<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE MIDDLEBY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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Notes:
<PAGE>
THE MIDDLEBY CORPORATION
---------------------------------------------
1400 TOASTMASTER DRIVE
ELGIN, ILLINOIS 60120
April 11, 1997
Notice of Annual Stockholders Meeting:
You are hereby notified that the Annual Meeting of Stockholders of The Middleby
Corporation (the "Company") will be held at the Company's offices located at
1400 Toastmaster Drive, Elgin, Illinois at 10:00 a.m. local time, on Thursday,
May 15, 1997, for the following purposes:
1. To elect ten directors to hold office until the 1998 Annual Meeting.
2. To consider a proposal to ratify the selection of Arthur Andersen LLP as
independent auditors of the Company for the fiscal year ending January 3,
1998.
3. To transact such other business as may properly come before the Meeting or
any adjournment thereof.
The Board of Directors has fixed the close of business on March 21, 1997 as the
record date for the determination of stockholders entitled to notice of and to
vote at the Meeting.
You are urged to attend the Meeting in person. Whether or not you expect to be
present in person at the Meeting, please date, sign and return the enclosed
proxy in the envelope provided.
By Order of the Board of Directors
JOHN J. HASTINGS
SECRETARY
<PAGE>
THE MIDDLEBY CORPORATION
---------------------------------------------
1400 TOASTMASTER DRIVE
ELGIN, ILLINOIS 60120
1997 ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 1997
PROXY STATEMENT
GENERAL
This Proxy Statement and the accompanying proxy are furnished to stockholders of
The Middleby Corporation (the "Company") in connection with the solicitation of
proxies by the Company's Board of Directors for use at the 1997 Annual Meeting
of Stockholders (the "Meeting") to be held at the Company's offices located at
1400 Toastmaster Drive, Elgin, Illinois, at 10:00 a.m. local time, on Thursday,
May 15, 1997, for the purposes set forth in the accompanying Notice of Meeting.
The Proxy Statement, the form of proxy included herewith and the Company's
Annual Report to Stockholders for the fiscal year ended December 28, 1996 are
being mailed to stockholders on or about April 11, 1997.
Stockholders of record at the close of business on March 21, 1997 are entitled
to notice of and to vote at the Meeting. On such date there were outstanding
8,470,938 shares of common stock, par value $.01 per share, of the Company (the
"Common Stock"). The presence, in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding and entitled to vote at the
Meeting is necessary to constitute a quorum. In deciding all questions, each
holder of Common Stock shall be entitled to one vote, in person or by proxy, for
each share held on the record date.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by the
election inspectors appointed for the Meeting and will determine whether or not
a quorum is present. The election inspectors will treat abstentions as shares
that are present and entitled to vote but as not voted for purposes of
determining the approval of any matter submitted to the stockholders for a vote.
Abstentions will have the same effect as negative votes. If a broker indicates
on the proxy that it does not have discretionary authority as to certain shares
to vote on a particular matter, those shares will not be considered as present
and entitled to vote with respect to that matter.
Properly executed proxies will be voted in the manner directed by the
stockholders. If no direction is made, such proxies will be voted FOR the
election of all nominees named under the caption "Election of Directors" as set
forth therein as directors of the Company, and FOR the ratification of the
selection of Arthur Andersen LLP as Independent Auditors for the fiscal year
ending January 3, 1998. Any proxy may be revoked by the stockholder at any time
prior to the voting thereof by notice in writing to the Secretary of the
Company, either prior to the Meeting (at the above address) or at the Meeting if
the stockholder attends in person. A later dated proxy will revoke a prior dated
proxy. As of the date of this Proxy Statement, the Board of Directors knows of
no other business which will be presented for consideration at the Meeting. If
other proper matters are presented at the Meeting, however, it is the intention
of the proxy holders named in the enclosed form of proxy to take such actions as
shall be in accordance with their best judgment.
The information contained in this Proxy Statement relating to the occupations
and security holdings of directors and officers of the Company and their
transactions with the Company is based upon information received from each
individual as of February 14, 1997.
