SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1997
Commission File No. 0-24298
MILLER INDUSTRIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Tennessee 62-1566286
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3220 Pointe Parkway, Suite 100
Norcross, Georgia 30092
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 446-5255
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES /X/ NO/ /
The number of shares outstanding of the registrant's Common Stock, $.01
par value, as of August 31, 1997 was 43,584,734.<PAGE>
MILLER INDUSTRIES, INC.
INDEX
PART I. FINANCIAL INFORMATION Page Number
Item 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets -
July 31, 1997 and April 30, 1997 3
Condensed Consolidated Statements of Income
for the Three Months Ended July 31, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended July 31, 1997 and 1996 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9
PART II. OTHER INFORMATION
Item 2. CHANGES IN SECURITIES
RECENT SALES OF UNREGISTERED SECURITIES 11
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
2<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
ASSETS
<TABLE>
<CAPTION>
July 31, April 30,
1997 1997
-------- ----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and temporary investments $ 1,738 $ 8,508
Accounts receivable, net 55,458 49,844
Inventories 69,390 60,574
Deferred income taxes 5,206 4,541
Prepaid expenses and other 2,292 1,885
---------- ----------
Total current assets 134,084 125,352
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, net 55,718 49,171
---------- ----------
GOODWILL, net 46,999 36,916
---------- ----------
OTHER ASSETS 3,697 3,858
---------- ----------
$ 240,498 $ 215,297
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 4,802 $ 4,479
Accounts payable 32,054 38,548
Accrued liabilities and other 22,807 20,345
---------- ----------
Total current liabilities 59,663 63,372
---------- ----------
LONG-TERM DEBT, less current portion 26,388 11,282
---------- ----------
DEFERRED INCOME TAXES 2,290 1,860
---------- ----------
SHAREHOLDERS' EQUITY (Note 2):
Preferred stock, $.01 par value, 5,000,000 shares authorized;
none issued or outstanding 0 0
Common stock, $.01 par value, 100,000,000 shares
authorized; 43,417,592 and 42,480,202 shares issued
and outstanding, respectively 434 425
Additional paid-in capital 119,347 110,773
Retained earnings 32,825 28,027
Cumulative translation adjustment (449) (442)
---------- ---------
Total shareholders' equity 152,157 138,783
---------- ---------
$ 240,498 $ 215,297
========== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
July 31,
-----------------------------
1997 1996
---- ----
<S> <C> <C>
NET SALES $ 85,353 $ 60,963
COST AND EXPENSES:
Costs of operations 67,229 50,320
Selling, general, and administrative expenses 10,200 6,003
Interest expense, net 271 140
--------- --------
Total costs and expenses 77,700 56,463
--------- --------
INCOME BEFORE INCOME TAXES 7,653 4,500
PROVISION FOR INCOME TAXES 2,855 1,643
--------- --------
NET INCOME $ 4,798 $ 2,857
--------- --------
NET INCOME PER SHARE $ 0.11 $ 0.07
========= ========
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES
OUTSTANDING 45,214 38,409
========= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JULY 31,
---------------------------
1997 1996
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 4,798 $ 2,857
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization 1,686 601
Deferred income tax provision 108 157
Changes in operating assets and liabilities:
Accounts receivable (4,878) (803)
Inventories (2,523) (1,061)
Prepaid expenses and other (376) (252)
Accrued liabilities 1,302 (1,226)
Accounts payable (6,854) (3,214)
Other assets 161 22
-------- -------
Net cash used in operating activities (6,576) (2,919)
-------- -------
INVESTING ACTIVITIES:
Purchases of property, plant, and equipment (5,893) (517)
Proceeds from sales of property, plant, and equipment 290 318
Acquisition of businesses, net of cash acquired (2,929) -
Funding of finance receivables (1,067) -
Other - 413
-------- -------
Net cash (used in) provided by investing activities ( 9,599) 214
-------- -------
FINANCING ACTIVITIES:
Net borrowings (payments) under line of credit 16,530 (94)
Repayment of long-term debt ( 7,481) (555)
Proceeds from exercise of stock options 379 14
Distribution to former shareholders of acquired companies - (229)
-------- -------
Net cash provided by (used in) financing activities 9,428 (771)
-------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
TEMPORARY INVESTMENTS (23) (36)
-------- -------
NET INCREASE (DECREASE) IN CASH AND TEMPORARY INVESTMENTS (6,770) (3,512)
CASH AND TEMPORARY INVESTMENTS, BEGINNING OF
PERIOD 8,508 25,117
-------- -------
CASH AND TEMPORARY INVESTMENTS, END OF PERIOD $ 1,738 $ 21,605
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash payments for interest $ 184 $ 170
