Exhibit 99.1
THE MIDDLEBY CORPORATION
EXECUTIVE OFFICER INCENTIVE PLAN,
As Amended and Restated
WHEREAS The Middleby Corporation has adopted The Middleby Corporation
Executive Officer Incentive Plan, effective as of December 19, 2005, subject
to the approval of the Company's shareholders; and
WHEREAS the Committee administering the Plan has not granted any Tax
Assistance Awards under the Plan and has determined, pursuant to Section 3(a)
of the Plan, that no Tax Assistance Awards shall be granted under the Plan in
the future;
NOW, THEREFORE, primarily in order to eliminate provisions relating to
Tax Assistance Awards, the Plan is hereby amended and restated as follows:
1. Purposes; Interpretation. The purposes of The Middleby Corporation
Executive Officer Incentive Plan are to reinforce corporate, organizational
and business-development goals; to promote the achievement of year-to-year
financial and other business objectives; and to reward the performance of the
Company's key employees in fulfilling their personal responsibilities. The
Plan is designed and intended to comply, to the extent applicable, with
Section 162(m) of the Code and to be exempt from treatment as a deferred
compensation plan under Section 409A of the Code, and all provisions hereof
shall be construed in a manner to so comply and to be exempt from such
treatment.
2. Definitions. The following terms, as used herein, shall have the
following meanings:
(a) "Award" or "Special Incentive Award" shall mean an incentive
compensation award, granted pursuant to the Plan, which is contingent upon the
attainment of the Performance Goals established by the Committee with respect
to a Performance Period.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
(d) "Committee" shall mean the committee appointed by the Board to
administer the Plan, the composition of which shall at all times satisfy the
provisions of Section 162(m) of the Code.
(e) "Company" shall mean The Middleby Corporation and its successors.
(f) "Participant" shall mean a key employee of the Company who is
selected to participate herein pursuant to Section 4 hereof.
(g) "Performance Goals" shall mean performance goals determined by
the Committee in its sole discretion. Such goals may be based on one or more
of the following criteria, determined in accordance with generally accepted
accounting principles where applicable: (i) earnings before or after interest,
taxes, depreciation, amortization, or extraordinary or special items; (ii) net
income, before or after extraordinary or special items; (iii) return on equity
(gross or net), before or after extraordinary or special items; (iv) earnings
per share, before or after extraordinary or special items; and (v) stock
price. Where applicable, the Performance Goals may be expressed in terms of
attaining a specified level of the particular criteria or the attainment of an
increase or decrease in the particular criteria (expressed in absolute numbers
or a percentage), and may be applied to one or more of the Company, a
subsidiary or affiliate, or a division or strategic business unit of the
Company, or may be applied to the performance of the Company relative to a
market index, a group of other companies or a combination thereof, all as
determined by the Committee. Without limiting the generality of the foregoing,
to the extent not inconsistent with Section 162(m) of the Code, the Committee
shall have the authority to make equitable adjustments in the Performance
Goals in recognition of unusual or non-recurring events affecting the Company,
in response to changes in applicable laws or regulations, or to account for
items of gain, loss or expense determined to be extraordinary or unusual in
nature or infrequent in occurrence or related to the disposal of a segment of
a business or related to a change in accounting principles. The Performance
Goals may include a threshold level of performance below which no compensation
will be earned, levels of performance at which specified compensation will be
earned, and a maximum level of performance beyond which no additional
compensation will be earned. Achievement of each of the foregoing Performance
Goals shall be subject to certification by the Committee.
(h) "Performance Period" shall mean an "Incentive Performance Period"
established with respect to a Special Incentive Award. "Incentive Performance
Periods" shall mean the following five annual periods: January 1,
2006-December 31, 2006; January 1, 2007-December 31, 2007; January 1,
2008-December 31, 2008; January 1, 2009-December 31, 2009; and January 1,
2010-December 31, 2010.
(i) "Plan" shall mean The Middleby Corporation Executive Officer
Incentive Plan, as amended from time to time.
3. Administration.
(a) General. The Plan shall be administered by the Committee. The
Committee shall have the authority in its sole discretion, subject to and not
inconsistent with the express provisions of the Plan, to administer the Plan
and to exercise all the powers and authorities either specifically granted to
it under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Awards; to determine the
time or times at which Awards shall be granted; to determine all of the terms
and conditions (including but not limited to the Performance Goals) relating
to any Award; to determine whether, to what extent, and under what
circumstances an Award may be settled, cancelled or forfeited; to make
adjustments in the Performance Goals; to construe and interpret the Plan and
any Award; to prescribe, amend and rescind rules and regulations relating to
the Plan; and to make all other determinations deemed necessary or advisable
for the administration of the Plan. No member of the Board or the Committee
shall be liable for any action taken or determination made in good faith with
respect to the Plan or any Award granted under the Plan.
The Committee shall consist of two or more persons, each of whom
shall be an "outside director" within the meaning of Section 162(m) of the
Code. The Committee may appoint a chairperson and a secretary and may make
such rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings. All determinations of the
Committee shall be made by a majority of its members either present in person
or participating by conference telephone at a meeting or by written consent.
