SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
/ / Preliminary Proxy Statement
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MILLER INDUSTRIES, INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11.
<PAGE>
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 O-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule O-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>
MILLER INDUSTRIES, INC. [LOGO]
8503 HILLTOP DRIVE,
OOLTEWAH, TENNESSEE 37363
(423) 238-4171
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Miller Industries, Inc. (the
"Company") will be held at 10:00 a.m. (Eastern Time), on Friday, October 15,
1999 at Atlanta Mariott Norcross, 475 Technology Parkway, Norcross, Georgia
30092, for the following purposes:
1. To elect six (6) directors to hold office for a term of one
(1) year or until their successors are duly elected and
qualified; and
2. 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 August 23, 1999
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
August 30, 1999
================================================================================
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.
8503 HILLTOP DRIVE,
OOLTEWAH, TENNESSEE 37363
(423) 238-4171
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 Atlanta Mariott Norcross, on Friday, October 15, 1999 at 10:00
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 August 30, 1999.
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 six
director nominees.
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 August 23, 1999 are
entitled to vote at the Annual Meeting. On such date, the Company had issued and
outstanding 46,694,297 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.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July 12, 1999, 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 each director or nominee for director, (ii) by the
executive officers named above under "Executive Officers of the Registrant," and
(iii) all executive officers and directors of the Company 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
OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP<F1> CLASS<F1>
- ------------------------------------ ------------- ---------
<S> <C> <C> <C>
William G. Miller<F2> 6,931,791 <F3> 14.81%
Jeffrey I. Badgley 364,756 <F4> *
Frank Madonia 323,756 <F5> *
J. Vincent Mish 325,631 <F6> *
James A. McKinney - *
Adam L. Dunayer 83,500 <F7> *
A. Russell Chandler, III 95,919 <F8> *
Paul E. Drack 95,918 <F9> *
Richard H. Roberts 80,918 <F10> *
All Executive Officers and Directors as a Group 8,042,263 <F11> 17.19%
(11 persons)
- ----------------------------
<FN>
* Less than one percent
<F1> The Percent of Class column represents the percentage that the named
person or group would beneficially own if such person or group, and only
such person or group, exercised all currently exercisable options and
rights to acquire shares of Common Stock held by such person or group.
<F2> Mr. Miller's business address is c/o Miller Industries, Inc., 3220 Pointe
Parkway, Suite 100, Norcross, Georgia 30092.
<F3> Includes 546,444 shares held by the Miller Family Foundation, Inc., a
Georgia non-profit corporation of which Mr. Miller is the sole director.
<F4> Includes 288,179 shares which are issuable pursuant to options which are
exercisable within sixty days of the date set forth above.
<F5> Includes 245,679 shares which are issuable pursuant to options which are
exercisable within sixty days of the date set forth above.
<F6> Includes 247,554 shares which are issuable pursuant to options which are
exercisable within sixty days of the date set forth above.
<F7> Includes 83,500 shares which are issuable pursuant to options which are
exercisable within sixty days of the date set forth above.
<F8> Includes 95,919 shares which are issuable pursuant to options which are
exercisable within sixty days of the date set forth above.
<F9> Includes 95,918 shares which are issuable pursuant to options which are
exercisable within sixty days of the date set forth above.
<F10> Includes 80,918 shares which are issuable pursuant to options which are
exercisable within sixty days of the date set forth above.
<F11> Includes 1,364,688 shares which are issuable pursuant to options which
are exercisable within sixty days of the date set forth above.
</FN>
</TABLE>
2
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
Pursuant to the Company's Charter and Bylaws, the Board has fixed the
number of directors at six. Under the terms of the Company's Charter and Bylaws,
the members of the Board of Directors comprise a single class and at each annual
meeting of shareholders all directors will be elected. The directors, if
reelected, will serve until the annual meeting of shareholders in 2000. The
Board may fill directorships resulting from vacancies or may increase the number
of directors to as many as fifteen or decrease such number to as few as three
directors. Executive officers are appointed annually and serve at the discretion
of the Board of Directors.