======== =======
Cash payments for income taxes $ 1,608 1,520
======== =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The condensed consolidated financial statements of Miller
Industries, Inc. and subsidiaries (the "Company") included
herein have been prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures
normally included in annual financial statements prepared in
accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and
regulations. Nevertheless, the Company believes that the
disclosures are adequate to make the financial information
presented not misleading. In the opinion of management, the
accompanying unaudited condensed consolidated financial
statements reflect all adjustments, which are of a normal
recurring nature, to present fairly the Company's financial
position, results of operations and cash flows at the dates
and for the periods presented. Interim results of
operations are not necessarily indicative of results to be
expected for the fiscal year. These condensed consolidated
financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended
April 30, 1997.
2. Net Income Per Share
Net income per common share is computed by dividing net
income by the weighted average number of common and common
equivalent shares outstanding.
All share numbers, share prices, and per share amounts have
been restated to reflect the 2-for-1 stock split which
occurred on September 30, 1996 and the 3-for-2 stock split
which occurred on December 30, 1996.
3. Inventories
Inventory costs include materials, labor and factory
overhead. Inventories are stated at the lower of cost or
market, determined on a first-in, first-out basis.
Inventories at July 31, 1997 and April 30, 1997 consisted of
the following (in thousands):
6
<PAGE>
July 31, April 30,
1997 1997
Chassis $ 17,693 $ 18,837
Raw Materials 17,048 16,257
Work in process 7,967 7,843
Finished goods 26,682 17,637
--------- ---------
$ 69,390 $ 60,574
========= =========
4. Business Combinations
In May 1997, the Company acquired all the outstanding common stock
of three towing equipment distributors with historical revenues of
approximately $13 million annually. The consideration for these
transactions consisted of approximately 44,000 shares of common
stock and approximately $.9 million in cash. Additionally, in June
and July 1997, the Company purchased all the outstanding common
stock of eight towing service companies through the issuance of
approximately 511,000 shares of common stock and cash payments of
approximately $2.9 million. These acquisitions were accounted for
using the purchase method of accounting. The pro forma impact of
these acquisitions on net income and earnings per share was not
significant for the periods presented herein.
In May 1997, the Company issued approximately 151,000 shares of its
common stock in exchange for all the outstanding common stock of one
additional towing equipment distributor with historical revenues of
approximately $13 million annually. In July 1997, the Company
issued approximately 108,000 shares of its common stock in exchange
for all the outstanding shares of one additional towing service
company. These mergers have been accounted for as poolings of
interests.
5. Legal Matters
The Company is, from time to time, a party to litigation arising in
the normal course of its business. Management believes that none of
these actions, individually or in the aggregate, will have a
material adverse effect on the financial position or results of
operations of the Company.
6. Subsequent Events
Subsequent to the end of the quarter, the Company has closed three
additional acquisitions of towing service companies with aggregate
annual historical revenues of approximately $3 million. The
consideration for these transactions consists of approximately
115,000 shares of Company common stock and $.2 million in cash as
well as the assumption of certain indebtedness. In addition, the
7
<PAGE>
Company has executed letters of intent to acquire 17 additional
towing service companies.
Also, subsequent to the end of the quarter, the Company announced
its intention to further consolidate its domestic
wrecker production at its Ooltewah, Tennessee facility. The
consolidation will entail the closure of the Olive Branch,
Mississippi facility with the relocation of wrecker production to
Ooltewah. The consolidation is expected to result in a one time
after-tax charge of approximately $2 - $2.5 million in the second
quarter. The Company's operating earnings for the portion of the
remainder of the fiscal year may be further adversely impacted by
any inventory losses, any operating losses which may occur during
the consolidation period, and costs incurred to relocate employees
and equipment to other facilities. These additional costs are not
included in the one time charge above but are not expected to have a
material impact on net income and earnings per share.
