal income taxes are computed by the Company and each of its subsidiaries on a separate return basis. The current portion of such tax is paid to the Parent Company. During 1996 and 1995, the federal and state income taxes paid by the Company were approximately $8,464,000 and $12,122,000, respectively. The Company's effective tax rate differs from the federal statutory rate primarily due to state income taxes and percentage depletion. Provision for income taxes consists of the following:
Year Ended December 31, ----------------------1996 1995 $ 7,278 $8,795 1,296 355 -----------$ 8,574 $9,150 ======= ====== $ 1,401 (89) ------$ 1,312 ======= $1,399 291 -----$1,690 ======

Federal State Total current tax expense

Federal State Total deferred tax expense

A summary of components of the net deferred tax assets (liabilities) included in the accompanying consolidated balance sheets resulting from differences in the book and tax bases of assets and liabilities are as follows: -15-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 NOTE K--INCOME TAXES--continued
December 31, -----------------------1996 1995 --------------Current portion:

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 NOTE K--INCOME TAXES--continued
December 31, -----------------------1996 1995 --------------Current portion: Accrued expenses and reserves Inventory Total current $ 521 (40) -------$ 481 ======== 448 (37) -------$ 411 ======== $

Long-term portion: Depreciation, depletion and amortization Pensions Installment sales Partnership investment Deferred compensation Other - net Total long-term

$(23,379) 5,527 (1,211) (1,796) 1,700 (693) -------$(19,852) ========

$(19,522) 5,714 (928) (1,811) 1,327 (3,936) -------$(19,156) ========

The current portion of deferred income taxes shown above, a net deferred tax asset, is included in other current assets in the accompanying consolidated balance sheets. NOTE L--DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS Statement of Financial Accounting Standards No. 107, "Disclosures About Fair Value of Financial Instruments", requires disclosure about the fair value of financial instruments. Carrying amounts for cash and cash equivalents and revolving credit approximate fair value. The fair value of notes receivable and payable is estimated based on the discounted value of the future cash flows using borrowing rates currently available to the Company for bank loans with similar terms and average maturities. The fair value compared to the carrying value are summarized as follows:
December 31, ---------------------1996 1995 ------FAIR VALUE: Notes receivable Notes payable CARRYING VALUE: Notes receivable Notes payable $ 3,906 $27,176 $ 5,023 $29,367

$ 2,621 $27,061

$ 3,790 $29,053

-16-

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995

THE NORTH AMERICAN COAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1996 and 1995 NOTE M--TRANSACTIONS WITH AFFILIATED COMPANIES Costs and expenses include net receipts from the Parent Company and other subsidiaries of the Parent Company. These receipts approximated $1,185,000 in 1996 and $1,150,000 in 1995 for administrative and other services. The note receivable from Parent Company of $41,952,000 in 1996 and $14,939,000 in 1995 is a demand note, with interest of 5.94% at December 31, 1996, and 5.78% at December 31, 1995. -17-

Exhibit 99(ii) HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS Consolidated Balance Sheets as of December 31, 1996 and 1995 Consolidated Statements of Operations for the Years Ended December Consolidated Statements of Changes in Stockholder's Equity for the 31, 1996 and 1995 Consolidated Statements of Cash Flows for the Years Ended December Notes to Consolidated Financial Statements as of December 31, 1996 PAGE 1 2 3 4 5 6 - 1

31, 1996 and 1995 Years Ended December 31, 1996 and 1995 and 1995

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Hamilton Beach/Proctor-Silex, Inc.: We have audited the accompanying consolidated balance sheets of Hamilton Beach/Proctor-Silex, Inc. (a Delaware corporation), and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of operations, changes in stockholder's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and

Exhibit 99(ii) HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS Consolidated Balance Sheets as of December 31, 1996 and 1995 Consolidated Statements of Operations for the Years Ended December Consolidated Statements of Changes in Stockholder's Equity for the 31, 1996 and 1995 Consolidated Statements of Cash Flows for the Years Ended December Notes to Consolidated Financial Statements as of December 31, 1996 PAGE 1 2 3 4 5 6 - 1

31, 1996 and 1995 Years Ended December 31, 1996 and 1995 and 1995

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Hamilton Beach/Proctor-Silex, Inc.: We have audited the accompanying consolidated balance sheets of Hamilton Beach/Proctor-Silex, Inc. (a Delaware corporation), and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of operations, changes in stockholder's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hamilton Beach/Proctor-Silex, Inc., and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for the years then ended, in conformity with generally accepted accounting principles. Arthur Andersen, LLP Richmond, Virginia, January 31, 1997 - -1-

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS Consolidated Balance Sheets as of December 31, 1996 and 1995 Consolidated Statements of Operations for the Years Ended December Consolidated Statements of Changes in Stockholder's Equity for the 31, 1996 and 1995 Consolidated Statements of Cash Flows for the Years Ended December Notes to Consolidated Financial Statements as of December 31, 1996 PAGE 1 2 3 4 5 6 - 1

31, 1996 and 1995 Years Ended December 31, 1996 and 1995 and 1995

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Hamilton Beach/Proctor-Silex, Inc.: We have audited the accompanying consolidated balance sheets of Hamilton Beach/Proctor-Silex, Inc. (a Delaware corporation), and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of operations, changes in stockholder's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hamilton Beach/Proctor-Silex, Inc., and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for the years then ended, in conformity with generally accepted accounting principles. Arthur Andersen, LLP Richmond, Virginia, January 31, 1997 - -1-

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1996 AND 1995 (Dollars in Thousands)
ASSETS 1996 ---CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net $ 359 60,054

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Hamilton Beach/Proctor-Silex, Inc.: We have audited the accompanying consolidated balance sheets of Hamilton Beach/Proctor-Silex, Inc. (a Delaware corporation), and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of operations, changes in stockholder's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hamilton Beach/Proctor-Silex, Inc., and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for the years then ended, in conformity with generally accepted accounting principles. Arthur Andersen, LLP Richmond, Virginia, January 31, 1997 - -1-

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1996 AND 1995 (Dollars in Thousands)
ASSETS 1996 ---CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Inventories, net Deferred income taxes Prepaid expenses and other Total current assets PROPERTY, PLANT, AND EQUIPMENT, NET DEFERRED CHARGES AND INTANGIBLE ASSETS, NET DEFERRED INCOME TAXES OTHER ASSETS Total assets 359 60,054 48,326 2,368 6,721 --------117,828 52,592 96,679 4,729 14 --------$ 271,842 ========= LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: $

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1996 AND 1995 (Dollars in Thousands)
ASSETS 1996 ---CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Inventories, net Deferred income taxes Prepaid expenses and other Total current assets PROPERTY, PLANT, AND EQUIPMENT, NET DEFERRED CHARGES AND INTANGIBLE ASSETS, NET DEFERRED INCOME TAXES OTHER ASSETS Total assets 359 60,054 48,326 2,368 6,721 --------117,828 52,592 96,679 4,729 14 --------$ 271,842 ========= LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Current maturities of long-term obligations Accounts payable Other current liabilities Total current liabilities $

9,211 21,388 33,253 --------63,852 --------9,695 ---------

$

OTHER LIABILITIES

LONG-TERM OBLIGATIONS: Revolving credit agreements Capital leases Total long-term obligations STOCKHOLDER'S EQUITY: Common stock and paid-in capital, 100 shares authorized, issued, and outstanding at $0.01 par value Retained deficit Minimum pension liability Cumulative translation adjustment Total stockholder's equity Total liabilities and stockholder's equity

80,000 449 --------80,449 ---------

155,609 (35,739) (393) (1,631) --------117,846 --------$ 271,842 =========

The accompanying notes are an integral part of these consolidated balance sheets. - -2-

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Dollars in Thousands)
1996 -------NET SALES COST OF SALES Gross profit SELLING, ADMINISTRATIVE, AND GENERAL EXPENSES Operating profit OTHER EXPENSE: Interest Amortization Other, net Total other expense Income before income taxes PROVISION FOR INCOME TAXES Net income $395,046 326,146 -------68,900 39,502 -------29,398 1995 -------$381,356 318,968 -------62,388 34,293 -------28,095

5,959 5,715 345 -------12,019 -------17,379 6,696 -------$10,683 ========

6,573 3,683 813 -------11,069 -------17,026 5,274 -------$11,752 ========

The accompanying notes are an integral part of these consolidated statements. - -3-

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Dollars in Thousands, Other Than Par Value)
COMMON STOCK -------------------SHARES PAR OUTSTANDING VALUE ------------- ----COMMON STOCK AND PAID-IN CAPITAL --------MINIMUM PENSION LIABILITY --------CUMULAT TRANSLAT ADJUSTM --------

RETAINED DEFICIT --------

BALANCES, December 31, 1994 Minimum pension liability Net income Translation adjustment BALANCES, December 31, 1995 Minimum pension liability Dividend paid for acquisition of Glen Dimplex shares Dividend Net income Translation adjustment BALANCES, December 31, 1996

100 --100 -

$1 -1 -

$149,268 -------149,268 -

$(14,568) 11,752 -------(2,816) -

$(2,357) (164) ------(2,521) 2,128

$(1,9

3 ----(1,5

--100 ===

-$1 ==

6,341 -------$155,609 ========

(33,606) (10,000) 10,683 -------$(35,739) ========

------$ (393) =======

( ----$(1,6 =====

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Dollars in Thousands, Other Than Par Value)
COMMON STOCK -------------------SHARES PAR OUTSTANDING VALUE ------------- ----COMMON STOCK AND PAID-IN CAPITAL --------MINIMUM PENSION LIABILITY --------CUMULAT TRANSLAT ADJUSTM --------

RETAINED DEFICIT --------

BALANCES, December 31, 1994 Minimum pension liability Net income Translation adjustment BALANCES, December 31, 1995 Minimum pension liability Dividend paid for acquisition of Glen Dimplex shares Dividend Net income Translation adjustment BALANCES, December 31, 1996

100 --100 -

$1 -1 -

$149,268 -------149,268 -

$(14,568) 11,752 -------(2,816) -

$(2,357) (164) ------(2,521) 2,128

$(1,9

3 ----(1,5

--100 ===

-$1 ==

6,341 -------$155,609 ========

(33,606) (10,000) 10,683 -------$(35,739) ========

------$ (393) =======

( ----$(1,6 =====

The accompanying notes are an integral part of these consolidated statements. - -4-

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Dollars in Thousands)
1996 ------CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation Loss on disposal of fixed assets Amortization Deferred income taxes Changes in assets and liabilitiesDecrease (increase) in: Accounts receivable, net Inventories, net Prepaid expenses and other Deferred charges and intangible assets (Decrease) increase in: Accounts payable Other liabilities Net cash provided by operating activities 1995 -------

$10,683

$11,752

13,263 224 5,715 (3,226)

12,156 599 3,683 38

10,139 10,401 55 (315) (228) 5,118 ------51,829 -------

6,086 (9,670) (665) (2,067) (10,219) (2,569) ------9,124 -------

CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of Glen Dimplex shares

(33,606)

-

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Dollars in Thousands)
1996 ------CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation Loss on disposal of fixed assets Amortization Deferred income taxes Changes in assets and liabilitiesDecrease (increase) in: Accounts receivable, net Inventories, net Prepaid expenses and other Deferred charges and intangible assets (Decrease) increase in: Accounts payable Other liabilities Net cash provided by operating activities 1995 -------

$10,683

$11,752

13,263 224 5,715 (3,226)

12,156 599 3,683 38

10,139 10,401 55 (315) (228) 5,118 ------51,829 -------

6,086 (9,670) (665) (2,067) (10,219) (2,569) ------9,124 -------

CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of Glen Dimplex shares Capital expenditures Proceeds from sale of fixed assets Acquisition of supplier Other Net cash used in investing activities

(33,606) (15,129) 41 58 ------(48,636) -------

(9,549) 115 (1,508) ------(10,942) -------

CASH FLOWS FROM FINANCING ACTIVITIES: Reduction of long-term obligations Borrowings under long-term obligations Dividend paid Net cash used in financing activities

(59,937) 66,829 (10,000) ------(3,108) ------(34) ------51 308 ------$ 359 =======

(42,741) 42,183 ------(558) ------377 ------(1,999) 2,307 ------$ 308 =======

EFFECT OF EXCHANGE RATE CHANGES ON CASH Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS, beginning of year CASH AND CASH EQUIVALENTS, end of year

The accompanying notes are an integral part of these consolidated statements. - -5-

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995

HAMILTON BEACH/PROCTOR-SILEX, INC., AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 (Dollars in Thousands) 1. ORGANIZATION AND BUSINESS: Hamilton Beach/Proctor-Silex, Inc., and its wholly owned subsidiaries in Canada and Mexico (the "Company"), design, manufacture, and sell small consumer electric appliances. The principal markets for the Company's products are the United States and Canada. The Company's products are sold primarily to retailers and distributors. The Company is a wholly owned subsidiary of HB/PS Holdings, Inc. ("Holdings"). Through October 17, 1996, Holdings was owned 80 percent by NACCO Industries, Inc. ("NACCO"), and 20 percent by Glen Dimplex. Effective October 18, 1996, Holdings became a wholly owned subsidiary of NACCO (see Note 3). 2. SIGNIFICANT ACCOUNTING POLICIES: PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash in banks and highly liquid investments with initial maturities of three months or less. INVENTORIES, NET Inventories are stated at the lower of cost or market. Cost has been determined by the last-in, first-out ("LIFO") method for substantially all inventories accounted for in the United States and under the first-in, first-out method for all other inventories. - -6-

PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment is stated at cost. All property, plant, and equipment is depreciated on a straightline basis over estimated useful lives of up to 40 years for buildings and 4 to 6 years for machinery and equipment. Assets recorded under capital leases and leasehold improvements are amortized over the lesser of their estimated useful lives or remaining lease terms on a straight-line basis. GOODWILL Goodwill is being amortized on a straight-line basis over periods up to 40 years. The Company continually evaluates whether events and circumstances have occurred subsequent to its acquisitions that indicate the remaining estimated useful life of goodwill may warrant revision or that the remaining balance of goodwill may not be recoverable. When factors indicate that goodwill should be evaluated for possible impairment, the Company uses an estimate of the Company's undiscounted cash flow over the remaining life of the goodwill in measuring whether the goodwill is recoverable. PRODUCT DEVELOPMENT COSTS Costs associated with the development of new products and changes to existing products are charged to operations as incurred. These costs amounted to $3,690 and $3,304 in 1996 and 1995, respectively. ADVERTISING COSTS Promotional or advertising costs associated with customer support programs are accrued when the related

PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment is stated at cost. All property, plant, and equipment is depreciated on a straightline basis over estimated useful lives of up to 40 years for buildings and 4 to 6 years for machinery and equipment. Assets recorded under capital leases and leasehold improvements are amortized over the lesser of their estimated useful lives or remaining lease terms on a straight-line basis. GOODWILL Goodwill is being amortized on a straight-line basis over periods up to 40 years. The Company continually evaluates whether events and circumstances have occurred subsequent to its acquisitions that indicate the remaining estimated useful life of goodwill may warrant revision or that the remaining balance of goodwill may not be recoverable. When factors indicate that goodwill should be evaluated for possible impairment, the Company uses an estimate of the Company's undiscounted cash flow over the remaining life of the goodwill in measuring whether the goodwill is recoverable. PRODUCT DEVELOPMENT COSTS Costs associated with the development of new products and changes to existing products are charged to operations as incurred. These costs amounted to $3,690 and $3,304 in 1996 and 1995, respectively. ADVERTISING COSTS Promotional or advertising costs associated with customer support programs are accrued when the related revenues are recognized. All other costs incurred in producing media advertising are expensed at the time the advertising takes place. Promotional and advertising costs charged to expense were $26,270 and $26,465 in 1996 and 1995, respectively. FOREIGN CURRENCY TRANSLATION Assets and liabilities of the Company's foreign subsidiaries are translated at current exchange rates, while income and expense items are translated at average rates for the period. Translation gains and losses associated with the Company's Canadian subsidiary are reported as a component of stockholder's equity. Translation gains and losses related to the Company's subsidiaries located in Mexico are reported in the accompanying consolidated statements of operations. PRODUCT LIABILITY The Company is insured for product liability claims for amounts in excess of established self-insured retention limits. Costs estimated to be incurred with respect to product liability claims are accrued based on experience factors. - -7-

SELF-INSURANCE The Company maintains a self-insurance program for health claims and a high deductible insurance program for workers' compensation claims of all covered employees. Losses are accrued based on the Company's estimate of future costs that will be incurred for employee losses incurred prior to the balance sheet date. FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS The Company's financial instruments include cash, accounts receivable, payables, debt, interest rate agreements, and foreign currency contracts. The estimated fair values of the Company's financial instruments at December 31, 1996 and 1995, approximate their carrying value as reflected in the consolidated balance sheets (see Note 10). The estimated fair values of financial instruments have been determined through information obtained from quoted market sources and management estimates. The Company does not hold or issue financial instruments or derivative financial instruments for trading purposes. The Company enters into forward foreign exchange contracts in order to hedge certain foreign currency commitments. Gains and losses from these contracts are deferred and are recognized as part of the cost of the underlying transaction being hedged. The Company also enters into interest rate swap agreements with various terms and maturity dates. The

SELF-INSURANCE The Company maintains a self-insurance program for health claims and a high deductible insurance program for workers' compensation claims of all covered employees. Losses are accrued based on the Company's estimate of future costs that will be incurred for employee losses incurred prior to the balance sheet date. FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS The Company's financial instruments include cash, accounts receivable, payables, debt, interest rate agreements, and foreign currency contracts. The estimated fair values of the Company's financial instruments at December 31, 1996 and 1995, approximate their carrying value as reflected in the consolidated balance sheets (see Note 10). The estimated fair values of financial instruments have been determined through information obtained from quoted market sources and management estimates. The Company does not hold or issue financial instruments or derivative financial instruments for trading purposes. The Company enters into forward foreign exchange contracts in order to hedge certain foreign currency commitments. Gains and losses from these contracts are deferred and are recognized as part of the cost of the underlying transaction being hedged. The Company also enters into interest rate swap agreements with various terms and maturity dates. The differential between the floating interest rate and the fixed interest rate that is to be paid or received is recognized in interest expense on a current basis. 3. ACQUISITION OF SHAREHOLDER INTEREST: On October 18, 1996, Holdings, through its parent company, Housewares Holding Company ("Housewares"), purchased Glen Dimplex's 20 percent ownership interest in Holdings for $33,606. The purchase was established based upon provisions included in the Shareholder Agreement dated October 11, 1990, among Housewares, Holdings, and Hamilton Beach, Inc. The purchase of the Glen Dimplex shares was effected via a dividend by the Company to Holdings in the amount of the purchase price. The effect of this transaction on the financial statements of the Company was an increase to retained deficit of $33,606, and an increase to goodwill and additional paid-in capital of $6,341. The addition to goodwill is being amortized on a straight-line basis over the remaining life of the goodwill acquired upon the formation of the Company. 4. ACQUISITION: On November 30, 1995, the Company acquired all the outstanding stock of Plasticos Sotec, S.A de C.V. ("Sotec"), a Mexican supplier of molded plastic parts, under the purchase method of accounting. The Company paid net cash of $1,508 and assumed other liabilities of $350 for the stock and certain assets of Sotec, plus acquisition costs. Prior to the acquisition, the Company paid $2,650 to terminate the supplier manufacturing arrangement. The goodwill associated with the acquisition of $2,129 and the amount paid to terminate the supplier manufacturing arrangement are being amortized over a 25 month period. - -8-

5. ACCOUNTS RECEIVABLE, NET: At December 31, accounts receivable consist of the following.
1996 ------Accounts receivable Less- Allowance for returns, discounts, and adjustments Allowance for doubtful accounts Accounts receivable, net $68,479 (7,498) (927) ------$60,054 ======= 1995 ------$77,716 (6,878) (645) ------$70,193 =======

6. INVENTORIES, NET: At December 31, inventories consist of the following.

5. ACCOUNTS RECEIVABLE, NET: At December 31, accounts receivable consist of the following.
1996 ------Accounts receivable Less- Allowance for returns, discounts, and adjustments Allowance for doubtful accounts Accounts receivable, net $68,479 (7,498) (927) ------$60,054 ======= 1995 ------$77,716 (6,878) (645) ------$70,193 =======

6. INVENTORIES, NET: At December 31, inventories consist of the following.
1996 ------Raw materials Work in process Finished goods LIFO allowance Inventories, net $10,915 3,061 34,078 272 ------$48,326 ======= 1995 ------$12,458 3,196 43,323 (250) ------$58,727 =======

As a result of changes in prices, and liquidation of certain LIFO inventories in 1996, operating profit increased $522 and decreased $141 for 1996 and 1995, respectively. The cost of inventories stated under the LIFO method was 91 percent of the value of total inventories at December 31, 1996 and 1995. 7. PROPERTY, PLANT, AND EQUIPMENT, NET: At December 31, property, plant, and equipment (including capital leases) consists of the following.
1996 --------Land, buildings, and improvements Machinery and equipment Construction work in process $ 17,971 97,746 9,542 --------125,259 (72,667) --------$ 52,592 ========= 1995 --------17,862 89,344 5,231 --------112,437 (61,398) --------$ 51,039 ========= $

Less- Accumulated depreciation and amortization Property, plant, and equipment, net

8. DEFERRED CHARGES AND INTANGIBLE ASSETS, NET: Goodwill amounted to $96,460 and $93,649 at December 31, 1996 and 1995, respectively, net of accumulated amortization, and is being amortized over periods up to 40 years on a straight-line basis. Goodwill amortization expense amounted to $3,844 and $2,816 for 1996 and 1995, respectively. Patents, trademarks, and other at December 31, 1996 and 1995, amounted to $25 and $1,323, respectively, net of accumulated amortization, and are being amortized on a straight-line basis over their remaining lives. Total amortization for 1996 and 1995 amounted to $1,287 and $284, respectively. Deferred financing costs at December 31, 1996 and 1995, amounted to $194 and $778, respectively, net of accumulated amortization, and are being amortized on a straight-line basis over the life of the amended and restated credit agreement (see Note 9). Amortization expense related to deferred financing costs for 1996 and 1995 was $584 and $583, respectively. 9. REVOLVING CREDIT AGREEMENTS: The Company has a bank credit facility (the "Agreement"), which includes a revolving credit line and a letter-of-

The Company has a bank credit facility (the "Agreement"), which includes a revolving credit line and a letter-ofcredit facility of up to $160,000 through May 1999. In April 1995, the Agreement was amended to provide a lower interest rate and facility fee if the Company achieves certain interest coverage ratios and to allow for interest rates to be quoted under a competitive bid option. In October 1996, the Agreement was amended to accommodate the dividend for the purchase of the Glen Dimplex shares (see Note 3). This amendment increased the amount available under the Agreement by $25,000 and modified certain required ratios. The maturity date of the Agreement may, upon mutual consent, be extended annually for an additional year. As amended, the Agreement allows borrowings to be made at either (i) the lender's prime rate plus 0.25 percent or (ii) LIBOR plus 0.75 percent. Additionally, a facility fee of 0.50 percent per annum times the committed amount of the credit facility is paid to the lender. The borrowing margins and facility fee rates are subject to reductions based upon the Company achieving certain predetermined interest coverage ratios. During 1996, the Company received an average reduction of 0.79 basis points on the combined borrowing margin plus a facility fee resulting in an average margin over LIBOR paid of 0.29 percent and an average facility fee paid of 0.17 percent. - -9-

The Agreement is secured by substantially all the Company's assets. The Agreement includes certain covenants requiring, among other things, maintenance of certain levels of (i) net worth, (ii) debt to total capital, and (iii) interest coverage. At December 31, 1996, the Company was in compliance with all the financial covenants of the Agreement. The Company also has in place uncommitted credit lines, which are secured through and subject to the Agreement, and which allow for borrowings of up to $20,000 on a daily basis. In addition, the Company has an unsecured, uncommitted credit line of $5,000. During 1996 and 1995, total average borrowings outstanding under all debt and credit agreements were $94,762 and $99,724, at a weighted-average interest rate of 6.12 percent and 6.58 percent, respectively. At December 31, 1996 and 1995, the weighted average interest rate on all borrowings outstanding was 6.11 percent and 6.23 percent, respectively. In addition, at December 31, 1996 and 1995, outstanding obligations under letters of credit were $4,797 and $4,312, respectively. At the option of Housewares, a wholly owned subsidiary of NACCO, the Company may, subject to certain terms and conditions of the Agreement, borrow up to $35,000 from Housewares. No borrowings were outstanding during 1996 or 1995 under this agreement. 10. FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS: INTEREST RATE DERIVATIVES The primary objective of interest rate risk management is to minimize the impact of interest rate fluctuations on the Company's cash flow and financial results. The Company has entered into certain interest rate swap agreements to swap floating rate for fixed rate interest payments. At December 31, 1996, the notional amount on interest rate swap agreements in effect and expiring on various dates from March 1999 through November 1999 was $75 million, with the average variable rate received and the average fixed rate paid during 1996 being 5.96 percent and 6.22 percent, respectively. At December 31, 1996, the aggregate fair market value of the Company's interest rate swap agreements was $342, based on quoted market prices received from the Company's swap agreement counter parties. FOREIGN CURRENCY DERIVATIVES The Company enters into forward foreign exchange contracts for purposes of hedging its exposure to foreign currency exchange rate fluctuations. These contracts hedge primarily firm commitments and relate to the Canadian dollar. At December 31, 1996, the Company had foreign currency contracts totaling $2,700, with various expiration dates through March 10, 1997. The amount of deferred gain associated with these contracts was not material. All interest rate and foreign currency derivative agreements are with major commercial banks; therefore, the risk of credit loss from nonperformance by the banks is minimal. The Company evaluates its exposure to credit loss on an ongoing basis. 11. CONCENTRATION OF CREDIT RISK: The Company sells its products to retailers and distributors located primarily in North America and, as a result, maintains significant receivable balances with its major customers. The Company performs ongoing credit evaluations of its customers' financial condition and generally requires no collateral from its customers. In addition,

The Agreement is secured by substantially all the Company's assets. The Agreement includes certain covenants requiring, among other things, maintenance of certain levels of (i) net worth, (ii) debt to total capital, and (iii) interest coverage. At December 31, 1996, the Company was in compliance with all the financial covenants of the Agreement. The Company also has in place uncommitted credit lines, which are secured through and subject to the Agreement, and which allow for borrowings of up to $20,000 on a daily basis. In addition, the Company has an unsecured, uncommitted credit line of $5,000. During 1996 and 1995, total average borrowings outstanding under all debt and credit agreements were $94,762 and $99,724, at a weighted-average interest rate of 6.12 percent and 6.58 percent, respectively. At December 31, 1996 and 1995, the weighted average interest rate on all borrowings outstanding was 6.11 percent and 6.23 percent, respectively. In addition, at December 31, 1996 and 1995, outstanding obligations under letters of credit were $4,797 and $4,312, respectively. At the option of Housewares, a wholly owned subsidiary of NACCO, the Company may, subject to certain terms and conditions of the Agreement, borrow up to $35,000 from Housewares. No borrowings were outstanding during 1996 or 1995 under this agreement. 10. FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS: INTEREST RATE DERIVATIVES The primary objective of interest rate risk management is to minimize the impact of interest rate fluctuations on the Company's cash flow and financial results. The Company has entered into certain interest rate swap agreements to swap floating rate for fixed rate interest payments. At December 31, 1996, the notional amount on interest rate swap agreements in effect and expiring on various dates from March 1999 through November 1999 was $75 million, with the average variable rate received and the average fixed rate paid during 1996 being 5.96 percent and 6.22 percent, respectively. At December 31, 1996, the aggregate fair market value of the Company's interest rate swap agreements was $342, based on quoted market prices received from the Company's swap agreement counter parties. FOREIGN CURRENCY DERIVATIVES The Company enters into forward foreign exchange contracts for purposes of hedging its exposure to foreign currency exchange rate fluctuations. These contracts hedge primarily firm commitments and relate to the Canadian dollar. At December 31, 1996, the Company had foreign currency contracts totaling $2,700, with various expiration dates through March 10, 1997. The amount of deferred gain associated with these contracts was not material. All interest rate and foreign currency derivative agreements are with major commercial banks; therefore, the risk of credit loss from nonperformance by the banks is minimal. The Company evaluates its exposure to credit loss on an ongoing basis. 11. CONCENTRATION OF CREDIT RISK: The Company sells its products to retailers and distributors located primarily in North America and, as a result, maintains significant receivable balances with its major customers. The Company performs ongoing credit evaluations of its customers' financial condition and generally requires no collateral from its customers. In addition, the Company maintains allowances for potential credit losses. The Company's five largest customers accounted for approximately 48.6 percent and 46.4 percent of net sales in 1996 and 1995, respectively, and approximately 48.4 percent and 47.0 percent of net accounts receivable at December 31, 1996 and 1995, respectively. 12. LEASES: The Company leases certain facilities under noncancelable leases expiring at various dates through 2021. Plant and equipment under capital leases has been recorded as property, plant, and equipment in the consolidated balance sheets, and the related amortization is included with depreciation expense. At December 31, property, plant, and equipment includes the following amounts relating to capital leases.
1996 -----Plant and equipment Less- Accumulated amortization $9,303 (4,282) -----$5,021 ====== 1995 -----$9,323 (3,829) -----$5,494 ======