Unless contrary instructions are received, shares of Common Stock
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
directors. All six 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.
NAME OF DIRECTOR BACKGROUND INFORMATION
---------------- ----------------------
Jeffrey I. Badgley Mr. Badgley, 47, has served as Chief Executive
Officer of the Company since November 1997, as
President of the Company since June 1996 and as a
director since January 1996. In June 1997, he was
named Co-Chief Executive Officer of the Company, a
title he shared with Mr. Miller until November
1997. Mr. Badgley served as Vice President of the
Company from 1994 to 1996, and as Chief Operating
Officer of the Company from June 1996 to June
1997. In addition, Mr. Badgley has served as
President of Miller Industries Towing Equipment
Inc. since 1996. Mr. Badgley served as Vice
President--Sales of Miller Industries Towing
Equipment Inc. from 1988 to 1996. He previously
served as Vice President--Sales and Marketing of
Challenger Wrecker Corporation ("Challenger
Wrecker"), from 1982 until joining Miller
Industries Towing Equipment Inc.
A. Russell Chandler, III Mr. Chandler, 54, has served as a director of the
Company since April 1994. He currently serves as
Chairman of Amplified.Com, an internet music
provider, and is founder and Chairman of Whitehall
Group Ltd., a private investment firm based in
Atlanta, Georgia. Mr. Chandler served as the Mayor
of the Olympic Village for the Atlanta Committee
for the Olympic Games from 1990 through August
1996. 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.
3
<PAGE>
Paul E. Drack Mr. Drack, 70, has served as a director of the
Company since April 1994. Mr. Drack is also a
director of Euramax International PLC. 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 Cyprus Minerals in November
1993, AMAX Inc. was a producer of aluminum and
manufactured aluminum products with interests in
domestic energy and gold production.
James A. McKinney Mr. McKinney, 54, has served as Chief Executive
Officer of RoadOne, Inc. and as a director of the
Company since June 1999. From August 1998 through
June 1999, Mr. McKinney served as Executive Vice
President of Rollins, Inc., a national consumer
services company. From January 1997 through May
1998, Mr. McKinney served as the Chief Executive
Officer of Skywire. From 1993 to 1997 he served as
Senior Vice President for Federal Express, an
international express transportation company.
William G. Miller Mr. Miller, 52, has served as Chairman of the
Board since April 1994. He served as Chief
Executive Officer of the Company from April 1994
until June 1997. In June 1997, he was named
Co-Chief Executive Officer, a title he shared with
the Company's President, Jeffrey I. Badgley until
November 1997. Mr. Miller also served as President
of the Company from April 1994 to June 1996. He
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.
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 Mr. Roberts, 45, has served as a director of the
Company since April 1994. Mr. Roberts currently
serves as Senior Vice President, Secretary and
General Counsel of Forward Air Corporation, a
position he has held since August, 1994. He also
holds similar positions with Landair Corporation
which he has held since September, 1998. 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. Mr.
Roberts has served as a director of Landair
Services, Inc. since May 1995.
The Board of Directors held 8 meetings during the fiscal year ended
April 30, 1999. The Board of Directors has standing Audit, Compensation and
Nominating Committees. The Audit Committee is comprised of Messrs. Chandler,
Drack 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 4 meetings during fiscal 1999.
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, Drack and Roberts comprise the Compensation Committee, which
met 5 times during fiscal 1999.
The Nominating Committee is comprised of Messrs. Chandler, Drack and
Miller. The Nominating Committee was established to evaluate candidates for
service as directors to the Company. The Nominating Committee held 2 meeting
during fiscal 1999. The Nominating Committee will consider candidates
recommended by shareholders. Shareholder recommendations must comply with the
procedures for nominations set forth in Article I, Section 1.2, of the Company's
Bylaws.
