Ooltewah, Tennessee 37363
(423) 238-4171
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 28, 2010 |
The annual meeting of shareholders of Miller Industries, Inc. will be held at 9:00 a.m. (Eastern Time)time), on Friday, May 25, 2007,28, 2010, at 1100 Peachtree Street, Suite 2800, Atlanta,879 College Drive, Dalton, Georgia 30720, for the following purposes:
| 1. | to elect |
| 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 April 13, 20076, 2010 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, | ||
| /s/ Frank Madonia | ||
| Frank Madonia | ||
| Secretary | ||
April 24, 200714, 2010
We urge you to attend the |
TABLE OF CONTENTS
| Page | ||
| GENERAL | 1 | |
| VOTING PROCEDURES | 1 | |
| NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS | 2 | |
| PROPOSAL 1 — ELECTION OF DIRECTORS | 2 | |
| Introduction | 2 | |
| Information Regarding Nominees | 3 | |
| CORPORATE GOVERNANCE | 5 | |
| Independence, Board Meetings and Related Information | 5 | |
| Committees of the Board of Directors | 5 | |
| Board Leadership Structure | 6 | |
| Risk Management | 7 | |
| Director Nominations | 7 | |
| Related Transactions and Business Relationships | 7 | |
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 8 | |
| COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS | 9 | |
| Compensation Discussion and Analysis | 9 | |
| Report of the Compensation Committee | 12 | |
| Compensation Committee Interlocks and Insider Participation | 12 | |
| Summary Compensation Table | 12 | |
| Additional Discussion of Material Items in Summary Compensation Table | 13 | |
| Outstanding Equity Awards at Fiscal Year-End | 14 | |
| Option Exercises and Stock Vested in | 14 | |
| Potential Payments Upon Termination or Change in Control | 14 | |
| Non-Employee Director Compensation for | 17 | |
| ACCOUNTING MATTERS | 18 | |
| Audit Committee Report | 18 | |
| Independent Public Accountants | 19 | |
| CODE OF BUSINESS CONDUCT AND ETHICS | 20 | |
| EQUITY COMPENSATION PLAN INFORMATION | 20 | |
| COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 | 20 | |
| OTHER MATTERS | 20 | |
| Deadline for Shareholder Proposals for | 20 | |
| Expenses of Solicitation | ||
MILLER INDUSTRIES, INC.
8503 Hilltop Drive
Ooltewah, Tennessee 37363
(423) 238-4171
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 200728, 2010
GENERAL
This proxy statement is being furnished in connection with the solicitation of proxies by the Board of Directors of Miller Industries, Inc. (the “Company” or “Miller Industries”) for use at the Company’s 2010 annual meeting of shareholders (the “Annual”Annual Meeting”) to be held at 1100 Peachtree Street, Suite 2800, Atlanta,879 College Drive, Dalton, Georgia 30720, on Friday, May 25, 2007,28, 2010, at 9:00 a.m. (Eastern Time)time), and any adjournments or postponements thereof. ThisIt is anticipated that this proxy statement and the accompanying proxy card werewill first be mailed to shareholders on or about April 27, 2007.23, 2010.
Only holders of the Company’s common stock, $0.01 par value per share (the “Common Stock”), at the close of business on April 13, 20076, 2010 are entitled to notice of and to vote at the Annual Meeting. On such date, the Company had issued and outstanding 11,533,29411,637,775 shares of Common Stock. A list of all shareholders entitled to vote will be available for inspection at the Annual Meeting.
VOTING PROCEDURES
A majority of shares entitled to vote and represented in person or by proxy at the Annual Meeting will constitute a quorum. Abstentions and “non-votes”broker non-votes will be counted for the purpose of determining a quorum. Each outstanding share of Common Stock is entitled to one vote.
The election of the nomineesa nominee to the Board of Directors requires a plurality of the votes cast by holders of shares of Common Stock present in person or represented by proxy at the Annual Meeting. Therefore, those nominees receiving the greatest number of votes at the Annual Meeting shall be deemed elected, even though such nominees may not receive a majority of the votes cast.
Abstentions and broker non-votes will not be considered in the election of the nominees to the Board of Directors, but will be treated as votes against any other proposals presented to the shareholders. A “non-vote”broker non-vote occurs when a proxy received from a broker or other nominee holding shares foron behalf of a beneficial owner votes on one proposal, butclient does not votecontain voting instructions on another proposala “non-routine” matter because the broker or other nominee does not have discretionary voting power and has not received specific voting instructions from the beneficial owner.client with respect to such non-routine matter. The proposals in this proxy statement are non-routine matters and accordingly the brokerage firm cannot vote your shares on those proposals without your instructions.