7. Reclassifications
Certain amounts in the prior period financial information have been
reclassified to conform to the current presentation.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Except for historical information contained herein, the matters set
forth in this Report are forward-looking statements. Such forward-
looking statements involve a number of risks and uncertainties that could
cause actual results to differ materially from any such statement,
including the risks and uncertainties discussed in the Company's
Registration Statement on Form S-4 dated August 29, 1997,
file no. 333-34641 under the caption "Risk Factors", which
discussion is incorporated herein by this reference.
RECENT DEVELOPMENTS
As more fully discussed in Note 4 to condensed consolidated
financial statements, during the quarter ended July 31, 1997, the Company
acquired a total of nine towing service companies and four towing
equipment distributors.
Subsequent to the end of the quarter and as more fully discussed in
Note 6 to condensed consolidated financial statements, the Company has
closed three additional acquisitions of towing service companies and has
executed letters of intent to acquire 17 additional towing service
companies.
Also, subsequent to the end of the quarter, the Company announced
its intention to further consolidate its domestic wrecker production at
its Ooltewah, Tennessee facility. The consolidation will entail the
closure of the Olive Branch, Mississippi facility with the relocation of
wrecker production to Ooltewah. The consolidation is expected to result
in a one time after-tax charge of approximately $2 - $2.5 million in the
second quarter. The Company's operating earnings for the portion of the
remainder of the fiscal year may be further adversely impacted by any
inventory losses, any operating losses which may occur during the
consolidation period, and costs incurred to relocate employees and
equipment to other facilities. These additional costs are not included
in the one time charge above but are not expected to have a material
impact on net income and earnings per share.
RESULTS OF OPERATIONS--THREE MONTHS ENDED JULY 31, 1997 COMPARED TO THREE
MONTHS ENDED JULY 31, 1996
Net sales for the three months ended July 31, 1997, increased 40.0%
to $85.4 million from $61.0 million for the comparable period in 1996.
The increase in net sales was primarily the result of higher sales from
the manufacturing operations, the inclusion since the acquisition dates
during the quarter ended July 31, 1997 of sales from the distribution
and towing service companies acquired via purchase transactions, and an
increase in sales of truck chassis sold by the domestic manufacturing
operations to third parties. The growth in sales of the manufacturing
operations was a result of continued market share gains.
9
<PAGE>
Costs of operations for the three months ended July 31, 1997,
increased 33.6% to $67.2 million from $50.3 million for the comparable
period in 1996. Costs of operations as a percentage of net sales
decreased to 78.8% from 82.5%. This reduction was primarily a result of
the Company's towing service division, which generally has a lower level
of operating costs than the manufacturing and distribution division,
accounting for a higher proportion of revenues in the quarter ended July 31,
1997.
Selling, general and administrative expenses for the three months
ended July 31, 1997, increased 69.9% to $10.2 million from $6.0 million
for the comparable period of 1996. As a percentage of sales, selling,
general and administrative expenses increased from 9.8% for the three
months ended July 31, 1996 to 11.9% for the three months ended July 31,
1997. This increase was primarily a result of the Company's towing
services division, which generally has a higher level of selling, general
and administrative costs as a percentage of sales than the manufacturing
and distribution division.
Net interest expense increased $131,000 to $271,000 for the three
months ended July 31, 1997 from $140,000 for the three months ended July
31, 1996 primarily due to increased borrowings under the Company's line
of credit to fund working capital needs and additional acquisitions of
distributors and towing service companies.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital requirements are for working capital,
acquisition of businesses, debt service and capital expenditures. The
Company has financed its operations and growth from internally generated
funds and debt financing and, since August 1994, in part from the
proceeds from its initial public offering and its subsequent public
offerings completed in January 1996 and November 1996.