4
<PAGE>
All incumbent directors attended more than 75% of the meetings of the
Board of Directors and the respective committees of which they are members.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information for each of the last
three fiscal years of the Company concerning compensation paid by the Company
and its subsidiaries to the Company's Chief Executive Officer and to each of the
Company's other most highly compensated executive officers as of the end of
fiscal 1999 who earned in excess of $100,000 in salary and bonus during fiscal
1999 (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION <F1> COMPENSATION
AWARDS
---------------------- ----------------------------
SECURITIES ALL
UNDERLYING OTHER
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
--------------------------- ---- ------- ------- ------ -------------
<S> <C> <C> <C> <C> <C> <C>
William G. Miller<F2> <F3> 1999 $180,000 - - -
Chairman 1998 162,500 $129,167 - -
1997 150,000 54,167 - -
Jeffrey I. Badgley <F2> 1999 191,667 60,000 120,000 <F6> $ 1,653 <F4>
President and Chief Executive Officer 1998 162,500 119,417 35,000 2,056 <F4>
1997 119,167 37,417 90,000 1,266 <F4>
Frank Madonia <F2> 1999 145,625 48,333 90,000 <F6> 1,592 <F4>
Executive Vice President, Secretary and 1998 132,500 97,083 22,000 1,292 <F4>
General Counsel 1997 99,167 33,750 72,000 1,079 <F4>
J. Vincent Mish <F2> 1999 120,000 48,333 7,500 1,205 <F4>
Vice President, Chief Financial Officer and 1998 120,000 93,063 22,000 1,167 <F4>
President of the Financial Services Group 1997 99,167 30,750 72,000 813 <F4>
Adam L. Dunayer <F2> <F5> 1999 145,625 40,000 90,000 <F6> 737 <F4>
Executive Vice President and Chief 1998 132,500 80,000 72,000 562 <F4>
Financial Officer 1997 66,766 - 120,000 -
- -----------------------
<FN>
<F1> Excludes perquisites and other personal benefits aggregating less than
$50,000 or 10% of the named executive officer's annual salary and bonus
<F4> Bonus awards consist entirely of amounts earned in previous fiscal years
which are paid incrementally to the executive officer in the year noted in
accordance with the Company's bonus plan. No bonuses were awarded to
executive officers based on performance during the 1998 fiscal year.
<F3> Mr. Miller served as Co-Chief Executive Officer with Mr. Badgley until
November 10, 1997. (4) Consists of a matching contribution made to the
executive's account in the Company's 401(k) Plan. (5) Mr. Dunayer joined
the Company during the 1997 fiscal year and resigned from the Company
effective July 31, 1999.
<F4> Consists of a matching contribution made to the executive's account in the
Company's 401(k) Plan.
<F5> Mr. Dunayer joined the Company during the 1997 fiscal year and resigned
from the Company effective July 31, 1999.
<F6>Issued in connection with employment agreements entered into in September
1998, as further described under the heading "Employment Contracts,
Termination of Employment, Severance and Change-in-Control Arrangements"
below.
</FN>
</TABLE>
5
<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table summarizes certain information regarding stock
options issued to the Named Executive Officers during fiscal 1999 under the
Company's 1994 Stock Option and Incentive Plan (the "1994 Plan"). The
hypothetical gains or "option spreads" that would exist for the respective
options, based on assumed rates of annual compound stock appreciation of 5% and
10% from the date the options were granted over the full option term, are also
reflected:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------------------------------------------
Potential realizable
Percent of value at assumed
Number of total annual rates of stock
Securities options price appreciation for
Underlying granted to Exercise or option term <F2>
Options employees in base price Expiration -----------------------
Name Granted<F1> fiscal year ($/Sh) date 5%($) 10%($)
---- ------- ----------- ------ ---- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
William G. Miller 0 - - - - -
Jeffrey I. Badgley 120,000 <F3> 10.22% 4.1250 9/11/08 $ 311,303 $ 788,903
Frank Madonia 90,000 <F3> 7.66% 4.1250 9/11/08 233,477 591,677
J. Vincent Mish 7,500 0.64% 7.0625 6/26/08 35,859 90,873
Adam L. Dunayer 90,000 <F3> 7.66% 4.1250 10/31/99 233,477 591,677
<FN>
<F1> All options were granted pursuant to the 1994 Plan, have a term of
ten years, and vest in one-fourth increments annually from the date of
grant.