Future minimum lease payments for capital leases as of December 31, 1996, are as follows: 1997 - $143; 1998$91; 1999 - $79; 2000 - $74; 2001 - $72; and thereafter - $688, and have a net present value of $587. Future minimum lease payments for operating leases are as follows: 1997 - $3,751; 1998 - $3,424; 1999 $2,673; 2000 - $1,978, 2001 - $1,781; and thereafter - $2,155. Rental expense for operating leases amounted to $5,593 and $5,140 for 1996 and 1995, respectively. 13. INCOME TAXES: The Company is included in the consolidated Federal income tax return filed by NACCO. The Company's tax sharing agreement with NACCO provides that Federal income taxes are computed by the Company on a separate return basis, - -10-

except that net operating loss and tax credit carryovers that benefit the consolidated tax return are advanced to the Company and are repaid as utilized on a separate return basis. To the extent that these carryovers are not used on a separate return basis, the Company is required, under conditions pursuant to the tax sharing agreement, to refund to NACCO the balance of carryovers advanced and not used by the Company. The provision for income taxes consists of the following amounts.
1996 ---Current: Federal State Foreign Total current provision 199 ---

$8,208 1,143 538 -----9,889 ------

$5,28 64 47 ----6,40 -----

Deferred: Federal State Foreign Total deferred benefit Total provision for income taxes

(2,663) (250) (280) -----(3,193) -----$6,696 ======

(1,55 30 11 ----(1,12 ----$5,27 =====

A reconciliation of Federal statutory to effective income tax provision follows.
1996 ---Statutory taxes at 35% Effect of: State taxes Foreign taxes Acquisition accounting adjustments Foreign tax credit Other Provision for income taxes $6,083 199 --$5,95

580 131 1,028 (615) (511) -----$6,696 ====== 38.5% ======

61 18 96 (2,78 33 ----$5,27 ===== 31. =====

Effective rate

except that net operating loss and tax credit carryovers that benefit the consolidated tax return are advanced to the Company and are repaid as utilized on a separate return basis. To the extent that these carryovers are not used on a separate return basis, the Company is required, under conditions pursuant to the tax sharing agreement, to refund to NACCO the balance of carryovers advanced and not used by the Company. The provision for income taxes consists of the following amounts.
1996 ---Current: Federal State Foreign Total current provision 199 ---

$8,208 1,143 538 -----9,889 ------

$5,28 64 47 ----6,40 -----

Deferred: Federal State Foreign Total deferred benefit Total provision for income taxes

(2,663) (250) (280) -----(3,193) -----$6,696 ======

(1,55 30 11 ----(1,12 ----$5,27 =====

A reconciliation of Federal statutory to effective income tax provision follows.
1996 ---Statutory taxes at 35% Effect of: State taxes Foreign taxes Acquisition accounting adjustments Foreign tax credit Other Provision for income taxes $6,083 199 --$5,95

580 131 1,028 (615) (511) -----$6,696 ====== 38.5% ======

61 18 96 (2,78 33 ----$5,27 ===== 31. =====

Effective rate

- -11-

The foreign tax credit of $615 realized in 1996 resulted from repatriation of virtually all prior earnings of a Mexican subsidiary, and additional foreign tax credit realized from the 1995 repatriation of earnings of the Canadian subsidiary. Such benefit is not expected to recur in 1997. The foreign tax credit of $2,784 realized in 1995 resulted from repatriation of virtually all prior earnings of the Canadian subsidiary. A summary of the deferred tax assets and (liabilities) that comprise the net deferred tax balances in the accompanying consolidated balance sheets resulting from differences in the book and tax bases of assets and liabilities is as follows.
1996 ---Deferred tax assets: Employee benefits 1995 ----

$

2,848

$

3,065

The foreign tax credit of $615 realized in 1996 resulted from repatriation of virtually all prior earnings of a Mexican subsidiary, and additional foreign tax credit realized from the 1995 repatriation of earnings of the Canadian subsidiary. Such benefit is not expected to recur in 1997. The foreign tax credit of $2,784 realized in 1995 resulted from repatriation of virtually all prior earnings of the Canadian subsidiary. A summary of the deferred tax assets and (liabilities) that comprise the net deferred tax balances in the accompanying consolidated balance sheets resulting from differences in the book and tax bases of assets and liabilities is as follows.
1996 ---Deferred tax assets: Employee benefits Plant restructuring reserve Environmental reserve Product liability reserve Net operating loss and tax credit carryovers Other Total deferred tax assets 1995 ----

$

2,848 517 2,195 1,906 5,289 344 -------13,099 --------

$

3,065 530 2,288 1,786 6,041 213 -------13,923 --------

Deferred tax liabilities: Advertising, sales, and inventory related reserves Accelerated depreciation Other Total deferred tax liabilities Net deferred tax assets

(2,428) (2,462) (1,112) -------(6,002) -------$ 7,097 ========

(3,120) (4,007) (1,589) -------(8,716) -------$ 5,207 ========

As of December 31, 1996, the Company had Federal net operating loss carryovers of approximately $7,236, related to Hamilton Beach, Inc., and foreign tax credit carryovers of $2,705. For Federal tax purposes, the utilization of acquired net operating loss carryovers is limited to $1,953 on an annual basis, with any unused limitation available for carryover to subsequent years. The Company utilized $1,953 of the net operating loss carryovers related to Hamilton Beach, Inc., in 1996. Loss carryovers are scheduled to expire in the years 2002 and 2003, and foreign tax credit carryovers are scheduled to expire in the years 1997 to 2000. As of December 31, 1996, the Company has recorded a deferred tax asset of $5,238 associated with these carryforwards. Realization of the asset is dependent on generating sufficient taxable and foreign source income prior to expiration of the carryforwards. The amount of the deferred tax asset considered realizable could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. Although realization is not assured, the Company fully expects to realize its deferred tax assets. As a result, the Company has no valuation allowances as of December 31, 1996 and 1995. No provision has been made for Federal income taxes on undistributed earnings of foreign subsidiaries of approximately $945 as of December 31, 1996, as any future remittances are expected to be substantially tax free. - -12-

14. RETIREMENT BENEFIT PLANS: The Company sponsors a defined benefit plan, the Hamilton Beach/Proctor-Silex, Inc., Profit Sharing Retirement Plan (the "Plan"). All full-time hourly and salaried U.S. employees are eligible to participate in the Plan. The Plan provides that participants accrue benefits annually based on age and annual earnings. Upon retirement, participants receive their vested account balances under the Plan plus all vested accrued benefits earned under prior frozen benefit plans. Benefits will be paid upon normal retirement at age 65 or early retirement after age 55. Participants become fully vested after five years of service.

14. RETIREMENT BENEFIT PLANS: The Company sponsors a defined benefit plan, the Hamilton Beach/Proctor-Silex, Inc., Profit Sharing Retirement Plan (the "Plan"). All full-time hourly and salaried U.S. employees are eligible to participate in the Plan. The Plan provides that participants accrue benefits annually based on age and annual earnings. Upon retirement, participants receive their vested account balances under the Plan plus all vested accrued benefits earned under prior frozen benefit plans. Benefits will be paid upon normal retirement at age 65 or early retirement after age 55. Participants become fully vested after five years of service. The Company's funding policy is to contribute each year an amount that satisfies the minimum required contribution but does not exceed the maximum tax deductible contribution. Also, the Company may make additional contributions to the Plan, dependent upon the Company achieving certain profit and performance objectives. In 1996 and 1995, the Company accrued $413 and $433, respectively, representing the estimated amount of profit sharing to be contributed to the Plan in the subsequent year. The Company contributed $2,693 and $1,658 to the Plan for the plan years ended December 31, 1996 and 1995, respectively. Assets held by the Plan consist mainly of common stocks, corporate and government bonds, and cash and cash equivalents. Effective December 31, 1996, the Company froze benefit accruals under the Plan and established a new participant retirement account under the HBPS Employees Retirement Savings Plan (401k) effective January 1, 1997. Accordingly, all benefits accrued and obligations recorded under the Plan were frozen as of December 31, 1996. The details of the components of net pension expense for the years ended December 31, 1996 and 1995, are as follows.
1996 -----Service cost Interest cost on projected benefit obligation Actual return on assets Net amortization and deferral Net pension expense $1,373 2,595 (2,299) (287) -----$1,382 ====== 1995 -----$1,179 2,597 (5,373) 3,036 -----$1,439 ======

Actuarial factors used in accounting for the Plan as of December 31, 1996 and 1995, are as follows.
1996 -----Weighted-average discount rate Long-term rate of return on assets Rate of increase in compensation levels: Salaried Hourly 8.0% 9.0% 5.0% 5.0% 1995 -----7.5% 9.0% 4.5% 4.5%

- -13-

The funded status of the Plan and amounts recognized in the Company's consolidated balance sheets as of December 31, 1996 and 1995, are as follows.
1996 ------Actuarial present value of benefit obligation: Vested accumulated benefit obligation Nonvested accumulated benefit obligation Total accumulated benefit obligation Value of future salary projections Total projected benefit obligation $32,01 1,82 ------33,83 14 ------33,98

The funded status of the Plan and amounts recognized in the Company's consolidated balance sheets as of December 31, 1996 and 1995, are as follows.
1996 ------Actuarial present value of benefit obligation: Vested accumulated benefit obligation Nonvested accumulated benefit obligation Total accumulated benefit obligation Value of future salary projections Total projected benefit obligation Fair value of plan assets $32,01 1,82 ------33,83 14 ------33,98 33,05 ------(92 ( 53 2 (65 ------$ (1,02 =======

Projected benefit obligation in excess of plan assets Unrecognized net transition asset Unrecognized net loss Unrecognized prior service cost Additional minimum liability Pension liability recognized in consolidated balance sheets at December 31, 1996 and 1995

Statement of Financial Accounting Standards No. 87 ("SFAS 87"), "Employers' Accounting for Pensions", requires the Company to recognize a minimum pension liability equal to the unfunded accumulated benefit obligation ("ABO"). At December 31, 1996 and 1995, the cumulative unfunded ABO was $1,020 and $5,311, respectively. The Company recorded an adjustment that recognized an additional minimum liability equal to the unfunded ABO. In accordance with SFAS 87, the portion of the unfunded ABO in excess of unrecognized prior service cost was charged directly to stockholder's equity and is separately presented in the consolidated statements of changes in stockholder's equity. The Company also sponsors the HBPS Employees Retirement Savings Plan (401k), a defined contribution retirement savings plan covering substantially all of its full-time United States employees. Under the plan, employees may defer up to 15 percent of pay on a pre-tax basis. Effective July 1, 1995, the Company began matching employee contributions to the plan at the rate of 50 percent, up to the first 2 percent of employee contributions. Effective January 1, 1997, the employer match was increased to match 50 percent of the first 4 percent of employee contributions. Employee pre-tax and employer matching contributions are immediately 100 percent vested. Effective January 1, 1997, the Company added a profit sharing feature to the plan. Under the plan, participants receive an automatic contribution based on age, ranging between 2 percent and 6.33 percent of annual pay. The Company may also make additional profit sharing contributions to participant accounts dependent upon the Company's achievement of certain profit and performance goals. Profit sharing contributions vest on a 20 percent, five year graded schedule. - -14-

The Company maintains a postretirement health care plan for all retirees who retired prior to October 1, 1992. In addition, the Company provides life insurance benefits to all retirees who retired prior to October 1, 1992, assuming they reached certain age and service requirements while working for the Company. Under the Company's current policy, plan benefits are funded at the time they are due to participants. The plan has no assets. 15. RELATED-PARTY TRANSACTIONS: The Company sells merchandise to The Kitchen Collection, Inc. ("Kitchen Collection"), a wholly owned subsidiary of Housewares. The Company's sales to Kitchen Collection were $6,201 and $5,030 for 1996 and 1995, respectively. Accounts receivable due from Kitchen Collection at December 31, 1996 and 1995, amounted to $146 and $361, respectively, and are included in accounts receivable.

