Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) dated as of February 19, 2018 is
entered into by and among The Middleby Corporation, a Delaware corporation (the
“Company”), Middleby Marshall Inc., a Delaware corporation (“MMI”),
(collectively the “Employer”), and David Brewer (“Employee”).

 

R E C I T A L S

 

Employee currently serves the Company as its Chief Operating Officer, Commercial
Foodservice Equipment Group; and

 

The Employer desires to continue the employment relationship and Employee
desires to serve the Employer in such capacity, all pursuant to the terms and
conditions described herein.

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, Employee’s employment by the Employer, the compensation to be paid
Employee while employed by the Employer, and other good and valuable
consideration, the receipt and sufficiency of which is acknowledged, the parties
agree as follows:

 

1.                                      Employment. The Employer agrees to
employ Employee and Employee agrees to be employed by the Employer subject to
the terms and provisions of this Agreement.

 

2.                                      Term. The term of this Agreement shall
be for a period commencing on January 1, 2018 (the “Effective Date”) and ending
on December 31, 2020, unless sooner terminated as provided in Section 5.

 

3.                                      Duties. Employee shall serve as Chief
Operating Officer, Commercial Foodservice Equipment Group of the Company, or in
such other executive capacities as the Board of Directors of the Company or MMI,
as applicable (the “Board”), may designate and shall have such powers and duties
as may be from time to time prescribed by the Board. Employee shall devote
substantially all of his time and effort as reasonably may be required for him
to perform the duties and responsibilities to be performed by him under the
terms of this Agreement.

 

4.                                      Compensation.

 

(a)                                 Base Salary. The Employer shall pay to
Employee a base salary at a rate per annum of $750,000, payable in accordance
with the normal payroll practices of Employer.

 

(b)                                 Incentive Compensation. Employee shall be
eligible to participate in, and earn an annual bonus under, the management
incentive programs adopted by the Employer from time to time, subject to all
terms and conditions thereof, based upon the achievement of performance targets
established in the sole discretion of Employer.

 

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5.                                      Termination.

 

(a)                                 Employee’s employment hereunder may be
terminated by Employer or by Employee at any time, or by the death of Employee.
Such termination shall automatically terminate all of the Employer’s obligations
not theretofore accrued under this Agreement other than as specifically set
forth in this Agreement or in any employee benefit plan, program or arrangement
in which Employee participates. If the Employer terminates Employee’s employment
under this Agreement (as hereafter amended or extended) without “Cause,” as
defined below, or if employment is terminated due to Employee’s death or
disability, incentive compensation under the Employer’s annual incentive
programs  for any year shall be deemed to have accrued as of the date of
termination if and to the extent that incentive compensation under such annual
incentive program 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 March 15 or at the same time as
incentive compensation under the annual incentive program for such year is paid
to those employees who are still employed by the Employer. Notwithstanding the
foregoing, upon the occurrence of a Change of Control (as defined in the Value
Creation Incentive Plan), (i) the provisions of Section 9 of the Value Creation
Incentive Plan shall apply with respect to Employee’s entitlement to incentive
compensation with respect to the then current Performance Period (as defined in
the Value Creation Incentive Plan) and any completed Performance Periods at the
time of the Change of Control and (ii) the Compensation Committee of the Board
may in its sole discretion determine that the amount of incentive compensation
to be paid under the Value Creation Incentive Plan shall be in respect of the
full Performance Period for the year of the Change of Control.

 

(b)                                 Notwithstanding anything to the contrary
contained in this Agreement, in the event that the Employer terminates
Employee’s employment under this Agreement (as hereafter amended or extended)
without “Cause,” as defined below, (for this purpose, not including termination
due to Employee’s death or disability), Employee shall be entitled to a lump sum
amount equal to two (2) times Employee’s annual base salary as in effect
immediately prior to the date of the termination, payable in one lump sum within
thirty (30) days of the date of termination.

 

(c)                                  If the duties assigned by the Employer to
Employee are materially diminished, or become inconsistent with those assigned
to the Chief Operating Officer of a principal division of a similarly situated
publicly traded company, and such change in duties is not cured by the Employer
within ten (10) days following receipt by the Board of written notice from
Employee, such change in duties shall be deemed a termination by the Employer of
Employee’s employment without Cause, pursuant to the terms of this Agreement,
and Employee shall be entitled to resign his employment hereunder and to
thereafter receive all rights, benefits and payments set forth in Sections
5(a) and (b).