If you hold shares of Common Stock in your own name as holder of record, you may give a proxy to be voted at the Annual Meeting in any of the following ways: (i) over the telephone by calling a toll-free number; (ii) electronically, using the Internet; or (iii) by completing, signing and mailing the enclosed printed proxy card. If you are a shareholder holdsof record and would like to submit your proxy vote by telephone or Internet, you should refer to the specific instructions provided on the enclosed proxy card. If you are a shareholder of record and wish to submit your proxy by mail, you should sign and return the proxy card in accordance with the instructions thereon prior to the Annual Meeting. Additionally, a holder of record may vote in person by completing a ballot at the Annual Mee ting. Even if you currently plan to attend the Annual Meeting, the Company recommends that you also submit your proxy as described above so that your vote will be counted if you later decide not to attend the Annual Meeting.
If you hold shares of Common Stock through a broker or other nominee (i.e., in “street name”), the broker or other nominee should provide instructions on how the shareholderyou may instruct the broker or other nominee to vote those shares on the shareholder’syour behalf.
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The Board of Directors has designated William G. Miller and Frank Madonia, and each or either of them, to vote on its behalf the proxies being solicited hereby. The Board of Directors knows of no matters which are to be brought to a vote at the Annual Meeting other than those set forth in the accompanying Notice of 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.
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
| ● | this proxy statement for the Annual Meeting; and |
| ● | the Company’s 2009 Annual Report to Shareholders (which includes the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, other than the exhibits thereto). |
PROPOSAL 1
ELECTION OF DIRECTORS
Introduction
Pursuant to the Company’s Charter and Bylaws, the Board of Directors has fixed the number of directors at five.six. The members of the Board of Directors comprise a single class, and at each annual meeting of shareholders all directors will beare elected. The directors elected at the Annual Meeting will serve until the annual meeting of shareholders in 2008,2011, or until their successors are duly elected and qualified. The Board of Directors may fill directorships resulting from vacancies, and may increase or decrease the number of directors to as many as fifteen or as few as three. In March 2010, the Board of Directors increased the size of the Board from five to six members and appointed Theodore H. Ashford, III, effective April 1, 2010, to serve on the Board of Directors until the Annual Meeting. Executive officers are appointed annually and serve at the discretion of the Board of Directors.
Upon the recommendation of the Nominating Committee, the Board of Directors has nominated Theodore H. Ashford, III, Jeffrey I. Badgley, A. Russell Chandler, III, Paul E. Drack, William G. Miller and Richard H. Roberts, the current members of the Board, for re-election as directors. Each such nominee has consented to be named herein and to serve as a director, if elected.
Unless contrary instructions are received, shares of Common Stock represented by duly executed proxies will be voted in favor of the election of each of the fivesix nominees named above to constitute the entire Board of Directors. The Board of Directors has no reason to expect that the nomineesany nominee will be unable to serve and, therefore, at this time it does not have any substitute nominees under consideration.
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Information concerning the nominees for election, based on data furnished by them, is set forth below. TheyCurrently, they are all now directors of the Company. The Board of Directors has determined that three of the five nomineesMessrs. Ashford, Chandler, Drack and Roberts are independent directors under the listing standards of the New York Stock Exchange (“NYSE”).
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE FIVESIX DIRECTOR NOMINEES.