<F2> These amounts represent assumed rates of appreciation only. Actual gains,
if any, on stock option exercises and holdings of Common Stock are
dependent upon the future performance of the shares and overall market
conditions. There can be no assurance that the amounts reflected in this
table will be achieved.
<F3>Issued in connection with employment agreements entered into in September
1998, as further described under the heading "Employment Contracts,
Termination of Employment, Severance and Change-in-Control Arrangements"
below.
</FN>
</TABLE>
OPTIONS EXERCISED IN LAST FISCAL YEAR, FISCAL YEAR END OPTION VALUES
The following table summarizes certain information regarding option
exercises during the fiscal year ended April 30, 1999 and year end option values
of the Named Executive Officers. The Named Executive Officers did not exercise
any options during the fiscal year.
<TABLE>
<CAPTION>
- -------------------------- ------------------------------------------ ------------------------------------------
Number of securities underlying Value of unexercised in-the-money
Name unexercised options at April 30, 1999 options at April 30, 1999 <F1>
(No. of shares)
------------------------------------------ ------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- -------------------------- -------------------- --------------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
William G. Miller - - - -
Jeffrey I. Badgley 235,929 216,000 $ 390,041 $ 144,316
Frank Madonia 206,804 161,625 368,348 108,960
J. Vincent Mish 206,804 79,125 368,348 24,585
Adam L. Dunayer 78,000 204,000 0 84,375
<FN>
<F1> Reflects the market value of the underlying securities at the closing price
on the New York Stock Exchange on April 30, 1999 ($5.0625), less the
exercise price.
</FN>
</TABLE>
6
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, SEVERANCE AND CHANGE-IN-CONTROL
ARRANGEMENTS
In May 1999, the Company entered into an employment agreement with Mr.
McKinney. The employment agreement provides for a three-year term, to be
automatically extended at the next shareholders' meeting following the initial
term, and at every shareholders' meeting thereafter unless within 10 days
following such shareholders' meeting, the Company gives written notice that the
employment agreement will not be extended. Notwithstanding these renewal
provisions, the employment agreement will expire upon Mr. McKinney's 65th
birthday. Under the employment agreement Mr. McKinney receives a base salary of
$250,000, subject to annual review by the Board of Directors. Additionally, Mr.
McKinney may participate in any bonus plans or other benefits generally
available to executive officers of the Company. The Company may terminate Mr.
McKinney for any reason upon written notice. However, if Mr. McKinney is
terminated pursuant to a change in control (as defined in his change in control
agreement described below) or for other than "just cause" (as defined in the
employment agreement), 100% of Mr. McKinney's options to acquire Company stock
granted pursuant to the Company's Stock Option and Incentive Plan will vest and
become immediately exercisable, and the Company must pay Mr. McKinney his
current base salary plus bonuses and health and life insurance benefits for a
period of three years, or until the end of the term of the employment agreement,
whichever is shorter. The employment agreement also provides for non-competition
and confidentiality during employment and for a period ending two years from
termination or expiration of the employment agreement (or one year if
termination occurs pursuant to a change in control).
In May 1999, the Company also entered into a change in control
agreement with Mr. McKinney. The change in control agreement provides for a
three-year term, to be automatically extended at the next shareholders' meeting
following the initial term, and at every shareholders' meeting thereafter unless
within 10 days following such shareholders' meeting, the Company gives written
notice that the change in control agreement will not be extended.
Notwithstanding these renewal provisions, the change in control agreement will
expire upon Mr. McKinney's 65th birthday. Upon termination within 6 months prior
to or 2 years after a change in control (as defined in the change in control
agreement), Mr. McKinney is entitled to payment of then current salary, plus
bonuses and incentives, and health and life insurance coverage for a period of
three years following termination.
In September 1998, the Company entered into employment agreements with
Messrs. Badgley, Dunayer, and Madonia. Each employment agreement provides for a
rolling three-year term, extended automatically each day for an additional day
such that the remaining term of each employment agreement is three years.