Cash flows used in operating activities were $6.6 million for the
three month period ended July 31, 1997 as compared to $2.9 million for
the comparable period of 1996. The cash flows used in operating
activities were used primarily to fund working capital needed to support
the growth of the businesses.
Cash used in investing activities was $9.6 million for the three
month period ended July 31, 1997 compared to $0.2 million provided by
investing activities for the comparable period in 1996. The cash used in
investing activities was primarily for capital expenditures and equipment
and acquisition of businesses.
Cash provided by financing activities was $9.4 million for the three
month period ended July 31, 1997 and $0.8 million for the comparable
period in the prior year. The cash was provided primarily by borrowing
under the Company's lines of credit.
10
<PAGE>
The Company has a $50 million unsecured revolving credit facility
with NationsBank of Tennessee, N.A. (the "Credit Facility"). Borrowings
under the Credit Facility bear interest at a rate equal to the 30-day
LIBOR plus .08%. At July 31, 1997, $16.5 million was outstanding under
the Credit Facility. The Credit Facility imposes restrictions on the
Company with respect to the maintenance of certain financial ratios, the
incurrence of indebtedness, the sale of assets, mergers, capital
expenditures, and the payment of dividends.
The Company has recently expanded its Hermitage, Pennsylvania
facility and is currently increasing the capacity of its plant in
Ooltewah, Tennessee. In January 1997 the Company purchased a car carrier
manufacturing facility in Greeneville, Tennessee and is currently
increasing its capacity. Capital expenditures remaining for these
expansions and additional equipment are expected to be approximately $1.0
million. As described in Note 4 to condensed consolidated financial
statements, the Company has expended approximately $3.8 million for the
purchase of companies during the quarter ended July 31, 1997. Excluding
the capital commitments set forth above, the Company has no other
material capital commitments. The Company believes that cash on hand,
cash flows from operations and unused borrowing capacity under the Credit
Facility will be sufficient to fund its operating needs, capital
expenditures and debt service requirements for the next fiscal year.
Management continually evaluates potential strategic acquisitions.
Although the Company believes that its financial resources will enable it
to consider potential acquisitions, additional debt or equity financing
may be necessary. No assurance in this regard can be given, however,
since future cash flows and the availability of financing will depend on
a number of factors, including prevailing economic conditions and
financial, business and other factors beyond the Company's control.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
Per Share," which establishes new standards for computing and presenting
earnings per share ("EPS"). SFAS No. 128 is effective for financial
statements issued for periods ending after December 15, 1997, including
interim periods. Early adoption is not permitted and upon initial
application, all prior period EPS data is required to be restated. The
adoption of SFAS No. 128 will not have a material effect on the Company's
EPS amounts.
11
<PAGE>
PART II. OTHER INFORMATION
Item 2. CHANGES IN SECURITIES
RECENT SALES OF UNREGISTERED SECURITIES
During the fiscal quarter ended July 31, 1997, the Company
issued 814,244 shares of its Common Stock, par value $.01 per share,
that were not registered under the Securities Act. The shares, in
combination with cash, were issued as consideration in the
acquisition of 9 towing service companies and four towing and
recovery equipment distribution companies and were issued to
approximately 22 individuals, entities and trusts. The market price
on the date of issuance ranged from $14.125 per share to $17.188 per
share. The Company has filed and will use its reasonable best
efforts to obtain the prompt effectiveness of, a registration
statement under the Securities Act to register the resales of these
shares, so that such shares may be offered and sold from time to
time on the New York Stock Exchange or in privately negotiated
transactions.