Information Regarding Nominees
Name of Director | Background Information | |
| Theodore H. Ashford, III | Mr. Ashford, 46, has served as a director of the Company since April 2010. Mr. Ashford has served as President and Chief Investment Officer of Ashford Capital Management, Inc. since October 2003. From 1993 to 2003, Mr. Ashford served as an investment analyst for Ashford Capital Management, Inc. Prior to 1993, Mr. Ashford worked for International Management Group. Mr. Ashford’s management experience brings valuable operations and leadership expertise to the Board of Directors. Additionally, Mr. Ashford has experience analyzing companies for investment purposes, including extensive international travel evaluating companies and markets around the world. Such investment advisory experience and financial analysis skills bring beneficial financial experience and a broad global perspective to the Board of Directors. | |
| Jeffrey I. Badgley | Mr. Badgley, With over twenty years of experience at the Company and over twenty-five years of experience in the towing and recovery equipment industry, Mr. Badgley provides essential insight and guidance to the Board of Directors from an inside perspective of the day-to-day operations of the Company and extensive experience and comprehensive knowledge of the towing industry. |
Name of Director | Background Information | |
A. Russell Chandler, III | Mr. Chandler, Mr. Chandler has founded and successfully managed several companies. He also has extensive experience in analyzing businesses for the purpose of making investments. Mr. Chandler’s more than thirty-five years of experience as a Chairman and/or Chief Executive Officer at various companies, including, among others, a private investment firm which he founded, brings key leadership, financial and operational experience to the Board of Directors. | |
Paul E. Drack | Mr. Drack, Mr. Drack’s extensive leadership experience in the manufacturing industry demonstrates his management capability and business insight. His experience with complex financial and operational issues in the manufacturing industry brings valuable financial, operational and strategic expertise to the Board of Directors. | |
William G. Miller | Mr. Miller, As Chairman and Co-Chief Executive Officer, as well as the founder, of the Company and with over twenty years of experience at the Company, Mr. Miller has a deep knowledge and understanding of the Company, its operating companies and its line of business and brings that knowledge and understanding to the Board of Directors. Additionally, Mr. Miller’s experience in leadership positions at various companies prior to founding the Company brings valuable leadership expertise to the Board of Directors. |
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| Name of Director | Background Information | |
| Richard H. Roberts | Mr. Roberts, Mr. Roberts’ experience as a corporate attorney and an executive officer and general counsel of two public companies brings extensive legal, operational and public company finance experience to the Board of Directors. Additionally Mr. Roberts’ experience on the Board of Directors of companies in other industries demonstrates his leadership capability and broad knowledge of financial and operational issues that companies face. |
CORPORATE GOVERNANCE
Independence, Board Meetings and Related Information
Independence
The Board of Directors has determined that a majority of the members of the Board of Directors are “independent,” as “independent” is defined under applicable federal securities laws and the listing standards of the NYSE. The independent directors are Messrs. Ashford, Chandler, Drack and Roberts.
Meetings
The Board of Directors held five meetings during 2006.2009. All incumbent directors attended more than 75% of the meetings of the Board of Directors and the respective committees of which they are members.members, excluding Mr. Ashford who was not a member of the Board of Directors during 2009. The non-management directors meet in executive session as a part of the meetings of the Audit Committee. The presiding director at those sessions is selected by the non-management directors on a meeting-by-meeting basis. The Company does not require its directors to attend its annual meeting of shareholders. In 2006,2009, two of the Company’s five directors attended the annual meeting of shareholders.shareholders in person, and the remaining three directors participated in the annual meeting by telephone.
Communication with Directors
Interested parties may communicate with aany non-management director by mailing a communication to the attention of that director at 8503 Hilltop Drive, Ooltewah, Tennessee 37363.
Committees of the Board of Directors
The Board of Directors has standing Audit, Compensation and Nominating Committees. Generally, members of these committees are elected annually by the Board of Directors, but changes to the committees may be made at the Board of Directors’ discretion at any time. These committees operate pursuant to separate written charters adopted by the Board of Directors. The charter of the Audit Committee was amended and restated by the Board in March 2007. These charters, along with the Company’s Corporate Governance Guidelines, are available on the Company’s website at www.millerind.com through the “Investor Relations” link, and the amended and restated charter of the Audit Committee is attached as Appendix A to this proxy statement.link. In addition, copies of these charters and guidelines can be obtained upon request from the Company’s Corporate Secretary.
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Audit Committee
The Audit Committee is comprised of Messrs. Chandler, Drack and Roberts. The Board of Directors has determined that each of the members of the audit committee is “financially literate” within the meaning of the listing standards of the NYSE, and qualifies as an “audit committee financial expert” as defined by applicable SEC rules.
The Audit Committee, among other things, recommends the appointment of the Company’s independent public accountants, reviews the scope of audits proposed by the Company’s independent public accountants, reviews audit reports on various aspects of corporate operations, and periodically consults with the Company’s independent public accountants on matters relating to internal financial controls and procedures, among other duties.procedures. The Audit Committee held four meetings during 2006.2009. The report of the Audit Committee is included in this proxy statement beginning on page 15.18.
Compensation Committee
The Compensation Committee is comprised of Messrs. Chandler, Drack and Roberts. The Compensation Committee establishes, among other things, salaries, bonuses and other compensation for the Company’s officers, and administers the Company’s stock option and other employee benefit plans. The Compensation Committee held one meetingmeetings during 2006.2009. The report of the Compensation Committee is included in this proxy statement beginning on page 9.12.
Nominating Committee
The Nominating Committee is comprised of Messrs. Chandler, Drack and Roberts. The Nominating Committee was established to evaluate candidates for service as directors toof the Company and to conduct the Board’s annual self-assessment process. The Nominating Committee will consider candidates recommended by shareholders. Shareholder recommendations must comply with the procedures for director nominations set forth in Article I, Section 1.2, of the Company’s Bylaws.Bylaws and applicable law. The Nominating Committee held one meetingtwo meetings during 2006.2009.