1
<PAGE>
HOLDINGS OF STOCKHOLDERS, DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth, as of March 21, 1997, the name, address and
holdings of each person (including any "group" as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934) known by the Company to be the beneficial
owner of more than five percent of the Company's Common Stock, and the amount of
Common Stock beneficially owned by each of the directors, nominees for director
and named executive officers of the Company and by all directors and executive
officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NAME OF NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C>
William F. Whitman, Jr. 2,155,271 shares(1) 25.4%
The Middleby Corporation
1400 Toastmaster Drive
Elgin, IL 60120
Robert R. Henry 1,838,894 shares(2)(6) 21.7%
P.O. Box 115
Route 202
Linfield Farm
Far Hills, NJ 07931
David P. Riley 501,545 shares(3) 5.9%
The Middleby Corporation
1400 Toastmaster Drive
Elgin, IL 60120
A. Don Lummus 208,300 shares(4) 2.4%
Sabin C. Streeter 26,000 shares (7)
Newell Garfield, Jr. 28,000 shares (7)
John R. Miller III 26,000 shares (7)
Philip G. Putnam 6,750 shares(5)(6) (7)
Joseph G. Tompkins 7,750 shares(6) (7)
Laura B. Whitman 23,750 shares(6)(8) (7)
Robert L. Yohe 24,750 shares(6) (7)
John J. Hastings 34,397 shares(9) (7)
All directors and executive 4,881,407 shares 57.4%
officers of the Company (2)(3)(4)(5)(6)(8)(9)
- ----------------------------------------------------------------------------
</TABLE>
NOTES:
(1) Does not include 1,755,750 shares owned by the trusts described in Note (2)
below, as to which Mr. Whitman disclaims beneficial ownership. Includes
255,300 shares owned by Mr. Whitman's spouse.
(2) Includes 1,755,750 shares of Common Stock held by Mr. Henry as trustee under
trusts as follows: (a) 1,474,500 shares for the benefit of Mr. Whitman's two
adult children, W. Fifield Whitman III and Laura B. Whitman (437,250 shares
owned by each of two trusts and 300,000 shares owned by each of two other
trusts), and (b) 281,250 shares for the benefit of Mr. Whitman's spouse. Mr.
Henry disclaims beneficial ownership of these shares.
(3) Includes 78,650 shares of Common Stock owned by trusts for the benefit of
Mr. Riley's two adult children and for which Mr. Riley and his wife serve as
trustees, but does not include 2,350
2
<PAGE>
shares owned directly by Mr. Riley's adult children. Mr. Riley disclaims
beneficial ownership of all of these shares. Also includes 173,670 shares of
Common Stock held by Mr. Riley's spouse in trust.
(4) Includes 1,000 shares of Common Stock deemed issued upon exercise of stock
options issued in May 1992.
(5) Includes 3,000 shares of Common Stock deemed issued upon exercise of stock
options issued in May 1992.
(6) Includes 3,750 shares of Common Stock deemed issued upon exercise of stock
options issued in February 1996.
(7) Represents less than 1% of all common shares outstanding.
(8) Does not include shares owned by trusts for the benefit of Ms. Whitman
described in Note (2) above.
(9) Mr. Hastings, age 41, is Executive Vice President, Chief Financial Officer,
Secretary and Treasurer of the Company, and his holdings include 16,000
shares of Common Stock deemed issued upon exercise of stock options.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to report to its stockholders those directors, officers
and owners of more than 10% of any class of the Company's equity securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), who fail to timely file reports of beneficial
ownership and changes in beneficial ownership, as required by Section 16(a) of
the Exchange Act.
Upon a review of these reports, the Company believes that all reports were filed
on a timely basis, with the exception of two Form 4 reports for A. Don Lummus to
disclose four purchase transactions, which were untimely filed.
ELECTION OF DIRECTORS
Ten directors are to be elected by a plurality of the stockholder votes cast at
the Meeting to serve until the 1998 Annual Meeting of Stockholders and until
their successors shall be elected and shall qualify. Newell Garfield, Jr., a
director since 1978, will not to stand for reelection at the Meeting in
accordance with the Company's retirement policy for directors. The following
persons have been nominated:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DIRECTOR OF
DURING PAST FIVE YEARS COMPANY OR
NAME AGE AND OTHER PUBLIC DIRECTORSHIPS PREDECESSOR SINCE
<S> <C> <C> <C>
Robert R. Henry 56 President of Robert R. Henry Co., Inc., a 1996
venture capital firm, since 1989. Managing
Director of Morgan Stanley & Co., Inc. from
1977-1989. Advisory Director of Morgan
Stanley and Director of Alfacell
Corporation, a pharmaceutical company.