The sales of the above securities are exempt from registration
under the Securities Act pursuant to Section 4(2) of the Securities
Act, or Regulation D promulgated thereunder, as transactions by an
issuer not involving a public offering.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders was held on Friday, August 29,
1997 in Norcross, Georgia, at which several matters were submitted to a
vote of the shareholders:
(a) Votes cast for or withheld regarding the election of two
Directors for a term expiring in 2000 were as follows:
FOR WITHHELD
--------- --------
Paul F. Drack 34,202,421 116,719
Stephen A. Furbacher 34,202,421 116,719
Additional Directors, whose terms of office as Directors continued
after the meeting, are as follows:
Term Expiring in 1998 Term Expiring in 1999
--------------------- ----------------------
William G. Miller A. Russell Chandler, III
Richard H. Roberts Jeffrey I. Badgley
(b) Votes cast for or against and the number of abstentions
regarding each other matter voted upon at the meeting were
as follows:
<TABLE>
<CAPTION>
BROKER BROKER
DESCRIPTION OF MATTER FOR AGAINST ABSTAIN NO VOTE
<S> <C> <C> <C> <C>
Ratification of the appointment of
Arthur Andersen LLP as independent
auditors of the Company to serve for
the 1998 fiscal year 34,286,590 18,227 14,323 --
Ratification of the amendment to the
Company's Charter to elect Directors
on an annual basis 30,059,956 92,301 15,691 4,151,192
</TABLE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit 10 - Employment Agreement dated as of July 8, 1997, by
and between Miller Industries, Inc., and William G. Miller
Exhibit 27 - Financial Data Schedule (For SEC use only)
(included as Exhibit 27 to the Company's Report on Form
10-Q for the quarter ended July 31, 1997 previously filed with
the Commission and incorporated herein by reference)
(b) Reports on Form 8-K - No reports on Form 8-K were filed by
the Company during the first quarter of the fiscal year.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Miller Industries, Inc. has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MILLER INDUSTRIES, INC.
By: /s/ Adam L. Dunayer
Adam L. Dunayer
Vice President and
Chief Financial Officer
Date: September 16, 1997
<PAGE>
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of
July 8, 1997, is made and entered into by and between MILLER
INDUSTRIES, INC., a Tennessee corporation (the "Company"), and
WILLIAM G. MILLER (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to continue its employment of
the Employee, and the Employee desires to continue his employment
with the Company, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of these premises, and of
the mutual covenants and agreements hereinafter set forth, the
parties agree as follows:
1. TERM. Employee's employment under this Agreement shall
commence on the date hereof and shall continue until terminated
in accordance with the provisions of Section 4 below (the
"Employment Period").
2. SALARY AND BENEFITS.
2.1 During the Employment Period, for all services
rendered by the Employee under this Agreement, the Company shall
pay the Employee a base salary per annum (the "Base Salary") that
shall be agreed to by the Company and the Employee from time to
time, but which shall in any event be substantially the same as
the base salary of the Co-Chief Executive Officer of the Company
or the Chief Executive Officer of the Company if other than
Employee, payable in accordance with the customary payroll policy
of the Company in effect at the time such payment is made.
2.2 In addition to the Base Salary, the Employee shall
be entitled to participate in any of the Company's present and
future stock or cash based bonus plans that are generally
available to its senior executives, as such plans may exist or be
changed from time to time at the discretion of the Company.
2.3 The Employee shall be entitled to such vacation
time, fringe benefits, insurance coverage, and other benefits as
the Company generally provides to its executive officers from
time to time.
3. DUTIES. The Employee shall serve the Company as its
Chairman of the Board ("Chairman") and as its Co-Chief Executive
Officer ("CCEO") (the Employee may cease serving as the CCEO at
his discretion without terminating or otherwise affecting
thisAgreement). As Chairman and CCEO, the duties of the Employee
shall include but not be limited to the supervision of the
business affairs of the Company and such other duties as are
customarily performed by comparably situated officers and as may
be assigned from time to time by the Company's Board of Directors
(the "Board"). During the term of this Agreement, the Employee
shall devote his primary time, attention and skill to his duties
hereunder; faithfully and diligently perform such duties and
exercise such powers as may be from time to time assigned to or
vested in him by the Board; obey the directions of the Board; and
use his best efforts to promote the interests of the Company.
<PAGE>
The Company acknowledges, however, that the Employee may pursue
other business related interests so long as they do not interfere
with the performance of Employee's duties for the Company. The
Employee may be required in pursuance of his duties hereunder, to
perform services for any company controlling, controlled by or
under common control with the Company (such companies hereinafter
collectively called "Affiliates") for some period of time and
from time to time. The Employee shall obey all policies of the
Affiliates.
