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Audit Review Committee

Hamilton Beach Brands Holding Company Audit Review Committee Charter

Purposes

The purposes of the Audit Review Committee (the “Committee”) of the Board of Directors (the “Board”) of Hamilton Beach Brands Holding Company (the “Company”) are to:

  1. assist the Board in fulfilling its oversight responsibilities with respect to (a) the integrity and audit of the Company’s consolidated financial statements (b) the Company’s accounting, financial reporting and disclosure processes and adequacy of the systems of disclosure and internal controls established by management, (c) the Company and its subsidiaries’ compliance with legal and regulatory requirements, (d) the qualifications and independence of the registered public accounting firm designated by the Company as the independent auditors of the consolidated financial statements of the Company and its subsidiaries (the “independent auditors”), (e) the Company’s cybersecurity and data privacy risks, controls and procedures, and (f) the performance of the independent auditors and the Company’s internal audit department;

  2. oversee the Company’s Corporate Compliance Program; and

  3. prepare the Committee’s report, made pursuant to the rules and requirements promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), to be included in the Company’s annual proxy statement (the “Audit Review Committee Report”).

Composition of the Committee

Number. The Committee shall consist of no fewer than three members.

Qualifications. Each Committee member shall have all of the following qualifications:

  1. Each Committee member shall meet the independence criteria of (a) the listing standards of the New York Stock Exchange, Inc. (“NYSE”), as such requirements are interpreted by the Board in its business judgment in accordance with the Company’s Corporate Governance Guidelines, and (b) Section 301 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the rules and listing requirements promulgated thereunder by the Securities and Exchange Commission (“SEC”), including Rule 10A-3 of the Exchange Act, and the NYSE.

  2. Each Committee member shall be financially literate or shall become financially literate within a reasonable period of time after his or her appointment to the Committee. Additionally, at least one member of the Committee shall have accounting or related financial management expertise sufficient to meet the criteria of a financial expert within the meaning of Section 407 of the Sarbanes-Oxley Act and any rules promulgated thereunder by the SEC. The Board shall determine, in its business judgment, whether a member is financially literate and whether at least one member has the requisite accounting or financial management expertise. The Board will also determine whether one or more members of the Committee meets the financial expert criteria of Section 407 of the Sarbanes-Oxley Act and any rules promulgated thereunder by the SEC and if so, identify at least one of such members. A person who satisfies this definition of a financial expert will also be presumed to have accounting or related financial management expertise. The designation or identification of a person as an audit committee financial expert shall not (a) impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Committee and Board in the absence of such designation or identification, or (b) affect the duties, obligations or liability of any other member of the Committee or Board.

  3. Each Committee member shall receive as compensation from the Company only those forms of compensation that are not prohibited by Section 301 of the Sarbanes-Oxley Act and the rules and listing requirements promulgated thereunder by the SEC and NYSE. Permitted compensation includes directors’ fees (which includes all forms of compensation paid to directors of the Company for service as a director or member of a Board Committee).

  4. If a Committee member simultaneously serves on the audit committee of more than three public companies (including the Company), the Board must determine that such simultaneous service would not impair the ability of such member to effectively serve on the Committee. The Company shall disclose any such determination in its annual proxy statement.

Appointment. The Board will appoint the members and the Chairman of the Committee in accordance with the Company’s bylaws. Committee members shall serve at the pleasure of the Board and for such term or terms as the Board may determine.

Duties and Responsibilities of the Committee

The Committee is responsible for overseeing the Company’s accounting and financial reporting process on behalf of the Board. Management is responsible for the preparation, presentation and integrity of the Company’s consolidated financial statements and for the appropriateness of the accounting principles and reporting policies that are used by the Company. The independent auditors are responsible for auditing the Company’s consolidated financial statements and for reviewing the Company’s interim consolidated financial statements.

The Committee is directly responsible for the appointment, compensation, retention and oversight of the work of the Company’s independent auditors (including resolution of disagreements between management and the independent auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company.

