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:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(3)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MILLER INDUSTRIES, INC. (TN)
-----------------------------------------------
(Name of Registrant as Specified in Its Charter)
MILLER INDUSTRIES, INC. (TN)
--------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or 14a-6(j)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) 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:
__________________________________________________
<PAGE>
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:
__________________________________________________
4) Date Filed:
__________________________________________________<PAGE>
<PAGE>
[MILLER INDUSTRIES, INC.] [LOGO]
900 Circle 75 Parkway
Atlanta, Georgia 30339
(770) 988-0797
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Miller Industries,
Inc. (the "Company") will be held at 11:00 a.m. (Eastern Time),
on Friday, August 30, 1996 at the Atlanta Marriott Northwest,
200 Interstate North Parkway, Atlanta, Georgia for the following
purposes:
1. To elect two (2) directors to hold office for a term of
three (3) years or until their successors are duly
elected and qualified;
2. To consider and act upon a proposal to amend the
Company's Non-Employee Director Stock Option Plan to
increase the number of shares issuable thereunder;
3. To consider and act upon a proposal to amend the
Company's Stock Option and Incentive Plan to increase
the number of shares issuable thereunder;
4. To consider and act upon a proposal to amend the
Company's Charter to increase the number of authorized
shares of Common Stock;
5. To consider and act upon a proposal to amend the
Company's Charter to increase the maximum number of
directors which may constitute the entire Board of
Directors;
6. To consider and act upon a proposal to ratify the
appointment of Arthur Andersen, LLP as the independent
accountants of the Company; and
7. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on July
20, 1996 are entitled to notice of and to vote at the Annual
Meeting. Your attention is directed to the Proxy Statement
accompanying this notice for a complete statement regarding
matters to be acted upon at the Annual Meeting.
By order of the Board of Directors,
Frank Madonia
Secretary
Atlanta, Georgia
July ___, 1996
WE URGE YOU TO ATTEND THE ANNUAL MEETING. WHETHER OR NOT YOU
PLAN TO ATTEND, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
YOU MAY REVOKE THE PROXY AT ANY TIME BEFORE IT IS VOTED.
<PAGE>
MILLER INDUSTRIES, INC.
900 Circle 75 Parkway
Atlanta, Georgia 30339
(770) 988-0797
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
The accompanying proxy is solicited by the Board of
Directors of Miller Industries, Inc. (the "Company") for use at
the Annual Meeting of Shareholders to be held at the Atlanta
Marriott Northwest, 200 Interstate North Parkway, Atlanta,
Georgia, on Friday, August 30, 1996 at 11:00 a.m. (Eastern
Time), and any adjournment thereof, for the purposes set forth
in the foregoing Notice of Annual Meeting of Shareholders.
This proxy material was first mailed to shareholders on or about
July ___, 1996.
A shareholder who signs and returns a proxy may revoke the
same at any time before the authority granted thereby is
exercised by attending the Annual Meeting and electing to vote in
person, by filing with the Secretary of the Company a written
revocation or by duly executing a proxy bearing a later date.
Unless revoked, the shares represented by the proxy will be voted
at the Annual meeting. Where a choice is specified on the proxy,
the shares represented thereby will be voted in accordance with
such specifications. If no specification is made, such shares
will be voted FOR the election of the two director nominees, FOR
the amendment of the Company's Non-Employee Director Stock Option
Plan (the "Director Plan"), FOR the amendment of the Company's
Stock Option and Incentive Plan (the "1994 Plan"), FOR both
amendments to the Company's Charter, and FOR the ratification of
Arthur Andersen, LLP as the independent accountants of the
Company.
The Board of Directors knows of no other matters which are
to be brought to a vote at the Annual Meeting. However, if any
other matter properly does come before the Annual Meeting, the
persons appointed in the proxy or their substitutes will vote in
accordance with their best judgment on such matters.
Only holders of the common stock of the Company, $0.01 par
value per share (the "Common Stock"), at the close of business on
July 20, 1996 are entitled to vote at the Annual Meeting. On
such date, the Company had issued and outstanding __________
shares of Common Stock. Holders of the Common Stock will be
entitled to one vote for each share of Common Stock so held,
which may be given in person or by proxy duly authorized in
writing.
The cost of solicitation of proxies will be borne by the
Company, including expenses in connection with preparing,
assembling and mailing this Proxy Statement. Such solicitation
will be made by mail, and also may be made by the Company's
executive officers or employees personally or by telephone or
telegram. The Company does not anticipate paying any
compensation to any other party other than its regular employees
for this solicitation of proxies, but may reimburse brokerage
firms and others for their reasonable expenses in forwarding
solicitation material to beneficial owners.
-2-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 28, 1996,
certain information with respect to (a) all shareholders known to
be "beneficial owners" (as that term is defined in the rules of
the Securities and Exchange Commission) of more than five percent
of the Common Stock; and (b) the Common Stock "beneficially
owned" (i) by the directors and (ii) by the executive officers
named in the Summary Compensation Table (the "Named Executive
Officers"), both individually and as a group. Except as
otherwise indicated, the shareholders listed in the table have
sole voting and investment powers with respect to the Common
Stock owned by them.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
of Beneficial Common Stock
Name and Address of Beneficial Owner Ownership <F1> Outstanding <F1>
- - ------------------------------------ ------------------ -----------------
<S> <C> <C>
William G. Miller<F2> 3,378,563 29.2%
Jeffrey I. Badgley 60,750 <F3> *
Frank Madonia 58,875 <F4> *
J. Vincent Mish 58,875 <F4> *
L. Stanley Neely 52,500 <F5> *
A. Russell Chandler, III 32,500 <F6> *
Paul E. Drack 17,500 <F7> *
Stephen A. Furbacher 22,000 <F7> *
H. Patrick Mullen 38,500 <F7> *
Richard H. Roberts 19,000 <F7> *
All Executive Officers and Directors as a Group 3,396,440 <F>8 32.1%
(11 persons)
____________________________
*Less than one percent
<FN>
<F1> For the purpose of determining "beneficial ownership," the rules of
the Securities and Exchange Commission (the "SEC") require that every
person who has or shares the power to vote or dispose of shares of
stock be reported as a "beneficial owner" of all shares as to which
such power exists. As a consequence, many persons may be deemed to be
the "beneficial owners" of the same securities. The SEC rules also
require that certain shares of stock that a beneficial owner has the
right to acquire within sixty days of the date set forth above pursuant
to the exercise of stock options are deemed to be outstanding for the
purpose of calculating the percentage ownership of such owner, but are
not deemed outstanding for the purpose of calculating the percentage
ownership of any other person.
<F2> Mr. Miller's business address is c/o Miller Industries, Inc., 900
Circle 75 Parkway, Suite 1250, Atlanta, Georgia 30339.
<F3> Includes 38,250 shares which are issuable pursuant to options which
are exercisable within sixty days of the date set forth above.
<F4> Includes 36,375 shares which are issuable pursuant to options which
are exercisable within sixty days of the date set forth above.
<F5> Includes 30,000 shares which are issuable pursuant to options which
are exercisable within sixty days of the date set forth above.
<F6> Includes 4,500 shares held in trust for the benefit of Mr. Chandler's
children and 16,000 shares which are issuable pursuant to options which
are exercisable within sixty days of the date set forth above.
<F7> Includes 16,000 shares which are issuable pursuant to options which
are exercisable within sixty days of the date set forth above.
<F8> Includes 255,875 shares which are issuable pursuant to options which
are exercisable within sixty days of the date set forth above.
</FN>
</TABLE>
-3-<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
Pursuant to the Company's Charter and Bylaws, the Board has fixed
the number of directors at seven. Under the terms of the Company's
Charter and Bylaws, the members of the Board of Directors are divided
into three classes (Class I, Class II, and Class III). The Class II
directors (which include Mr. Chandler and Mr. Badgley) are standing for
reelection at the Annual Meeting and, if reelected, will serve until the
annual meeting of shareholders in 1999. The term of the Class I
directors (which includes Mr. Miller and Mr. Roberts) expires at the time
of the 1998 annual meeting of shareholders, and the term of the Class III
directors (which includes Mr. Drack, Mr. Furbacher and Mr. Mullen)
expires at the time of the 1997 annual meeting of shareholders. At each
succeeding annual meeting of shareholders successors to the class of
directors whose term expires at that annual meeting will be elected for a
three-year term. The Board may fill directorships resulting from
vacancies or may decrease the number of directors. Executive officers are
appointed annually and serve at the discretion of the Board of Directors.
