The Board of Directors (the “Board”) of Hamilton Beach Brands Holding Company
(the “Company”) has adopted these Corporate Governance Guidelines (these
“Guidelines”) to assist the Board in the exercise of its duties and
responsibilities and to serve the best interests of the Company and its
stockholders. These Guidelines should be applied in a manner consistent with
all applicable laws, regulations and listing requirements, as well as the
Company’s Certificate of Incorporation and By-Laws. These Guidelines provide a
framework for the conduct of the Board’s business.
Responsibilities of the Board
The Board, acting directly or through duly constituted committees, should
endeavor to fulfill the following responsibilities to the Company and its
stockholders:
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Oversee the conduct of the Company’s business and evaluate whether the
business is being properly managed;
-
Review, approve and monitor fundamental business and financial strategies
and major corporate actions;
-
Oversee processes designed to ensure the accuracy and completeness of the
Company’s financial statements;
- Monitor the effectiveness of the Company’s internal controls;
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Assess major risks facing the Company, review options for addressing such
risks and oversee all Company risk management procedures, including
operational and strategic;
-
Ensure processes are in place for maintaining the integrity of the Company,
including the integrity of its financial statements, the integrity of the
Company’s compliance with law and ethics, and the integrity of its
relationships with its stakeholders;
-
Evaluate and authorize compensation of the Company’s Chief Executive Officer
(“CEO”) and review and approve the succession planning of the Company’s CEO;
and
-
Oversee the selection, evaluation, development, compensation and succession
planning of the Company’s senior managers.
Director Qualifications
Independence. The Board will be comprised of at least
a majority of independent directors. For purposes of these Guidelines, the
term “independent” shall be interpreted by the Board to meet or exceed the
independence standards of the New York Stock Exchange and any applicable laws,
rules and regulations. The Board shall undertake an annual review of the
independence of each director. Directors have an affirmative obligation to
inform the Board of any material changes in their circumstances or
relationships that may impact their designation by the Board as independent.
Director Qualifications. As a general matter, the
Company seeks directors who will represent the best long-term interests of the
Company’s stockholders. Directors should possess the highest personal and
professional ethics, integrity and values, and be committed to representing
the long-term interests of the stockholders. Additional factors to be
considered include judgment, skill, independence, possible conflicts of
interest, experience with businesses and other organizations of comparable
size or character, and the interplay of the candidate’s experience and
approach to addressing business issues with the experience and approach of
incumbent directors and other new director candidates. The Company’s goal in
selecting directors for nomination to the Board is generally to seek a
well-balanced membership that combines a diversity of experience, skill and
intellect in order to enable the Company to pursue its strategic objectives.
The Board does not believe that arbitrary term limits on directors’ service or
retirement ages are appropriate or in the best interests of the Company, nor
does it believe that directors should automatically expect to be renominated
annually. The performance of each director is evaluated annually by the
Nominating and Corporate Governance Committee.
Confidentiality. The proceedings and deliberations of
the Board and its committees are confidential. Each director will maintain the
confidentiality of information received in connection with his or her service
as a director.
CEO Service on Other Boards. The Company encourages
its CEO to serve on additional company boards which are likely to add
perspective and experience highly valuable to the CEO’s role in the Company,
provided that the time commitment for such service on other company boards is
reasonable and appropriate, as approved in each instance by the Nominating and
Corporate Governance Committee.
Board Leadership Structure
Positions of Chair and CEO. From time to time, the
Board will decide, in its business judgment, whether to have the same person
occupy the offices of Chair and CEO after considering relevant factors,
including the specific needs of the business and the best interests of the
Company and its stockholders. The independent directors should periodically
review, including in connection with the selection of a new CEO, the Board’s
leadership structure and consider whether the position of the Chair should be
held by the CEO or another director.
Board Meetings
Number of Meetings. The Board meets at four regularly
scheduled meetings each year. In addition, the board of directors of the
Company’s principal operating subsidiary, Hamilton Beach Brands, Inc., of
which each of the directors of the Company is a member, meets in person at
four regularly scheduled meetings each year. The Board and the board of
directors of such principal operating subsidiary also meet on other occasions
in person or by telephone at additional special meetings as needed.
Meetings of the Non-Management and Independent Directors.
In accordance with the rules of the New York Stock Exchange, the Company’s
non-management directors meet in executive session, without management, at
least once a year. These executive sessions are typically held following each
regular Board meeting, with the Non-Executive Chairman presiding. In addition,
the independent members of the Board meet at least once a year in separately
scheduled sessions, with the presiding director determined based upon the
context and subject matter of the meeting. Additional meetings of the
independent directors may be scheduled when the independent directors believe
such meetings are desirable.
Agenda and Meeting Materials.
Meeting agendas and other information and materials that are important to the
directors’ understanding of the business to be conducted at Board and
committee meetings or that will facilitate the Board’s or a committee’s
discussion generally will be distributed in advance of those meetings.