Board Leadership Structure
The Board of Directors has determined that the Company is benefited by having Co-Chief Executive Officers one of whom also serves as Chairman of the Board. The Company currently has Co-Chief Executive Officers, Jeffrey I. Badgley and William G. Miller, both of whom have executive decision making power for the Company. Mr. Badgley focuses principally on the management of the day-to-day operations of the Company. Mr. Miller also serves as a Co-Chief Executive Officer and Chairman of the Board and focuses primarily on strategic issues the Company faces on an ongoing basis. Each of the standing committees of the Board of Directors, the Audit, Compensation and Nominating Committees, is chaired by an independent director and is comprised entirely of independent directors.
The Board of Directors believes that combining the position of Co-Chief Executive Officer and Chairman of the Board allows the Co-Chief Executive Officer to serve as a bridge between management and the Board, ensuring that both groups act with a common purpose. Mr. Miller, as Co-Chief Executive Officer, is one of the two individuals selected by the Board of Directors to manage the Company, and his direct involvement in the Company’s operations makes him well positioned to lead productive Board strategic planning sessions and determine the time allocated to each agenda item in discussions of the Company’s short- and long-term objectives.
Additionally, the Board has not appointed a lead independent director. Currently, the Board consists of six directors, four of whom are independent. Due to the small size of the Board, all of the independent directors are able to closely monitor the activities of the Company and meet regularly in executive sessions without management to discuss the development and strategy of the Company. These executive sessions allow the independent directors to review key decisions and discuss matters in a manner that is independent of our Co-Chief Executive Officers. Therefore, the Board has determined that a lead independent director is not necessary at this time. As the composition of the Board changes and/or grows in the future, the Board of Directors intends to reevaluate the need for a lead independent director.
Risk Management
Management is responsible for the day-to-day management of risks the Company faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. The Board believes that full and open communication between management and the Board of Directors is essential for effective risk management and oversight. The Board receives regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, strategic, competitive and reputational risks. Additionally, senior management is available to address any questions or concerns raised by the Board on risk management-related and any other matters.
While the Board is ultimately responsible for risk oversight at the Company, our three Board committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements, and, in accordance with the NYSE rules, discusses policies with respect to risk assessment and risk management. The Compensation Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The Nominating and Governance Committee assists the Board in fulfilling its oversight responsibilit ies with respect to the management of risks associated with board organization, membership and structure, succession planning for our directors and executive officers, and corporate governance.
Director Nominations
The Nominating Committee considers qualifications and characteristics that it, from time to time, deems appropriate when it selects individuals to be nominated for election to the Board of Directors. These qualifications and characteristics may include, without limitation, independence, integrity, business experience, education, accounting and financial expertise, age, diversity (including diversity of skills, background and experience), reputation, civic and community relationships and industry knowledge and experience. In addition, prior to nominating an existing director for re-election to the Board of Directors, the Nominating Committee will consider and review anthe existing director’s Board and committee attendance, performance and length of Board service. The composition of the current Boa rd of Directors reflects diversity in business and professional experience and skills.
Related Transactions and Business Relationships
Policy on Related Party Transactions
The Company recognizes that transactions between the Company or its subsidiaries and any of its directors or executive officers can present potential or actual conflicts of interest. Accordingly, as a general matter it is the Company’s preference to avoid such transactions. Nevertheless, the Company recognizes that there are circumstances where such transactions may be in, or not inconsistent with, the best interests of the Company. Therefore, the Company has adopted a formal policy that requires the Company’s Audit Committee to review and, if appropriate, approve or ratify any such transactions. Pursuant to the policy, the Committee will review any transaction in which the Company is or will be a participant and the amount involved exceeds $120,000, and in which any of the Company’sCom pany’s directors, executive officers or 5% shareholders had, has or will have a direct or indirect material interest. After its review, the Committee will only approve or ratify those transactions that are in, or are not inconsistent with, the best interests of the Company and its shareholders.
Certain Related Transactions and Business Relationships
In 2009, the son of William G. Miller, the Company’s Chairman and Co-Chief Executive Officer and holder of approximately 11.97%4.12% of the Company’s outstanding Common Stock, is the sole lender under the Company’s junior credit facility. At January 1, 2006, the aggregate amount of debt under the Company’s junior credit facility was $10.0 million. The Company repaid a total of $5.0 million of debt under the junior credit facility during 2006, and as of March 31, 2007, the Company’s debt under its junior credit facility was approximately $5.0 million. The Company paid approximately $684,000 in interest under its junior credit facility in 2006, and approximately $39,000 is included in accrued liabilities for unpaid interest on the junior credit facility at December 31, 2006. The Company expects to continue to make payments under its junior credit facility during 2007, and may engage in such other transactions with Mr. Miller with respect thereto as may be related to Mr. Miller’s continuing ownership of the Company’s junior debt, including transactions that may result in a longer term or new junior credit facility.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 2007,2010, certain information with respect to: (a)to the Common Stock beneficially owned by (i) each director or nominee for director, (ii) the executive officers named in the Summary Compensation Table, (iii) all executive officers and directors of the Company as a group, and (iv) all shareholders known to be beneficial owners (as that term is defined under SEC rules) of more than 5% 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 in the Summary Compensation Table for 2006 and (iii) by all executive officers and directors of the Company as a group.Stock. 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.