Unless contrary instructions are received, shares of voting
securities of the Company represented by duly executed proxies will be
voted in favor of the election of the nominees named below. If for any
reason a nominee is unable to serve as a director, it is intended that
the proxies solicited hereby will be voted for such substitute nominee as
the Board of Directors of the Company may propose. The Board of
Directors has no reason to expect that the nominees will be unable to
serve and, therefore, at this time it does not have any substitute
nominees under consideration.
The nominees for election shall be elected by a plurality of the
votes cast by holders of the shares of Common Stock entitled to vote at
the Annual Meeting. Shareholders have no right to vote cumulatively for
directors, but rather each shareholder shall have one vote for each
director for each share of Common Stock held by such shareholder.
The following persons are the nominees for election to serve as
Class II directors. Both nominees are presently directors of the
Company. Certain information relating to the nominees, which has been
furnished to the Company by the individuals named, is set forth below.
<TABLE>
<CAPTION>
Class of Director;
Annual Meeting at
Name of Director Which Term Expires Background Information
- - ---------------- ------------------- ----------------------
<S> <S> <S>
A. Russell Chandler, III II; 1996 Mr. Chandler, 51, has served as a director of the
Company since April 1994. He serves on the board of
Summit Partners, a venture capital partnership, and is
founder and Chairman of Whitehall Group Ltd., a private
investment firm based in Atlanta, Georgia. Mr. Chandler
is also the Mayor of the Olympic Village for the Atlanta
Committee for the Olympic Games, a position he has held
since 1990. From 1987 to 1993, he served as Chairman of
United Plastic Films, Inc., a manufacturer and
distributor of plastic bags. He founded Qualicare,
Inc., a hospital management company, in 1972 and served
as President and Chief Executive Officer until its sale
in 1983. In addition, Mr. Chandler serves on a number
of community advisory boards, including the Wharton
Graduate Advisory Board and the Georgia Tech Foundation
Board of Trustees.
-4-<PAGE>
Jeffrey I. Badgley II; 1996 Mr. Badgley, 44, has served as President and Chief
Operating Officer of the Company since June 1996 and as
a director since January 1996. In addition, Mr. Badgley
is President of Miller Industries Towing Equipment, a
subsidiary of the Company (Miller Industries Towing
Equipment"). Mr. Badgley served as Vice President - Sales
of Miller Industries Towing Equipment from 1988 to 1996.
Mr. Badgley served for over five years as Vice President
- Sales and Marketing of Challenger Wrecker Corporation
("Challenger Wrecker"), a position he held from 1982 until
joining Miller Industries Towing Equipment. He served as
Vice- President of the Company from April 1994 to June 1996.
</TABLE>
The following five persons currently are members of the
Board of Directors and will continue in their present positions
after the Annual Meeting. THE FOLLOWING PERSONS ARE NOT
NOMINEES, AND SHAREHOLDERS ARE NOT BEING ASKED TO VOTE FOR THEM.
Certain information relating to the following persons has been
furnished to the Company by the individuals named.
<TABLE>
<CAPTION>
Class of Director;
Annual Meeting at
Name of Director Which Term Expires Background Information
---------------- ------------------- -----------------------
<S> <C> <C>
William G. Miller I; 1998 Mr. Miller, 49, has served as Chairman of the Board and
Chief Executive Officer of the Company since April 1994
and spends substantially all of his time on Company
matters. He also served as President of the Company
from April 1994 until June 1996. Mr. Miller served as
Chairman of Miller Group, Inc., from August 1990 through
May 1994, as its President from August 1990 to March
1993, and as its Chief Executive Officer from March 1993
until May 1994. Mr. Miller also serves as Chairman of
Flow Measurement, Inc. ("Flow Measurement"), a maker of
industrial flow meters, and served as its President from
February 1987 until April 1994. Mr. Miller beneficially
owns 80% of the capital stock of Flow Measurement.
Prior to 1987, Mr. Miller served in various management
positions for Bendix Corporation, Neptune International
Corporation, Wheelabrator-Frye Inc. and The Signal
Companies, Inc.
Richard H. Roberts I; 1998 Mr. Roberts, 41, has served as a director of the Company
since April 1994. Mr. Roberts currently serves as
Senior Vice President, Secretary and General Counsel of
Landair Services, Inc., a position he has held since
August, 1994. Mr. Roberts was partner in the law firm
of Baker, Worthington, Crossley & Stansberry, counsel to
the Company, from January 1991 to August 1994 and prior
thereto was an associate of the firm for a period in
excess of five years. Mr. Roberts has served as a
director of Landair Services, Inc. since May 1995.
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
Class of Director;
Annual Meeting at
Name of Director Which Term Expires Background Information
---------------- ------------------- -----------------------
<S> <C> <C>
Paul E. Drack III; 1997 Mr. Drack, 67, has served as a director of the Company
since April 1994. Mr. Drack retired in December 1993 as
President and Chief Operating Officer of AMAX Inc.,
positions he held since August 1991. From 1985 to 1991,
Mr. Drack served in various capacities for operating
subsidiaries of AMAX Inc. including Chairman, President
and Chief Executive Officer of Alumax Inc. and President
of Kawneer Company. He was a director of AMAX Inc. from
1988 to 1993. Prior to its acquisition by another
entity in November 1993, AMAX Inc. was a producer of
aluminum and manufactured aluminum products with
interests in domestic energy and gold production.
Stephen A. Furbacher III; 1997 Mr. Furbacher, 74, has served as a director of the
Company since April 1994 and of Miller Group since
January 1993. Since 1986, Mr. Furbacher has been a
business consultant and has been involved in various
corporate turnarounds and reorganizations. Over the
past 25 years Mr. Furbacher has served on the boards of
various public companies, including Fleet Financial
Group, AMAX Inc., Kennecott Copper Corporation, Amerace
Corporation and Bostrom Manufacturing Company. He
presently serves on the board of United Film
Incorporated.
H. Patrick Mullen III; 1997 Mr. Mullen, 48, has served as a director of the Company
since April 1994 and of Miller Group since January 1993.
Mr. Mullen has served as President of Flow Measurement
since April 1994 and as President of Hersey Measurement
Company, a division of Flow Measurement, since May 1990.
He was Vice President-Sales and Marketing of Flow
Measurement from 1987 until May 1990. Prior to 1987,
Mr. Mullen served in various management positions for
Trackmobile, Inc., Neptune Measurement Company and The
Singer Company.
</TABLE>
The Board of Directors held four meetings during the fiscal year ended
April 30, 1996. The Board of Directors has Audit, Compensation,
Executive and Nominating Committees. The Audit Committee is comprised of
Messrs. Drack, Furbacher and Roberts. The Audit Committee meets with the
Company's independent auditors to review the Company's financial
statements and it is the function of this committee to ensure that the
Company's financial statements accurately reflect the Company's financial
position and results of operations. The Audit Committee held four
meetings during fiscal 1996.
The purpose of the Compensation Committee is to establish, among
other things, salaries, bonuses and other compensation for the Company's
officers, and to administer the Company's stock option and other employee
benefit plans. Messrs. Chandler, Furbacher and Roberts comprise the
Compensation Committee, which met two times during fiscal 1996.
The Executive Committee is comprised of Messrs. Furbacher, Badgley
and Miller. The Executive Committee held one meeting during fiscal
1996.
-6-<PAGE>
The Nominating Committee is comprised of Messrs. Badgley, Miller and
Mullen. The Nominating Committee was established to evaluate candidates
for service as directors to the Company. The Nominating Committee held
one meeting during fiscal 1996.
All incumbent directors attended more than 75% of the meetings of
the Board of Directors and the respective committees of which they are
members.
-7-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash
compensation for each of the last three fiscal years earned by or
paid to the Company's Chief Executive Officer and to each of the
Company's four other most highly compensated executive officers
as of the end of fiscal 1996 who earned in excess of $100,000 in
salary and bonus during fiscal 1996 (collectively, the "Named
Executive Officers").