However, on each individual's 62nd birthday, the employment agreement ceases to
extend automatically, and instead terminates three years from that date. The
employment agreements provide for base salaries of $200,000 to Mr. Badgley,
$165,000 to Dunayer, and $165,000 to Mr. Madonia, each subject to annual review
by the Board of Directors. Additionally, each individual may participate in any
bonus plans or other benefits generally available to executive officers of the
Company. The Company may terminate Messrs. Badgley, Dunayer, or Madonia pursuant
to their respective employment agreements for any reason upon written notice.
However, if termination is for other than "just cause" (as defined in the
employment agreements), 100% of the terminated individual's options on Company
stock granted pursuant to the Company's Stock Option and Incentive Plan will
vest and become immediately exercisable, and the Company must pay the terminated
individual his current base salary plus bonuses and health and life insurance
benefits for a period of three years, or until the end of the term of the
employment agreement, whichever is shorter. Finally, each employment agreement
also provides for non-competition and confidentiality during employment and for
a period ending two years from termination or expiration of the employment
agreement (or one year if termination occurs pursuant to a change in control as
defined in each individual's change in control agreement described below).
In September 1998, the Company entered into change in control
agreements with Messrs. Badgley, Dunayer, and Madonia. Each change in control
agreement provides for a rolling three-year term, extended automatically each
day for an additional day such that the remaining term of each employment
7
<PAGE>
agreement is three years. However, on each individual's 62nd birthday, the
employment agreement ceases to extend automatically, and instead terminates
three years from that date. Upon termination within 6 months prior to or 2 years
after a change in control (as defined in each respective change in control
agreement), Messrs. Badgley, Dunayer, and Madonia are entitled to payment of
then current salary, plus bonuses and incentives, and health and life insurance
coverage for a period of three years following termination.
In July 1997, the Company entered into an employment agreement with Mr.
Miller which provides for a base salary as agreed to by the Company and Mr.
Miller from time to time, but which shall in any event be substantially the same
as the base salary of the Chief Executive Officer of the Company. Mr. Miller
also receives certain insurance and other benefits as are generally provided by
the Company to its executive employees. Mr. Miller's employment agreement is for
an indeterminate term and requires Mr. Miller to meet certain concurrent
employment conditions with the Company or its affiliates. Employment may be
terminated by either party upon three years written notice or for "cause," as
defined in the employment agreement. The agreement also provides for
non-competition by Mr. Miller for a period ending three years from termination
of the agreement if the agreement is terminated by breach of Mr. Miller.
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. Upon
initial election to the Board, each non-employee director is 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 receives an option to purchase a number
of shares of the Company's common stock equal to $32,500 divided by the Black-
Scholes value (as established by the Company's independent accountant) of an
option to purchase one such share, and up to 2,000 additional shares based upon
the earnings of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, the Compensation Committee was comprised of Messrs.
Chandler, Furbacher and Roberts, all of whom were non-employee directors. Mr.
Furbacher retired from the Board in June 1999.
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 cash bonus awards and stock option grants, except with respect to the
Chairman, who declined any stock option award in fiscal 1999 as has been his
custom in previous years. In addition to the Committee's determinations on base
salary and bonus award, the Committee administers the 1994 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 sectors and the
compensation policies of similar companies in its business sectors. 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
8
<PAGE>
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.
During fiscal 1999, the Compensation Committee conducted an executive
compensation study with the assistance of an independent consulting firm
specializing in these matters. The Committee compared compensation packages,
including salary, bonus and equity incentives, of executive management of other
companies with those of the Company. The Committee noted that the compensation
packages of the Company's executive officers were in general substantially below
the averages reflected in this survey. As a result of this study, the Company
began the incremental process of increasing the compensation of its executive
officers by entering into the employment agreements described under "Employment
Contracts, Termination of Employment, Severance and Change in Control
Arrangements", providing for the salary increases and the option grants
reflected in such agreements.