The Company maintains a postretirement health care plan for all retirees who retired prior to October 1, 1992. In addition, the Company provides life insurance benefits to all retirees who retired prior to October 1, 1992, assuming they reached certain age and service requirements while working for the Company. Under the Company's current policy, plan benefits are funded at the time they are due to participants. The plan has no assets. 15. RELATED-PARTY TRANSACTIONS: The Company sells merchandise to The Kitchen Collection, Inc. ("Kitchen Collection"), a wholly owned subsidiary of Housewares. The Company's sales to Kitchen Collection were $6,201 and $5,030 for 1996 and 1995, respectively. Accounts receivable due from Kitchen Collection at December 31, 1996 and 1995, amounted to $146 and $361, respectively, and are included in accounts receivable. NACCO incurs certain administrative and other expenses directly related to the operation of the Company. These expenses are reimbursed to NACCO. The Company expensed and paid $743 and $627 of these administrative expenses to NACCO in 1996 and 1995, respectively. The related payable to NACCO was $48 and $73 at December 31, 1996 and 1995, respectively. 16. CONTINGENCIES: Various legal proceedings and claims have been or may be asserted against the Company relating to the conduct of its business, including product liability and environmental claims. These proceedings and claims are incidental to the Company's ordinary course of business. Management believes that it has meritorious defenses and will vigorously defend itself in these actions. Any costs that management estimates may be paid as a result of these proceedings or claims are accrued when the liability is considered probable and the amount can be reasonably estimated. Although the ultimate disposition of these proceedings and claims is not presently determinable, management believes, after consultation with its general counsel, the likelihood that material costs will be incurred in excess of accruals already recognized is remote. 17. INDUSTRY SEGMENT AND FOREIGN OPERATIONS: The Company designs, manufactures, and sells small consumer electric appliances. Net sales to one major customer totaled 27.5 percent in 1996 and 22.5 percent in 1995. The Company has operations in the United States, Mexico, and Canada. Products are transferred between these geographic areas at the market value of the products. Identifiable assets are those assets identified with the operations in each geographic area at year-end. All deferred charges and intangible assets are attributed to the United States. Eliminations include amounts for intercompany sales, intercompany profits in inventory, and intercompany investments. - -15-

The following table presents sales, operating profit, and other financial information by geographic area for 1996 and 1995.
UNITED STATES -----CANADA -----MEXICO -----ELIMINATIONS -----------C -

1996: Net sales Sales and transfers between geographic areas Operating profit Depreciation Identifiable assets Capital expenditures 1995: Net sales Sales and transfers between geographic areas Operating profit Depreciation Identifiable assets Capital expenditures

$376,982 21,220 28,998 9,351 252,438 6,341

$38,349 424 69 11,927 180

$14,389 13,454 120 3,843 16,347 8,608

$(34,674) (34,674) (144) (8,870) -

$361,749 22,608 27,195 8,932 270,333 7,732

$41,795 1,230 32 13,625 109

$

9,508 9,088 167 3,192 7,266 1,708

$(31,696) (31,696) (497) (3,197) -

The following table presents sales, operating profit, and other financial information by geographic area for 1996 and 1995.
UNITED STATES -----CANADA -----MEXICO -----ELIMINATIONS -----------C -

1996: Net sales Sales and transfers between geographic areas Operating profit Depreciation Identifiable assets Capital expenditures 1995: Net sales Sales and transfers between geographic areas Operating profit Depreciation Identifiable assets Capital expenditures

$376,982 21,220 28,998 9,351 252,438 6,341

$38,349 424 69 11,927 180

$14,389 13,454 120 3,843 16,347 8,608

$(34,674) (34,674) (144) (8,870) -

$361,749 22,608 27,195 8,932 270,333 7,732

$41,795 1,230 32 13,625 109

$

9,508 9,088 167 3,192 7,266 1,708

$(31,696) (31,696) (497) (3,197) -

18. SUPPLEMENTAL CASH FLOW INFORMATION: Cash payments during 1996 and 1995 included interest of $5,588 and $6,762 and income taxes of $4,656 and $11,771, respectively. 19. RECENTLY ISSUED ACCOUNTING STANDARDS: In 1996, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS 121 establishes accounting standards for the impairment of long-lived assets, certain intangibles, and goodwill related to those assets. SFAS 121 provides, among other things, that impairment losses be recognized when expected future cash flows are less than the related assets' carrying value. Impairment is recorded based on an estimate of expected future discounted cash flows. There was no material effect on the Company's consolidated financial statements as a result of its adoption of SFAS 121. - -16-

Exhibit 99(iii) THE KITCHEN COLLECTION, INC. FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Stockholder of The Kitchen Collection, Inc.: We have audited the accompanying balance sheets of THE KITCHEN COLLECTION, INC. (a Delaware corporation) as of December 31, 1996 and 1995, and the related statements of income, changes in stockholder's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

Exhibit 99(iii) THE KITCHEN COLLECTION, INC. FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Stockholder of The Kitchen Collection, Inc.: We have audited the accompanying balance sheets of THE KITCHEN COLLECTION, INC. (a Delaware corporation) as of December 31, 1996 and 1995, and the related statements of income, changes in stockholder's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Kitchen Collection, Inc. as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Arthur Andersen, LLP Columbus, Ohio, January 29, 1997.

THE KITCHEN COLLECTION, INC. BALANCE SHEETS AS OF DECEMBER 31, 1996 AND 1995
ASSETS -----Current assets: Cash Miscellaneous receivables Accounts receivable - affiliate Inventories Import inventories in-transit Prepaid expenses and other Total current assets Property, plant and equipment: Land Building and leasehold improvements Furniture and fixtures Construction in progress $ 1996 ---140,235 131,723 3,600,000 14,915,677 480,255 1,886,586 -----------21,154,476 ------------276,446 7,158,482 ------------7,434,928 (4,559,945) -----------$ 1995 ---130,405 175,179 1,950,000 14,124,708 145,447 1,608,637 -----------18,134,376 -----------61,300 866,459 6,376,292 77,500 -----------7,381,551 (4,142,388) ------------

Less:

Accumulated depreciation and amortization

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Stockholder of The Kitchen Collection, Inc.: We have audited the accompanying balance sheets of THE KITCHEN COLLECTION, INC. (a Delaware corporation) as of December 31, 1996 and 1995, and the related statements of income, changes in stockholder's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Kitchen Collection, Inc. as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Arthur Andersen, LLP Columbus, Ohio, January 29, 1997.

THE KITCHEN COLLECTION, INC. BALANCE SHEETS AS OF DECEMBER 31, 1996 AND 1995
ASSETS -----Current assets: Cash Miscellaneous receivables Accounts receivable - affiliate Inventories Import inventories in-transit Prepaid expenses and other Total current assets Property, plant and equipment: Land Building and leasehold improvements Furniture and fixtures Construction in progress $ 1996 ---140,235 131,723 3,600,000 14,915,677 480,255 1,886,586 -----------21,154,476 -----------$ 1995 ---130,405 175,179 1,950,000 14,124,708 145,447 1,608,637 -----------18,134,376 ------------

Less:

Accumulated depreciation and amortization

Property, plant and equipment, net Goodwill, net of accumulated amortization Total assets LIABILITIES AND STOCKHOLDER'S EQUITY -----------------------------------Current liabilities: Accounts payable and miscellaneous accrued liabilities Accounts payable - affiliates Income taxes payable to affiliate Accrued salaries and benefits Other accrued taxes

-276,446 7,158,482 ------------7,434,928 (4,559,945) -----------2,874,983 3,616,425 -----------$ 27,645,884 ============

61,300 866,459 6,376,292 77,500 -----------7,381,551 (4,142,388) -----------3,239,163 3,731,536 -----------$ 25,105,075 ============

$

6,300,484 23,884 864,576 1,378,280 817,521 ------------

$

5,253,026 151,330 1,015,720 1,183,603 733,632 ------------

THE KITCHEN COLLECTION, INC. BALANCE SHEETS AS OF DECEMBER 31, 1996 AND 1995
ASSETS -----Current assets: Cash Miscellaneous receivables Accounts receivable - affiliate Inventories Import inventories in-transit Prepaid expenses and other Total current assets Property, plant and equipment: Land Building and leasehold improvements Furniture and fixtures Construction in progress $ 1996 ---140,235 131,723 3,600,000 14,915,677 480,255 1,886,586 -----------21,154,476 -----------$ 1995 ---130,405 175,179 1,950,000 14,124,708 145,447 1,608,637 -----------18,134,376 ------------

Less:

Accumulated depreciation and amortization

Property, plant and equipment, net Goodwill, net of accumulated amortization Total assets LIABILITIES AND STOCKHOLDER'S EQUITY -----------------------------------Current liabilities: Accounts payable and miscellaneous accrued liabilities Accounts payable - affiliates Income taxes payable to affiliate Accrued salaries and benefits Other accrued taxes Total current liabilities Long-term debt Total liabilities Stockholder's equity: Common stock; $.01 par value; 100,000 shares authorized; 10,500 shares issued and outstanding Additional paid-in capital Retained earnings Total stockholder's equity Total liabilities and stockholder's equity

-276,446 7,158,482 ------------7,434,928 (4,559,945) -----------2,874,983 3,616,425 -----------$ 27,645,884 ============

61,300 866,459 6,376,292 77,500 -----------7,381,551 (4,142,388) -----------3,239,163 3,731,536 -----------$ 25,105,075 ============

$

6,300,484 23,884 864,576 1,378,280 817,521 -----------9,384,745 5,000,000 -----------14,384,745 ------------

$

5,253,026 151,330 1,015,720 1,183,603 733,632 -----------8,337,311 5,000,000 -----------13,337,311 ------------

105 4,999,890 8,261,144 -----------13,261,139 -----------$ 27,645,884 ============

105 4,999,890 6,767,769 -----------11,767,764 -----------$ 25,105,075 ============

The accompanying notes to financial statements are an integral part of these balance sheets.

THE KITCHEN COLLECTION, INC. STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
1996 ----------$74,921,070 1995 ----------$69,588,640

Net sales

THE KITCHEN COLLECTION, INC. STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
1996 ----------$74,921,070 43,306,213 ----------31,614,857 28,361,721 ----------3,253,136 511,051 136,710 ----------2,605,375 1,112,000 ----------$ 1,493,375 =========== 1995 ----------$69,588,640 40,048,483 ----------29,540,157 26,102,350 ----------3,437,807 505,848 131,183 ----------2,800,776 1,174,000 ----------$ 1,626,776 ===========

Net sales Cost of sales Gross margin Selling, general, administrative and other expenses Operating income Interest expense Amortization expense Income before provision for income taxes Provision for income taxes

Net income

The accompanying notes to financial statements are an integral part of these statements.

THE KITCHEN COLLECTION, INC. STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
Additional Paid-in Capital ------$4,999,890 ----------4,999,890 ----------$4,999,890 ========== Total Stockholder's Equity -----$10,140,988 1,626,776 ----------11,767,764 1,493,375 ----------$13,261,139 ===========

Balance, December 31, 1994 Net income

Number of Shares --------10,500 ------10,500 ------10,500 ======

Common Stock ----$105 ----105 ----$105 ====

Retained Earnings -------$5,140,993 1,626,776 ---------6,767,769 1,493,375 ---------$8,261,144 ==========

Balance, December 31, 1995 Net income

Balance, December 31, 1996

The accompanying notes to financial statements are an integral part of these statements.

THE KITCHEN COLLECTION, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995

THE KITCHEN COLLECTION, INC. STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
Additional Paid-in Capital ------$4,999,890 ----------4,999,890 ----------$4,999,890 ========== Total Stockholder's Equity -----$10,140,988 1,626,776 ----------11,767,764 1,493,375 ----------$13,261,139 ===========

Balance, December 31, 1994 Net income

Number of Shares --------10,500 ------10,500 ------10,500 ======

Common Stock ----$105 ----105 ----$105 ====

Retained Earnings -------$5,140,993 1,626,776 ---------6,767,769 1,493,375 ---------$8,261,144 ==========

Balance, December 31, 1995 Net income

Balance, December 31, 1996

The accompanying notes to financial statements are an integral part of these statements.

THE KITCHEN COLLECTION, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
Increase (Decrease) in Cash --------------------------1996 1995 --------------------CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Loss on the disposal of assets Decrease in miscellaneous receivables (Increase) decrease in inventories Increase in prepaid expenses and other Increase (decrease) in accounts payable and miscellaneous accrued liabilities Decrease in accounts payable - affiliates Decrease in income taxes payable to affiliate Increase in accrued salaries and benefits Increase (decrease) in other accrued taxes other than income Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Expenditures for property, plant and equipment Proceeds from disposal of assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Net (advances to) repayments on loan to affiliate Net cash provided by (used in) financing activities $ 1,493,375 $ 1,626,776

1,100,430 10,398 43,456 (1,125,777) (277,949) 1,047,458 (127,446) (151,144) 194,677 83,889 ----------2,291,367 ----------(1,058,127) 426,590 ----------(631,537) ----------(1,650,000) ----------(1,650,000) -----------

1,025,093 26,090 52,527 119,050 (174,545) (2,312,501) (55,891) (61,640) 35,305 (37,938) ----------242,326 ----------(1,459,676) 2,450 ----------(1,457,226) ----------1,175,000 ----------1,175,000 -----------

(Continued on next page)

THE KITCHEN COLLECTION, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
Increase (Decrease) in Cash --------------------------1996 1995 --------------------CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Loss on the disposal of assets Decrease in miscellaneous receivables (Increase) decrease in inventories Increase in prepaid expenses and other Increase (decrease) in accounts payable and miscellaneous accrued liabilities Decrease in accounts payable - affiliates Decrease in income taxes payable to affiliate Increase in accrued salaries and benefits Increase (decrease) in other accrued taxes other than income Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Expenditures for property, plant and equipment Proceeds from disposal of assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Net (advances to) repayments on loan to affiliate Net cash provided by (used in) financing activities $ 1,493,375 $ 1,626,776

1,100,430 10,398 43,456 (1,125,777) (277,949) 1,047,458 (127,446) (151,144) 194,677 83,889 ----------2,291,367 ----------(1,058,127) 426,590 ----------(631,537) ----------(1,650,000) ----------(1,650,000) -----------

1,025,093 26,090 52,527 119,050 (174,545) (2,312,501) (55,891) (61,640) 35,305 (37,938) ----------242,326 ----------(1,459,676) 2,450 ----------(1,457,226) ----------1,175,000 ----------1,175,000 -----------

(Continued on next page)

THE KITCHEN COLLECTION, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Continued)
Increase (Decrease) in Cash --------------------------1996 1995 -------------------$ 9,830 $ (39,900) 130,405 ---------$ 140,235 ========== 170,305 ----------$ 130,405 ===========

NET INCREASE (DECREASE) IN CASH CASH, beginning of the year CASH, end of the year

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: - ------------------------------------------------Cash paid during the year for: Interest Income taxes

$ 463,689 $1,253,554

$ 560,133 $ 1,446,353

THE KITCHEN COLLECTION, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Continued)
Increase (Decrease) in Cash --------------------------1996 1995 -------------------$ 9,830 $ (39,900) 130,405 ---------$ 140,235 ========== 170,305 ----------$ 130,405 ===========

NET INCREASE (DECREASE) IN CASH CASH, beginning of the year CASH, end of the year

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: - ------------------------------------------------Cash paid during the year for: Interest Income taxes

$ 463,689 $1,253,554

$ 560,133 $ 1,446,353

The accompanying notes to financial statements are an integral part of these statements.