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation <F1> Awards
------------------- -------------
Securities All
Underlying Other
Salary Bonus Options Compensation
Name and Principal Position Year <F2> ($) ($) (#) ($)
- - ---------------------------- ------- ------ ------ ---------- -------------
<S> <C> <C> <C> <S>
William G. Miller 1996 $150,000 $41,667 - -
Chairman and Chief Executive 1995 154,000 12,500 - -
Officer 1994 112,000 - - -
Jeffrey I. Badgley 1996 98,333 27,083 33,000 -
President and Chief Operating 1995 76,667 6,250 60,000 50,000<F3>
Officer 1994 75,000 - - -
Frank Madonia 1996 83,333 22,083 25,500 -
Vice President, Secretary and 1995 80,667 6,250 60,000 50,000<F3>
General Counsel 1994 77,000 - - -
J. Vincent Mish 1996 83,333 20,000 25,500 -
Vice President, Treasurer 1995 80,667 6,250 60,000 50,000<F3>
and Chief Financial Officer 1994 77,000 - - -
L. Stanley Neely 1996 85,000 19,028 -
Vice President 1995 89,000 4,584 60,000 50,000 <F3>
1994 97,000 - - -
<FN>
<F1> Excludes perquisites and other personal benefits aggregating
less than $50,000 or 10% of the named executive's officer's
annual salary and bonus.
<F2> Years 1996 and 1995 reflect fiscal years ended April 30; Year
1994 reflects the twelve months ended April 30, 1994.
<F3> Consists of the one time payment made to the listed officers
in August 1994 as part of the settlement of certain equity
participation plans which were terminated in connection with a
reorganization in April 1994.
</FN>
</TABLE>
-8-
<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table summarizes certain information regarding
stock options issued to the Named Executive Officers during
fiscal 1996. No stock appreciation rights ("SARs") have been
granted by the Company.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Appreciation for
Individual Grants Option Term<F2>
------------------------------------------------------------------------- --------------------
Number of Percent of Total
Securities Options Granted to Exercise
Underlying Options Employees in Fiscal Price Expiration
Name Granted 1996 ($/Share) Date 5%($) 10%($)
(#)<F1>
----- -------------------- ------------------ ----------- ----------- ----- ------
<S> <C> <C> <C> <C> <S>
William G. Miller -0- -0- - - - -
Jeffrey I. Badgley 33,000 12.3% $11.33 7/18/05 $235,137 $595,884
Frank Madonia 25,500 9.5% 11.33 7/18/05 181,697 460,456
J. Vincent Mish 25,500 9.5% 11.33 7/18/05 181,697 460,456
L. Stanley Neely -0- -0- - - - -
<FN>
<F1> All options were granted pursuant to the Stock Option and Incentive
Plan, have a term of ten years, and vest in one-fourth increments
annually from July 19, 1995.
<F2> Potential realizable value is calculated from a base stock price of
$11.33, the exercise price of the options granted.
</FN>
</TABLE>
OPTIONS EXERCISED IN LAST FISCAL YEAR, FISCAL YEAR END OPTION VALUES
No options were exercised in the fiscal year ended April 30, 1996.
The following table summarizes certain information regarding year end
option values of the Named Executive Officers.
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options Held at Value of Unexercised In-the-Money
April 30, 1996 Options Held at April 30, 1996($)<F1>
------------------------------------- ----------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
-------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William G. Miller . . . -0- -0- -0- -0-
Jeffrey I. Badgley . . 15,000 78,000 $313,125 1,485,360
Frank Madonia . . . . . 15,000 70,500 313,125 1,361,273
J. Vincent Mish . . . . 15,000 70,500 313,125 1,361,273
L. Stanley Neely . . . 15,000 45,000 313,125 939 375
- - --------------------
<FN>
<F1> Reflects the market value of the underlying securities at the closing
price on the New York Stock Exchange on April 30, 1996, ($27,875),
less the exercise price.
</FN>
</TABLE>
-9-
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, SEVERANCE AND CHANGE-IN-
CONTROL ARRANGEMENTS
Miller Industries Towing Equipment entered into an employment agreement
with Mr. Badgley which provides for a base salary of a minimum of $70,000.
Mr. Badgley also receives certain insurance and other benefits as are
generally provided by the Company to its employees. Mr. Badgley's
employment agreement is for a term of 10 years and requires Mr. Badgley
to meet certain concurrent employment conditions with Miller Industries
Towing Equipment or its affiliates. Employment may be terminated prior
to that time for "cause," as defined in the employment agreement.
The employment agreement may also be terminated at the option of Miller
Industries Towing Equipment in the event net sales of products do not
equal or exceed $35 million for any rolling twelve month period and
continuing through the term of the agreement. The agreement also provides
for non-competition by Mr. Badgley for a period ending three years
from termination or expiration of the agreement, unless such a period is
extended by agreement. In consideration of the non-competition agreement,
Miller Industries Towing Equipment will pay one-half of Mr. Badgley's
base salary for such period.
In July 1995, the Company approved employment agreements with
Messrs. Madonia and Mish. Each of the agreements provides for a base
salary of $80,000 and provides for such additional benefits as are
generally available to the executive officers of the Company. Each of
these employment agreements is for a period of two years and may be
terminated by the Company for "cause," as defined therein. In addition,
each agreement provides for non-competition by the employees for a period
ending two years from expiration of the terms of the agreement, two years
following voluntary termination by the employee or termination for cause
by the Company. In consideration of the non-competition provision, the
Company will pay one-half of such employee's base salary for such period.
Each of the remaining executive officers has entered into non-
competition agreements which generally limit the ability to be employed
by a competitor of the Company, or otherwise compete with the Company,
for three years from the date of expiration or termination of employment.
The non-competition agreements also contain confidentiality and non-
disclosure provisions respecting disclosure of confidential information
of the Company.
COMPENSATION OF DIRECTORS
The members of the Board of Directors who are employees of the
Company do not receive additional compensation for Board or committee
service. Each of the non-employee directors of the Company was granted
upon the effectiveness of the Company's initial public offering options
to purchase 10,000 shares of the Common Stock pursuant to the Director
Plan at an exercise price equal to the then applicable fair market value
($7.00 per share). Each individual who subsequently becomes a non-
employee director shall be granted an option to purchase 10,000 shares of
Common Stock as of the date of becoming a director. In addition, on the
first business day following each annual meeting of shareholders, each
non-employee director is to receive an option to purchase 2,000 shares,
plus up to 2,000 additional shares based upon the earnings of the
Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 1996, the Compensation Committee was comprised of
Messrs. Chandler, Furbacher and Roberts, all of whom are non-employee
directors.
-10-
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW. The Company's general compensation policies on executive
officer compensation are administered by the Compensation Committee (the
"Committee") of the Board of Directors; however, the Committee submits
its determinations to the full Board for its comments and concurrence.
All members of the Committee are non-employee directors. It is the
responsibility of the Committee to determine whether the executive
compensation policies are reasonable and appropriate, meet their stated
objectives and effectively serve the best interests of the Company and
its shareholders.
The three components of executive officer compensation are base
salary, annual bonus awards and stock option grants, except for the Chief
Executive Officer whose compensation includes only base salary and annual
bonus awards. In addition to the Committee's determinations on base
salary and bonus award, the Committee administers the Company's stock
option plan and recommends to the Board of Directors the options to be
granted to executive officers.
The Company believes that its executive compensation policy should
be reviewed annually and should be reviewed in light of the Company's
financial performance, its annual budget, its position within its
industry sector and the compensation policies of similar companies in its
business sector. The Committee believes that in addition to corporate
performance, it is appropriate to consider in setting and reviewing
executive compensation the level of experience and the responsibilities
of each executive as well as the personal contributions a particular
individual may make to the success of the corporate enterprise. Such
qualitative factors as leadership skills, analytical skills, organization
development, public affairs and civic involvement are deemed to be
important qualitative factors to take into account in considering levels
of compensation. No relative weight is assigned to these qualitative
factors, which are applied subjectively by the Committee.
The Company uses grants of options to better align the interests of
the Company's officers and employees with the long-term interests of the
Company and its shareholders. All options for the purchase of 500 or
more shares vest in four equal annual installments, and all options for
the purchase of fewer than 500 shares vest in two equal annual
installments. All options are exercisable until the tenth anniversary of
the grant date unless otherwise earlier terminated pursuant to the terms
of the individual option agreement. During the 1996 fiscal year, the
Company granted an aggregate of 269,304 options to employees and executive
officers under the 1994 Plan. The named executive officers received
options for the purchase of an aggregate of 84,000 shares, or 31.2% of the
total shares subject to option grants granted in fiscal 1996 under the
1994 Plan. In total, options have been granted to approximately 270
employees and sales representatives of the Company since the beginning of
fiscal 1995. The Committee strongly believes it is important for the
non-executive officer employees of the company to have a long-term equity
interest in the Company.