 

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(d)                                 For purposes of this Section 5, the term
“Cause” shall mean termination of Employee’s employment due to his willful
misconduct in respect of his obligations to the Company occurring during the
course of his employment, including violations of the Company’s code of conduct
or code of ethics, which in either case results in or would reasonably be
expected to result in material damage to the property, business or reputation of
the Company or its affiliates; provided, however, that in no event shall
unsatisfactory job performance alone be deemed to be Cause; and provided,
further, that, to the extent curable, Employee shall have 30 calendar days after
receiving written notice from the Company in which to cure any of the actions or
inactions that would otherwise result in Cause.

 

(e)                                  Notwithstanding anything to the contrary
contained herein (or any other agreement entered into by and between the
Employer and Employee or any incentive arrangement or plan offered by the
Company), in the event that any amount or benefit paid or distributed to
Employee pursuant to this Agreement, taken together with any amounts or benefits
otherwise paid to Employee by the Employer (collectively, the “Covered
Payments”), would constitute an “excess parachute payment” as defined in
Section 280G of the Code, and would thereby subject Employee to an excise tax
under Section 4999 of the Code (an “Excise Tax”), the provisions of this
Section 5(e) shall apply.  If the aggregate present value (as determined for
purposes of Section 280G of the Code) of the Covered Payments exceeds the amount
which can be paid to Employee without Employee incurring an Excise Tax, then,
solely to the extent that Employee would be better off on an after tax basis by
receiving the maximum amount which may be paid hereunder without Employee
becoming subject to the Excise Tax, as determined by Employee in his sole
discretion, the amounts payable to Employee under this Agreement (or any other
agreement by and between the Employee and Employee or pursuant to any incentive
arrangement or plan offered by the Company) shall be reduced (but not below
zero) to the maximum amount which may be paid hereunder without Employee
becoming subject to the Excise Tax (such reduced payments to be referred to as
the “Payment Cap”).  In the event Employee receives reduced payments and
benefits as a result of application of this Section 5(e), Employee shall have
the right to designate which of the payments and benefits otherwise set forth
herein (or any other agreement between the Company and Employee or any incentive
arrangement or plan offered by the Company) shall be received in connection with
the application of the Payment Cap, subject to the following sentence. 
Reduction shall first be made from payments and benefits which are determined
not to be nonqualified deferred compensation for purposes of Section 409A of the
Code, and then shall be made (to the extent necessary) out of payments and
benefits which are subject to Section 409A of the Code and which are due at the
latest future date.

 

6.                                      Payment. Payment of all compensation and
benefits to Employee hereunder shall be made in accordance with the relevant
policies of the Employer in effect from time to time and shall be subject to all
applicable employment and withholding taxes.

 

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7.                                      Successors. This Agreement shall be
binding upon, and inure to the benefit of and be enforceable by, Employer and
its successors and assigns. This Agreement shall inure to the benefit of
Employee’s heirs, legatees, legal representatives and assigns, but neither this
Agreement nor any right or interest hereunder shall be assignable by Employee
without Employer’s prior written consent.

 

8.                                      Notices. All notices, requests, demands
and other communications made or given in connection with this Agreement shall
be in writing and shall be deemed to have been duly given (a) if delivered, at
the time delivered or (b) if mailed, at the time mailed at any general or branch
United States Post Office enclosed in a certified post-paid envelope addressed
to the address of the respective parties as follows:

 

To the Company:

1400 Toastmaster Drive

 

Elgin, Illinois 60120

 

Attention: Chief Executive Officer

 

 

 To MMI:

1400 Toastmaster Drive

 

Elgin, Illinois 60120

 

Attention: Chief Executive Officer

 

 

To Employee:

David Brewer

 

1400 Toastmaster Drive,

 

Elgin, Illinois 60120

 

or to such other address as the party to whom notice is to be given may have
previously furnished to the other party in writing in the manner set forth
above, provided that notices of changes of address shall only be effective upon
receipt.

 

9.                                      Modifications and Waivers. This
Agreement may be modified or amended only by a written instrument executed by
the Employer and Employee. No term or condition of this Agreement shall be
deemed to have been waived nor shall there be any estoppel to enforce any
provision of this Agreement except by written instrument of the party charged
with such waiver or estoppel.

 

10.                               Entire Agreement. This Agreement supersedes
all prior agreements between the parties hereto relating to the subject matter
hereof and constitutes the entire agreement of the parties hereto relating to
the subject matter hereof.

 

11.                               Law Governing. The validity, interpretation,
construction, performance and enforcement of this Agreement shall be governed by
the laws of the State of Illinois without regard to principles of conflicts of
laws.

 

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12.                               Invalidity. The invalidity or unenforceability
of any term or terms of this agreement shall not invalidate, make unenforceable
or otherwise affect any other term of this Agreement which shall remain in full
force and effect.