THE KITCHEN COLLECTION, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 AND 1995 (1) ORGANIZATION The Kitchen Collection, Inc. (the Company) is a specialty retailer of kitchenware, tableware, small electrical appliances and related accessories. The Company operates a chain of 144 retail and factory outlet stores throughout the United States and is a wholly-owned subsidiary of NACCO Industries, Inc. (NII). (2) SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. INVENTORIES Inventories are stated at the lower of cost or market as determined by the retail inventory method. LEASEHOLD IMPROVEMENTS, FURNITURE AND FIXTURES Leasehold improvements, furniture and fixtures are stated at cost. Expenditures for maintenance and repairs are charged to operations as incurred. For financial reporting purposes, depreciation and amortization is provided using the straight-line method based upon the estimated useful lives of the related assets, as follows: Leasehold improvements 5 years Furniture and fixtures 5 years

THE KITCHEN COLLECTION, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 AND 1995 (1) ORGANIZATION The Kitchen Collection, Inc. (the Company) is a specialty retailer of kitchenware, tableware, small electrical appliances and related accessories. The Company operates a chain of 144 retail and factory outlet stores throughout the United States and is a wholly-owned subsidiary of NACCO Industries, Inc. (NII). (2) SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. INVENTORIES Inventories are stated at the lower of cost or market as determined by the retail inventory method. LEASEHOLD IMPROVEMENTS, FURNITURE AND FIXTURES Leasehold improvements, furniture and fixtures are stated at cost. Expenditures for maintenance and repairs are charged to operations as incurred. For financial reporting purposes, depreciation and amortization is provided using the straight-line method based upon the estimated useful lives of the related assets, as follows: Leasehold improvements 5 years Furniture and fixtures 5 years

GOODWILL Goodwill is associated with the purchase of the Company by NII and is being amortized over forty years on a straight-line basis. Accumulated amortization was $988,045 and $872,934 at December 31, 1996 and 1995, respectively, with related amortization expense of $115,111 for each of the years ended December 31, 1996 and 1995. Management regularly evaluates its accounting for goodwill considering such factors as historical and future profitability and believes that the asset is realizable and the amortization period remains appropriate. INCOME TAXES Deferred tax assets or liabilities are based on the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate. Deferred income tax expense or benefit is based on the changes in the assets or liabilities from period to period, refer to Note 5 "Income Taxes" for additional information. ADVERTISING The Company incurs advertising costs in the form of radio, newspaper and other print ads. Such costs are expensed as incurred. Advertising expense was $250,455 and $204,879 in 1996 and 1995, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company enters into interest rate swap agreements with terms that run concurrent with the related debt. The differential between the floating interest rate and the fixed interest rate, which is to be paid or received, is recognized in interest expense as interest rates change over the life of the related debt agreement.

GOODWILL Goodwill is associated with the purchase of the Company by NII and is being amortized over forty years on a straight-line basis. Accumulated amortization was $988,045 and $872,934 at December 31, 1996 and 1995, respectively, with related amortization expense of $115,111 for each of the years ended December 31, 1996 and 1995. Management regularly evaluates its accounting for goodwill considering such factors as historical and future profitability and believes that the asset is realizable and the amortization period remains appropriate. INCOME TAXES Deferred tax assets or liabilities are based on the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate. Deferred income tax expense or benefit is based on the changes in the assets or liabilities from period to period, refer to Note 5 "Income Taxes" for additional information. ADVERTISING The Company incurs advertising costs in the form of radio, newspaper and other print ads. Such costs are expensed as incurred. Advertising expense was $250,455 and $204,879 in 1996 and 1995, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company enters into interest rate swap agreements with terms that run concurrent with the related debt. The differential between the floating interest rate and the fixed interest rate, which is to be paid or received, is recognized in interest expense as interest rates change over the life of the related debt agreement. The fair values of financial instruments have been determined through information obtained from quoted market sources and management estimates. The fair value of the financial instruments approximated their carrying values at December 31, 1996 and 1995. The Company does not hold or issue financial instruments or derivative financial instruments (interest rate swap agreements) for trading purposes. RECLASSIFICATIONS Certain reclassifications have been made to 1995 amounts to conform to 1996 presentation.

(3) LINE-OF-CREDIT AGREEMENT The Company has an unsecured revolving line-of-credit agreement with a commercial bank for $5,000,000. Interest accrues at the bank's prime rate, money market rate or LIBOR rate plus a base rate margin of .425% to 1.25%, as determined by certain performance measures. The Company had no funds drawn against the available balance at December 31, 1996 or 1995. As of December 31, 1996, the Company had letters of credit outstanding totaling $71,736, which reduces the available balance to $4,928,264. The credit agreement expires on May 31, 1999. (4) LONG-TERM DEBT Long-term debt consists of the following, as of December 31:
1996 ---------Note payable to bank at 8.06% at December 31, 1996 and 7.81% at December 31, 1995 1995 ----------

$5,000,000 ==========

$5,000,000 ==========

On May 10, 1994, the Company entered a term note agreement with a commercial bank for $5,000,000. Interest is payable quarterly at 6.81%, plus a base rate margin between .75% and 1.75%, determined by certain performance measures. The note is unsecured and annual principal payments are due on January 15 of the

(3) LINE-OF-CREDIT AGREEMENT The Company has an unsecured revolving line-of-credit agreement with a commercial bank for $5,000,000. Interest accrues at the bank's prime rate, money market rate or LIBOR rate plus a base rate margin of .425% to 1.25%, as determined by certain performance measures. The Company had no funds drawn against the available balance at December 31, 1996 or 1995. As of December 31, 1996, the Company had letters of credit outstanding totaling $71,736, which reduces the available balance to $4,928,264. The credit agreement expires on May 31, 1999. (4) LONG-TERM DEBT Long-term debt consists of the following, as of December 31:
1996 ---------Note payable to bank at 8.06% at December 31, 1996 and 7.81% at December 31, 1995 1995 ----------

$5,000,000 ==========

$5,000,000 ==========

On May 10, 1994, the Company entered a term note agreement with a commercial bank for $5,000,000. Interest is payable quarterly at 6.81%, plus a base rate margin between .75% and 1.75%, determined by certain performance measures. The note is unsecured and annual principal payments are due on January 15 of the following years:
Year -------1997 1998 1999 2000 Amount -----------$ 2,500,000 2,500,000 -----------$ 5,000,000 ============

The note contains restrictive covenants regarding maintenance of minimum net worth, interest coverage and leverage. The Company was in compliance with all covenants as of December 31, 1996 and 1995.

The Company entered into an interest rate swap agreement with a six year term during 1994. The use of this agreement allowed the Company to enter into a long-term credit agreement with a performance based, floating rate of interest and then swap it for a fixed rate as opposed to entering into a higher cost fixed-rate credit agreement. This agreement is with a major commercial bank; therefore, the risk of credit loss from nonperformance by the bank is minimal. The following summarizes the notional amount and related rates on this interest rate swap agreement at December 31, 1996:
Notional amount Average variable rate received Average fixed rate paid $5,000,000 6.81% 8.00%

(8.06% at December 31, 1996)

(5) INCOME TAXES The provision for income taxes consists of the following:
1996 -----------Currently payable: Federal State and local $ 882,000 244,000 1995 ------------$ 988,000 234,000

The Company entered into an interest rate swap agreement with a six year term during 1994. The use of this agreement allowed the Company to enter into a long-term credit agreement with a performance based, floating rate of interest and then swap it for a fixed rate as opposed to entering into a higher cost fixed-rate credit agreement. This agreement is with a major commercial bank; therefore, the risk of credit loss from nonperformance by the bank is minimal. The following summarizes the notional amount and related rates on this interest rate swap agreement at December 31, 1996:
Notional amount Average variable rate received Average fixed rate paid $5,000,000 6.81% 8.00%

(8.06% at December 31, 1996)

(5) INCOME TAXES The provision for income taxes consists of the following:
1996 -----------Currently payable: Federal State and local 882,000 244,000 -----------1,126,000 -----------(18,000) 4,000 -----------(14,000) -----------$1,112,000 ============ $ 1995 ------------988,000 234,000 ------------1,222,000 ------------(32,000) (16,000) ------------(48,000) ------------$1,174,000 ============= $

Deferred: Federal State and local

The components of the net deferred income tax benefit are as follows:
1996 -----------Inventory uniform capitalization and volume discounts Tax over book depreciation Vacation pay Medical cost State income taxes Other Total deferred income tax benefit, net $ 84,000 5,000 (18,000) (6,000) (44,000) (35,000) ============ $ (14,000) ============ 1995 ------------(36,000) 7,000 (19,000) (47,000) 63,000 (16,000) ============= $ (48,000) ============= $

Reconciliation of the Federal statutory and effective income tax rates is as follows:
1996 --------35.0% 1.5 1995 --------35.0% 1.4

Federal statutory rate Amortization of goodwill State and local income tax, net of Federal income tax effect

6.2

5.8

Other

--------42.7%

(0.3) --------41.9%

Effective tax rate

Reconciliation of the Federal statutory and effective income tax rates is as follows:
1996 --------35.0% 1.5 1995 --------35.0% 1.4

Federal statutory rate Amortization of goodwill State and local income tax, net of Federal income tax effect

6.2

5.8

Other

--------42.7% =========

(0.3) --------41.9% =========

Effective tax rate

A summary of the components of the net deferred tax asset balances, included in the accompanying balance sheet in prepaid expenses and other, are as follows:
1996 -------$140,000 366,000 (18,000) (226,000) ======== $262,000 ======== 1995 -------$224,000 230,000 (62,000) (220,000) ======== $172,000 ========

Inventories Accrued expenses and reserves State income taxes Depreciation Deferred tax asset, net

(6) RELATED PARTY TRANSACTIONS Net purchases of inventories from Hamilton Beach<>Procter Silex (HBPS), a related company, during the years ended December 31, 1996 and 1995, were $6,080,255 and $5,467,375, respectively. The purchase price of this inventory is determined by negotiations between the two companies and is comparable to market. Related inventory levels at December 31, 1996 and 1995, were approximately $1,682,000 and $2,359,000, respectively. At December 31, 1996 and 1995, the Company owed HBPS $415 and $126,179, respectively, for these purchases. The Company incurred $79,138 and $87,913 for miscellaneous services provided by NII for the years ended December 31, 1996 and 1995, respectively. The Company had payables for such services at December 31, 1996 and 1995, of $23,469 and $25,151, respectively. The Company has an agreement with NII to loan NII up to $15,000,000. Outstanding amounts are collectible on demand. Interest is payable quarterly at the applicable short-term Federal rate. The Company has a receivable due from NII at December 31, 1996 and 1995 of $3,600,000 and $1,950,000, respectively. The Company recorded related interest income of $14,184 during 1996 and $20,209 during 1995.

The Company has a tax sharing agreement with NII, as NII and the Company are included in the same consolidated group for Federal tax purposes. The Company files separate tax returns for state and local tax purposes. The Company has recorded taxes payable to NII at December 31, 1996 and 1995, of $864,576 and $1,015,720, respectively. (7) LEASES The Company leases its home office, retail stores, warehouse space and equipment under noncancellable operating leases which expire at various dates through 2006. Future minimum lease payments are as follows:

The Company has a tax sharing agreement with NII, as NII and the Company are included in the same consolidated group for Federal tax purposes. The Company files separate tax returns for state and local tax purposes. The Company has recorded taxes payable to NII at December 31, 1996 and 1995, of $864,576 and $1,015,720, respectively. (7) LEASES The Company leases its home office, retail stores, warehouse space and equipment under noncancellable operating leases which expire at various dates through 2006. Future minimum lease payments are as follows:
1997 1998 1999 2000 2001 Thereafter Total minimum payments $ 5,844,388 5,263,029 4,324,017 3,206,764 1,452,642 1,269,623 ----------$21,360,463 ===========

The Company has leases with percentage of sales clauses in all but two of its retail store locations. Percentage of sales rent expense amounted to $552,036 for the year ended December 31, 1996 and $375,144 for the year ended December 31, 1995. The Company's total rent expense for the years ended December 31, 1996 and 1995, was $8,631,686 and $7,759,326, respectively. (8) RETIREMENT INCOME PLANS The Company maintains a defined contribution savings plan for employees, who have completed one year of service and are at least 21 years of age. Employees can elect to defer and contribute a portion of their salary, following the guidelines established in the plan. The Company makes matching contributions of 50% of the employee's contribution, limited to 3% of the employee's compensation. In addition, the Company can make an annual profit sharing contribution at its discretion. Effective January 1, 1995, the Company established a deferred compensation plan for management employees. The purpose of the plan is to provide for certain employees of the Company benefits they would have received under the retirement savings plan but for certain limitations imposed by the INTERNAL REVENUE CODE. The plan is administrated and the related assets are held by the Company. Earnings are accrued by the Company based upon return on equity, as defined by the plan. The assets of the plan are unsecured.

The Company's matching contribution, profit sharing contribution and earnings accrued on the plans described above was $267,443 and $317,613 for the years ended December 31, 1996 and 1995, respectively. Effective December 20, 1995, the Company established a deferred compensation plan for participants in the retirement savings plan not included in the deferred compensation plan for management employees. The purpose of the plan is to provide for certain employees of the Company benefits they would have received under the retirement savings plan but for certain limitations imposed by the INTERNAL REVENUE Code. The plan is administrated and the related assets are held by the Company. Earnings shall be accrued by the Company based upon the earnings of the retirement savings plan, as defined by the plan. The assets of the plan shall be unsecured. As of December 31, 1996, there are no participants nor has the Company incurred any expense with relation to this plan. (9) SELF INSURANCE COVERAGE The Company is self insured for health insurance with stop loss coverage for claims which exceed $45,000 per incident. Total expense for 1996 and 1995 was approximately $558,000 and $649,000, respectively. (10) SUBSEQUENT EVENTS

The Company's matching contribution, profit sharing contribution and earnings accrued on the plans described above was $267,443 and $317,613 for the years ended December 31, 1996 and 1995, respectively. Effective December 20, 1995, the Company established a deferred compensation plan for participants in the retirement savings plan not included in the deferred compensation plan for management employees. The purpose of the plan is to provide for certain employees of the Company benefits they would have received under the retirement savings plan but for certain limitations imposed by the INTERNAL REVENUE Code. The plan is administrated and the related assets are held by the Company. Earnings shall be accrued by the Company based upon the earnings of the retirement savings plan, as defined by the plan. The assets of the plan shall be unsecured. As of December 31, 1996, there are no participants nor has the Company incurred any expense with relation to this plan. (9) SELF INSURANCE COVERAGE The Company is self insured for health insurance with stop loss coverage for claims which exceed $45,000 per incident. Total expense for 1996 and 1995 was approximately $558,000 and $649,000, respectively. (10) SUBSEQUENT EVENTS Through January 29, 1997, the Company made additional advances to NII of $400,000 and received payments of $2,530,000, for a net receivable balance of $1,470,000 at January 29, 1997.