During fiscal 1996, the Committee reviewed the salaries of all
executive officers and the established levels of participation of those
officers in the Company's Cash Bonus Plan and the 1994 Plan. In its
review, the Committee discussed the performance of the executive officers
with the Chief Executive Officer and further considered the compensation
packages, employment agreements (as applicable) and existing stock
- 11-
<PAGE>
options (as applicable) of each officer and of the Chief Executive
Officer. The Committee's review of executive officer compensation
included consideration of individual performance and contribution to the
Company, a comparison to compensation paid to executive officers in
companies of similar size in related industries, the financial
performance of the Company, and other factors the Committee believed were
relevant in making its determination. Based on its review, the Committee
determined not to grant any additional options or otherwise adjust
compensation for any of the Executive Officers as had been previously
established by the Board of Directors.
Each of Messrs. Badgley, Madonia and Mish is a party to an
employment agreement with the Company or a subsidiary of the Company.
The agreement of Badgley was entered into on October 14, 1993, and the
agreements of Messrs. Madonia and Mish were approved in July, 1995. Mr.
Miller, the Company's Chief Executive Officer, is not employed under an
employment agreement. Mr. Miller's compensation for fiscal 1996 was
established by the Board of Directors, and he received no options for the
purchase of shares of Common Stock. Mr. Miller is a holder of
approximately 29% of the outstanding Common Stock.
FEDERAL INCOME TAX DEDUCTIBILITY LIMITATION ON EXECUTIVE
COMPENSATION. Section 162(m) of the Internal Revenue Code was enacted as
part of the 1993 Omnibus Budget Reconciliation Act ("OBRA") and generally
disallows a corporate deduction for compensation over $1,000,000 paid to
the Company's Chief Executive Officer or any other of the four highest
compensated officers. The Committee continues to analyze the potential
impact of this limitation. Under the regulations and the transition
rules, executive compensation pursuant to the 1994 Plan should be
qualifying "performance based" compensation and therefore be excluded
from the $1,000,000 limit. Other forms of compensation provided by the
Company, however, including base salary and amounts awarded under the
Cash Bonus Plan, are not excluded from the limit. The Committee
currently anticipates that substantially all compensation to be paid in
future years will be deductible under Section 162(m) because of the
spread between present levels of executive officer compensation and the
limit under the regulation. In any event, the Committee believes that
performance based compensation is desirable and can be structured in a
manner to constitute qualifying as performance based compensation under
Section 162(m).
A. Russell Chandler, III
Stephen A. Furbacher
Richard H. Roberts
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PERFORMANCE GRAPH
The following line graph compares the percentage change in the
cumulative shareholder return on the Common Stock with The Nasdaq Composite
Index, The New York Stock Exchange Composite Index and the Standard &
Poor's Heavy Trucks and Parts Index over the period of time from August 2,
1994 (the initial trading date of the Common Stock) through April 30, 1996.
The Common Stock was reported on the Nasdaq Stock Market's National Market
until December 19, 1995, and since that date has traded on the New York
Stock Exchange. The companies included in the Standard & Poor's Heavy Trucks
and Parts Index are Cummins Engine Company, Inc., Dana Corporation, Eaton
Corporation, Navistar International Corporation and Paccar, Inc. The
respective returns assume reinvestment of dividends paid.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Stock Performance Graph
8/2/94 4/28/95 4/30/96
------ ------- -------
<S> <C> <C> <C>
Miller Industries, Inc. 100.0 161.1 371.6
NYSE Composite Index 100.0 109.1 138.2
Nasdaq Composite Index 100.0 116.4 164.3
S&P Heavy Duty Trucks & Parts 100.0 105.0 121.3
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EQUIPMENT LEASE. The Company has leased certain manufacturing
equipment from Challenger Wrecker Corporation ("Challenger Wrecker")
under an operating lease agreement. In connection with the dissolution
and liquidation of Challenger Wrecker and Miller Group, Inc., the
equipment was distributed to William G. Miller. The Company made lease
payments of $12,000 to Mr. Miller and acquired the equipment at one-half
its book value ($52,800) in accordance with the lease terms in August
1995.
PAYMENTS TO FLOW MEASUREMENT, INC. During the fiscal year 1996, the
Company leased an airplane from Flow Measurement, Inc. Aggregate payments
made during fiscal 1996 were $75,734. William G. Miller, Chairman,
President and Chief Executive Officer of the Company owns 80% of the
outstanding stock of Flow Measurement, Inc. The Company believes the
rates charged for lease of the airplane were below rates the Company
could otherwise obtain from an independent third party.
PROPOSAL 2: AMENDMENT OF
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Non-Employee Director Stock Option Plan (the "Director Plan")
was originally adopted by the Company's shareholders on April 28, 1994,
and amended at the 1995 annual meeting. The purposes of the Plan are to
attract and retain well-qualified persons for service as directors of the
Company and to provide directors with an opportunity to increase their
ownership interest in the Company, thereby aligning their interests with
those of the Company's shareholders, generally. The Director Plan
currently authorizes the grant of options for an aggregate of 300,000
shares (as adjusted to give effect to the 3-for-2 stock split on the
Common Stock effected in April 1996). The Board of Directors has adopted
an amendment to the Director Plan, which, subject to shareholder approval
at the Annual Meeting, would increase the aggregate number of shares of
Common Stock authorized for issuance to 400,000.
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As initially adopted, the Director Plan provided that on the first
business day following each annual meeting of shareholders, each non-
employee director was to receive an option to purchase up to 2,000 shares
of the Common Stock. The specific number of shares granted (up to a
maximum of 2,000) was based on the performance of the Company as measure
by the increase in income before income taxes for the immediately
preceding fiscal year as compared to the next preceding fiscal year. In
addition, each non-employee director who served as of the effective date
of the Company's initial public offering (or who becomes a director at
any time in the future) received (or shall receive) an option for the
purchase of 10,000 shares of Common Stock.
As amended, the Director Plan currently provides that, in addition
to the provisions set forth in the paragraph above, non-employee
directors, in lieu of cash compensation, receive an option for the
purchase of 2,000 shares of Common Stock for service as a director, on
the first day following each annual meeting of shareholders (beginning
with the Annual Meeting). Therefore each non-employee director on the
day following each annual meeting of shareholders will receive an option
for the purchase of 2,000 shares of Common Stock and an option for the
purchase of up to 2,000 shares based on the Company's performance as set
forth in the paragraph above. No cash compensation for attending Board
or committee meetings is paid.
Should the amendment to the Director Plan be approved, the number of
shares reserved for issuance pursuant to the exercise of options under
the Director Plan will be increased to an aggregate of 400,000 shares of
Common Stock.
A copy of the proposed amendment is attached as EXHIBIT A to this
Proxy Statement. If approved by the shareholders, the amendment will
become effective as of June 28, 1996.
SUMMARY OF MATERIAL PROVISIONS OF THE DIRECTOR PLAN
The following is a summary of the material provisions of the
Director Plan, as proposed to be amended.
SHARES. The total number of shares of Common Stock available for
distribution pursuant to the Director Plan is currently 300,000 shares,
of which options for the purchase of 120,000 shares have been granted.
Approval of the proposed amendment will increase the shares available for
issuance upon the exercise of options from 300,000 to 400,000 shares.
The increase in authorized shares is to provide the Company with the
ability over the next several years to make the nondiscretionary grants
as contemplated in the Director Plan. Options which expire unexercised
or are forfeited shall again become available for distribution under the
Director Plan.
PARTICIPATION. All directors of the Company who are neither full-
time employees of the Company nor officers of the Company participate in
the Director Plan.
ADMINISTRATION. The Director Plan is administered by the
Compensation Committee of the Company's Board of Directors.
AWARDS UNDER THE DIRECTOR PLAN. Pursuant to the Director Plan, the
Company granted options to purchase 15,000 shares of Common Stock to each
of the Company's then-current non-employee directors on the date of the
effectiveness of the initial public offering at an exercise price equal
to the initial public offering price of the Common Stock in the Offering.