Name and Address of Beneficial Owner | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class(2) | Amount and Nature of Beneficial Ownership (1) | Percent of Class (2) | |||||||||
Ashford Capital Management, Inc. P.O. Box 4172 Wilmington, DE 19807 | 1,593,200 (3) | 13.82% | ||||||||||||
Directors and Executive Officers | ||||||||||||||
| Theodore H. Ashford, III | 0 | (3) | * | |||||||||||
| A. Russell Chandler, III | 104,413 | (4) | * | |||||||||||
| Paul E. Drack | 23,806 | * | ||||||||||||
| Richard H. Roberts | 19,873 | * | ||||||||||||
| William G. Miller | 479,619 | (5) | 4.12 | % | ||||||||||
| Jeffrey I. Badgley | 55,000 | (6) | * | |||||||||||
| Frank Madonia | 17,501 | (7) | * | |||||||||||
| J. Vincent Mish | 31,101 | (8) | * | |||||||||||
| All Directors and Executive Officers as a Group (8 persons) | 731,313 | (9) | 5.40 | % | ||||||||||
Beneficial Owners of More than 5% of the Common Stock | ||||||||||||||
Hotchkis and Wiley Capital Management, LLC 725 Figueroa Street, 39th Floor Los Angeles, CA 90017 | 1,497,298 | (10) | 12.87 | % | ||||||||||
William G. Miller 8503 Hilltop Drive Ooltewah, TN 37363 | 1,379,619 (4) | 11.97% | ||||||||||||
Amica Mutual Insurance Company 100 Amica Way Lincoln, RI 02865 | 733,590 | (11) | 6.30 | % | ||||||||||
Hotchkiss and Wiley Capital Management, LLC 725 Figueroa Street, 39th Floor Los Angeles, CA 90017 | 1,283,878 (5) | 11.14% | ||||||||||||
Rutabaga Capital Management 64 Broad Street, 3rd Floor Boston, MA 02109 | 710,878 | (12) | 6.11 | % | ||||||||||
Scopia Management Inc. Matthew Sirovich Jeremy Mindich |  | (6) | 823,601 (6) | 7.14% | ||||||||||
Wellington Management Company, LLC 75 State Street Boston, MA 02109 | 731,500 (7) | 6.34% | ||||||||||||
| Jeffrey I. Badgley | 57,000 (8) | * | ||||||||||||
| Frank Madonia | 25,501 (9) | * | ||||||||||||
| J. Vincent Mish | 15,501 (10) | * | ||||||||||||
| A. Russell Chandler, III | 117,259 (11) | 1.02% | ||||||||||||
| Richard H. Roberts | 11,119 | * | ||||||||||||
| Paul E. Drack | 15,052 | * | ||||||||||||
All Directors and Executive Officers as a Group (7 persons) | 1,621,051 (12) | 13.96% | ||||||||||||
Dimensional Fund Advisors LP Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746 | 691,959 | (13) | 5.95 | % | ||||||||||
| * | Less than one percent. |
| (1) | Includes shares of Common Stock |
| (2) | The percentage of beneficial ownership is based on 2010. |
| (3) |
| (4) |
| Includes |
| As reported in an amendment to Schedule 13D filed with the SEC on January 6, 2009. Does not include 900,000 shares owned by Mr. Miller’s adult children, with respect to which Mr. Miller disclaims beneficial ownership. |
| (6) | Includes |
| (7) | Includes 17,500 shares issuable pursuant to options that are exercisable within 60 days of March 31, 2010. |
| (8) | Includes 25,000 shares issuable pursuant to options that are exercisable within 60 days of March 31, 2010. |
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| (9) | Includes 97,500 shares issuable pursuant to options that are exercisable within 60 days of March 31, 2010. |
| (10) | As reported in an amendment to Schedule 13G filed with the SEC on February 11, 2010 by Hotchkiss and Wiley Capital Management, LLC, a registered investment adviser. |
| (11) | As reported in a Schedule 13G filed with the SEC on January 15, 2010, by Amica Mutual Insurance Company. |
| (12) | As reported in a Schedule 13G filed with the SEC on February 9, 2010, by Rutabaga Capital Management. |
| (13) | As reported in a Schedule 13G filed with the SEC on February 8, 2010 by Dimensional Fund Advisors LP. |
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Compensation Discussion and Analysis
Overview
This discussion and analysis addresses the material elements of the Company’s compensation program for named executive officers, including the Company’s compensation objectives and overall compensation philosophy, the compensation process and the administration of the compensation program. It is intended to complement and enhance an understanding of the compensation information presented in the “Summary Compensation Table for 2006”Table” and other accompanying tables.tables in this proxy statement.