A. Don Lummus 61 Vice Chairman of Sasib Bakery North America, 1984
Inc. (formerly Stewart Systems, Inc.),
manufacturer of automated bakery equipment,
since 1993. Prior thereto, Chairman,
President and Chief Executive Officer of
Stewart Systems, Inc.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DIRECTOR OF
DURING PAST FIVE YEARS COMPANY OR
NAME AGE AND OTHER PUBLIC DIRECTORSHIPS PREDECESSOR SINCE
<S> <C> <C> <C>
John R. Miller III 56 President of Equal Opportunity Publications, 1978
Inc., publishers of special market career
and health care magazines. Director of First
National Bank of Long Island and its holding
company, the First of Long Island
Corporation.
Philip G. Putnam 56 1996 - Present, Executive Vice President, 1978
Brean Murray & Co. Inc., investment bankers.
1983 - 1996, Executive Vice President of
American Asset Management Company,
investment advisers.
David P. Riley 50 President and Chief Executive Officer of the 1984
Company and its principal subsidiary,
Middleby Marshall Inc. ("MM"). Director of
Zebra Technologies Corporation, an
industrial equipment manufacturer.
Sabin C. Streeter 55 Managing Director of Donaldson, Lufkin & 1987
Jenrette Securities Corp., investment
bankers, 1989 to 1990 and 1993 to the
present. Managing Director of Sprout Group,
its venture capital affiliate, 1991 to 1993.
Director of Oakwood Homes Corporation,
Parker/Hunter Incorporated and Fotoball
U.S.A., Inc.
Joseph G. Tompkins 56 President, Saga Investment Co. Inc., an 1996
investment advisor, 1992 to present.
1967-1995, Morgan Stanley & Co., Inc.,
serving as Advisory Director 1992-1995 and
Managing Director and Head of Asian Equity
Business from 1976-1994. Member of Advisory
Committee, Center for Japanese Studies,
Columbia Business School.
William F. Whitman, Jr. 57 Chairman of the Board of the Company and MM. 1978
Laura B. Whitman (1) 29 Specialist in Chinese Paintings, Christie's, 1996
New York, 1995 to present, and Sotheby's,
New York, 1990-1995. Graduate of Williams
College, B.A.; Yale University, M.A. in East
Asian studies.
Robert L. Yohe 60 Independent Director and Corporate Advisor. 1996
Vice Chairman and Director of Olin
Corporation, a chemicals manufacturer, 1992
to 1994. Director of Airgas, Inc., Betz
Dearborn, Inc., Calgon Carbon Corporation,
LaRoche Industries, Inc. and Marsulex Inc.
</TABLE>
- --------------
(1) Ms. Whitman is the daughter of the Chairman of the Company.
The Board of Directors knows of no reason why any of the foregoing nominees will
be unavailable to serve, but, in the event of any such unavailability, the
proxies received will be voted for such substitute nominees as the Board of
Directors may recommend.
4
<PAGE>
On February 14, 1996, the Board of Directors granted options to purchase 15,000
shares of Common Stock to each of Robert R. Henry, Joseph G. Tompkins, Laura B.
Whitman and Robert L. Yohe in connection with their election by the stockholders
as directors of the Company. In addition, on February 14, 1996, the Board of
Directors granted options to purchase 15,000 shares of Common Stock to Philip G.
Putnam.
COMMITTEES; BOARD MEETINGS
The Company has an Audit Committee composed of Messrs. Putnam (Chairman),
Streeter and Tompkins and Ms. Whitman. During the fiscal year ended December 28,
1996, the Audit Committee met twice for the purposes of (i) approving the
selection of the Company's independent auditors; (ii) reviewing the arrangements
for and scope of the audit; (iii) discussing matters of concern to the Committee
and/or the Board of Directors with regard to the Company's financial statements
or other results of the audit; and (iv) reviewing the Company's internal
accounting procedures and controls and the activities and recommendations of the
Company's independent auditors.
The Company has a Compensation Committee composed of Messrs. Garfield
(Chairman), Henry, Lummus, Miller and Yohe. The Compensation Committee met once
during the fiscal year ended December 28, 1996. The function of the Compensation
Committee is to review and approve recommendations concerning the compensation
of the Chairman of the Board and the President and Chief Executive Officer of
the Company. The Company does not have a Nominating Committee.
