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CONFIDENTIAL
THE MIDDLEBY CORPORATION
SEVERANCE AGREEMENT
The Middleby Corporation
(“Middleby” or “Employer”) and David B.
Baker (“Employee”) enter into this severance agreement
on this 1st day of March 2004. In recognition of the
Employee’s past and continued service to The Middleby
Corporation, Middleby agrees to provide the Employee with one year
of base salary severance and one year of normal employer provided
health insurance in the event of the Employee’s involuntary
termination of employment from Middleby for any reason other than
Cause. Cause shall mean gross negligence, willful misconduct,
breach of fiduciary duty involving personal profit, substance
abuse, or commission of a felony.
This one-year base salary
severance and health insurance guarantee to the Employee will also
be in effect in the event of a Change of Control of Middleby and
shall be considered a liability of the successor owner of Middleby.
In the event of a Change of Control of Middleby, Employee shall
have the right at any time within the six-month period immediately
following the Change of Control to terminate his employment by
providing written notice to Middleby or its Successor. Upon
providing such notice of termination Employee shall be entitled to
receive one-year of base salary severance and one year of normal
employer provided health insurance. For purposes of this agreement
a Change of Control shall mean any twenty-five percentage point
increase in the percentage of outstanding voting securities of The
Middleby Corporation hereafter held by any person or group of
persons who agree to act together for the purpose of acquiring,
holding, voting, or disposing of such voting securities as compared
to the percentage of outstanding voting securities of The Middleby
Corporation held by such person or group of persons on the date
hereof.
Example: On
February 11, 2004 individual A owns 2.42% of the total outstanding
voting securities of The Middleby Corporation. Thereafter,
individual A commences a series of open market and private
purchases, and on March 1, 2004 for the first time his holdings
exceed 27.42% of the outstanding voting securities of The Middleby
Corporation. A Change of Control occurs on March 1,
2004.
In addition, if the Employee is
involuntarily terminated other than for Cause by Middleby or its
Successor, incentive compensation under the Management Incentive
Plan for any year shall be deemed to have accrued as of the date of
termination if and to the extent that incentive compensation under
the Management Incentive Plan would have been payable to Employee
if he had been employed on the last day of such fiscal year and
shall be (i) pro rated based on the number of days that Employee
was employed during the fiscal year and (ii) payable in the
following fiscal year, on the earlier of April 1 or at the same
time as i
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