The Director Plan also provides that each new non-employee director will
receive options to purchase 10,000 shares of Common Stock upon his or her
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initial election to the Board. Such options will become exercisable
annually in three equal installments beginning on the first anniversary
of the date of the grant and will expire ten years from the date of grant
if not exercised.
In addition, the Director Plan provides that each non-employee
director who served in such capacity for at least six months of the
previous fiscal year is automatically granted, on the first business day
following each annual meeting of shareholders, an option to purchase up
to 2,000 shares of Common Stock based upon the performance of the Company
as measured by the increase in income before taxes for the immediately
preceding fiscal year as compared to the next preceding fiscal year. In
addition, each non-employee director shall receive an option for the
purchase of 2,000 shares on the first business day following each annual
meeting of shareholders. Such options will become exercisable in equal
amounts, one-half at the end of the fiscal year (but not less than six months)
following the date of grant, and the remainder 18 months after the date
of grant. All such options will expire ten years from the date of grant
if not exercised.
The option exercise price under the Director Plan will be equal to
100% of the Fair Market Value (as defined in the Director Plan) of the
Common Stock on the date of the option grant. The option exercise price
may be paid in cash, shares of Common Stock, or a combination of cash and
shares. All options granted to non-employee directors are
nontransferable, other than by will or the laws of descent and
distribution, and each option is exercisable, during the lifetime of the
optionee, only by the optionee. If a person ceases to be a non-employee
director due to death, disability or retirement, his or her options
generally will be exercisable for a period of one year thereafter (but
not later than the expiration date of the option). If a non-employee
director's service terminates for any other reason, options that are not
then exercisable shall be canceled, and options that are exercisable may
be exercised at any time within 90 days after the date of such
termination (but not later than the expiration date of the options).
CHANGE IN CONTROL PROVISIONS. The Director Plan provides for the
acceleration of certain benefits in the event of a "Change in Control"
(as defined in the Director Plan) of the Company. Upon the occurrence of
a Change in Control, all unexpired non-employee director options shall
become immediately exercisable and vested, and options which have been
outstanding for at least six months shall be canceled in consideration
for a payment equal to the excess of the Change in Control Price (as
defined in the Director Plan) of the Common Stock over the option
exercise price.
AMENDMENT. The Director Plan may be amended by the Board of
Directors, except that the Board may not (i) change any option previously
made under the Director Plan in a manner which would impair the
recipients' rights without their consent; (ii) amend the Director Plan
without approval of the Company's shareholders if the effect of the
amendment would be to: (a) materially increase the number of shares
reserved under or benefits accruing to participants under the Director
Plan, (b) materially change the requirements for eligibility under the
Director Plan, or (c) materially modify the method for determining the
number of options granted under the Director Plan, except as authorized
by the Director Plan; and (iii) amend the Director Plan within six months
of a prior amendment, except as required for compliance with the Internal
Revenue Code of 1986, as amended from time to time, or the rules
thereunder.
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<PAGE>
ADJUSTMENT. In the case of a reorganization, recapitalization,
stock split, reverse stock split, stock dividend, exchange or combination
of shares, merger, consolidation, rights offering, or any change in
capitalization of the Company, appropriate adjustments will be made by
the Compensation Committee, in its sole discretion, in the number of
shares for which options may be granted pursuant to the Director Plan.
FEDERAL INCOME TAX ASPECTS. With respect to the nonqualified stock
options to be granted pursuant to the Director Plan: (a) no income is
realized by the participant at the time the option is granted; (b)
generally upon exercise of the option, the participant realizes ordinary
income in an amount equal to the difference between the option price paid
for the shares and the fair market value on the date of exercise and the
Company will be entitled to a tax deduction in the same amount; and (c)
at disposition any appreciation (or depreciation) after the date of
exercise is treated as a short-term or a long-term capital gain or loss,
depending upon the length of time that the participant has held the
shares.
CONCLUSION AND RECOMMENDATION
The Board of Directors believes it is in the best interests of the
Company and its shareholders to adopt the amendment to the Director Plan.
A majority of the votes of all shares present, represented and
entitled to vote is necessary for approval of this proposal. THE BOARD
OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO THE NON-
EMPLOYEE DIRECTOR STOCK OPTION PLAN.
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<PAGE>
PROPOSAL 3: AMENDMENT OF
STOCK OPTION AND INCENTIVE PLAN
The Company's Stock Option and Incentive Plan was originally adopted
by the Company's shareholders in April 1994 (the "1994 Plan"). The 1994
Plan currently authorizes 1,500,000 shares (all share numbers have been
revised to give effect to the 3-for-2 stock split on the Common Stock effected
in April 1996) of Common Stock for issuance. At April 30, 1996 there
were 694,590 shares of Common Stock available for issuance under the
1994 Plan. The Board of Directors has proposed an amendment to the 1994
Plan, subject to shareholder approval at the Annual Meeting, to increase
the number of shares authorized for grant to a maximum of 3,000,000
shares. The amendment provides further, however, that the Compensation
Committee (the "Committee") may not make grants under the 1994 Plan to the
extent that any such grant would cause the number of shares authorized for
grant pursuant to outstanding grants to exceed 12.5% of the issued and
outstanding shares of Common Stock at the time of, and after giving
effect to, the grant. Based on the number of shares of Common Stock
outstanding at April 30, 1996, a maximum of 1,446,417 shares (12.5%
of 11,571,336) would have been eligible for issuance pursuant to options
under the 1994 plan as of that time.
As the Company expands internally and through acquisitions, it
expects the number of employees eligible for grants under the 1994 Plan
to increase. The Board has proposed the amendment to increase the
number of shares authorized under the 1994 Plan to accommodate the
expected increases in personnel, but, recognizing that the increases
will occur over time, the Board decided to limit the number of shares
subject to outstanding grants to 12.5% of the issued and outstanding
Common Stock at the time of the grant. For example, although the amendment
would ultimately allow up to 3,000,000 shares to be issued pursuant to
grants, at April 30, 1996 an aggregate of only 1,446,417 shares would
have been eligible for issuance due to the 12.5% limitation.
The Committee and the Board believe that stock-based incentive
compensation, particularly through the award of stock options, is a key
element of officer and key employee compensation. Stock-based
compensation advances the interests of the Company by encouraging and
providing for the acquisition of equity interests in the Company by
officers and key employees, thereby providing substantial motivation for
superior performance and more fully aligning their interests with
shareholders.
A copy of the proposed amendment is attached as EXHIBIT B to this
Proxy Statement. If approved by shareholders, the amendment will become
effective as of June 28, 1996.
SUMMARY OF MATERIAL PROVISIONS OF THE PLAN
The following is a summary of the material provisions of the 1994
Plan, as proposed to be amended.
SHARES
Subject to shareholder approval at the Annual Meeting, the
1994 Plan will be amended to authorize the issuance of up to 3,000,000
shares of the Common Stock. The number of shares subject to grants under
the 1994 Plan would be further limited, however, so that at no time may
the Committee make grants under the 1994 Plan for shares in excess of
12.5% of the issued and outstanding Common Stock at the time of any grant.
As of April 30, 1996, options for 805,410 shares (approximately 7% of the
Company's outstanding Common Stock on that date) under the Plan were
outstanding. Based on the number of shares of Common Stock outstanding
at April 30, 1996, a maximum of 1,446,417 shares (12.5% of 11,571,336) would
-17-<PAGE>
have been eligible for issuance pursuant to options under the 1994 Plan
as of that date. Shares awarded under the 1994 Plan may consist, in whole
or in part, of authorized and unissued shares or treasury shares. If shares
subject to an option under the 1994 Plan cease to be subject to such option,
or if shares awarded under the 1994 Plan are forfeited or otherwise terminate
without a payment being made to the participant in the form of Common
Stock and without the payment of any dividends thereon, such shares will
again be available for future distribution under the 1994 Plan. As
amended, the 1994 Plan will continue to provide for appropriate
adjustment in the number of shares in the event of a stock dividend,
recapitalization, merger or the like.
PARTICIPATION
1994 Plan awards may be made to employees, including
officers, of the Company, its subsidiaries and affiliates, and to
consultants thereof, but may not be granted to any director who is a
member of the Committee administering the 1994 Plan or to any other
director unless the director is also a regular employee of the Company,
its subsidiaries or affiliates. The number of officers and other
employees currently eligible for awards pursuant to the 1994 Plan is
approximately 320.