OPTION GRANTS. 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 generally 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 1999 fiscal year, the Company granted an aggregate of
1,174,652 options to employees and executive officers under the 1994 Plan. The
Named Executive Officers received options for the purchase of an aggregate of
507,500 shares, or 43.2% of the total shares subject to option grants granted in
the 1999 fiscal year under the 1994 Plan which were granted in connection with
the employment agreements referenced under "Employment Agreements" below. 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.
SALARIES. During fiscal 1999, 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 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.
EMPLOYMENT AGREEMENTS. Each of Messrs. Badgley, Miller, Madonia,
McKinney and Dunayer is a party to an employment agreement with the Company or a
subsidiary of the Company, which is described under "Employment Contracts,
Termination of Employment, Severance and Change-in-Control Arrangements."
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).
9
<PAGE>
A. Russell Chandler, III
Richard H. Roberts
PERFORMANCE GRAPH
The following line graph compares the percentage change in the
cumulative shareholder return of the Common Stock with 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 date of the Company's initial
public offering) through April 30, 1999. The Common Stock was quoted 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 respective returns assume
reinvestment of dividends paid.
COMPARISON OF CUMULATIVE TOTAL RETURNS
[stock performance graph]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
| 8/2/94 | 4/28/95 | 4/30/96 | 4/30/97 | 4/30/98 | 4/30/99
- ---------------------------------------|---------|----------|----------|----------|----------|----------
<S> <C> <C> <C> <C> <C> <C>
Miller Industries, Inc. | 100 | 161 | 372 | 475 | 315 | 205
- ---------------------------------------|---------|----------|----------|----------|----------|----------
NYSE Composite Index | 100 | 109 | 138 | 164 | 227 | 249
- ---------------------------------------|---------|----------|----------|----------|----------|----------
S&P Heavy Duty Trucks & Parts | 100 | 103 | 114 | 142 | 221 | 252
- ------------------------------------------------------------ ---------- ---------- ---------- ----------
</TABLE>
10
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 company, 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 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 1999 all Section 16(a) filing requirements applicable to its
executive officers, directors and stockholders were complied with, and the
Company is not aware of any filing delinquencies.
DEADLINES FOR SUBMISSION TO SHAREHOLDERS
OF PROPOSALS TO BE PRESENTED AT THE
2000 ANNUAL MEETING OF SHAREHOLDERS
Any proposal intended to be presented for action at the 2000 Annual
Meeting of Shareholders by any shareholder of the Company must be received by
the Secretary of the Company not later than May 2, 2000 in order for such
proposal to be considered for inclusion in the Company's Proxy Statement and
proxy relating to its 2000 Annual Meeting of Shareholders. In the event that a
proposal intended to be presented for action at the 2000 Annual Meeting of
Shareholders by any shareholder of the Company is not received by the Secretary
of the Company on or before July 16, 2000, then the management proxies would be
allowed to use their discretionary voting authority if the proposal is raised at
the annual meeting, whether or not the matter is discussed in the Proxy
Statement. 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, 1999 IS INCLUDED WITHIN THE ANNUAL REPORT PREVIOUSLY MAILED TO
SHAREHOLDERS. 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, EXECUTIVE VICE PRESIDENT,
SECRETARY AND GENERAL COUNSEL, MILLER INDUSTRIES, INC., 8503 HILLTOP DRIVE,
OOLTEWAH, TENNESSEE 37363.
11
<PAGE>
MILLER INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
FRIDAY, OCTOBER 15, 1999
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 heldat Atlanta
Mariott Norcross on Friday, the 15th day of October, 1999, at 10:00 a.m., and at
any and all adjournments thereof as follows:
(1) / / FOR all of the following nominees (except as marked to the
contrary below):
NOMINEES: Jeffrey I. Badgley, A. Russell Chandler, III, Paul
E. Drack, James A. McKinney, William G. Miller and Richard H.
Roberts.
/ / 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.)
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
(2) 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 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.
<PAGE>
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders dated August 30, 1999 and the Proxy Statement furnished
therewith.
Dated and signed ____ __________________, 1999
--------------------------------------------
--------------------------------------------
(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, P.O. Box 105649, Atlanta,
Georgia 30348-9923, in the accompanying prepaid envelope.