In performing its responsibilities, the Committee shall:

  1. Retain the Independent Auditors. The Committee has the sole authority to (a) appoint, retain and terminate the Company’s independent auditors, (b) approve all audit engagement fees, terms and services, and (c) approve any non-audit services provided by the Company’s independent auditors, subject to the following. The Committee will exercise this authority in a manner consistent with Section 201, Section 202 and Section 301 of the Sarbanes-Oxley Act and the rules and listing standards promulgated thereunder by the SEC and NYSE. The Committee may delegate the authority to grant any pre-approvals required by such sections to one or more members of the Committee that it designates, subject to the delegated member or members reporting any such pre-approvals to the Committee at its next scheduled meeting. The independent auditors will report directly to the Committee.

  2. Review and Discuss the Independent Auditors’ Quality-Control. At least annually, the Committee will obtain and review a report by the independent auditors describing (a) the independent auditors’ internal quality-control procedures and (b) any material issues raised by the most recent internal quality- control review, or peer review, of the registered public accounting firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, with respect to one or more independent audits carried out by the registered public accounting firm, and any steps taken to deal with any such issues.

  3. Review and Discuss the Independence of the Independent Auditors. In connection with the retention of the Company’s independent auditors, at least annually the Committee will review and discuss the information provided by management and the independent auditors relating to the independence of the independent auditors, including, among other things, information related to the non-audit services provided and expected to be provided by the independent auditors. The Committee is responsible for (a) ensuring that the independent auditors submit at least annually to the Committee a formal written statement delineating all relationships between the independent auditors and the Company consistent with applicable independence standards, (b) actively engaging in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors and (c) taking appropriate action in response to the independent auditors’ report to satisfy itself of the independent auditors’ independence.

  4. Evaluation of Independent Auditors. At least annually, the Committee will evaluate the independent auditors’ qualifications, performance and independence. These evaluations should include the experience and qualification of the lead partner of the independent auditors and the audit team in general and confirm that all partner rotation requirements, as promulgated by applicable rules and regulations, are executed. The Committee will present its conclusions to the full Board.

  5. Set Hiring Policies. The Committee will set hiring policies for employees or former employees of the independent auditors, which include the restrictions set forth in Section 206 of the Sarbanes-Oxley Act and any rules promulgated thereunder by the SEC and NYSE.

  6. Review and Discuss the Audit Plan. The Committee will review and discuss with the independent auditors the plans for, and the scope of, the annual audit and other examinations, including the independent auditors’ review of internal controls over financial reporting. The Committee will receive and review any disclosure from the Company‘s CEO (Principal Executive Officer) and CFO (Principal Financial Officer) made in connection with the certification of the Company‘s quarterly and annual reports filed with the SEC of: a) significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company‘s ability to record, process, summarize, and report financial data; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company‘s internal controls.

  7. Review and Discuss Conduct of the Audit. The Committee will review and discuss with the independent auditors the matters required to be discussed by applicable Public Company Accounting Oversight Board auditing standards and SEC requirements relating to the conduct of the audit, as well as any audit problems or difficulties and management’s response, including (a) any restriction on audit scope or on access to requested information, (b) any disagreements with management, and (c) significant issues discussed with the independent auditors’ national office. The Committee will decide all unresolved disagreements between management and the independent auditors regarding financial reporting.

  8. Review and Discuss Consolidated Financial Statements and Disclosures. The Committee will review and discuss with appropriate officers of the Company and the independent auditors the annual audited and quarterly consolidated financial statements of the Company prior to the Company’s Form 10-K and 10-Q filings or release of earnings, including (a) the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and (b) the disclosures regarding internal controls over financial reporting and other matters required by Sections 302 and 404 of the Sarbanes-Oxley Act and any rules promulgated thereunder by the SEC. In consultation with the independent auditors and the internal audit department, the Committee will review the integrity of the Company’s internal and external financial reporting processes

  9. Review and Discuss Corporate Responsibility Disclosures. The Committee will review and discuss with management the processes and controls in place around corporate responsibility disclosures, which shall include environmental, social and governance disclosures. The Committee will review and discuss with management the general nature of such corporate responsibility disclosures in the context of SEC requirements.