Exhibit 99(iv) NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT

Report of Independent Public Accountants To the Board of Directors and Stockholders of NACCO Materials Handling Group, Inc.: We have audited the accompanying consolidated balance sheets of NACCO Materials Handling Group, Inc. (an indirect majority-owned subsidiary of NACCO Industries, Inc.) and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NACCO Materials Handling Group, Inc. and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. Portland, Oregon Arthur Andersen LLP February 3, 1997

Exhibit 99(iv) NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT

Report of Independent Public Accountants To the Board of Directors and Stockholders of NACCO Materials Handling Group, Inc.: We have audited the accompanying consolidated balance sheets of NACCO Materials Handling Group, Inc. (an indirect majority-owned subsidiary of NACCO Industries, Inc.) and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NACCO Materials Handling Group, Inc. and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. Portland, Oregon Arthur Andersen LLP February 3, 1997

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1996 AND 1995 (in thousands of dollars except share amounts)
ASSETS -----1996 --------CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other Deferred income taxes $ 42,789 126,663 218,644 5,221 5,390 --------398,707 --------12,556 169,687 1995 --------$ 25,777 194,406 286,085 5,338 2,714 --------514,320 --------13,360 148,347

OTHER ASSETS PROPERTY, PLANT AND EQUIPMENT, net DEFERRED CHARGES:

Report of Independent Public Accountants To the Board of Directors and Stockholders of NACCO Materials Handling Group, Inc.: We have audited the accompanying consolidated balance sheets of NACCO Materials Handling Group, Inc. (an indirect majority-owned subsidiary of NACCO Industries, Inc.) and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NACCO Materials Handling Group, Inc. and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. Portland, Oregon Arthur Andersen LLP February 3, 1997

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1996 AND 1995 (in thousands of dollars except share amounts)
ASSETS -----1996 --------CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other Deferred income taxes $ 42,789 126,663 218,644 5,221 5,390 --------398,707 --------12,556 169,687 1995 --------$ 25,777 194,406 286,085 5,338 2,714 --------514,320 --------13,360 148,347

OTHER ASSETS PROPERTY, PLANT AND EQUIPMENT, net DEFERRED CHARGES: Goodwill, net Other

Total assets

360,882 9,054 --------369,936 --------$ 950,886 --------LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------

367,670 8,462 --------376,132 --------$1,052,159 ---------

CURRENT LIABILITIES: Accounts payable Short-term obligations

$

148,283 7,772

$

212,164 78,621

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1996 AND 1995 (in thousands of dollars except share amounts)
ASSETS -----1996 --------CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other Deferred income taxes $ 42,789 126,663 218,644 5,221 5,390 --------398,707 --------12,556 169,687 1995 --------$ 25,777 194,406 286,085 5,338 2,714 --------514,320 --------13,360 148,347

OTHER ASSETS PROPERTY, PLANT AND EQUIPMENT, net DEFERRED CHARGES: Goodwill, net Other

Total assets

360,882 9,054 --------369,936 --------$ 950,886 --------LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------

367,670 8,462 --------376,132 --------$1,052,159 ---------

CURRENT LIABILITIES: Accounts payable Short-term obligations Current maturities of long-term obligations Accrued expenses Accrued income taxes Deferred income taxes

$

LONG-TERM OBLIGATIONS, net of current maturities OTHER LIABILITIES DEFERRED INCOME TAXES STOCKHOLDERS' EQUITY: Common stock, par value $1 per share; 10,000 shares authorized; 5,599 shares outstanding Capital in excess of par value Retained income Foreign currency translation adjustment Pension liability adjustment and other

148,283 7,772 3,433 91,292 801 ---------251,581 --------247,717 64,443 17,385

$

212,164 78,621 3,265 89,028 2,197 1,793 --------387,068 --------250,000 56,293 17,844

Total liabilities and stockholders' equity

6 198,205 158,330 15,006 (1,787) --------369,760 --------$ 950,886 =========

6 198,205 131,887 12,810 (1,954) --------340,954 --------$1,052,159 =========

The accompanying notes are an integral part of these consolidated balance sheets.

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (in thousands of dollars)
1996 ----------$ 1,560,092 1,283,012 ----------277,080 ----------193,049 11,517 ----------204,566 ----------72,514 1995 ----------$ 1,510,106 1,234,050 ----------276,056 ----------181,754 10,844 ----------192,598 ----------83,458

NET SALES COST OF SALES Gross profit OPERATING EXPENSES: Selling, administrative and general expenses Goodwill amortization

Operating profit OTHER INCOME (EXPENSE): Interest income Interest expense Other, net

590 (24,994) (2,088) ----------(26,492) ----------46,022 19,579 ----------26,443 -----------$ 26,443 ===========

923 (25,840) (160) ----------(25,077) ----------58,381 21,490 ----------36,891 (3,399) ----------$ 33,492 ===========

Income before income taxes and extraordinary charge PROVISION FOR INCOME TAXES INCOME BEFORE EXTRAORDINARY CHARGE EXTRAORDINARY CHARGE, NET OF TAX NET INCOME

The accompanying notes are an integral part of these consolidated statements.

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (in thousands of dollars)
1996 --------CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by (used for) operating activitiesExtraordinary charge, net of tax Depreciation and amortization Deferred income taxes Other Changes in working capital: Accounts receivable Inventories Prepaid expenses and other Accounts payable and accrued expenses Accrued income taxes $ 26,443 1995 --------$ 33,492

-33,785 (5,089) 2,766 82,029 75,540 404 (65,274) (1,594)

2,161 31,791 (1,162) 5,944 (48,642) (73,543) 5,381 29,332 (9,147)

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (in thousands of dollars)
1996 --------CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by (used for) operating activitiesExtraordinary charge, net of tax Depreciation and amortization Deferred income taxes Other Changes in working capital: Accounts receivable Inventories Prepaid expenses and other Accounts payable and accrued expenses Accrued income taxes Net cash provided by (used for) operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Expenditures for property, plant and equipment Acquisition of subsidiary Proceeds from sale of assets Other Net cash used for investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Additions to long-term obligations Reduction of long-term obligations Revolving credit facility, net Short-term obligations, net Working capital financing, net Capital grants Other Net cash provided by (used for) financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH CASH AND CASH EQUIVALENTS: Increase for the year BALANCE AT THE BEGINNING OF THE YEAR BALANCE AT THE END OF THE YEAR $ 26,443 1995 --------$ 33,492

-33,785 (5,089) 2,766 82,029 75,540 404 (65,274) (1,594) --------149,010 --------(42,294) (11,537) 407 2,239 --------(51,185) --------1,880 (2,533) (4,378) (72,465) (10,603) 4,154 1,274 --------(82,671) --------1,858 --------17,012 25,777 --------$ 42,789 =========

2,161 31,791 (1,162) 5,944 (48,642) (73,543) 5,381 29,332 (9,147) --------(24,393) --------(39,432) (5,780) 650 1,097 --------(43,465) --------2,529 (219,650) 212,935 73,060 10,805 4,017 (1,567) --------82,129 --------743 --------15,014 10,763 --------$ 25,777 =========

The accompanying notes are an integral part of these consolidated statements.

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (in thousands of dollars)
1996 1995

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (in thousands of dollars)
1996 --------$ 6 --------198,205 --------131,887 26,443 --------158,330 --------12,810 2,196 --------15,006 --------(1,787) --------$ 369,760 ========= 1995 --------$ 6 --------198,205 --------98,395 33,492 --------131,887 --------10,511 2,299 --------12,810 --------(1,954) --------$ 340,954 =========

COMMON STOCK CAPITAL IN EXCESS OF PAR VALUE RETAINED INCOME: Beginning balance Net income

FOREIGN CURRENCY TRANSLATION ADJUSTMENT: Beginning balance Foreign currency translation adjustment

PENSION LIABILITY ADJUSTMENT AND OTHER TOTAL STOCKHOLDERS' EQUITY

The accompanying notes are an integral part of these consolidated statements.

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1996 AND 1995 1. ACCOUNTING POLICIES: Basis of Presentation The accompanying consolidated financial statements of NACCO Materials Handling Group, Inc. and subsidiaries include the accounts of NACCO Materials Handling Group, Inc. and subsidiaries and its parent Hyster-Yale Materials Handling, Inc., a holding company (collectively, the Company). Hyster-Yale Materials Handling, Inc. is a 98% owned subsidiary of NACCO Industries, Inc. (NACCO). NACCO Materials Handling Group, Inc. and subsidiaries is the primary operating business. Principles of Consolidation The consolidated financial statements include the accounts of Hyster-Yale Materials Handling, Inc. and NACCO Materials Handling Group, Inc. and its majority-owned domestic and international subsidiaries except for Companhia Hyster, a Brazilian subsidiary. Income from this Brazilian subsidiary is recognized when cash is received in the form of a dividend. Investments in Sumitomo-Yale Company, Ltd. (S-Y), a 50% owned joint venture, and Yale Financial Services, Inc. (YFS, Inc.), a 20% owned joint venture, are accounted for by the equity method. All significant intercompany accounts and transactions among the consolidated companies are eliminated in consolidation. Cash and Cash Equivalents The Company considers cash equivalents to be investments with a maturity of three months or less.

NACCO MATERIALS HANDLING GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1996 AND 1995 1. ACCOUNTING POLICIES: Basis of Presentation The accompanying consolidated financial statements of NACCO Materials Handling Group, Inc. and subsidiaries include the accounts of NACCO Materials Handling Group, Inc. and subsidiaries and its parent Hyster-Yale Materials Handling, Inc., a holding company (collectively, the Company). Hyster-Yale Materials Handling, Inc. is a 98% owned subsidiary of NACCO Industries, Inc. (NACCO). NACCO Materials Handling Group, Inc. and subsidiaries is the primary operating business. Principles of Consolidation The consolidated financial statements include the accounts of Hyster-Yale Materials Handling, Inc. and NACCO Materials Handling Group, Inc. and its majority-owned domestic and international subsidiaries except for Companhia Hyster, a Brazilian subsidiary. Income from this Brazilian subsidiary is recognized when cash is received in the form of a dividend. Investments in Sumitomo-Yale Company, Ltd. (S-Y), a 50% owned joint venture, and Yale Financial Services, Inc. (YFS, Inc.), a 20% owned joint venture, are accounted for by the equity method. All significant intercompany accounts and transactions among the consolidated companies are eliminated in consolidation. Cash and Cash Equivalents The Company considers cash equivalents to be investments with a maturity of three months or less. Inventories Inventories are stated at the lower of cost or market. Cost has been determined under the last-in, first-out (LIFO) method for domestic inventories and under the first-in, first-out (FIFO) method with respect to all other inventories. Costs for inventory valuation include labor, material and manufacturing overhead. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation, including amortization of equipment acquired under capital leases, is computed using the straight-line method over the estimated useful service lives for purposes of financial reporting. For tax purposes, an accelerated method is generally used. Maintenance and repairs are expensed as incurred. Advertising Costs Advertising costs are expensed as incurred and reported in selling, general and administrative expenses.

-2Goodwill Goodwill, the excess of the purchase price paid over the fair value of the net assets acquired, relates primarily to the 1989 acquisition of Hyster Company and is amortized on a straight-line basis over 40 years. Amortization was $11.5 million and $10.8 million in 1996 and 1995 respectively. Accumulated amortization was $82.7 million and $71.2 million at December 31, 1996 and 1995, respectively. Management regularly evaluates its accounting for goodwill considering such factors as historical and future profitability and believes that the asset is realizable and the amortization period is still appropriate. Product Development Costs

-2Goodwill Goodwill, the excess of the purchase price paid over the fair value of the net assets acquired, relates primarily to the 1989 acquisition of Hyster Company and is amortized on a straight-line basis over 40 years. Amortization was $11.5 million and $10.8 million in 1996 and 1995 respectively. Accumulated amortization was $82.7 million and $71.2 million at December 31, 1996 and 1995, respectively. Management regularly evaluates its accounting for goodwill considering such factors as historical and future profitability and believes that the asset is realizable and the amortization period is still appropriate. Product Development Costs Expenditures associated with the development of new products and improvements to existing products are expensed as incurred. These costs amounted to $23.3 and $24.2 million in 1996 and 1995, respectively. Foreign Currency The financial statements for the Company's foreign operations are translated into United States dollars at yearend exchange rates as to assets and liabilities and at weighted average exchange rates as to revenues and expenses. Gains and losses that do not impact cash flows are excluded from net income. Effects of changes in exchange rates on the translated financial statements are designated as "foreign currency translation adjustment," a separate component of stockholders' equity. Financial Instruments and Derivative Financial Instruments The fair values of financial instruments have been determined through information obtained from quoted market sources and management estimates. The Company does not hold or issue financial instruments or derivative financial instruments for trading purposes. The Company enters into forward foreign exchange contracts with terms of one to twelve months. These contracts hedge certain foreign currency denominated receivables and payables and foreign currency commitments. Gains and losses on contracts which do not hedge firm commitments are reported currently in income, while gains and losses from contracts related to firm commitments are deferred and recognized as part of the cost of the underlying transaction being hedged. The Company also enters into interest rate swap agreements with terms ranging from eighteen months to seven years. The differential between the floating interest rate and the fixed interest rate which is to be paid or received is recognized in interest expense as the floating interest rate changes over the life of the agreement. Long-Lived Assets During fiscal year 1996, the Company adopted Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This statement had no material effect on the Company's accompanying financial statements. Reclassifications Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current period's presentation.

-32. RISKS AND UNCERTAINTIES: Nature of Operations The Company designs, manufactures and markets material handling machinery and equipment. Its product

-32. RISKS AND UNCERTAINTIES: Nature of Operations The Company designs, manufactures and markets material handling machinery and equipment. Its product offerings cover all categories of forklift trucks, with electric rider and internal combustion engine (ICE) forklift trucks being the major product lines. The Company also derives significant revenue from the sale of service parts for its own and competitors' forklift trucks. The Company's manufacturing operations are primarily located in the United States and Europe. Products are differentiated between the Hyster(R) and Yale(R) brands and each brand is distributed worldwide through separate dealer networks. Both brands are also sold directly to certain national account customers. The Company's market position is strongest in North America; it also has significant presence in Europe although its competitive position varies from country to country. The Company's market share in Asia-Pacific is relatively low. The forklift truck industry is highly competitive and the Company has established alliances with a limited number of suppliers to secure sources of competitively priced materials and components. If the supply of key components or materials were disrupted, or if major price increases were imposed that could not be passed onto end customers, there could be an adverse impact on the Company's operating results. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. 3. EXTRAORDINARY CHARGES: The 1995 extraordinary charge of $3.4 million, net of $2.2 million in tax benefits, represents premiums and writeoff of unamortized debt issuance costs associated with the retirement of approximately $78 million of 12-3/8% subordinated debentures. The Company retired these debentures in August 1995 utilizing proceeds from the Credit Agreement, as discussed in Note 10. 4. SUPPLEMENTAL CASH FLOW INFORMATION: Supplemental cash flow information is as follows:
Year Ended December 31, ----------------------1996 1995 --------------(in thousands) $25,794 $29,553 32,900 30,239 6,152 2,213

Interest paid Income taxes paid Income tax refunds received

-45. ACCOUNTS RECEIVABLE: Allowances for doubtful accounts of $4.1 million and $3.8 million at December 31, 1996 and 1995, respectively, were deducted from accounts receivable.

