EX-10.2



 





Exhibit 10.2




HAMILTON BEACH, INC.




NON-EMPLOYEE DIRECTORS’ EQUITY COMPENSATION PLAN




1. Purpose of the Plan




     The purpose of this Non-Employee Directors’ Equity Compensation Plan (the “Plan”) is to
provide for the payment to the non-employee directors of Hamilton Beach, Inc. (the “Company”) of a
portion of their annual retainer (and, at their election, other fees or retainers or the remaining
portion of the annual retainer) in capital stock of the Company in order to further align the
interests of such directors with the stockholders of the Company and thereby promote the long-term
profits and growth of the Company.



2. Effective Date/Term




     This Plan shall be effective as of, and contingent upon, the occurrence of the “Spin-Off
Date” as such term is defined in the Amended and Restated Spin Off Agreement dated as of April 25,
2007, by and among NACCO Industries, Inc., Housewares Holding Company, Hamilton Beach, Inc. and
Hamilton Beach/Proctor-Silex, Inc. The term of this Plan shall be ten years from the occurrence
of the Spin-Off Date.



3. Definitions




     (a) “Average Share Price” means the average of the closing price per share on the New York
Stock Exchange on the Friday (or if Friday is not a trading day, the last trading day before such
Friday) for Class A Common Stock for each week of the calendar quarter ending on the Quarter Date.



     (b) “Change in Control” means the occurrence of (i), (ii), (iii) or (iv) below:



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	 	i.	 	The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of voting securities of the Company after the Spin-Off
Date where such acquisition causes such Person to own 50% or more of the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
“Outstanding Voting Securities”); provided, however, that for purposes of
this Subsection (i), the following acquisitions shall not be deemed to
result in a Change in Control:






          (A) any acquisition of voting securities directly from the Company
that is approved by the Incumbent Board (as defined in Subsection (ii),
below),




          (B) any acquisition of voting securities by the Company or a
Subsidiary,




          (C) any acquisition of voting securities by (i) any employee benefit
plan (or related trust) sponsored or maintained by the Company, (ii) the
Company or a Subsidiary, or (iii) any member of the Rankin or Taplin
families or any corporation, partnership, trust or other entity owned or
controlled by such families (an “Interested Party”),



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          (D) any acquisition of voting securities by any Person pursuant to a
transaction described in clauses (A), (B) and (C) of Subsection (iii)
below; and




provided, further, that if any Person’s beneficial ownership of the Outstanding
Voting Securities reaches or exceeds 50% as a result of a transaction
described in clause (A) or (B) above, and such Person subsequently
acquires beneficial ownership of additional voting securities of the
Company, such subsequent acquisition shall be treated as an acquisition
that causes such Person to own 50% or more of the Outstanding Voting
Securities; and provided, further, that if at least a majority of the
members of the Incumbent Board determines in good faith that a Person has
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the Outstanding
Voting Securities inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares so that such Person beneficially
owns (within the meanings of Rule 13d-3 promulgated under the Exchange
Act) less than 50% of the Outstanding Voting Securities, then no Change in
Control shall have occurred as a result of such Person’s acquisition; or




	 	ii.	 	individuals who, as of the Spin-Off Date, constitute
the Board of Directors of the Company (the “Incumbent Board” (as modified
by this clause (ii)) cease for any reason to constitute at least a
majority




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	 	 	 	of such Board of Directors; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee for director,
without objection to such nomination) shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board of Directors; or
	 
	 	iii.	 	the consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets of another
corporation, or other transaction (“Business Combination”) excluding,
however, such a Business Combination pursuant to which all three of the
following apply:






          (A) the individuals and entities who were the ultimate beneficial
owners of voting securities of the Company immediately prior to such
Business Combination beneficially own, directly or



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indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case may be, of the entity resulting from such Business Combination
(including, without limitation, an entity that as a result of such
transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries),




          (B) no Person (excluding any Interested Party, the Company or such
entity resulting from such Business Combination) beneficially owns,
directly or indirectly 30% or more of the combined voting power of the
then outstanding securities entitled to vote generally in the election of
directors of the entity resulting from such Business Combination, and




          (C) at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business Combination; or




	 	iv.	 	approval by the Company’s shareholders of a complete
liquidation or dissolution of the Company except pursuant to a Business
Combination described in clauses (A), (B) and (C) of Subsection (iii),
above.




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     (c) “Class A Common Stock” means the Company’s Class A Common Stock, par value $0.01 per
share.



     (d) “Director” means an individual duly elected or appointed as a director of the Company who
is not also an employee of the Company or any of its subsidiaries.



     (e) “Extraordinary Event” shall have the meaning set forth in Section 5.



     (f) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any
successor statute.