The Board of Directors of the Company held four meetings during the fiscal year
ended December 28, 1996, and each director attended at least 75% of all Board
and applicable Committee meetings.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-term
compensation for services to the Company in all capacities for the fiscal years
ending December 28, 1996 (the "1996 fiscal year"), December 30, 1995 (the "1995
fiscal year") and December 31, 1994 (the "1994 fiscal year"), received by those
persons who were, at December 28, 1996, (i) the chief executive officer and (ii)
the most highly compensated executive officers of the Company whose total annual
salary and bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
----
AWARDS
----
ANNUAL COMPENSATION SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS/ COMPENSATION
POSITION YEAR ($) ($)(1) ($)(2) SARS(#)(3) ($)
<S> <C> <C> <C> <C> <C> <C>
David P. Riley 1996 $285,000 $228,615 $38,000 -- $4,768
President and Chief 1995 $270,000 $320,790 $38,000 -- $4,935
Executive Officer 1994 $170,000 $395,458 $35,000 -- $4,949
William F. Whitman, Jr. 1996 $312,500 $228,615 $63,000 -- $4,768
Chairman of the 1995 $295,000 $320,790 $63,000 -- $4,935
Board 1994 $195,000 $395,458 $60,000 -- $4,949
John J. Hastings (4) 1996 $138,375 $ 76,205 $-- 5,000 $4,768
Executive Vice 1995 $130,938 $106,930 $-- 5,000 $4,935
President, Chief 1994 $116,875 $ 98,486 $-- -- $3,482
Financial Officer,
Secretary and Treasurer
- ---------------------------------------------------------------------------------------------
</TABLE>
NOTES:
(1) Includes special bonuses awarded in 1994 to Mr. Riley and to Mr. Whitman in
the amount of $100,000 in connection with their efforts in obtaining a new
financing facility for the Company.
(2) Amounts for Mr. Riley and Mr. Whitman represent director's fees for services
to the Company and its subsidiaries.
(3) Represents options to purchase shares of the Company's Common Stock awarded
under the Company's Amended and Restated 1989 Stock Incentive Plan (the
"Stock Incentive Plan").
(4) Mr. Hastings was appointed to these positions on August 27, 1993. Prior
thereto and beginning in 1992, he served as Vice President and General
Manager of Middleby Cooking Systems Group. Between April 1991 and December
1991, Mr. Hastings was the Vice President and General Manager of MM. Between
November 1989 and March 1991, he served as the Vice President and Corporate
Controller of the Company, and from February 1987 through November 1989, he
was the Director of Finance of MM.
6
<PAGE>
EMPLOYMENT AGREEMENTS
DAVID P. RILEY. The Company and MM entered into an employment agreement with
Mr. Riley dated as of January 1, 1988, as restated and amended January 1, 1995.
The employment agreement, as amended, provides for Mr. Riley to serve as
President of the Company and President and Chief Executive Officer of MM (or in
such other executive capacities as the Board of Directors of the Company and MM
may designate) for a term ending December 31, 2000, and for the payment of
compensation to him at a minimum rate of $300,000 per year. The agreement
further provides that Mr. Riley shall be entitled to one-half of the amounts
credited to the Company's executive bonus pool (i.e., 6% of the operating
profits of MM, calculated prior to tax, interest, corporate office, and other
allocation charges). The agreement contains provisions for termination in the
event of death or disability, or for cause, and for the payment of base salary
(subject to adjustment) for certain periods following termination of employment
in certain events. The agreement provides that after Mr. Riley's termination for
any reason, the Company will pay Mr. Riley or his designee retirement benefits
in equal monthly installments commencing on the first day of the month following
the later to occur of (i) the date of such termination of employment, or (ii)
Mr. Riley's 55th birthday (whether or not he is then living). Each monthly
installment of retirement benefits shall be in an amount (subject to consumer
price index ("CPI") adjustments) equal to one-twelfth ( 1/12) of certain
percentages (ranging from 10% to 50%) of Mr. Riley's total compensation in
effect during the last year of his employment with the Company, depending on the
date of termination of employment. Retirement benefits will be paid to Mr. Riley
for his life, or if he dies before age 75, such benefits, reduced by 50%, will
be paid to his spouse until Mr. Riley would have attained age 75.