The Committee may delegate to one or more of its members or to one or more
agents such ministerial duties as it may deem advisable, and the Committee or
any person to whom it has delegated duties as aforesaid may employ one or more
persons to render advice with respect to any responsibility the Committee or
such person may have under the Plan. All decisions, determinations and
interpretations of the Committee shall be final and binding on all persons,
including the Company, each Participant (or any person claiming any rights
under the Plan from or through a Participant) and any Company shareholder.
4. Eligibility. Awards under this Plan shall be granted only to key
employees of the Company who are selected by the Committee in its sole
discretion. In determining the persons to whom Awards shall be granted and the
Performance Goals relating to each Award, the Committee shall take into
account such factors as the Committee shall deem relevant to accomplishing the
purposes of the Plan, as stated in Section 1 hereof.
5. Terms of Awards.
(a) In General. Any Award under the Plan shall be made by the
Committee not later than ninety (90) days after the commencement of the
relevant Performance Period and before twenty-five percent (25%) of the
relevant Performance Period has elapsed. The Committee shall specify with
respect to an Incentive Performance Period, not later than ninety (90) days
after the commencement of the relevant Performance Period and before
twenty-five percent (25%) of the relevant Incentive Performance Period has
elapsed, the Performance Goals applicable to each Special Incentive Award and,
may, in its sole discretion, specify minimum, target and maximum levels
applicable to each Performance Goal. Awards for any Incentive Performance
Period shall be expressed as a dollar amount. Payment in respect of Special
Incentive Awards shall be made only if and to the extent the Performance Goals
with respect to such Incentive Performance Period are attained. A Participant
shall become entitled to any amount otherwise payable with respect to any
Award made hereunder only if the Participant is employed by the Company on the
last day of the applicable Performance Period.
(b) Limit on Special Incentive Award Payments. Notwithstanding
anything to the contrary contained in this Section 5, in no event shall
payment in respect of a Special Incentive Award granted for an Incentive
Performance Period be made to a Participant in an amount that exceeds $3.5
million. The Committee may, in its sole discretion, decrease the amount
otherwise payable to a Participant upon the achievement of Performance Goals
under a Special Incentive Award but in no event may the Committee increase the
amount otherwise payable to a Participant pursuant to a Special Incentive
Award.
(c) Time and Form of Payment. All payments in respect of Awards
granted under this Plan shall be made in cash within two and one-half (2-1/2)
months after the end of the applicable Performance Period. Such payments shall
be made only after achievement of applicable Performance Goals for the
relevant Incentive Performance Period has been certified by the Committee. The
Committee shall meet to consider the extent of any such achievements and make
a decision as to such certification to facilitate timely payment within such
two and one-half (2-1/2) month period of any amounts based on such
certification.
6. General Provisions.
(a) Compliance With Legal Requirements. The Plan and the granting and
payment of Awards, and the other obligations of the Company under the Plan and
any Award shall be subject to all applicable federal and state laws, rules and
regulations, and to such approvals by any regulatory or governmental agency as
may be required.
(b) Nontransferability. Awards shall not be transferable by a
Participant except by will or the laws of descent and distribution.
(c) Participant Rights. No Participant shall have any claim to be
granted any Award under the Plan. Nothing in the Plan or in any Award granted
pursuant hereto shall confer upon any Participant the right to continue in the
employ of the Company or to be entitled to any remuneration or benefits not
set forth in the Plan or under such Award or to interfere with or limit in any
way the right of the Company to terminate the Participant's employment.
(d) Beneficiary. A Participant may file with the Committee a written
designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such designation. If no
designated beneficiary survives a Participant, the executor or administrator
of the Participant's estate shall be deemed to be the Participant's
beneficiary.
(e) Withholding Taxes. The Company shall have the right to withhold
the amount of any taxes that the Company may be required to withhold before
delivery of payment of an Award to a Participant or other person entitled to
such payment, or to make such other arrangements for the withholding of taxes
that the Company deems satisfactory.
(f) Amendment and Termination of the Plan. The Board or the Committee
may at any time and from time to time alter, amend, suspend, or terminate the
Plan in whole or in part; provided, however, that no amendment that requires
shareholder approval in order for the Plan to continue to comply with Section
162(m) of the Code or to comply with any other law, regulation or rule shall
be effective unless the same shall be approved by the requisite vote of the
Company's shareholders. Notwithstanding the foregoing, no amendment or
termination of the Plan shall affect adversely any of the rights of a
Participant, without the Participant's consent, under any Award theretofore
granted under the Plan.
(g) Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan
or any Award shall give the Participant any rights that are greater than those
of a general creditor of the Company.
(h) Governing Law. The Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of Delaware
without giving effect to the conflict of laws principles thereof.
(i) Effective Date. The Plan, as hereby amended and restated, shall
be effective as of December 19, 2005, subject to the approval of the Company's
shareholders.