     (g) “Payment Deadline” means the date which is two and one-half months after each Quarter
Date.



     (h) “Quarter Date” means the last day of the calendar quarter for which a Required Amount is
earned.



     (i) “Required Amount” means an amount of money constituting that portion (as determined from
time to time by the Board of Directors) of a Director’s annual retainer earned by such Director
for services as a director of the Company for any calendar quarter, which amount is payable in
Shares pursuant to this Plan.



     (j) “Rule 16b-3” means Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (or
any successor rule to the same effect), as in effect from time to time.



     (k) “Shares” means shares of Class A Common Stock which are issued to a Director pursuant to,
and with such restrictions as are imposed by, the terms of this Plan and which represent the
Director’s Required Amount.



     (l) “Transfer” shall have the meaning set forth in Section 4.2(a).



     (m) “Voluntary Amount” shall have the meaning set forth in Section 4.2(b).



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     (n) “Voluntary Shares” means shares of Class A Common Stock which are issued to a Director in
accordance with Section 4.1(c) and which represent the Director’s Voluntary Amount.



4. Shares and Voluntary Shares




     4.1 Required Amount and Voluntary Amount



     (a) Required Amount. From time to time, the Board of Directors of the Company shall
determine (i) the amount of the annual retainer to be paid to each Director for each calendar
quarter of a year, (ii) the portion of such retainer that shall be paid in cash and (iii) the
equity portion of such retainer that is required to be paid in Shares (the “Required Amount”).



     (b) Voluntary Shares. For any calendar quarter, a Director may elect to have up to
100% of the cash component of the annual retainer payable for such quarter, and any other cash to
be earned by the Director for such quarter for services as a director of the Company (collectively
referred to as a “Voluntary Amount”), applied to the issuance of Voluntary Shares pursuant to this
Plan; provided that the Director must notify the Company in writing of such election prior to the
first day of the first calendar quarter for which such election is made, which election will be
irrevocable after such date for such calendar quarter and shall remain in effect for future
calendar quarters unless or until revoked by the Director prior to the first day of a calendar
quarter. The Company shall use any such Voluntary Amount to issue the shares of Class A Common
Stock to fulfill its obligation to issue Voluntary Shares to a Director pursuant to Section
4.1(c).



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     (c) Payment. Promptly following each Quarter Date (and, in any event, no later than
the Payment Deadline), the Company shall issue to each Director (or to a trust for the benefit of
a Director, or such Director’s spouse, children or grandchildren, if so directed by the Director)
(i) a number of whole Shares equal to the Required Amount earned for services rendered to the
Company by such Director for the calendar quarter ending on such Quarter Date divided by the
Average Share Price and (ii) a number of whole Voluntary Shares equal to such Director’s Voluntary
Amount for such calendar quarter divided by the Average Share Price. To the extent that the
application of the foregoing formulas would result in fractional Shares or fractional Voluntary
Shares, no fractional shares of Class A Common Stock shall be issued by the Company pursuant to
this Plan, but instead, such amount shall be paid to the Director in cash at the same time the
Shares and Voluntary Shares are issued to the Director. Shares and Voluntary Shares shall be fully
paid, nonassessable shares of Class A Common Stock. Shares shall be subject to the restrictions
set forth in this Plan, whereas Voluntary Shares shall not be so restricted. Shares and Voluntary
Shares may be shares of original issuance, treasury shares or a combination of the foregoing and,
in the discretion of the Company, may be issued as certificated or uncertificated shares. The
Company shall pay any and all fees and commissions incurred in connection with the purchase by the
Company of shares of Class A Common Stock which are to be Shares or Voluntary Shares, and the
transfer to Directors of Shares or Voluntary Shares.



     4.2 Restrictions on Shares.



     (a) Restrictions on Transfer of Shares. No Shares shall be assigned, pledged,
hypothecated or otherwise transferred by a Director or any other person, voluntarily or



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involuntarily, other than (i) by will or by the laws of descent and distribution, (ii)
pursuant to domestic relations orders meeting the definition of a qualified domestic relations
order under Section 206(d)(3)(B) of ERISA (“QDRO”) or (iii) to a trust for the benefit of a
Director, or such Director’s spouse, children or grandchildren. The restrictions on Shares set
forth in this Section shall lapse for all purposes and shall be of no further force or effect upon
the earlier to occur of (A) five years after the Quarter Date with respect to which such Shares
were issued, (B) the date of the death or permanent disability of the Director, (C) five years (or
earlier with the approval of the Board of Directors) after the Director’s retirement from the
Board of Directors of the Company, (D) the date that a Director is both retired from the Board of
Directors of the Company and has reached 70 years of age, (E) the transfer of Shares to a person
other than the Director pursuant to a QDRO, but only as to those Shares so transferred, (F) on the
date of a Change in Control or (G) at such other time as determined by the Board of Directors in
its sole and absolute discretion. Following the lapse of restrictions pursuant to this
Subsection (a), at the Director’s request, the Company shall take all such action as may be
necessary to remove such restrictions from the stock certificates, or other applicable records
with respect to uncertificated shares, representing the Shares, such that the Shares shall be
fully paid, nonassessable and unrestricted by the terms of this Plan.