In addition, MM and the Company may terminate the agreement without cause upon
two years notice; further, Mr. Riley may terminate the agreement and continue to
receive his base salary (subject to adjustment) for two years (but not beyond
December 31, 2000) if the Company and MM relocate their executive offices
outside of the Chicago metropolitan area. If Mr. Riley voluntarily terminates
his employment for certain reasons, or if the Company terminates the agreement
for cause, then Mr. Riley may not compete with the Company or MM for a period of
two years following termination of his employment. Moreover, the agreement
extends to Mr. Riley rights similar to those extended to Mr. Whitman in the
event of a change in control of the Company.
If Mr. Riley remains an employee of the Company until the first to occur of (i)
his 55th birthday, or (ii) his death, the Company will maintain for the
continued benefit of Mr. Riley and his spouse after termination of his
employment all health and medical plans and programs which the Company maintains
for its senior executives and their families.
WILLIAM F. WHITMAN, JR. The Company and MM entered into an employment agreement
with Mr. Whitman dated as of March 10, 1978, as amended and restated January 1,
1995. The employment agreement, as amended, provides, among other things, for
Mr. Whitman to serve as Chairman of the Board of Directors of the Company and
Chairman of the Board of MM for a term ending December 31, 2000 and for a
specified minimum amount of annual compensation. The agreement provides that Mr.
Whitman is to be entitled to a distribution equal to one-half of the amounts
credited to the Company's executive bonus pool, along with similar distributions
of any other bonus or similar program established by the Company or MM. In
addition, the employment agreement provides that Mr. Whitman shall be entitled
to certain retirement benefits in the event of Mr. Whitman's termination of
employment for any reason, including death or disability, such payments to
commence on the first day of the month following the date of such termination of
employment. Each monthly installment of retirement benefits shall be in an
amount (subject to CPI adjustments) equal to one-twelfth ( 1/12) of 75% of Mr.
Whitman's total compensation in effect during the last year of his employment
with the Company. Any such retirement benefits will be reduced, commencing March
1, 2005, by the amount per month which Mr. Whitman is entitled to receive under
the Salaried Retirement Plan of the Company which was terminated in 1982.
Retirement benefits will be paid to Mr. Whitman for his life, or if he dies
before age 75, until he would have attained age 75.
7
<PAGE>
The employment agreement gives both parties the right to terminate in the event
of a breach (willful breach, if the Company is terminating) of the obligations
of the other party under the agreement, with certain payments to Mr. Whitman in
certain events. The agreement may also be terminated by the Company at any time
without cause upon 90 days notice, such termination to be effective in two
years, but in such event Mr. Whitman would be entitled to salary and bonus for
such two year period. After termination for any reason except breach by the
Company or MM, the Company and MM may elect to pay Mr. Whitman his base salary
for an additional year, in which event Mr. Whitman may not compete with the
Company or MM for such period of time. Moreover, the agreement extends to Mr.
Whitman the right to terminate his employment at any time during a two-year
period following a change in control of the Company, and upon such termination
Mr. Whitman is entitled to receive as severance pay an amount equal to two years
of his base salary, all accrued but unpaid salary, all benefits under the
executive bonus pool and all retirement benefits under the agreement.
In addition, the Company maintains for the continued benefit of Mr. Whitman and
his spouse all health and medical plans and programs which the Company maintains
for its senior executives and their families. Mr. Whitman and his spouse are
entitled to such health and medical benefits for life.
SUPPLEMENTAL RETIREMENT BENEFIT PLAN
The Company adopted a non-qualified supplemental retirement benefit plan,
effective July 5, 1993, for senior management employees who retire from the
Company or MM. The purpose of this plan is to supplement the current profit
sharing and bonus plans. The supplemental retirement benefit plan, which is
unfunded, provides for an annual retirement benefit equal to 1.25% of base
salary for each year of service beginning January 1, 1993, with a twenty year
maximum. The maximum annual benefit is 25% of base salary after 20 years of
service, beginning January 1, 1993. Retirement age is 65, and participants must
be employees of the Company or MM at the time of retirement to obtain this
benefit. For the purpose of the plan, base salary is the average salary for the
last three years of service prior to retirement. The number of years of service
is based on the date of hire or January 1, 1993, whichever is later. Partial
years of service are not counted. Plan benefits are not subject to off-set for
social security or other non-plan benefits.
At December 28, 1996, the only individual named in the Summary Compensation
Table who participates in this plan was Mr. Hastings, who had four years of
credited service. Messrs. Riley and Whitman have separate pension plans in
accordance with their employment agreements with the Company.