4. TERMINATION. Unless terminated in accordance with the
following provisions to this Section 4, the Company shall
continue to employ the Employee and the Employee shall continue
to work for the Company, during the Employment Period.
4.1 The Company may terminate the Employee's
employment at any time for Cause. "Cause" shall mean (i) willful
malfeasance or gross negligence or (ii) knowingly engaging in
wrongful conduct resulting in detriment to the good will of the
Company or damage to the Company's relationships with its
customers, suppliers or employees. Upon termination pursuant to
this Section 4.1, the Company shall pay the Employee any salary
earned and unpaid to the date of termination, and any outstanding
funds advanced by the Company to or on behalf of the Employee
shall become immediately due and payable.
4.2 In the event the Employee dies or becomes mentally
or physically handicapped or disabled so as to be unable to
perform his duties during the Employment Period, this Agreement
shall automatically terminate with no further liability on the
part of the Company.
4.3 This Agreement may be terminated by either party
upon three (3) years prior written notice of termination, with or
without Cause.
4.4 In the event of a "Change in Control" (as such
term is defined in Section __ of the Company's Stock Option and
Incentive Plan), the Employee may terminate this Agreement upon
sixty (60) days notice of termination.
5. COMPETITION. The Employee agrees that during the term
of this Agreement, the Employee will not directly or indirectly,
whether or not for compensation and whether or not as an
employee, be engaged in any business competing with or which may
compete with the business of the Company (or with any business of
any Affiliate for which the Employee performed services
hereunder) within any state, region or locality in which the
Company or such Affiliate is then doing business or marketing its
products, as the business of the Company or such Affiliate may
then be constituted and in which the Employee has been involved.
This agreement not to compete shall be applicable for three (3)
years from the date of termination of employment hereunder by the
Employee in breach of this Agreement or by the Company for Cause,
notwithstanding that the Employee shall not be entitled to any
compensation hereunder from and after any such termination.
For purposes of this Agreement, the Employee shall be deemed
to be engaged in such a business if he is an employee, officer,
director, or partner, of any person, partnership, corporation,
trust or other entity which is engaged in such a business or if
-2-
<PAGE>
he directly or indirectly performs services for such entity or if
he or any member of his immediate family beneficially owns an
equity interest, or interest convertible into equity, in such
entity; provided, however, that the foregoing shall not prohibit
the Employee or a member of his immediate family from owning, for
the purpose of passive investment, less than five percent (5%) of
any class of securities of a publicly held corporation.
The Employee acknowledges that his services to be rendered
to the Company in the aforesaid capacity are of a special and
unusual character which have a unique value to the Company, the
loss of which cannot adequately be compensated by damages in an
action at law. In view of (i) the unique value to the Company of
the services of the Employee for which the Company has employed
the Employee; and (ii) the confidential information to be
obtained by or disclosed to the Employee as an employee of the
Company; and as a material inducement to the Company to employ
the Employee and to pay to the Employee the compensation for such
services to be rendered for the Company by the Employee, the
Employee covenants and agrees the Company shall be entitled to
equitable relief to the full extent available under the
applicable law.
6. CONFIDENTIALITY. The Employee shall not divulge or
communicate to any person (except in performing his duties under
this Agreement) or use for his own purposes trade secrets,
confidential commercial information or any other information,
knowledge or data of the Company or of any of its Affiliates
which is not generally known to the public and shall use his best
efforts to prevent the publication or disclosure by any other
person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by
the Employee while employed by the Company in connection with the
business of the Company shall be and remain the Company's
property and shall be delivered by the Employee to the Company
upon the termination of the Employee's employment or at any
earlier time requested by the Company.
7. OWNERSHIP OF CONFIDENTIAL INFORMATION. The Employee
hereby agrees that any and all improvements, inventions,
discoveries, formulas, processes, methods, know-how, confidential
data, trade secrets and other proprietary information
(collectively "Work Product") within the scope of any business of
the Company or any Affiliate which the Employee may conceive or
make or has conceived or made during his employment with the
Company shall be and are the sole and exclusive property of the
Company, and that the Employee shall, whenever requested to do so
by the Company, at its expense, execute and sign any and all
applications, assignments or other instruments and do all other
things which the Company may deem necessary or appropriate (i) in
order to apply for, obtain, maintain, enforce or defend letters
patent of the United States or any foreign country for any Work
Product, or (ii) in order to assign, transfer, convey or
otherwise make available to the Company the sole and exclusive
right, title and interest in and to any Work Product.