As used in this proxy statement, the term “named executive officers” means the Company’s Chairman and Co-Chief Executive Officer; President and Co-Chief Executive Officer; Executive Vice President and Chief Financial Officer; and Executive Vice President, Secretary and General Counsel. In this “Compensation Discussion and Analysis” section, the terms “we,” “our,” “us” and the “Committee” refer to the Compensation Committee of the Company’s Board of Directors.
Compensation Objectives and Overall Compensation Philosophy
The Company’s executive compensation program is designed to enhance Company profitability, and thus shareholder value, by aligning executive compensation with the Company’s business goalsexpectations and performance, and by attracting, retainingestablishing a system that can retain and rewardingreward executive officers who contribute to the long-term success of the Company. More specifically, the overall goals of the executive compensation program include:
| offering |
| providing strong links between Company performance and total compensation earned |
| emphasizing the long-term performance of the Company, thus enhancing shareholder value; and |
| promoting and facilitating stock ownership by executive |
We believe that it is in the best interests of the Company’s shareholders and its named executive officers that the Company’s executive compensation program, and each of its elements, remain simple and straightforward. This approach should reduce the time and cost involved in setting the Company’s executive compensation policies and calculating the payments under such policies, and should enhance the transparency of, and the ability to comprehend, these policies.
Administration
The Compensation Committee has overall responsibility with respect to approving and monitoring the Company’s executive compensation program, and operates under a Charter that was approved by the Company’s Board of Directors in 2004. None of the members of the Compensation Committee has been an officer or employee of the Company, and the Board of Directors has considered and determined that all of the members are independent“independent,” as “independent”that term is defined under NYSE rules, and otherwise meet the criteria set forth in the Committee’s Charter.
In fulfilling its responsibilities, the Compensation Committee, among other things, establishes and approves the compensation level of each of the named executive officers, reviews and approves corporate goals and objectives relevant to the compensation of the named executive officers, evaluates the performance of the named executive officers in light of these goals and objectives, determines and approves compensation based on these objectives and its evaluations, establishes criteria for granting stock options to the named executive officers and the Company’s other employees, considering the recommendations of senior management, and approves such stock option grants.
We regularly review and discuss the compensation of the named executive officers with William G. Miller, the Company’s Chairman and Co-Chief Executive Officer, and consult with Mr. Miller in evaluating the performance of the named executive officers. In addition, Mr. Miller may make recommendations to us regarding compensation for all of the named executive officers, other than for himself.
As discussed in greater detail below, the levels of each element of compensation for the named executive officers are determined based on several factors, which may include the Company’s historical performance and relative shareholder return, our informal benchmarking against the valueassessment of similar compensation paid to executives atin comparable companies,industries, the amount and the elements of compensation provided in previous years, the terms of each named executive officer’s employment agreement with the Company, our expectations for the Company’s future financial performance and other matters that we deem relevant. In addition, we consider the level of experience and the responsibilities of each named executive officer, his performance as well asand the personal contributions he makes to the success of the Company. Qualitative factors such as leadershipLeadership skills, analyticalana lytical skills, organization development, public affairs and civic involvement have been and will continue to be deemed to be important qualitative factors to take into account in considering elements and levels of compensation. We have not adopted any formal or informal policy for allocating compensation between long-term and short-term elements, between cash and non-cash or among the different possible forms of non-cash compensation.
The continued deterioration of the U.S. and global economy, and the uncertainty that this creates for business planning purposes, impacted executive compensation decisions for 2009. In 2006,2009, the Company’s executive compensation program consisted primarily of two primary elements: base salary and annual discretionary cash performance bonuses (which are disclosed in the “Summary Compensation Table for 2006” under the “Bonus” column).salary. In addition, while the Company did not pay any annual discretionary cash performance bonuses or grant any stock option awards in 2006,2009, annual discretionary cash performance bonuses and stock options have historically been an elementelements of the Company’s executive compensation program, and we expect that equity-based awards willmay again be an elementelements of the Company’s executive compensation program in the future. In addition to these primary elements,base salary, the Company has provided, and will continue to provide, its named executive officers with certain benefits, such as healthcare plans, that are available to all employees.