     (b) Dividends, Voting Rights, Exchanges, Etc. Except for the restrictions set forth
in this Section 4.2 and any restrictions required by law, Directors shall have all rights of a
stockholder with respect to their Shares including the right to vote, to receive dividends as and
when declared by the Board of Directors and paid by the Company.



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Except for any restrictions required by law, Directors shall have all rights of a stockholder
with respect to their Voluntary Shares. All securities received by a Director with respect to
Shares in connection with any Extraordinary Event shall be deemed to be Shares for purposes of
this Plan and shall be restricted pursuant to the terms of this Plan to the same extent and for
the same period as if such securities were the original Shares with respect to which they were
issued (subject to the terms of Section 4.2(a) above), unless the Board of Directors of the
Company, in its sole and absolute discretion, eliminates such restrictions or accelerates the time
at which such restrictions on transfer shall lapse.



     (c) Restriction on Transfer of Rights to Shares. No rights to Shares or Voluntary
Shares shall be assigned, pledged, hypothecated or otherwise transferred by a Director or any
other person, voluntarily or involuntarily, other than (i) by will or by the laws of descent and
distribution, or (ii) pursuant to a QDRO.



     (d) Legend. The Company shall cause a legend, in substantially the following form,
to be placed on each certificate, or other applicable record(s) with respect to uncertificated
shares, for the Shares:




THE[SE] SHARES [REPRESENTED BY THIS CERTIFICATE] ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN THE HAMILTON BEACH, INC.
NON-EMPLOYEE DIRECTORS’ EQUITY COMPENSATION PLAN (“PLAN”). SUCH
RESTRICTIONS ON TRANSFER UNDER THE PLAN SHALL LAPSE FOR ALL PURPOSES AND
SHALL BE OF NO FURTHER FORCE OR EFFECT AFTER                     , OR SUCH
EARLIER TIME AS PROVIDED IN THE PLAN.



5. Amendment, Termination and Adjustments




     (a) The Board of Directors of the Company may alter or amend the Plan from time to time or
may terminate it in its entirety; provided, however, that no such action



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shall, without the consent of a Director, affect the rights in any Shares or Voluntary Shares
issued or to be issued to such Director. All Shares issued prior to any termination of this Plan
shall continue to be subject to the terms of this Plan; provided that the transfer restrictions on
such Shares shall lapse as provided in Section 4.2(a) or, if earlier, at the time specified by the
Board of Directors, in its sole discretion.



     (b) Notwithstanding the provisions of Subsection (a), without further approval by the
stockholders of the Company no such amendment or termination shall (i) increase the total number
of shares of Class A Common Stock to be issued under this Plan specified in Section 6 (except that
adjustments and additions expressly authorized by this Section shall not be limited by this
clause (i)), (ii) change the provisions of Section 4.1(c) that specify the timing of the issuance
or the calculation of the number of Shares to be issued to a Director, (iii) cause Rule 16b-3 to
become inapplicable to this Plan or (iv) make any other change for which stockholder approval
would be required under applicable stock exchange requirements.



     (c) The Board of Directors may make or provide for such adjustments in the number and kind of
shares of Class A Common Stock specified in Section 6 as the Board of Directors, in its sole
discretion, exercised in good faith, may determine is equitably required to reflect (i) any stock
dividend, stock split, combination of shares, recapitalization or any other change in the capital
structure of the Company, (ii) any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets, issuance of rights
or warrants to purchase securities, or (iii) any other corporate transaction or event having an
effect similar to any of the foregoing ( collectively referred to as an “Extraordinary Event).



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6. Shares Subject to Plan




     Subject to adjustment as provided in this Plan, the total number of shares of Class A Common
Stock which may be issued under this Plan shall be 250,000.



7. General Provisions




     (a) No Continuing Right as Director. 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
Director any right to continue as a director of the Company or any subsidiary of the Company.



     (b) Governing Law. The provisions of this Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its conflict of laws rules.



     (c) Cash If Shares Not Issued. Pending issuance of Shares and Voluntary Shares, all
Required Amounts and Voluntary Amounts are the property of the Directors and shall be paid to them
in cash by no later than the Payment Deadline in the event that Shares and Voluntary Shares are
not issued.



     (d) 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 singular shall also include within its meaning the plural, and vice
versa.




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