The following table indicates examples of annual pension benefits to be paid in
an annuity of equal monthly installments upon normal retirement at age 65.
<TABLE>
<CAPTION>
AVERAGE FINAL ESTIMATED ANNUAL PENSION BENEFITS AT AGE 65
THREE YEARS OF 5 YEARS 10 YEARS 15 YEARS 20 YEARS
BASE SALARY SERVICE SERVICE SERVICE SERVICE
<S> <C> <C> <C> <C>
$100,000 $ 6,250 $12,500 $18,750 $25,000
150,000 9,375 18,750 28,125 37,500
200,000 12,500 25,000 37,500 50,000
250,000 15,625 31,250 46,875 62,500
300,000 18,750 37,500 56,250 75,000
</TABLE>
8
<PAGE>
PROFIT SHARING PLAN
The Company maintains a tax-qualified Profit Sharing and Savings Plan for those
of its employees and the employees of affiliated employers who are not union
employees, non-resident aliens or leased employees. Each eligible employee
becomes a participant upon employment. This Plan provides for an annual
discretionary contribution by the Company and affiliated companies. The
contribution is allocated to individual accounts of participants in proportion
to their compensation and is integrated with the applicable Social Security
taxable wage base. A participant's profit sharing account begins vesting after 3
years of service with the Company and affiliated employers and is fully vested
after 7 years of service. A participant whose employment terminates for reasons
other than death, total disability or retirement on or after attaining age 65 is
entitled only to the vested portion of his account. The Plan also permits
participants to contribute to their own accounts on a pre-tax basis by means of
compensation reduction elections. The portion of a participant's account that is
attributable to compensation reduction contributions is always 100% vested. The
Plan also permits the Company and affiliated employers to make discretionary
matching contributions under the Savings Plan that are allocated to participants
as a uniform percentage of their compensation reduction contributions for the
same year. The portion of a participant's account that is attributable to
matching contributions is subject to the same vesting rules that apply to that
participant's profit sharing account. During the fiscal year ended December 28,
1996, the Company made Profit Sharing Plan contributions of $350,000 and no
matching contributions to the Savings Plan. Aggregate contributions to executive
officers in such fiscal year totaled $14,304.
DIRECTORS' RETIREMENT PLAN
On November 2, 1994, the Board of Directors authorized the establishment of an
unfunded retirement plan for non-employee directors. The plan provides for an
annual benefit upon retirement from the Board of Directors at age 70, equal to
100% of the director's last annual retainer, payable on a quarterly basis for a
number of years equal to the director's years of service, up to a maximum of 10
years.
STOCK OPTION GRANTS
The following table sets forth certain information concerning individual grants
of stock options made during the fiscal year ended December 28, 1996 to the
named executive officer of the Company receiving such grants under the Company's
Stock Incentive Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
NUMBER VALUE
OF INDIVIDUAL AT ASSUMED
SECURITIES GRANTS AS ANNUAL RATE OF
UNDERLYING % OF TOTAL STOCK PRICE
OPTIONS/ OPTIONS/SARS APPRECIATION
SARS GRANTED TO EXERCISE OR FOR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION OPTION TERM
NAME (#) FISCAL YEAR PER SHARE ($) DATE 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
John J. Hastings 5,000(1) 8.3% $5.250(2) 11/1/06 $16,508 $41,836
- ---------------------------------------------------------------------------------------------
</TABLE>
NOTES:
(1) Such options become exercisable in 25% increments over a four-year period
and expire 10 years from the date of grant.
(2) The exercise price was equal to 100% of the fair market value of the
Company's Common Stock as of the grant date.
9
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth certain information concerning the exercise of
stock options during the fiscal year ended December 28, 1996 by each of the
named executive officers and the fiscal year-end value of unexercised options
under the Stock Incentive Plan. Options awarded under the Stock Incentive Plan
become exercisable in accordance with the terms of the grant, generally in 25%
increments annually, commencing one year after the grant date.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<S> <C> <C> <C> <C>
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
David P. Riley 0 n/a 0/0 n/a
William F. Whitman,
Jr. 0 n/a 0/0 n/a
John J. Hastings 3,000 $10,125 16,000/5,000 $51,875 /$5,625
</TABLE>
10
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The graph below compares five-year cumulative total return for a shareholder
investing $100 in the Company on December 31, 1991, with the Standard & Poor's
500 Composite Index, a performance indicator of the overall stock market, the
American Stock Exchange Market Value Index, the Nasdaq Stock Market Index and
the Index of Nasdaq Non-Financial Stocks, assuming reinvestment of dividends.