Elements of Compensation
Base Salary. On an annual basis weWe determine the base salary for each of the named executive officers. The base salary for a named executive officer is establishedofficers annually based on, among other things, his experience and the scope of his responsibilities, his performance and the performance of the Company, our expectations for the Company’s future financial performance and our informal benchmarking against the valueassessment of similar salaries paid to executives atin comparable companies.industries. The minimum levels of some of these base salaries are mandated by employment agreements with the named executive officers (which are described in more detail below under the heading “Additional Discussion of Material Items in Summary Compensation Table for 2006―Table―Employment Agreements with Named Executive Officers”Officers”). We believe that base salaries are an important part of the Company’s executive compensation program because they provide the named executive officers with a steady income stream that is not contingent upon the Company’s overall performance.
For 2008 and continuing in 2009, the named executive officers voluntarily reduced their salaries as part of a broader set of company-wide cost-reduction measures undertaken at their direction. For 2009, taking into account the economic conditions and the Board’s expectations for the Company’s financial performance in a difficult economic environment, the base salary for each named executive officer was increased only 1.5%, which is the same rate at which compensation for all other domestic employees was increased in 2009. Beginning in November 2009, based on the improvement in economic conditions and our expectations for the Company’s financial performance for the remainder of 2009 and 2010 and in connection with the increase in base salaries for domestic salaried employees, the base salary fo r each named executive officer was restored to the level of base salary that such named executive officer was paid prior to the voluntary salary reductions implemented in 2008 plus 1.5%. Under Mr. Miller’s employment agreement with the Company, Mr. Miller is entitled to receive a base salary that is substantially the same as the Company’s other Co-Chief Executive Officer,Officer; however, sincefrom 1999 through 2006 he has declined increases to which he would bewas entitled under his agreement. He may choose notEffective July 2007, the Compensation Committee increased Mr. Miller’s salary to decline these increasesmatch the salary of the other Co-Chief Executive Officer in the future.accordance with his employment agreement. For 2006,2009, Mr. Badgley’sMiller’s base salary was increased $14,993, Mr. Mish’sadjusted accordingly to match the 2009 base salary was increased $14,996 andfor Mr. Madonia’s base salary was increased $7,495.Badgley.
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Annual Discretionary Cash Bonuses. We utilize annual discretionary cash bonuses to rewardprovide additional compensation to the named executive officers, and to reward them for their performance and the performance of the Company during the prior year.performance. We have not adopted any formal or informal performance or other objectives for the calculation or payment of these discretionary bonuses. Instead, in determining an annual discretionary bonus, we consider, among other things, the Company’s performance for the previous year and relative shareholder value, discretionary bonuses awarded in previous years, the performance of the named executive officer and his personal contributions to the success of the Company.
Annual discretionary cash bonuses, as opposed to grants of stock options or other equity-based awards, are designed to more immediately rewardprovide additional compensation to the named executive officers, and to more immediately reward them for their performance. The immediacy of these bonuses provides a significantan incentive to the named executive officers to raise their level of performance, and thus the Company’s overall level of performance. Thus, we believe that discretionary cash bonuses are an important motivating factor for the named executive officers.
Equity Awards. In 2004 and in prior years, we awarded stock options to the named executive officers other than Mr. Miller, and, althoughAlthough we did not award stock options to the named executive officers from 2005 through 2007 or in 2005 or 2006,2009, we consider equity-based awards to be an important part of the Company’s overall executive compensation program.philosophy. Historically, Mr. Miller has declined grants of equity awards from the Company.
Stock options and other equity-based awards provide the named executive officers with a strong link to the Company’s long-term performance, promote an ownership culture and more closely align the interest of the named executive officers and the Company’s shareholders. Equity incentive awards are granted under the Company’s 2005 Equity Incentive Plan. This plan provides us with broad discretion to fashion the terms of awards to provide eligible participants with such stock-based incentives as we deem appropriate. It permits the issuance of awards in a variety of forms, including non-qualified stock options and incentive stock options, stock appreciation rights, restricted stock awards and performance shares.
In general, 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 stock options are exercisable until the tenth anniversary of the grant date unless otherwise earlier terminated pursuant to the terms of the individual option agreement.
Severance and Change of Control Arrangements. As discussed in more detail in the “Additional“Additional Discussion of Material Items in Summary Compensation Table for 2006―Table―Employment Agreements with Named Executive Officers”Officers” and “Potential Payments Upon Termination or Change in Control” sections below, the named executive officers may be entitled to certain benefits upon the termination of their respective employment or change in control agreements.