-45. ACCOUNTS RECEIVABLE: Allowances for doubtful accounts of $4.1 million and $3.8 million at December 31, 1996 and 1995, respectively, were deducted from accounts receivable. The Company has agreements which allow for the sale, without recourse, of undivided interests in revolving pools of its trade accounts receivable. The maximum allowable amount of receivables to be sold was $75.6 million at December 31, 1996 and $25.0 million at December 31, 1995. The amount sold at any measurement date varies based upon the level of eligible receivables. Under these agreements, $56.3 million and $23.2 million were sold as of December 31, 1996 and 1995, respectively. The sales are reflected as reductions of accounts receivable in the accompanying Consolidated Balance Sheets. The costs of these programs, which were $1.8 million in 1996 and $1.6 million in 1995, are charged to other expense in the accompanying Consolidated Statements of Income. 6. INVENTORIES: Inventories are summarized as follows:
December 31, ---------------------1996 1995 ------------(in thousands) $113,644 $117,393 120,620 182,032 (15,620) (13,340) --------------$218,644 $286,085 ======== ========

Finished goods and service parts Raw materials and work in process LIFO reserve

The cost of inventories has been determined by the last-in first-out (LIFO) method for 55% of such inventories as of December 31, 1996 and 61% as of December 31, 1995.

-57. INVESTMENTS: The Company owns a 50% interest in S-Y. The joint venture operates a facility in Japan from which the Company purchases certain components, internal combustion engines and electric forklift trucks. Following is SY's unaudited condensed financial information on a separate company basis, before elimination of intercompany profits.
November 30, ----------------------1996 1995 -------------(in thousands) (unaudited) $122,333 49,922 -------$172,255 ======== $ 73,121 59,484 -------132,605 26,551 13,099 $144,966 57,209 -------$202,175 ======== $ 55,700 95,898 -------151,598 36,320 14,257

Condensed Balance Sheets - ------------------------

Assets: Current assets Other assets

Liabilities and stockholders' equity: Notes payable Other current liabilities Total current liabilities Other liabilities Stockholders' equity

-57. INVESTMENTS: The Company owns a 50% interest in S-Y. The joint venture operates a facility in Japan from which the Company purchases certain components, internal combustion engines and electric forklift trucks. Following is SY's unaudited condensed financial information on a separate company basis, before elimination of intercompany profits.
November 30, ----------------------1996 1995 -------------(in thousands) (unaudited) $122,333 49,922 -------$172,255 ======== $ 73,121 59,484 -------132,605 26,551 13,099 -------$172,255 ======== $144,966 57,209 -------$202,175 ======== $ 55,700 95,898 -------151,598 36,320 14,257 -------$202,175 ========

Condensed Balance Sheets - ------------------------

Assets: Current assets Other assets

Liabilities and stockholders' equity: Notes payable Other current liabilities Total current liabilities Other liabilities Stockholders' equity

Condensed Statements of Income - ------------------------------

Net sales Gross profit Net income

Twelve Months Ended November 30, ---------------------1996 1995 ------------(in thousands) (unaudited) $221,160 $280,853 54,115 71,322 1,554 4,865

The Company's purchases from S-Y in 1996 and 1995 were $108.3 million and $134.4 million, respectively. Trade terms on certain payables to S-Y range from 180 to 210 days and the Company pays interest at market rates on all amounts owing after 60 days. Payables to S-Y with terms greater than 60 days are shown as working capital financing in the consolidated statements of cash flows. The Company's accounts receivable and accounts payable balances with S-Y are as follows:
December 31, --------------------1996 1995 ------------(in thousands) $ 578 $ 895 32,398 51,696

Accounts receivable Accounts payable

The Company reimbursed S-Y $1.2 million and $1.4 million for engineering assistance during 1996 and 1995, respectively.

-6-

-68. PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment includes the following:
December 31, --------------------------1996 1995 ----------------(in thousands) $ 6,546 $ 6,421 70,496 58,503 218,780 192,137 ----------------295,822 257,061 (126,135) --------$ 169,687 ========= (108,714) --------$ 148,347 =========

Land Buildings Machinery, tools and equipment

Less- Accumulated depreciation

Depreciation charged to income was $22.0 and $20.2 million in 1996 and 1995, respectively. 9. ACCRUED EXPENSES: The components of accrued expenses are summarized as follows:
December 31, ---------------------1996 1995 -------------(in thousands) $13,417 $13,105 2,307 3,107 21,506 16,708 8,000 8,000 10,605 12,104 35,457 36,004 ------------$91,292 $89,028 ======= =======

Wages, commissions and bonuses Interest Warranty Self insurance Sales discounts Other

10. SHORT-TERM AND LONG-TERM OBLIGATIONS: On February 28, 1995 the Company entered into a long-term financing agreement (the Credit Agreement) to refinance the majority of its previously outstanding long-term debt. The Credit Agreement provides the Company with an unsecured $350 million revolving line of credit with a five year maturity and an extension option. It is the Company's intention to exercise the extension option at maturity. The Credit Agreement also provides the Company with reduced interest rates upon achievement of certain financial performance targets. The Credit Agreement allowed the Company to redeem the $78 million of 12-3/8% subordinated debentures outstanding at December 31, 1994. This redemption caused the Company to record an extraordinary charge of $3.4 million, net of tax, in 1995 to write off the unamortized debt issuance costs and premiums as discussed in Note 3.

-7Borrowings under the Credit Agreement were $230 million at December 31, 1996 and are classified as a longterm obligation. Borrowings were $275 million at December 31, 1995 of which $246 million is classified as longterm and the remainder as short-term obligation. A facility fee, which is based upon the total $350 million commitment of the Credit Agreement, is currently 0.2% per annum. This facility bears interest under a variety of borrowing options with premiums on each option subject to reductions based on favorable performance. The

-7Borrowings under the Credit Agreement were $230 million at December 31, 1996 and are classified as a longterm obligation. Borrowings were $275 million at December 31, 1995 of which $246 million is classified as longterm and the remainder as short-term obligation. A facility fee, which is based upon the total $350 million commitment of the Credit Agreement, is currently 0.2% per annum. This facility bears interest under a variety of borrowing options with premiums on each option subject to reductions based on favorable performance. The weighted average effective interest rates on the revolving credit facility, including interest rate swaps, was 6.68% and 6.25% during 1996 and 1995, respectively. The weighted average interest rate, including interest rate swaps, at December 31, 1996 and 1995 was 6.50% and 6.68%, respectively. The Credit Agreement contains covenants related to minimum net worth, debt to capitalization ratios and debt of subsidiaries. In addition, the Credit Agreement limits capital spending, investments and dividends. As of December 31, 1996, the Company was in compliance with all the covenants in the Credit Agreement. In addition to the Credit Agreement, the Company has arrangements with lenders that allow for borrowings on an uncommitted basis at current market rates. At December 31, 1996, borrowings under these arrangements amounted to $14 million and are classified as long-term obligations. At December 31, 1995, these borrowings were classified as short-term obligations and amounted to $43.4 million. The weighted average interest rate on these borrowings at December 31, 1996 and 1995 was 6.875% and 6.41%, respectively. As further discussed in Note 15 to the consolidated financial statements, the Company has entered into unsecured interest rate swap agreements. The interest rate swap agreements mature at varying lengths from eighteen months to seven years and effectively changes the majority of the Company's floating interest rate exposure on the Credit Agreement to a fixed rate. The Company evaluates its exposure to floating rate debt on an ongoing basis. Long-term obligations, exclusive of current maturities, consists of the following:
December 31, ----------------------1996 1995 --------------(in thousands) $244,000 $245,935 3,717 4,065 --------------$247,717 $250,000 ======== ========

Revolving lines of credit Other, including capital leases Total long-term obligations

Maturities on long-term obligations excluding capital lease obligations for the next five years are as follows (Note 16):
Year Ending December 31, -----------1997 1998 1999 2000 2001

Amount -------------(in thousands) $1,095 51 -

-8To the extent allowed under the restrictive covenants of the Credit Agreement, foreign subsidiaries had credit lines at December 31, 1996 with an unused amount of $27.9 million. Borrowings under these credit lines are classified as short-term and amounted to $7.8 million and $6.2 million at December 31, 1996 and 1995, respectively. These credit lines are in various currencies and bear interest at an average rate of 8.8% and 8.4% at

-8To the extent allowed under the restrictive covenants of the Credit Agreement, foreign subsidiaries had credit lines at December 31, 1996 with an unused amount of $27.9 million. Borrowings under these credit lines are classified as short-term and amounted to $7.8 million and $6.2 million at December 31, 1996 and 1995, respectively. These credit lines are in various currencies and bear interest at an average rate of 8.8% and 8.4% at December 31, 1996 and 1995, respectively. 11. INCOME TAXES: The Company is included in the consolidated federal income tax return of NACCO. The Company and NACCO are parties to an income tax sharing agreement providing for the allocation of federal income tax liabilities. Under this arrangement, the Company will pay to NACCO an amount equal to the income taxes that would be payable by the Company if it were a corporation filing a separate return. Therefore, the currently payable federal portion of the provision for income taxes is payable to NACCO. The Company files separate state income tax returns. Components of income before income taxes and extraordinary charge are as follows:
Year Ended December 31, ----------------------1996 1995 ----------------(in thousands) $32,635 $35,305 13,387 23,076 ------------$46,022 $58,381 ======= =======

Domestic International

Income tax expense (credit) consists of the following:
Year Ended December 31, ---------------------1996 1995 --------------(in thousands) Current: Federal State Foreign $18,494 3,489 5,073 ------27,056 ------(1,883) (571) (5,023) ------(7,477) ------$19,579 ======= $17,814 3,650 3,767 ------25,231 ------(3,570) (1,394) 1,223 ------(3,741) ------$21,490 =======

Deferred: Federal State Foreign

The Company has provided for estimated United States and foreign income taxes, less available tax credits and deductions, which would be incurred on the remittance of undistributed earnings in its foreign subsidiaries in excess of earnings deemed to be indefinitely reinvested. It is the Company's policy to provide income taxes on all future accumulations of undistributed earnings for those foreign subsidiaries where it is anticipated that distribution of earnings is likely to occur.

-9Accumulated earnings at December 31, 1996 of international subsidiaries which have been deemed to be

-9Accumulated earnings at December 31, 1996 of international subsidiaries which have been deemed to be indefinitely reinvested totaled $45.5 million. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable. The amount of withholding taxes that would be payable upon remittance of all undistributed foreign earnings would be $6.3 million. These withholding taxes, subject to certain limitations, may be used to reduce U.S. income taxes. A reconciliation of the provisions for income taxes at the federal statutory income tax rate to income taxes as reported is as follows:
Year Ended December 31, ------------------1996 1995 ------------(in thousands) $46,022 $58,381 35% 35% ------------16,108 20,433 4,085 1,638 (1,670) (404) (1,288) 1,110 ------$19,579 ======= 4,085 1,391 (969) (1,174) (1,792) (484) ------$21,490 =======

Income before tax and extraordinary item Statutory rate Tax at statutory rate Effect of: Amortization of goodwill State income taxes Export benefit Income recorded net of tax Tax authorities settlement Other differences Tax Provision

A summary of the components of the net deferred tax balance in the Company's consolidated balance sheets resulting from differences in the book and tax basis of assets and liabilities follows: Deferred Tax Asset (Liability) at December 31, 1996 (in thousands)
Current --------------------Domestic Foreign -------------$(13,161) $ 373 13,397 1,446 67 3,112 436 37 (317) ------------$ 3,888 $1,502 ======== ====== Noncurrent -----------------Domestic Fo --------$ $ (876) ( 15,795 (16,663) (13,871) ( (86) --------$(15,701) $( ======== ==

Inventories Accrued expenses and reserves Pension Net operating loss carryforwards Product liability Tax credit carryforwards Unrepatriated earnings Depreciation Other

-10Deferred Tax Asset (Liability) at December 31, 1995 (in thousands)
Current ---------------------Domestic Foreign -------------$(17,775) $ 1,058 12,594 1,737 460 1,723 Noncurrent -----------------Domestic F -------$ $ (1,158) -

Inventories Accrued expenses and reserves Pension Net operating loss carryforwards

-10Deferred Tax Asset (Liability) at December 31, 1995 (in thousands)
Current ---------------------Domestic Foreign -------------$(17,775) $ 1,058 12,594 1,737 460 1,723 3,112 56 (240) (1,804) -------------$ (1,793) $ 2,714 ======== ======= Noncurrent -----------------Domestic F -------$ $ (1,158) 14,717 (11,642) (13,267) 1,210 -------$(10,140) $ ======== =

Inventories Accrued expenses and reserves Pension Net operating loss carryforwards Product liability Tax credit carryforwards Unrepatriated earnings Depreciation Other

12. POSTRETIREMENT BENEFITS: The Company maintains a variety of postretirement plans covering a majority of its employees. A portion of the employees are participants in the defined benefit plans discussed below. Most of the remaining covered employees participate in the profit sharing portion of the Company's defined contribution plan also described below. In addition, all eligible employees are included in the 401(k) portion of the defined contribution plan. Total postretirement expense for the Company was $11.0 million and $12.1 million for the years 1996 and 1995, respectively. Included in these amounts is the expense associated with government sponsored plans in which the Company's international subsidiaries participate. Cash contributions under the above plans were $16.5 million in 1996 and $7.8 million in 1995. During 1996, the Company recognized a curtailment gain of $1.3 million which is included in postretirement expense for the year. This gain resulted from the suspension of a U.S. defined benefit plan effective December 31, 1996. Future benefits to the participants of this plan will be earned under the profit sharing portion of the Company's defined contribution plan described below. This change is not expected to have a material impact on future annual pension costs. The Company participates in the combined defined benefit plan of NACCO for certain employee groups. The Company also maintains a defined benefit plan for those employees that are covered under collective bargaining agreements. Each defined benefit plan has a formula which is used to determine benefits upon retirement. Most formulas take into account age, compensation, and success of the Company in meeting certain goals, although certain hourly employees' formulas are based primarily on years of service. The Company's current funding policy is to contribute annually the minimum contribution calculated by the independent actuaries. Contributions are intended to provide not only for benefits attributed to service to date but also for those expected to be earned in the future.