  10. Discuss Financial Information. The Committee will discuss in general from time to time the types of information to be disclosed and the types of presentations to be made with respect to the Company’s earnings releases and other financial news releases as well as other financial information and earnings guidance, if any, to be disclosed by the Company, paying particular attention to any pro forma or adjusted non-GAAP information. In addition, the Committee will review and discuss earnings news releases prior to distribution. Such discussions may be in general terms (i.e., discussion of the types of information to be disclosed and the types of presentations to be made). The Committee will recommend to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K.

  11. Internal Audit. The Committee will (a) review and advise on the selection and removal of the Company’s Director of Internal Audit, (b) review the activities and organizational structure of the internal audit department, as well as the qualifications of its personnel, (c) annually, review and recommend changes (if any) to the internal audit charter, (d) periodically review, with the Director of Internal Audit, any significant difficulties, disagreements with management, or scope restrictions encountered in the course of the department’s work, (e) periodically review, with the independent auditors, the internal audit department’s responsibilities, budget, and staffing, (f) review and discuss with the Director of Internal Audit the plans for and the scope of the ongoing audit activities of the internal audit department, (g) review and discuss with the Director of Internal Audit the regular internal audit reports to management (or summaries thereof) prepared by the internal audit department, as well as management’s response, (h) review and discuss with the Director of Internal Audit the appropriateness of the CEO’s expenses at least on an annual basis. The Director of Internal Audit will report administratively to the President and Chief Executive Officer and functionally to the Committee.

  12. Review and Discuss the Systems of Internal Controls Over Financial Reporting. The Committee will review and discuss with the independent auditors, the Director of Internal Audit and appropriate officers of the Company the adequacy of the Company’s internal controls over financial reporting, the Company’s financial, auditing and accounting organizations and personnel, and the Company’s policies and compliance procedures with respect to business practices which shall include (a) the disclosures regarding internal controls over financial reporting and matters required by Sections 302 and 404 of the Sarbanes-Oxley Act and any rules promulgated thereunder by the SEC, and (b) a review with the independent auditors of their opinion on the effectiveness of management’s assessment of internal controls over financial reporting and the independent auditor’s analysis of matters requiring modification to management’s certifications pursuant to Section 302 of the Sarbanes-Oxley Act.

  13. Review and Discuss the Recommendations of Independent Auditors. The Committee will review and discuss with the Director of Internal Audit recommendations made by the independent auditors and the Director of Internal Audit, as well as such other matters, if any, as such persons or officers of the Company may bring to the attention of the Committee.

  14. Review and Discuss the Audit Results. The Committee will review and discuss with the independent auditors (a) the report of their annual audit, or proposed report of their annual audit, (b) the accompanying management letter, if any, (c) the reports of their reviews of the Company’s interim consolidated financial statements conducted in accordance with applicable auditing standards and (d) the reports of the results of such other examinations outside of the course of the independent auditors’ normal audit procedures that the independent auditors may from time to time undertake. The foregoing shall include the reports required by Section 204 of the Sarbanes-Oxley Act and any rules promulgated thereunder by the SEC and, as appropriate, a review of (a) major issues regarding (i) accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles, and (ii) the adequacy and effectiveness of the Company’s internal controls over financial reporting and any special audit steps adopted in light of significant deficiencies or material weaknesses, if any; (b) analyses prepared by management and/or the independent auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the consolidated financial statements, including analyses of the effects and disclosures of alternative GAAP treatments on the consolidated financial statements; and (c) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the consolidated financial statements of the Company

  15. Review and Discuss Certain Matters with Independent Auditors. The Committee will review and discuss with the independent auditors (a) critical accounting policies and practices, (b) alternative treatments of financial information within GAAP related to material items that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditors and (c) other written communications between the independent auditors and management, including, but not limited to, the management letter and the schedule of unadjusted differences.