Directors are expected to review these materials in preparation for the
meeting. The Board understands that certain items to be discussed at Board or
committee meetings may be extremely confidential or time-sensitive and that
distribution of materials relating to these matters prior to meetings may not
be appropriate or practicable. The Chair will establish the agenda for each
Board meeting. Any director may suggest items for inclusion on the agenda.
Meeting Attendance.
Absent an appropriate excuse, attendance is expected for the full length of
the meeting by all directors at the Company’s Annual Meeting of Stockholders,
at all meetings of the Board and the board of directors of the Company’s
principal operating subsidiary, and at all meetings of each committee of which
a director is a member.
Board Committees
The purpose of the committees of the Board is to help the Board to fulfill its
responsibilities effectively and efficiently, although the committees do not
displace the oversight responsibilities of the Board as a whole.
The Board has established five standing committees of the Board, each of which
has the responsibilities set forth in its respective Charter. Each of the
foregoing committees of the Board will also discharge any other duties or
responsibilities delegated to it from time to time by the Board. The five
standing committees are:
- Audit Review Committee;
- Nominating and Corporate Governance Committee;
- Compensation and Human Capital Committee;
- Planning Advisory Committee; and
- Executive Committee.
Director Compensation
The Compensation and Human Capital Committee will annually review director
compensation, and will make recommendations to the Board. Director
compensation may be paid in cash and equity interests in the Company, and may
consist of annual retainers, meeting fees and such other components as
appropriate. Separate compensation may be provided to members and chairpersons
of committees of the Board. In making its recommendations, the Compensation
Committee will consider such factors as the Compensation Committee deems
appropriate.
Directors who are also employees of the Company shall not receive any
additional compensation for their service as directors.
Director Orientation and Continuing Education
The Secretary of the Company will arrange for new directors to meet with
senior managers of the Company in order for the new director to become
familiar with the Company’s strategic plans, financial statements, and key
policies and practices. This orientation should begin as soon as practicable
after the new director is elected, and should be completed within one year
after the new director joins the Board. From time to time, the Company will
provide to directors presentations from Company and/or third party experts on
topics that will assist the directors in carrying out their responsibilities
and that will enhance the directors’ understanding of changes in the
regulatory environment. In addition, once each year on average, the Board may
visit a facility of one of its operating companies.
Director Access to Management and Independent Advisors
Directors have full and free access to officers and employees of the Company
and its subsidiaries. Any meetings or contacts that a director wishes to
initiate with officers or employees may be arranged through the CEO or
Secretary, or directly by the director. The Company will, on a regular basis,
provide specific opportunities for this type of interaction.
The Board or any committee may retain and terminate such independent advisors,
including attorneys, accountants, investment bankers and other consultants, as
it deems necessary or appropriate to the performance of its duties from time
to time. The Board or committee, as appropriate, will have the sole authority
to approve the fees and other retention terms of such independent advisors.
Board Interaction with Investors, Media and Others
The Board believes that communication and engagement with the Company’s
stockholders and other interested parties is an essential component of the
Company’s corporate governance practices. The Board believes that the Chair,
the CEO and senior managers designated by the Chair or CEO speak for the
Company. Directors may, from time to time, meet or otherwise communicate with
various constituencies that are involved with the Company, but it is expected
that directors would do so with the knowledge of the Chair and the CEO and, in
most instances, at the request of the Chair or the CEO.
Management Succession
The Board will annually review the report of the Compensation Committee
concerning the performance of the CEO. The Board will also annually review the
report of management or the applicable designated committee regarding the
succession plan for the CEO. Succession planning should include policies and
principles for CEO selection and performance review, as well as policies
regarding succession in the event that the CEO retires, resigns or is
incapacitated.
Annual Performance Evaluation of the Board
The Board will annually review the report of the Nominating and Corporate
Governance Committee concerning the performance of the Board and its members.
Such review will include an assessment of the Board’s composition and
independence, the effectiveness of the Board committees, the maintenance and
implementation of these Guidelines and such other matters as the directors may
determine. At least annually, the Board will conduct a self-evaluation to
determine whether the Board and its committees are functioning effectively.
Effect of Guidelines
These Guidelines are intended as one of the components of the flexible
framework within which the Board and its committees direct and oversee the
affairs of the Company. While these Guidelines should be interpreted in the
context of applicable laws, regulations and listing requirements, as well as
in the context of the Company’s Certificate of Incorporation and By-Laws, they
are not intended to establish by their own force any legally binding
obligations.
Amendment of Guidelines
The Board may amend, modify or make exceptions to these Guidelines from time
to time in its discretion and consistent with its duties and responsibilities
to the Company and its stockholders.
Disclosure of Guidelines
Consistent with New York Stock Exchange listing requirements, these Guidelines
are included on the Company’s website and are available upon request in
writing sent to the Secretary of the Company. The Company’s annual report to
stockholders states that these Guidelines are available on the Company’s
website and are available, without charge, upon request in writing sent to the
Secretary of the Company.
August 2023