ADMINISTRATION
The 1994 Plan is administered by a Committee of no
less than two disinterested individuals to be appointed by the Board,
which Committee is currently the Compensation Committee of the Board.
AWARDS UNDER THE PLAN
The Committee will have the authority to grant the following type
of awards under the 1994 Plan: (1) stock
options; (2) stock appreciation rights; (3) restricted stock; (4)
deferred stock; (5) stock purchase rights; and (6) other stock-based
awards.
1. STOCK OPTIONS. Incentive stock options ("ISOs") and non-
qualified stock options may be granted for such number of shares as the
Committee will determine and may be granted alone, in conjunction with,
or in tandem with, other awards under the 1994 Plan and/or cash awards
outside the 1994 Plan.
A stock option will be exercisable at such times and subject to such
terms and conditions as the Committee will determine and over a term to
be determined by the Committee, which term will be no more than ten years
after the date of grant. The option price for any ISO will not be less
than 100% (110% in the case of certain 10% shareholders) of the fair
market value of the Company's Common Stock as of the date of grant.
Payment of the option price (in the case of an ISO) may be in cash, or,
as determined by the Committee, by unrestricted Common Stock having a
fair market value equal to the option price. For non-qualified stock
options, payment, as determined by the Committee, may also be made in the
form of restricted stock or deferred stock.
Upon termination of an option holder's employment for cause, such
employee's stock options will terminate. On the employee's retirement,
stock options will be exercisable within the lesser of the remainder of
the option period or three months from the date of retirement. Upon death
or disability of an employee, stock options will be exercisable by the
deceased employee's representative within the lesser of the remainder
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<PAGE>
of the option period or one year from the date of the employee's death
or disability. Unless otherwise determined by the Committee, if the
employee's employment is terminated for any reason other than death,
disability or retirement, all of the employee's employment is
terminated for any reason other than death, disability or retirement,
all of the employee's unexercised options shall immediately terminate;
provided, however, that if the employee is involuntarily terminated
without cause, the employee's options will be exercisable for three
months following termination or until the end of the option period,
whichever is shorter.
2. STOCK APPRECIATION RIGHTS. Stock Appreciation Rights ("SARs")
may be granted in conjunction with all or part of a stock option and will
be exercisable only when the underlying stock option is exercisable.
Once an SAR has been exercised, the related portion of the stock
underlying the SAR will terminate.
Upon the exercise of an SAR, the Committee will pay to the employee
in cash, Common Stock or a combination thereof (the method of payment to
be at the discretion of the Committee), an amount of money equal to the
excess between the fair market value of the stock on the exercise date
and the option price, multiplied by the number of SARs being exercised.
In addition to the foregoing SARs, the Committee may grant limited
SARs which will be exercisable only in the event of a change in control
or potential change in control of the Company as defined in the 1994
Plan. In awarding SARs or limited SARs, the Committee may provide that
in the event of a change in control or potential change in control, SARs
or limited SARs may be cashed out on the basis of the change in control
price, as defined in the 1994 Plan.
3. RESTRICTED STOCK. Restricted stock may be granted alone, in
conjunction with, or in tandem with, other awards under the 1994 Plan
and/or cash awards outside of the 1994 Plan and may be conditioned upon
the attainment of specific performance goals or such other factors as the
Committee may determine. The provisions attendant to a grant of
restricted stock may vary from participant to participant.
In making an award of restricted stock, the Committee will determine
the periods during which the stock is subject to forfeiture, and may
grant such stock at a purchase price equal to or less than the par value
of the Common Stock.
During the restriction period, the employee may not sell, transfer,
pledge or assign the restricted stock. The certificate evidencing the
restricted stock will remain in the possession of the Company until the
restrictions have lapsed.
Upon the termination of the employee's employment for any reason
during the restriction period, all shares of restricted stock either will
vest or be subject to forfeiture, in accordance with the terms and
conditions established by the Committee at or after grant. During the
restriction period, the employee will have the right to vote the
restricted stock and to receive any cash dividends. At the time of
award, the Committee may require the deferral and reinvestment of any
cash dividends in the form of additional shares of restricted stock.
Stock dividends will be treated as additional shares of restricted stock
and will be subject to the same terms and conditions as the initial
grant.
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4. DEFERRED STOCK. Deferred stock may be granted alone, in
conjunction with, or in tandem with, other awards under the 1994 Plan
and/or cash awards outside of the 1994 Plan and may be conditioned upon
the attainment of specific performance goals or such other factors as the
Committee may determine. The provisions attendant on a grant of deferred
stock may vary from participant to participant.
During the deferral period as set by the Committee, the employee may
not sell, transfer, pledge or assign the deferred stock award. At the
end of the deferral period, shares of common stock equal to the number
covered by the award of deferred stock will be delivered to the employee.
5. STOCK PURCHASE RIGHTS. The Committee may grant eligible
individuals rights to purchase the Company's Common Stock at (a) fair
market value at the date of grant, (b) the fair market value on the date
of purchase, (c) 50% of fair market value at the date of grant or
purchase, (d) the book value at the date of grant or purchase, or (e) an
amount equal to the par value of the Common Stock on the date of grant.
The Committee may condition such rights, or their exercise, on such terms
and conditions as it sees fit.
6. OTHER STOCK-BASED AWARDS. The Committee may also grant other
types of awards that are valued, in whole or in part, by reference to or
otherwise based on the Company's Common Stock. These awards may be
granted alone, in addition to, or in tandem with, stock options, SARs,
restricted stock, deferred stock or stock purchase rights and/or cash
awards outside of the 1994 Plan. Such awards will be made upon terms and
conditions as the Committee may in its discretion provide.
CHANGE IN CONTROL PROVISIONS
If there is a change in control or a potential change in control
(as defined in the 1994 Plan), any SARs and limited SARs outstanding
for at least six months and any stock options which are not then
exercisable will become fully exercisable and vested. Similarly, the
restrictions and deferral limitations applicable to restricted stock,
deferred stock, stock purchase rights and other stock-based awards will
lapse and such shares and awards will be deemed fully vested. Stock
options, SARs, limited SARs, restricted stock, deferred stock, stock
purchase rights and other stock-based awards will, unless otherwise
determined by the Committee in its sole discretion, be cashed
out on the basis of the change in control price described below.
The change in control price will be the highest price per share paid
in any transaction reported on The New York Stock Exchange, or paid or
offered to be paid in any bona fide transaction relating to a potential
or actual change in control of the Company, at any time during the
immediately preceding 60 day period as defined by the Committee. A
change in control occurs if (1) any person becomes a beneficial owner
directly or indirectly of 40% or more of the total voting stock of the
Company (subject to certain exceptions), (2) as a result of, or in
connection with, any cash tender or exchange offer, merger or other
business combination or similar transaction less than a majority of the
combined voting power of the then outstanding securities of the Company
are held in the aggregate by the holders of Company securities entitled
to vote generally in the election of directors immediately prior to such
transaction, (3) during any period of two consecutive years, individuals
which at the beginning of such period constitute the Board of Directors
cease for any reason to constitute at least a majority thereof unless
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each director of the Company first elected during such period was
approved by a vote of at least two-thirds of the directors the Company
then still in office who were directors of the Company at the beginning
of any such period or (4) a majority of the members of the Committee in
office prior to the happening of any event determines in its sole
discretion that as a result of such event there has been a change of
control. A potential change in control means (1) approval by the
shareholders of an agreement which, if completed, would constitute a
change in control, or (2) the acquisition by a person of 5% or more of
the total voting stock of the Company and the adoption by the Committee
of a resolution that a potential change in control, as defined in the
1994 Plan, has occurred.
AMENDMENT
The 1994 Plan may be amended by the Board of Directors,
except that the Board may not, without the approval of the Company's
shareholders, increase the number of shares available for distribution,
change the pricing rule applicable for stock options or purchase rights,
change the employees or class of employees eligible to receive awards
under the 1994 Plan, or extend the term of the 1994 Plan.
ADJUSTMENT
In the case of a stock split, stock dividend,
reclassification, recapitalization, merger, reorganization, or other
change in the Company's structure affecting the Common Stock, appropriate
adjustments will be made by the Committee, in its sole discretion, in the
number of shares reserved under the 1994 Plan and in the number of shares
covered by options and other awards then outstanding under the 1994 Plan
and, where applicable, the exercise price for awards under the 1994 Plan.