The Company believes that a comparison of its stock's performance with the two
Nasdaq indexes provides a better indication of the stock's relative performance,
and so has decided to use such indexes for future comparisons. However, the
comparison to the S&P 500 Index and American Stock Exchange Index has also been
included in this year's table. The Company does not believe it is feasible to
provide a comparison against a group of peer companies, as there is an
insufficient number of other similar publicly traded companies. The following
graph shall not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933 (the "Securities Act") or the Exchange Act, except to the
extent the Company specifically incorporates the information contained therein
by reference, and shall not otherwise be deemed filed under such Acts.
[CHART]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ------ ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
The Middleby Corporation 100 271.43 300.00 485.71 1085.71 728.57
American Stock Exchange Index 100 101.06 120.78 109.78 138.77 147.65
S&P 500 Index 100 107.62 118.46 120.03 165.13 203.05
The Nasdaq Stock Market Index 100 116.38 133.59 130.59 184.67 227.16
Nasdaq Non-Financial Stocks Index 100 109.39 126.30 121.44 169.24 205.63
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE AND BOARD OF DIRECTORS
This Report of the Compensation Committee and Board of Directors shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act or under
the Exchange Act except to the extent the Company specifically incorporates the
information contained herein by reference, and shall not otherwise be deemed
filed under such Acts.
11
<PAGE>
The Compensation Committee reviews and approves recommendations concerning the
compensation of the Chairman and the President and Chief Executive Officer of
the Company. The full Board of Directors reviews the Company's operating profit
target levels and the bonus component of the compensation of executive officers
and senior managers of the Company other than the Chairman and the President and
Chief Executive Officer.
William F. Whitman, Jr., Chairman of the Board, and David P. Riley, President
and Chief Executive Officer, are employed by the Company pursuant to individual
employment agreements. These employment agreements are summarized elsewhere in
this Proxy Statement. Mr. Whitman's employment agreement establishes the
components of his compensation arrangement as a minimum base salary plus a bonus
based upon Company performance as measured by a percentage of defined operating
profits. Mr. Riley's employment agreement also provides for a minimum base
salary plus a bonus identical to that of Mr. Whitman (i.e., based on Company
performance as measured by the same percentage of defined operating profits).
The current levels of base salary for Messrs. Whitman and Riley have been
determined on the basis of the value contributed by these individuals to the
longstanding operations of the Company and MM. The bonus formula for the
Chairman and the President and Chief Executive Officer was originally
established in 1978 and amended in 1992, and is directly related to the
operating profits of the Company. The Compensation Committee believes that such
formula, as well as the current levels of base salary with respect to such
officers, provide fair incentives without being unfair to stockholders.
The compensation of other executive officers and senior managers of the Company
are set at levels to be competitive with amounts paid to executive officers and
senior managers with comparable qualifications, experience and responsibilities
at other businesses of similar type or with similar market capitalization. Such
individuals receive a salary and also participate in an annual Management
Incentive Compensation Plan. The Plan provides for payment of bonuses determined
as a percentage of such participant's base salary depending on the achievement
of certain levels of operating profits, earnings before tax and/or return on
investment percentage. Target levels are set annually to be in line with the
Company's annual budget, and are presented by the President and Chief Executive
Officer to the Board of Directors for review and approval.
The Board of Directors believes that options granted under the Company's Stock
Incentive Plan link the financial interests of management with those of the
stockholders. Grants during any fiscal year, including the fiscal year ended
December 28, 1996, are based on an individual's long-term contribution to the
operations of the Company and MM.
The Compensation Committee:
Newell Garfield, Jr., Chairman, Robert R. Henry,
A. Don Lummus, John R. Miller III and Robert L. Yohe
Other Directors:
William F. Whitman, Jr., David P. Riley, Philip G.Putnam,
Sabin C. Streeter, Joseph G. Tompkins and Laura B. Whitman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Newell Garfield, Jr., Robert R. Henry, A.
Don Lummus, John R. Miller III and Robert L. Yohe, all of whom are independent
directors of the Company and are neither officers of the Company nor affiliated
with any principal shareholder of the Company. William F. Whitman, Jr., the
Chairman of the Board, and David P. Riley, the President and Chief Executive
Officer of the Company, participate with the full board in reviewing and
approving certain components of compensation of other executive officers and
senior managers. Recommendations concerning the compensation of Messrs. Whitman
and Riley, however, are subject to the review and approval of the Compensation
Committee.
