THE MIDDLEBY CORPORATION
RETIREMENT PLAN FOR
INDEPENDENT DIRECTORS
THIS PLAN is adopted as of January 1, 1995 (the "Effective
Date") by The Middleby Corporation, a Delaware corporation (the
"Company"), for the benefit of its qualifying "Independent
Directors."
WHEREAS, in consideration of the good and valuable services
to be rendered to the Company by Independent Directors and in
order to offer the Independent Directors a package of
remuneration that is competitive with that which they could
expect to secure as directors elsewhere in the Company's
industry, the Company desires to offer Independent Directors this
Retirement Plan; and
WHEREAS, the Company intends that this Plan will be
structured so that Independent Directors will not be subject to
income tax liability with respect to their rights to retirement
benefits until payments are actually received;
NOW THEREFORE, the Company promises as follows:
1. ELIGIBLE DIRECTORS. Every director of the Company will
become a "Participant" in this Plan on the first date on which he
or she concurrently: (i) holds the office of a director; and (ii)
is not an employee of the Company or any of the Company's
subsidiaries, or the Company's parent or any subsidiaries of the
Company's parent ("Affiliates"). A director will be referred to
as an "Independent Director" herein when he or she meets both of
the preceding requirements concurrently. If an Independent
Director loses his or her status as such by virtue of becoming an
employee of the Company or an Affiliate, he or she will lose the
status of a Participant hereunder until such time as he or she
again becomes an Independent Director.
2. ELIGIBILITY FOR BENEFITS. Each Participant will become
entitled to benefits under this Plan when he or she retires from
the Board at the annual meeting following the date he or she
attains age 70; provided, however, that if a director had
attained age 70 prior to the Effective Date, he or she will be
entitled to benefits hereunder upon his or her retirement from
the Board. Only those who are Independent Directors at the time
of such retirement will be eligible for benefits hereunder.
3. BENEFITS PAYABLE. Each Participant who becomes
entitled to benefits hereunder will be paid, each calendar
quarter, 25% of his or her last annual retainer received prior to
retirement. "Last annual retainer" will mean the annual rate of
the retainer payable in the year of the Participant's retirement
from the Board and not the retainer payments actually made to the
Participant in the twelve months immediately preceding retirement
unless, coincidentally, the Participant's retirement coincides
with the end of a year over which retainer rates are set. Fees
received for acting as a committee chairperson will not be
included as part of the Participant's "Last annual retainer."
Payments hereunder will be made on the first day of each calendar
quarter beginning with the calendar quarter that begins with or
next follows the date of the Participant's retirement from the
Board. Payments will be made over a period equal in length to
the number of full "Years of Service" rendered by the Participant
to the Company as an Independent Director.
4. YEARS OF SERVICE. For the purposes of paragraph 3 and
as a limitation on the period over which payments hereunder will
be made, no more than ten Years of Service as an Independent
Director will be taken into account. For the purpose of
calculating benefits, Years of Service will be measured in 365-
day periods beginning with the date on which the Participant
first becomes an Independent Director and ending on the date he
or she retires from the Board. Only the last period of
uninterrupted service as an Independent Director will be
considered for determining a Participant's Years of Service and
service as an Independent Director that preceded a period of
service as an employee/director will be ignored. Periods of
service as an Independent Director that were performed prior to
the Effective Date will be considered Years of Service hereunder,
subject to the other rules contained herein.
5. SURVIVOR'S RIGHTS. There will be no survivor's rights
under this Plan and if a Participant should die before all
payments owed under paragraph 3 are made, the Company will have
no further obligation to make any additional payments hereunder
with respect to that Participant.
6. FORFEITURES. If a Participant ceases to be a director
of the Company prior to attaining age 70 and for any reason
including, but not limited to death, disability, contraction of
the size of the Board, liquidation of the Company without a
successor in interest, resignation or failure to be reelected,
nothing will be owed to him or her under this Plan. If a
Participant attains pay status and the Company subsequently
determines that he or she breached a fiduciary duty to the
Company or its Affiliates while acting as a director, or
committed fraud or an act of gross misconduct against the Company
or any of its affiliates while an employee of the same, nothing
will thereafter be owed to such Participant or his/her
beneficiary hereunder.
7. NO FUNDING, NO ALIENATION. The Company will not be
obligated to make any investment or to set aside any funds to
discharge its obligation hereunder. If the Company does decide
to make investments or set aside funds to facilitate its obligation
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to pay benefits, the Participants and their
beneficiaries will not have a special or preferred interest in
such investment assets. Those assets will not be registered in
the Participants' names and will always remain the property of
the Company, even after Participants becomes entitled to payments
of benefits. The Participants' rights and the rights of their
beneficiaries under this Plan will be no greater than those of
any other general unsecured creditor of the Company. The
Participants and their beneficiaries may not assign, pledge,
encumber or in any other way attempt to anticipate their rights
under this Plan, and any attempt to do so will not bind the
Company and will not be honored by the Company.
8. CHANGE IN CORPORATE FORM. Subject to the provisions of
paragraph 9, this Plan shall be binding upon the Company and upon
its successor in interest after any merger, acquisition of the
Company, entry into receivership or other reorganization;
provided, however, that in anticipation of a merger of the
Company with, or an acquisition of the Company by an entity that
is not controlled by the individuals who or entity(ies) that
control the Company prior to such merger or acquisition, the
Company may, in its discretion, discharge its obligation to make
payments hereunder through an immediate lump sum payment.
9. WITHHOLDING AND PAYROLL TAXES. The gross amounts that
are described above as amounts owed by the Company will be
reduced by any required income, payroll or other tax withholding,
the ultimate incident to which is imposed by law upon the payee.
10. AMENDMENT AND TERMINATION. The provisions of this Plan
may be amended and the Plan may be terminated by the Company, but
only in a writing and only with respect to future accruals of
benefits, such that the effect of an amendment will be to
terminate future crediting of additional Years of Service and a
Participant's entitlement to benefits will be determined by his
or her status as an Independent Director upon attaining age 70
and retiring.
11. MISCELLANEOUS.
(a) Nothing in this Plan will give the Participant a separate
right to continued status as a director of the Company.
(b) Nothing in this Agreement will be deemed as the Company's
guarantee or promise to any Participant of any particular tax
treatment for the credits or payments referred to herein.
(c) This Agreement will be construed and governed under the laws
of the State of Illinois.
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(d) Any notice, election or communication referred to herein
will be in writing and will be hand delivered or mailed to the
last known address of the recipient.
(e) This Plan will not affect or impair the rights and
obligations of the parties under any other contract or
arrangement entered into between them: provided, however, that
amounts credited to Participants hereunder will not be considered
part of their compensation for the purposes of the Company's
pension, profit-sharing, 401(k), life insurance, long term
disability, vacation, bonus or other relevant program under which
benefits are calculated in reference to compensation.
THE MIDDLEBY CORPORATION
By: /s/ David P. Riley
-----------------------
David P. Riley
Its President and
Chief Executive Officer
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