  16. Obtain Assurances under Section 10A(b) of the Exchange Act. The Committee will obtain assurance from the independent auditors that in the course of conducting the audit, there have been no acts detected or that have otherwise come to the attention of the independent auditors that require disclosure to the Committee under Section 10A(b) of the Exchange Act.

  17. Discuss Risk Management Policies. The Committee has been delegated the responsibility of financial risk by the Board. Consistent with this responsibility, the Committee will discuss guidelines and policies with respect to financial risk assessment and financial risk management, including the risk of fraud, to assess and manage the Company’s financial risk exposures and report as needed to the Board on these issues.

  18. Review of Cybersecurity and Data Privacy Risks, Controls and Procedures. The Committee shall regularly review the Company’s cybersecurity and other information technology risks, controls and procedures. The Committee shall review with management the Company’s plans to mitigate cybersecurity risks and the Company’s ability to respond to and remediate cyber and data privacy incidents. The Committee shall also review with management any specific cybersecurity issues that could affect the adequacy of the Company’s internal controls.

  19. Obtain Reports Regarding Conformity With Legal Requirements and the Company’s Code of Corporate Conduct. The Committee will periodically obtain reports from management and the Director of Internal Audit that the Company and its subsidiary/foreign affiliated entities are in conformity with applicable legal requirements and the Company’s Code of Corporate Conduct. The Committee will charge the independent auditors to report to the Committee regarding any failure by the Company and its subsidiary/foreign affiliated entities to be in conformity with applicable legal requirements and the Company’s Code of Corporate Conduct. The Committee should advise the Board with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations and with the Company’s Code of Corporate Conduct.

  20. Review Possible Dualities of Interest and Conflicts of Interest. The Committee will consider possible dualities of interest and conflicts of interest of directors and management and make recommendations to the Board to address any such duality of interest or conflicts of interest.

  21. Related-Person Transactions. The Committee will review all relationships and transactions in which the Company and its directors and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest in the transaction. The Company’s legal department is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related person transactions in order to enable the Committee to determine, based on the facts and circumstances, whether the related person has a direct or indirect material interest in the transaction. In the course of its review of a related person transaction (as defined by the NYSE and Item 404 of Regulation S-K), the Committee will consider:

    1. the nature of the related person’s interest in the transaction;
    2. the material terms of the transaction, including, without limitation, the amount and type of transaction;
    3. the importance of the transaction to the related person;
    4. the importance of the transaction to the Company;
    5. whether the transaction would impair the judgment of a director or executive officer to act in the best interest of the Company; and
    6. any other matters the Committee deems appropriate.

    Based on this review, the Committee will determine whether to approve any related person transaction. The Committee shall prohibit any related person transaction if it determines the related person transaction to be inconsistent with the interests of the Company and its stockholders.

    Any member of the Committee who is a related person with respect to a transaction under review may not participate in the deliberations or vote respecting approval of the transaction; however, such director may be counted in determining the presence of a quorum at a meeting of the Committee that considers the transaction.

    The Committee will assure that the independent auditors have had access to the Company's legal department and their evaluation of the Company's identification of, accounting for, and disclosure of its relationships with related parties.


  22. Establish Procedures for Complaints Regarding Financial Statements or Accounting Policies. The Committee will establish procedures for (a) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal controls over financial reporting, or auditing matters; and (b) the confidential, anonymous submission by employees of the Company and its subsidiaries of concerns regarding questionable accounting or auditing matters as required by Section 301 of the Sarbanes-Oxley Act and the rules and listing requirements promulgated thereunder by the SEC and NYSE.

  23. Discuss With General Counsel Matters Regarding Financial Statements or Compliance Policies. The Committee should discuss with the Company’s General Counsel legal matters that may have a material impact on the consolidated financial statements or the Company’s compliance policies.