12
<PAGE>
DIRECTORS' COMPENSATION
Each director of the Company receives an annual fee of $8,000, and each director
who is not an officer of the Company receives an additional fee of $1,000 for
each meeting of the Board of Directors or committee thereof that he or she
attends. Each director who serves as a committee chair receives an additional
annual fee of $2,000.
PROPOSAL TO RATIFY SELECTION OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP has audited the books and records of the Company
since its inception and the Board of Directors desires to continue the services
of this firm for the current fiscal year ending January 3, 1998. Accordingly,
the Board of Directors will recommend at the Meeting that the stockholders
ratify the appointment of the firm of Arthur Andersen LLP to audit the accounts
of the Company for the current fiscal year. Representatives of that firm are
expected to be present at the Meeting with the opportunity to make a statement
if they desire to do so and are expected to be available to respond to
appropriate questions.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF RATIFICATION OF THE
SELECTION OF ARTHUR ANDERSEN LLP.
------------------------
MISCELLANEOUS
The Company's 1996 Annual Report to Stockholders is being mailed to stockholders
contemporaneously with this Proxy Statement.
COST OF SOLICITATION
All expenses incurred in the solicitation of proxies will be borne by the
Company. In addition to the use of the mails, proxies may be solicited on behalf
of the Company by directors, officers and employees of the Company or by
telephone or telecopy. The Company will reimburse brokers and others holding
Common Stock as nominees for their expenses in sending proxy material to the
beneficial owners of such Common Stock and obtaining their proxies.
PROPOSALS OF SECURITY HOLDERS
Proposals of security holders intended to be presented at the 1998 Annual
Meeting must be received by the Company for inclusion in the Company's Proxy
Statement and form of proxy relating to that meeting no later than December 12,
1997.
By order of the Board of Directors.
JOHN J. HASTINGS
SECRETARY
Dated: April 11, 1997
13
<PAGE>
THE MIDDLEBY CORPORATION
1400 TOASTMASTER DRIVE, ELGIN, ILLINOIS 60120
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William F. Whitman, Jr., David P. Riley and
John J. Hastings, and each of them, with full power of substitution, attorneys
and proxies to represent the undersigned at the 1997 Annual Meeting of
Stockholders of THE MIDDLEBY CORPORATION (the "Company") to be held at the
Company's offices located at 1400 Toastmaster Drive, Elgin, Illinois at 10:00
a.m. local time, on Thursday, May 15, 1997, or at any adjournment thereof, with
all power which the undersigned would possess if personally present, and to vote
all shares of stock of the Company which the undersigned may be entitled to vote
at said Meeting as follows:
<TABLE>
<C> <C>
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below (unless name of nominee is / / WITHHOLD
crossed out) AUTHORITY
Robert R. Henry A. Don Lummus John R. Miller III David P. Riley Sabin C.
Streeter Philip G. Putnam
Joseph G. Tompkins William F. Whitman, Jr. Laura B. Whitman Robert L.
Yohe
2. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT
AUDITORS
/ / FOR / / AGAINST / / ABSTAIN
3. IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING (which the Board of Directors does not know of prior to April 11,
1997)
</TABLE>
Management recommends your vote FOR all proposals.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE. PLEASE SIGN ON THE REVERSE SIDE AND
RETURN PROMPTLY.
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTORS AND FOR THE RATIFICATION
OF THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS, AND WILL CONFER
THE AUTHORITY IN PARAGRAPH 3.
Receipt is hereby acknowledged of the Notice of the Meeting and Proxy
Statement dated April 11, 1997, as well as a copy of the 1996 Annual Report to
Stockholders.
Dated:
------------------------, 1997.
---------------------------------------------------
---------------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE TITLE. EACH JOINT OWNER
IS REQUESTED TO SIGN. IF A
CORPORATION OR PARTNERSHIP, PLEASE
SIGN BY AN AUTHORIZED OFFICER OR
PARTNER. PLEASE SIGN IN THE SAME
MANNER AS YOUR CERTIFICATE(S) IS
(ARE) REGISTERED.
PLEASE COMPLETE, DATE, SIGN AND RETURN this proxy in the envelope provided.