FEDERAL INCOME TAX ASPECTS
The following is a brief summary of the
Federal Income tax aspects of awards made under the 1994 Plan based upon
the federal income tax laws in effect on the date hereof. This summary
is not intended to be exhaustive, and does not describe state or local
tax consequences.
1. INCENTIVE STOCK OPTIONS. No taxable income is realized by the
participant upon the grant or exercise of an ISO. If Common Stock is
issued to a participant pursuant to the exercise of an ISO, and if no
disqualifying disposition of the shares is made by the participant within
two years of the date of grant or within one year after the transfer of
the shares to the participant, then: (a) upon the sale of the shares,
any amount realized in excess of the option price will be taxed to the
participant as a long-term capital gain, and any loss sustained will be a
capital loss, and (b) no deduction will be allowed to the Company for
Federal income tax purposes. The exercise of an ISO will give rise to an
item of tax preference that may result in an alternative minimum tax
liability for the participant unless the participant makes a
disqualifying disposition of the shares received upon exercise.
If Common Stock acquired upon the exercise of an ISO is disposed of
prior to the expiration of the holding periods described above, then
generally: (a) the participant will realize ordinary income in the year
of disposition in an amount equal to the excess, if any, of the fair
market value of the shares at exercise (or, if less, the amount realized
on the disposition of the shares) over the option price paid for such
shares, and (b) the Company will be entitled to deduct any such
recognized amount. Any further gain or loss realized by the participant
will be taxed as short-term or long-term gain or loss, as the case may
be, and will not result in any deduction by the Company.
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Subject to certain exceptions for disability or death, if an ISO is
exercised more than three months following the termination of the
participant's employment, the option will generally be taxed as a non-
qualified stock option.
2. NON-QUALIFIED STOCK OPTIONS. Except as noted below, with
respect to non-qualified stock options: (a) no income is realized by the
participant at the time the option is granted; (b) generally upon
exercise of the option, the participant realizes ordinary income in an
amount equal to the difference between the option price paid for the
shares and the fair market value of the shares on the date of exercise,
and the Company will be entitled to a tax deduction in the same amount;
and (c) at disposition, any appreciation (or depreciation) after date of
exercise is treated either as short-term or long-term capital gain or
loss, depending upon the length of time that the participant has held the
shares. See "Restricted Stock" for tax rules applicable where the spread
value of an option is settled in an award of restricted stock.
3. STOCK APPRECIATION RIGHTS. No income will be realized by a
participant in connection with the grant of an SAR. When the SAR is
exercised, the participant will generally be required to include as
taxable ordinary income in the year of exercise, an amount equal to the
amount of cash and the fair market value of any shares received. The
Company will be entitled to a deduction at the time and in the amount
included in the participant's income by reasons of the exercise. If the
participant receives Common Stock upon exercise of an SAR, the post-
exercise appreciation or depreciation will be treated in the same manner
discussed above under "Non-Qualified Stock Options".
4. RESTRICTED STOCK. A participant receiving restricted stock
generally will recognize ordinary income in the amount of the fair market
value of the restricted stock at the time the stock is no longer subject
to forfeiture, less the consideration paid for the stock. However, a
participant may elect, under Section 83(b) of the Code within 30 days of
the grant of the stock, to recognize taxable ordinary income on the date
of grant equal to the excess of the fair market value of the shares of
restricted stock (determined without regard to the restrictions) over the
purchase price of the restricted stock. Thereafter, if the shares are
forfeited, the participant will be entitled to a deduction, refund, or
loss, for tax purposes only, in an amount equal to the purchase price of
the forfeited shares regardless of whether he made a Section 83(b)
election. With respect to the sale of shares after the forfeiture period
has expired, the holding period to determine whether the participant has
long-term or short-term capital gain or loss generally begins when the
restriction period expires and the tax basis for such shares will
generally be based on the fair market value of such shares on such date.
However, if the participant made an election under Section 83(b), the
holding period will commence on the date of grant, the tax basis will be
equal to the fair market value of shares on such date (determined without
regard to restrictions), and the Company generally will be entitled to a
deduction equal to the amount that is taxable as ordinary income to the
participant in the year that such income is taxable.
5. DIVIDENDS AND DIVIDEND EQUIVALENTS. Dividends paid on
restricted stock generally will be treated as compensation that is
taxable as ordinary income to the participant, and will be deductible by
the Company. If, however, the participant makes a Section 83(b)
election, the dividends will be taxable as ordinary income to the
participant but will not be deductible by the Company.
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<PAGE>
6. OTHER STOCK-BASED AWARDS. The Federal income tax treatment of
other stock-based awards will depend on the nature of any such award and
the restrictions applicable to such award. Such an award may, depending
on the conditions applicable to the award, be taxable as an option, an
award of restricted stock, or in a manner not described herein.
CONCLUSION AND RECOMMENDATION
The Board of Directors believes it is in the best interests of the
Company and its shareholders to adopt the amendment to the 1994 Plan to
help attract and retain key persons of outstanding competence and to
further identify their interests with those of the Company's shareholders
generally.
A majority of the votes of all shares present, represented and
entitled to vote is necessary for approval of this proposal. THE BOARD
OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO THE 1994
EMPLOYEE STOCK INCENTIVE PLAN.
PROPOSAL 4: INCREASE IN AUTHORIZED COMMON STOCK
On June 28, 1996, the Board of Directors of the Company unanimously
approved an amendment to the Company's Charter to increase the number of
authorized shares of the Common Stock from 20,000,000 to 100,000,000
shares, subject to approval by the shareholders at the Annual Meeting.
The Board of Directors believes that the amendment is in the best
interest of the Company and its shareholders. The amendment will provide
additional shares of Common Stock which could be used for various
purposes without requiring further shareholder approval unless
necessitated by applicable law, regulation or stock exchange rule.
Immediately after the amendment, approximately 11,571,912 shares of
Common Stock would be outstanding, and 3,400,000 shares of Common Stock
would be reserved for issuance under the Company's stock option plans
(assuming approval of Items 2 and 3 described herein), of which
924,496 shares would be subject to outstanding options. The
remaining authorized shares of Common Stock would be available for
issuance from time to time for any proper corporate purpose, including
stock splits, stock dividends, financings, acquisitions, stock options
and other employee benefit plans.
The Board believes that having additional authorized shares of
Common Stock is desirable in order for the Company to be able to issue
additional shares without the expense and delay of a special shareholders
meeting in many cases. The Company does not presently have any definitive
agreement that would result in the issuance of any additional shares of
Common Stock, except pursuant to the Company's stock option plans.
The availability of authorized but unissued shares of Common Stock
could affect the ability of a third party to gain voting control of the
Company, since the Board of Directors could authorize the issuance of
such shares in a private placement or otherwise to one or more persons,
thereby diluting the voting power of a person attempting to acquire
control. Additionally, unissued shares could be issued in circumstances
that would dilute the equity position of any such potential acquiror. In
either event, the issuance of shares of Common Stock could serve to
preserve the present control of the Company.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock is required for the adoption of the proposed
amendment. The Board of Directors recommends a vote FOR approval of the
amendment to the Company's Charter to increase the number of authorized
shares.
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<PAGE>
PROPOSAL 5: INCREASE IN MAXIMUM SIZE OF BOARD
On June 28, 1996, the Board of Directors of the Company also
unanimously approved an amendment to the Company's Charter to increase
the maximum number of directors that may constitute the entire Board of
Directors from seven to fifteen, subject to approval by the shareholders
at the Annual Meeting.
The Company's Charter currently provides that the number of directors
which shall constitute the entire Board of Directors shall be not less
than three nor more than seven, with the exact number within that range
being determined from time to time by the Board of Directors. The Board
currently consists of seven directors, but cannot be expanded beyond
seven without amending the Company's Charter. The Board believes it
would be desirable for the Company to have the flexibility to offer Board
seats to qualified persons from time to time without replacing current
members. For example, if the Company were to consummate a significant
acquisition, the Board might find it beneficial to expand the size of the
Board to add one or more significant shareholders or members of management
of the acquired company. The Board could make such appointments without
seeking shareholder approval.