8. MISCELLANEOUS.
8.1 NOTICE. Any notice or other communication
required or permitted under this Agreement shall be effective
only if it is in writing and delivered personally or sent by
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registered or certified mail, postage prepaid, addressed as
follows:
If to the Company: Miller Industries, Inc.
P.O. Box 120
8503 Hilltop Drive
Ooltewah, Tennessee 37363
Attention: President
If to the Employee: William G. Miller
1025 Abingdon Lane
Alpharetta, Georgia 30202
or to such other address as any party may designate by notice to
the others, and shall be deemed to have been given upon receipt.
8.2 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties hereto with respect to the
Employee's employment by the Company, and supersedes and is in
full substitution for any and all prior understandings or
agreements with respect to the Employee's employment.
8.3 AMENDMENT. This Agreement may be amended only by
an instrument in writing signed by the parties hereto, and any
provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement
of such waiver is sought. The failure of either party hereto to
comply with any provision hereof shall in no way affect the full
right to require such performance at any time thereafter, nor
shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any
succeeding breach of such provision, or a waiver of the provision
itself, or a waiver of any other provision of this Agreement.
8.4 BINDING EFFECT. This Agreement is binding on and
is for the benefit of the parties hereto and their respective
successors, heirs, executors, administrators and other legal
representatives. Neither this Agreement nor any right or
obligation hereunder may be assigned by the Employee or the
Company, except for assignment by the Company to any wholly owned
subsidiary.
8.5 SEVERABILITY AND MODIFICATION. If any provision
of this Agreement or portion thereof is so broad, in scope or
duration, so as to be unenforceable, such provision or portion
thereof shall be interpreted to be only so broad as is
enforceable. In addition, to the extent that any provision of
this Agreement as applied to either party or to any circumstances
shall be adjudged by a court of competent jurisdiction to be void
or unenforceable, the same shall in no way affect any other
provision of this Agreement or the validity or enforceability of
this Agreement.
8.6 COST OF LITIGATION. In the event there is any
litigation between the Company or its successors or assigns and
the Employee or his heirs or representatives concerning or
arising out of this Agreement, the party prevailing in such
litigation shall be reimbursed for all costs and expenses
(including, but not limited to, reasonable attorneys' fees)
incurred in connection with such litigation.
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8.7 INTERPRETATION. This Agreement shall be
interpreted, construed and governed by and under the laws of the
State of Tennessee. If any provision of this Agreement is deemed
or held to be illegal, invalid, or unenforceable under present or
future laws effective during the term hereof, this Agreement
shall be considered divisible and inoperative as to such
provision to the extent it is deemed to be illegal, invalid or
unenforceable, and in all other respects this Agreement shall
remain in full force and effect; provided, however, that if any
provision of this Agreement is deemed or held to be illegal,
invalid or unenforceable there shall be added hereto
automatically a provision as similar as possible to such illegal,
invalid or unenforceable provision as shall be legal, valid or
enforceable. Further, should any provision contained in this
Agreement ever be reformed or rewritten by any judicial body of
competent jurisdiction, such provision as so reformed or
rewritten shall be binding upon the Employee and the Company.
8.8 COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same instrument.
8.9 NO CONFLICTING AGREEMENT. The Employee represents
and warrants that he is not party to any agreement, contract or
understanding which would prohibit him from entering into this
Agreement or performing fully his obligations hereunder.
IN WITNESS WHEREOF, the Company and the Employee have
executed this Agreement as of the date first written above.
/s/ William G. Miller
William G. Miller
MILLER INDUSTRIES, INC.
By: /s/ Jeffrey I. Badgley
Jeffrey I. Badgley
President and Co-Chief Executive
Officer