 

13.                               Headings. The headings contained herein are
for reference only and shall not affect the meaning or interpretation of this
Agreement.

 

14.                               Joint and Several Liability. The liability
hereunder of the Company and MMI shall be joint and several.

 

15.                               Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

 

16.                               Section 409A. It is intended that the payments
and benefits under this Agreement comply with, or as applicable, constitute a
short-term deferral or otherwise be exempt from, the provisions of Section 409A
of the Code and the regulations and other guidance issued thereunder
(“Section 409A”). The Employer shall administer and interpret this Agreement in
a manner so that such payments and benefits comply with, or are otherwise exempt
from, the provisions of Section 409A. Any provision that would cause this
Agreement to fail to satisfy Section 409A will have no force and effect until
amended to comply therewith (which amendment may be retroactive to the extent
permitted by Section 409A). Notwithstanding anything contained herein to the
contrary, to the extent required in order to avoid accelerated taxation and/or
tax penalties under Section 409A, Employee shall not be considered to have
terminated employment with the Employer for purposes of this Agreement and no
payments shall be due to Employee under this Agreement providing for payment of
amounts on termination of employment unless Employee would be considered to have
incurred a “separation from service” from the Employer within the meaning of
Section 409A. To the extent required in order to avoid accelerated taxation
and/or tax penalties under Section 409A, amounts that would otherwise be payable
and benefits that would otherwise be provided pursuant to this Agreement during
the six-month period immediately following Employee’s termination of employment
shall instead be paid on the first business day after the date that is six
months following Employee’s termination of employment (or upon death, if
earlier). In addition, for purposes of this Agreement, each amount to be paid or
benefit to be provided to Employee pursuant to this Agreement which constitutes
deferred compensation subject to Section 409A shall be construed as a separate
identified payment for purposes of Section 409A.

 

With regard to any provision herein that provides for reimbursement of costs and
expenses or in-kind benefits, except as permitted by Section 409A, (i) the right
to reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit, (ii) the amount of expenses eligible for
reimbursement, of in-kind benefits, provided during any taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, and (iii) such payments shall be made on or
before the last day of Employee’s taxable year following the taxable year in
which the expense occurred. Any tax gross-up payment as provided herein shall be
made in any event no later than the end of the calendar year immediately
following the calendar year in which Employee remits the related taxes, and any
reimbursement of expenses incurred due to a tax audit or litigation shall be
made no later than the end of the calendar year immediately following the
calendar year in which

 

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the taxes that are the subject of the audit or litigation are remitted to the
taxing authority, or, if no taxes are to be remitted, the end of the calendar
year following the calendar year in which the audit or litigation is completed.

 

17.                               Indemnification.  In his capacity as a
director, manager, officer, or employee of the Employer or serving or having
served any other entity as a director, manager, officer, or employee at the
Employer’s request, Employee shall be indemnified and held harmless by the
Employer to the fullest extent allowed by law from and against any and all
losses, claims, damages, liabilities, expenses (including legal fees and
expenses), judgments, fines, settlements and other amounts arising from any and
all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, in which Employee may be involved, or
threatened to be involved, as a party or otherwise by reason of Employee’s
status, which relate to or arise out of the Employer, their assets, business or
affairs. The Company shall advance all expenses incurred by Employee in
connection with the investigation, defense, settlement or appeal of any civil or
criminal action or proceeding referenced in this Section 17, including but not
necessarily limited to legal counsel, expert witnesses or other
litigation-related expenses.  Employee shall be entitled to coverage under the
Employer’s or the Company’s directors and officers liability insurance policy in
effect at any time in the future to no lesser extent than any other officers or
directors of the Employer.  After Employee is no longer employed by the
Employer, the Employer shall keep in effect the provisions of this Section 17,
which provision shall not be amended except as required by applicable law or
except to make changes permitted by law that would enlarge the right of
indemnification of Employee.  Notwithstanding anything herein to the contrary,
the provisions of this Section 17 shall survive the termination of this
Agreement for any reason and the expiration of the term of this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year set forth above.

 

 

THE MIDDLEBY CORPORATION

 

 

 

 

 

 

By:

/s/ John R. Miller III

 

 

John R. Miller III

 

 

Chairman, The Middleby Corporation

 

 

Compensation Committee

 

 

 

 

 

 

 

MIDDLEBY MARSHALL INC.

 

 

 

 

 

 

By:

/s/ John R. Miller III

 

 

John R. Miller III

 

 

Chairman, The Middleby Corporation

 

 

Compensation Committee

 

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

 

By:

/s/ David Brewer

 

 

David Brewer

 

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