If the proposed amendment is adopted, the Board may at any time act
to increase its size and appoint persons chosen by the Board to fill the
vacancy or vacancies created by such increase. The Board does not,
however, have any current plans to increase the size of the Board beyond
the seven members described in this proxy statement.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock is required for the adoption of the proposed
amendment. The Board of Directors recommends a vote FOR approval of the
amendment to the Company's Charter to increase the maximum size of the
Board of Directors.
PROPOSAL 6: RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
Upon recommendation of the Audit Committee, the Board of Directors
has appointed Arthur Andersen, LLP, independent public accountants, to
audit the accounts of the Company for fiscal 1997. Arthur Andersen, LLP
audited the accounts of the Company for fiscal 1996 and has served as
independent public accountants to the Company since its inception. While
ratification by the shareholders of this appointment is not required by
law or the Company's Charter or Bylaws, management of the Company
believes that such ratification is desirable. A representative of Arthur
Andersen, LLP, is expected to be present at the Annual Meeting, will have
an opportunity to make a statement if he or she so desires, and is
expected to be available to respond to appropriate questions. The Board
of Directors recommends a vote "FOR" ratification of Arthur Andersen, LLP
as independent public accountants to the Company.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 19934
Section 16(a) of the Securities Exchange Act of 1934 and the
disclosure requirements of Item 405 of Regulation S-K require the
directors and executive officers of the accompany, and any persons
holding more than 10% of any class of equity securities of the Company,
to report their ownership of such equity securities and any subsequent
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<PAGE>
changes in that ownership to the Securities and Exchange Commission, The
New York Stock Exchange and the Company. Based solely on a review of the
written statements and copies of such reports furnished to the Company by
its executive officers and directors, the Company believes that during
fiscal 1996 all Section 16(a) filing requirements applicable to its
executive officers, directors and stockholders were timely satisfied.
DEADLINE FOR SUBMISSION TO SHAREHOLDERS
OF PROPOSALS TO BE PRESENTED AT THE
1997 ANNUAL MEETING OF SHAREHOLDERS
Any proposal intended to be presented for action at the 1997 Annual
Meeting of Shareholders by any shareholder of the Company must be
received by the Secretary of the Company not later than March 3, 1997
in order for such proposal to be considered for inclusion in the
Company's Proxy Statement and proxy relating to its 1997 Annual Meeting
of Shareholders. Nothing in this paragraph shall be deemed to require
the Company to include any shareholder proposal which does not meet all
the requirements for such inclusion established by the Securities and
Exchange Commission at the time in effect.
METHOD OF COUNTING VOTES
Unless a contrary choice is indicated, all duly executed proxies
will be voted in accordance with the instructions set forth on the back
side of the proxy card. Abstentions and "non-votes" will be counted for
the purposes of determining a quorum. Abstentions and non-votes are
treated as votes against the proposals presented to the shareholders
other than the election of directors. Because directors are elected by a
plurality of the votes cast, abstentions are not considered in the
election. A "non-vote" occurs when a nominee holding shares for a
beneficial owner votes on one proposal, but does not vote on another
proposal because the nominee does not have discretionary voting power and
has not received instructions from the beneficial owner.
MISCELLANEOUS
It is important that proxies be returned promptly, to avoid
unnecessary expense. Therefore, shareholders who do not expect to attend
in person are urged, regardless of the number of shares of stock owned,
to date, sign and return the enclosed proxies promptly.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED APRIL 30, 1996 IS INCLUDED WITHIN THE ANNUAL REPORT PROVIDED
WITH THIS PROXY STATEMENT. COPIES OF EXHIBITS FILED WITH THE FORM 10-K
ARE AVAILABLE UPON WRITTEN REQUEST UPON PAYMENT OF CHARGES APPROXIMATING
THE COMPANY'S COST. REQUESTS SHOULD BE MADE IN WRITING TO FRANK MADONIA,
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL, MILLER INDUSTRIES, INC.,
900 CIRCLE 75 PARKWAY, SUITE 1250, ATLANTA, GEORGIA 30339.
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<PAGE>
EXHIBIT A
SECOND AMENDMENT TO
MILLER INDUSTRIES, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Miller Industries, Inc. Non-Employee Director Stock Option Plan
is hereby amended as follows, subject to the approval of the Miller
Industries, Inc. shareholders at the 1996 Annual Meeting of Shareholders:
1. By deleting the first sentence of Section 5(a) in its entirety
and substituting in its place the following:
"Options to purchase up to 400,000 shares of Common Stock
may be granted hereunder."
2. By inserting at the end of Section 8 the following sentence:
"The amendment to the Director Plan shall become effective as
of the first meeting of shareholders following the amendment
approved by the directors on June 28, 1996."
<PAGE>
EXHIBIT B
SECOND AMENDMENT TO
MILLER INDUSTRIES, INC.
STOCK OPTION AND INCENTIVE PLAN
Section 3 of the Miller Industries, Inc. Stock Option and Incentive
Plan is hereby amended, effective as of June 28, 1996, subject to the
approval of the Miller Industries, Inc. shareholders at the 1996 Annual
Meeting of Shareholders, by deleting the first sentence in its entirety
and substituting therefore the following:
"The total number of shares of Stock reserved and
available for distribution under the Plan shall be three
million (3,000,000) shares; provided, however, that at no time
may the Committee make grants hereunder with respect to shares of
Stock subject to outstanding grants under the Plan in excess of an
amount equal to 12.5% of the aggregate number of shares of Stock
outstanding at the time of, and after giving effect to, the grant."
<PAGE>
MILLER INDUSTRIES, INC.
This Proxy is Solicited by the Board of Directors for the Annual
Meeting of Shareholders to be Held on Friday, August 30, 1996
PROXY
The undersigned shareholder of Miller Industries, Inc. hereby
constitutes and appoints William G. Miller and Frank Madonia, or either
of them, the true and lawful attorneys and proxies of the undersigned with
full power of substitution and appointment, for and in the name, place and
stead of the undersigned, to vote all of the undersigned's shares of Common
Stock of Miller Industries, Inc., at the Annual Meeting of the Shareholders
to be held in Atlanta, Georgia on Friday, the 30th day of August, 1996, at
11:00 a.m., and at any and all adjournments thereof as follows:
(1) / / FOR all of the following Class II nominees (except as marked
to the contrary below:
NOMINEES: A. Russell Chandler, III and Jeffrey I. Badgley,
/ / WITHHOLD AUTHORITY to vote for all nominees listed,
(Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below).
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(2) For the approval of the proposal to amend the Company's Non-Employee
Director Stock Option Plan to increase the number of shares issuable
thereunder
/ / For / / Against / / Abstain
(3) For the approval of the proposal to amend the Company's Stock Option
and Incentive Plan to increase the number of shares issuable
thereunder.
/ / For / / Against / / Abstain
(4) For the approval of the proposal to amend the Company's Charter to
increase the number of authorized shares of Common Stock.
/ / For / / Against / / Abstain
(5) For the approval of the proposal to amend the Company's Charter to
increase the maximum number of directors which may constitute the
entire Board of Directors.
/ / For / / Against / / Abstain
(6) For the approval of the proposal to ratify the appointment of Arthur
Anderson, LLP as the independent accountants of the Company.
/ / For / / Against / / Abstain
(7) For the transaction of such other business as may lawfully come before
the meeting, hereby revoking any proxies as to said shares heretofore
given by the undersigned and ratifying and confirming all that said
attorneys and proxies may lawfully do by virtue hereof.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" EACH OF THE NOMINEES AND
PROPOSALS LISTED ABOVE AND UNLESS INSTRUCTIONS TO THE CONTRARY ARE
INDICATED IN THE SPACE PROVIDED, THE PROXY WILL BE SO VOTED.
It is understood that this proxy confers discretionary authority in
respect to matters not known or determined at the time of the mailing
of the notice of the meeting to the undersigned.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders dated July 30, 1996 and the Proxy Statement furnished
therewith.
Dated and signed _________ ____________, 1996
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(Signature should agree with the name(s)
hereon, Executors, administrators, trustees,
guardians and attorneys should so indicate
when signing. For joint accounts each owner
should sign. Corporations should sign their
full corporate name by a duly authorized
officer.)
This proxy is revocable at or at any time prior to the meeting. Please
sign and return this proxy to SunTrust Bank, Atlanta, Attn: Corporate
Trust Department, P.O. Box 4625, Atlanta, Georgia 30302, in the
accompanying prepaid envelope.
