Company: NC
Filing Date: 2025-04-07
Form Type: DEF 14A
Source: 0000789933-25-000012
Chunk: 69

Company: NACCO INDUSTRIES INC
Filing Date: 2025-04-07
Form: DEF 14A
Chunk 69
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 believe our future success depends in part on our ability to attract, motivate and retain high quality non-employee directors. The ability to provide equity-based awards under the Amended Directors' Plan is critical to achieving this success. We would be at a severe competitive disadvantage if we could not use share-based awards to recruit and compensate our non-employee Directors.

We also believe that equity compensation motivates non-employee Directors to appropriately focus on actions that enhance stockholder value because they will share in that value enhancement through improved share price performance. Our equity compensation also helps to retain our non-employee Directors and to promote a focus on sustained enhancement of stockholder value because our equity compensation awards are generally subject to lengthy transfer restrictions.

As of March 21, 2025, 41,211 Class A Common shares remained available for issuance under the Current Directors' Plan. If the Amended Directors' Plan is not approved, we may deem it necessary to increase significantly the cash component of our non-employee Director compensation, which may not necessarily align compensation interests with the investment interests of our stockholders as well as alignment provided by equity-based awards. Replacing equity awards with cash also would increase cash compensation expense and use cash that could be better utilized if reinvested in our businesses or returned to our stockholders.

The following includes (1) aggregated information regarding the dilution associated with the Current Directors' Plan and the potential stockholder dilution that would result if the proposed share increase under the Amended Directors' Plan is approved and (2) our burn rate. This information is as of March 21, 2025. As of that date, there were approximately 5,866,943 shares of Class A Common outstanding.

Under the terms of the Current Directors' Plan, a maximum of 200,000 shares of Class A Common (subject to adjustment as described in the Current Directors' Plan) were available to be issued as Mandatory and Voluntary Shares, of which 158,789 shares of Class A Common had been issued (which represents approximately 2.71% of our outstanding Class A Common shares) and 41,211 shares of Class A Common remained available for issuance as of March 21, 2025. The 41,211 shares of Class A Common remaining available for issuance, a portion of which will be issued in April 2025 in connection with quarterly retainer payments, represented approximately 0.70% of our outstanding Class A Common shares. Based on an Average Share Price (as defined in the Current Directors'