-11The components of periodic pension cost and actuarial assumptions for the Company's principal defined benefit plans for the years ended December 31, 1996 and 1995 are as follows:
1996 1995 ------------(in thousands) UNITED STATES PLANS: Interest accrued on projected benefit obligation Service cost-benefits earned during the year Actual return on plan assets, net of plan expense Net amortization and deferral Curtailment gain Net periodic pension cost $ 3,633 2,892 (2,284) 27 (1,288) ------$ 2,980 $ 3,098 3,693 (5,333) 3,622 -------$ 5,080

-11The components of periodic pension cost and actuarial assumptions for the Company's principal defined benefit plans for the years ended December 31, 1996 and 1995 are as follows:
1996 1995 ------------(in thousands) UNITED STATES PLANS: Interest accrued on projected benefit obligation Service cost-benefits earned during the year Actual return on plan assets, net of plan expense Net amortization and deferral Curtailment gain Net periodic pension cost Assumed discount rate Rate of compensation increase (where applicable) Expected long-term rate of return on plan assets UNITED KINGDOM PLANS: Interest accrued on projected benefit obligation Service cost-benefits earned during the year Actual return on plan assets, net of plan expense Net amortization and deferral Net periodic pension cost Assumed discount rate Rate of compensation increase (where applicable) Expected long-term rate of return on plan assets $ 3,633 2,892 (2,284) 27 (1,288) ------$ 2,980 ======= 8.0% 5.0% 9.0% $ 3,098 3,693 (5,333) 3,622 -------$ 5,080 ======= 7.5% 4.5% 9.0%

$ 2,279 1,081 (5,959) 2,869 ------$ 270 ======= 8.5% 5.5% 9.5%

$ 2,122 1,256 (3,397) 648 ------$ 629 ======= 8.0% 5.0% 9.5%

-12The following schedule reconciles the funded status of the Company's principal defined benefit plans with amounts reported in the consolidated balance sheets at December 31, 1996 and 1995:
December 31, --------------------------------------------------1996 19 --------------------------------------United United United States Kingdom States Plans Plans Plans ---------------------(in thousands) Projected benefit obligation, based on employment service to date and current salary levels: Vested accumulated benefit obligation Nonvested accumulated benefit obligation Total accumulated benefit obligation Additional amounts related to projected salary increase Total projected benefit obligation Fair value of plan assets

$ 40,517 1,382 -------41,899

$ 30,547 1,614 -------32,161

$ 34,912 1,027 -------35,939

133 -------42,032 39,197 --------

1,724 -------33,885 42,636 --------

6,781 -------42,720 29,533 --------

Plan assets in excess of (less than) projected benefit obligation Unrecognized net loss (gain) from past experience different from that assumed Unrecognized prior service cost Unrecognized net transition obligation Additional minimum liability

(2,835)

8,751

(13,187)

2,799 1,340 -(4,006)

(2,803) 1,311 (548) --

6,323 2,685 -(4,523)

-12The following schedule reconciles the funded status of the Company's principal defined benefit plans with amounts reported in the consolidated balance sheets at December 31, 1996 and 1995:
December 31, --------------------------------------------------1996 19 --------------------------------------United United United States Kingdom States Plans Plans Plans ---------------------(in thousands) Projected benefit obligation, based on employment service to date and current salary levels: Vested accumulated benefit obligation Nonvested accumulated benefit obligation Total accumulated benefit obligation Additional amounts related to projected salary increase Total projected benefit obligation Fair value of plan assets

$ 40,517 1,382 -------41,899

$ 30,547 1,614 -------32,161

$ 34,912 1,027 -------35,939

133 -------42,032 39,197 --------

1,724 -------33,885 42,636 --------

6,781 -------42,720 29,533 --------

Plan assets in excess of (less than) projected benefit obligation Unrecognized net loss (gain) from past experience different from that assumed Unrecognized prior service cost Unrecognized net transition obligation Additional minimum liability Prepaid (accrued) pension cost recognized

(2,835)

8,751

(13,187)

2,799 1,340 -(4,006) -------$ (2,702) ========

(2,803) 1,311 (548) --------$ 6,711 ========

6,323 2,685 -(4,523) -------$ (8,702) ========

The Company maintains a defined contribution retirement plan for U.S. employees which includes a profit sharing portion and a 401(k) portion. Contributions to the profit sharing plan are based on a formula which takes into account age, compensation, and success of the Company in meeting certain goals. Contributions vest over a fiveyear period. Under the 401(k) portion, eligible employees may contribute up to 17% of their compensation and the Company matches an amount equal to 66-2/3% of the participants' initial 3% before tax contribution. Participants are at all times fully vested in their contributions and those made by the Company. 13. OTHER POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS: The Company maintains health care and life insurance plans which provide benefits to eligible retired employees. The Company funds these benefits on a "pay as you go" basis, with the retirees paying a portion of the costs.

-13Summary information on the Company's plans is as follows:
December 31, -------------------1996 1995 ------------(in thousands) Accumulated postretirement benefit obligation (APBO): Retirees Fully eligible active plan participants Other active plan participants $ 4,639 395 5,188 ------$ 4,452 326 5,577 -------

-13Summary information on the Company's plans is as follows:
December 31, -------------------1996 1995 ------------(in thousands) Accumulated postretirement benefit obligation (APBO): Retirees Fully eligible active plan participants Other active plan participants $ 4,639 395 5,188 ------10,222 (2,587) ------$ 7,635 ======= $ 4,452 326 5,577 ------10,355 (2,483) ------$ 7,872 =======

Unrecognized net loss Accrued postretirement benefit

The components of net periodic other postretirement benefit cost are as follows:
Year Ended December 31, -----------------1996 1995 ----------(in thousands) $ 190 $ 167 814 163 -----$1,167 ====== 790 74 -----$1,031 ======

Service cost of benefits earned Interest cost on accumulated postretirement benefit obligation Amortization of unrecognized loss

The assumed health care cost trend rate for measuring the postretirement benefit cost was 8.5% in 1996 and 9.0% in 1995, gradually reducing to 5.25% in years 2003 and after. The weighted average discount rate used to determine the benefit obligation was 8.0% in 1996 and 7.50% in 1995. If the assumed health care trend rate were increased by one percentage point, the effect on the APBO and expense would be immaterial. 14. LONG-TERM INCENTIVE COMPENSATION PLAN: The Company has a Long-Term Incentive Compensation Plan for officers and key management employees of the Company and its subsidiaries. Awards under this plan represent book value appreciation units and entitle the recipient, subject to vesting and other restrictions, to receive cash equal to the difference between the base period price for the units and the book value price as of the quarter date coincident to or immediately preceding the date of disbursement. Awards vest and are payable ten years from date of grant or earlier under certain conditions. As of December 31, 1996, 1.7 million units have been awarded to key employees and officers. The amount charged to expense was $2.4 million and $3.2 million in 1996 and 1995, respectively. The total amount accrued at December 31, 1996 and 1995 for these awards was $6.8 million and $5.2 million, respectively, and was recorded as a long-term liability.

-1415. FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS: Financial Instruments A financial instrument is a contract that imposes or conveys a contractual obligation, or right, to deliver or receive cash or another financial instrument. The fair value of financial instruments approximated their carrying values at

-1415. FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS: Financial Instruments A financial instrument is a contract that imposes or conveys a contractual obligation, or right, to deliver or receive cash or another financial instrument. The fair value of financial instruments approximated their carrying values at December 31, 1996 and 1995. Interest Rate Derivatives The Company has entered into interest rate swap agreements. The use of these agreements allows the Company to enter into long-term credit arrangements that have performance based floating rates of interest and swap them into fixed rates, as opposed to entering into higher cost fixed-rate credit arrangements. These agreements are with major commercial banks; therefore, the risk of credit loss from nonperformance by the banks is considered minimal. As of December 31, 1996 the Company had $310 million notional principal amount of interest rate swaps with an average effective fixed rate of 6.4%, although $135 million of the swaps are delayed to start in 1997 and later. The carrying amount of the interest rate swaps is $0 and the fair value is $4.7 million, which reflects the net amount the Company would pay to terminate the contracts at December 31, 1996. Foreign Currency Derivatives The Company enters into forward foreign exchange contracts for purposes of hedging exposure to foreign currency exchange rate fluctuations. These contracts are with major financial institutions and the risk of credit loss from nonperformance by these institutions is considered minimal. These contracts hedge primarily firm commitments and, to a lesser degree, anticipated commitments relating to cash flows associated with sales and purchases denominated in foreign currencies. The Company enters into foreign exchange contracts in a variety of foreign currencies with maturities not exceeding one year. At December 31, 1996 the Company had $61.1 million contract value of forward foreign exchange contracts. 16. LEASES: Future minimum annual lease payments under noncancelable lease obligations as of December 31, 1996 are as follows:
Capital Operating Leases Leases ------------(in thousands) $ 2,338 $ 7,079 2,130 6,913 1,351 6,576 761 6,047 259 5,855 6,349 ------------6,839 $38,819 ======= (835) ------6,004 (2,338) ------$ 3,666 =======

1997 1998 1999 2000 2001 Subsequent to 2001 Total Future Minimum Lease Payments Less- Amount representing interest Present value of net minimum lease payments Less- Current maturities

-15Capital leases are for manufacturing equipment. Amounts included in property, plant and equipment are as follows:

-15Capital leases are for manufacturing equipment. Amounts included in property, plant and equipment are as follows:
December 31, -----------------1996 1995 ----------(in thousands) $18,152 $12,884 (9,251) (7,626) ----------$ 8,901 $ 5,258 ====== ======

Plant and equipment Less- Accumulated amortization Net leased property, plant and equipment

Aggregate rental expense for operating leases included in the consolidated statements of income was $7.1 and $6.5 million in 1996 and 1995, respectively. 17. CONTINGENCIES: The Company is subject to recourse or repurchase obligations under various financing arrangements for certain independently owned retail dealerships. Also, certain dealer loans are guaranteed by the Company. Total amounts subject to recourse, guarantee or repurchase obligation at December 31, 1996 and 1995 were $125.6 million and $100.8 million, respectively. When the Company is the guarantor of the principal amount financed, a security interest is usually maintained in assets of the parties for whom the Company is guaranteeing debt. Losses anticipated under the terms of the recourse or repurchase obligations have been provided for and are not significant. The Company is the defendant in various product liability and other legal proceedings incidental to its business. The majority of this litigation involves product liability claims. The Company has recorded a reserve for potential product liability losses at December 31, 1996 of $48.6 million, of which $8.0 million is estimated to be payable in 1997. While the resolution of litigation cannot be predicted with certainty, management believes that the reserves are adequate and no material adverse effect upon the financial position or results of operations of the Company will result from such legal actions. 18. SEGMENT INFORMATION: The Company's business consists of the engineering, manufacturing and marketing of materials handling machinery and equipment, under the Hyster(R) and Yale(R) trade names. The Company's products are manufactured in plants at five locations in the United States and eight international plants located in Scotland, Northern Ireland, The Netherlands, Italy, Brazil, Australia and Japan. Service parts are distributed through parts depots located in the United States, Europe, Australia and Brazil. Generally, products assembled abroad are comprised of parts and components manufactured or purchased locally and from U.S. plants at established transfer prices. The transfer price of production parts and completed units is established by a procedure designed to equate to an arm's-length price. However, for purposes of the following financial statement disclosure, transfers between geographic areas are presented at standard cost.

-16Europe, Africa & Middle East --------

1996 ------------------------Sales to unaffiliated customers Export sales to unaffiliated customers

Americas ----------

Asia Pacific ------(in thousands) $ 92,863 -

Eliminations ---------

$

908,793 106,660

$451,776 -

$

-

-16Europe, Africa & Middle East --------

1996 ------------------------Sales to unaffiliated customers Export sales to unaffiliated customers Transfers between geographic areas Total net sales Depreciation and amortization expense

Americas ----------

Asia Pacific ------(in thousands) $ 92,863 ------$92,863 ======= $ 403 ======= $ 389 =======

Eliminations ---------

$

908,793 106,660

$451,776 129,779 -------$581,555 ======== $ 12,522 ======== $ 18,728 ========

$

-

53,214 ---------$1,068,667 ========== $ 20,860 ========== $ 23,177 ==========

(182,993) --------$(182,993) ========= $ ========= $ =========

Capital expenditures

Research and development costs

$ 21,318 ========== $ 44,043 ========== $ 570,044 ==========

$ 1,940 ======== $ 32,307 ======== $335,493 ========

$ ======= $(3,836) ======= $45,349 =======

$ ========= $ ========= $ =========

Operating profit (loss)

Identifiable assets

In 1996, the Company had sales to a single affiliated group of customers which represented 10.3% of worldwide net sales.

-17Europe, Africa & Middle East --------

1995 ------------------------Sales to unaffiliated customers Export sales to unaffiliated customers Transfers between geographic areas Total net sales

Americas ----------

Asia Pacific ------(in thousands) $85,136

Eliminations ---------

$

936,600

$422,308

$

-

66,062

-

-

-

63,653 ---------$1,066,315 ==========

156,050 -------$578,358 ========

------$85,136 =======

(219,703) --------$(219,703) =========

Depreciation and amortization expense

$ 19,791 ========== $ 24,011 ==========

$ 11,661 ======== $ 15,031 ========

$ 339 ======= $ 390 =======

$ ========= $ =========

Capital expenditures

Research and development costs

$ 21,986 ========== $ 48,780 ========== $ 630,583 ==========

$ 2,233 ======== $ 34,437 ======== $373,437 ========

$ ======= $ 241 ======= $48,139 =======

$ ========= $ ========= $ =========

Operating profit

Identifiable assets

-17Europe, Africa & Middle East --------

1995 ------------------------Sales to unaffiliated customers Export sales to unaffiliated customers Transfers between geographic areas Total net sales

Americas ----------

Asia Pacific ------(in thousands) $85,136

Eliminations ---------

$

936,600

$422,308

$

-

66,062

-

-

-

63,653 ---------$1,066,315 ==========

156,050 -------$578,358 ========

------$85,136 =======

(219,703) --------$(219,703) =========

Depreciation and amortization expense

$ 19,791 ========== $ 24,011 ==========

$ 11,661 ======== $ 15,031 ========

$ 339 ======= $ 390 =======

$ ========= $ =========

Capital expenditures

Research and development costs

$ 21,986 ========== $ 48,780 ========== $ 630,583 ==========

$ 2,233 ======== $ 34,437 ======== $373,437 ========

$ ======= $ 241 ======= $48,139 =======

$ ========= $ ========= $ =========

Operating profit

Identifiable assets


								
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