  24. Review and Discuss Other Matters. The Committee should review and discuss such other matters that relate to the accounting, auditing, financial reporting and other information systems/cybersecurity practices and procedures of the Company as the Committee may, in its own discretion, deem desirable in connection with the review functions described above.

  25. Code of Business Conduct and Ethics. The Committee will review (a) the Company’s General Counsel’s oversight and management of the Company’s Code of Business Conduct and Ethics, (b) the investigation of alleged violations of the Code of Business Conduct and Ethics involving directors or executive officers, and (c) the enforcement of certain provisions of the Code of Business Conduct and Ethics, in each case as provided therein.

  26. Make Board Reports. The Committee should report its activities regularly to the Board in such manner and at such times as the Committee and the Board deem appropriate, but in no event less than once a year. Such report should include a review of any issues that arise with respect to the quality or integrity of the Company's consolidated financial statements, the Company’s compliance with legal or regulatory requirements, the performance and independence of the Company’s independent auditors and the performance of the internal audit function.

  27. Adapt to Changing Conditions and Circumstances. The Committee, in carrying out its responsibilities, policies and procedures, should continually review its activities to ensure that it adapts to changing conditions and circumstances.

  28. Other Delegated Duties or Responsibilities. The Committee will perform any other duties or responsibilities delegated to the Committee by the Board from time to time.

Meetings of the Committee

The Committee shall meet in person, telephonically or by any other interactive means at least four times annually, or more frequently as it may determine necessary, to comply with its responsibilities as set forth herein. The Chairman of the Committee shall, in consultation with the other members of the Committee, the Company’s independent auditors and the appropriate officers of the Company, be responsible for calling meetings of the Committee, establishing agendas therefor and supervising the conduct thereof. The majority of the members of the Committee will constitute a quorum at any meeting, and the act of a majority of the members present at a meeting at which a quorum is present will be the act of the Committee, unless a greater number is required by law, the Company’s Certificate of Incorporation or its By-Laws. The Committee may also take any action permitted hereunder by unanimous written consent.

The Committee may request any officer or employee of the Company or the Company’s outside legal counsel or independent auditors to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee shall meet with the Company’s management, the Director of Internal Auditor and the independent auditors periodically in separate private sessions to discuss any matter that the Committee, management, the independent auditors or such other persons believe should be discussed privately. The Committee will meet periodically in executive session without members of management present.

Delegation

Consistent with applicable laws, rules and regulations, the Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to one or more subcommittees of the Committee.

Resources and Authority of the Committee

The Committee shall have the resources and authority appropriate to discharge its responsibilities as required by law, including the authority to engage independent counsel and other advisors as the Committee deems necessary to carry out its duties.

The Company will provide for appropriate funding, as determined by the Committee, for payment of (a) compensation to the Company’s independent auditors engaged for the purpose of rendering or issuing an audit report or related work or performing other audit, review or attest services for the Company, (b) compensation to independent counsel or any other advisors employed by the Committee, and (c) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.

Audit Review Committee Report

The Committee will prepare, with the assistance of management, the independent auditors and outside legal counsel, the Audit Review Committee Report.

Annual Performance Evaluation

The Committee will conduct and review with the Board annually an evaluation of the Committee’s performance with respect to the requirements of this Charter. This evaluation should also set forth the goals and objectives of the Committee for the upcoming year. The Committee may conduct this performance evaluation in such manner as the Committee, in its business judgment, deems appropriate.

Annual Review of Charter

The Committee will conduct and review with the Board annually an evaluation of this Charter and recommend any changes to the Board. The Committee may conduct this Charter evaluation in such manner as the Committee, in its business judgment, deems appropriate.

Disclosure of Charter

Consistent with the listing standards of the NYSE, this Charter is included on the Company’s website and is available free of charge upon request in writing sent to the Secretary of the Company. The Company’s annual report to stockholders shall state that this Charter is available on the Company’s website and is available free of charge upon request in writing sent to the Secretary of the Company.

August 2023