Other Compensation. The named executive officers currently are entitled to participate in the Company’s health, life and disability insurance plans and in our 401(k) plan to the same extent that the Company’s employees are entitled to participate.
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Report of the Compensation Committee
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained under that heading in this proxy statement. On the basis of its reviews and discussions, the Committee has recommended that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006,2009, and this proxy statement.
Compensation Committee Paul E. Drack A. Russell Chandler, III Richard H. Roberts |
Compensation Committee Interlocks and Insider Participation
During 2006,2009, the Compensation Committee was comprised of Messrs. Chandler, Drack and Roberts, all of whom were non-employee, independent directors. During 2009, no executive officer of the Company served as a member of the board of directors or compensation committee of any other entity whose executive officer(s) served on the Company’s Board of Directors or Compensation Committee.
Summary Compensation Table for 2006
The following table sets forth the compensation awarded to, earned by, or paid by the Company during the yearyears ended December 31, 20062009, 2008 and 2007, respectively, to the Company’s Co-Chief Executive Officers, Chief Financial Officer and the Company’s other most highly compensated executive officer (who are referred to together as the Company’s named executive officers).
Name and Principal Position | Year | Salary (1) | Bonus (2) | Option Awards (3) | All Other Compensation (4) | Total | |||||||||||||
William G. Miller Chairman and Co-Chief Executive Officer | 2006 | $ | 180,007 | $ | - | $ | - | $ | - | $ | 180,007 | ||||||||
Jeffrey I. Badgley President and Co-Chief Executive Officer | 2006 | $ | 291,203 | $ | 60,600 | $ | 90,529 | $ | 5,629(5 | ) | $ | 447,961 | |||||||
Frank Madonia Executive Vice President, Secretary and General Counsel | 2006 | $ | 203,702 | $ | 40,600 | $ | 27,159 | $ | 4,564(5 | ) | $ | 276,025 | |||||||
J. Vincent Mish Executive Vice President and Chief Financial Officer | 2006 | $ | 191,202 | $ | 40,600 | $ | 27,159 | $ | 3,739(5 | ) | $ | 262,700 | |||||||
Name and Principal Position | Year | Salary (1) | Bonus (2) | Option Awards (3) | All Other Compensation | Total | ||||||||||||||||
| William G. Miller | 2009 | $ | 293,086 | (4) | $ | – | $ | – | $ | – | $ | 293,086 | ||||||||||
| Chairman and Co-Chief Executive Officer | 2008 | $ | 283,500 | (4) | $ | – | $ | – | $ | – | $ | 283,500 | ||||||||||
| 2007 | $ | 258,753 | (4) | $ | – | $ | – | $ | – | $ | 258,753 | |||||||||||
| Jeffrey I. Badgley | 2009 | $ | 294,286 | $ | 150 | $ | – | $ | 5,972 | (5) | $ | 300,408 | ||||||||||
| President and Co-Chief Executive Officer | 2008 | $ | 283,500 | $ | 47,150 | $ | 239,040 | $ | 7,138 | (5) | $ | 576,828 | ||||||||||
| 2007 | $ | 310,833 | $ | 69,250 | $ | – | $ | 7,484 | (5) | $ | 387,567 | |||||||||||
| Frank Madonia | 2009 | $ | 201,238 | $ | 150 | $ | – | $ | 5,972 | (5) | $ | 207,360 | ||||||||||
| Executive Vice President, Secretary and General Counsel | 2008 | $ | 193,500 | $ | 33,150 | $ | 79,680 | $ | 5,570 | (5) | $ | 311,900 | ||||||||||
| 2007 | $ | 212,917 | $ | 46,250 | $ | – | $ | 5,642 | (5) | $ | 264,809 | |||||||||||
| J. Vincent Mish | 2009 | $ | 201,238 | $ | 150 | $ | – | $ | 5,005 | (5) | $ | 206,393 | ||||||||||
| Executive Vice President, Treasurer and Chief Financial Officer | 2008 | $ | 193,500 | $ | 33,150 | $ | 79,680 | $ | 5,122 | (5) | $ | 311,452 | ||||||||||
| 2007 | $ | 210,833 | $ | 46,250 | $ | – | $ | 4,683 | (5) | $ | 261,766 | |||||||||||
| (1) | Base salary paid to the named executive officer. |
| (2) | Discretionary cash bonus awarded to the named executive officer based on, among other factors, the Company’s performance in the previous year. For 2009, the named executive officers received a nominal annual “holiday bonus” paid to all employees of the Company and no other discretionary cash bonus. |
| (3) | Amounts represent the aggregate grant date fair value for option awards in accordance with the stock compensation topic in the FASB codification utilizing assumptions discussed in Note 2 to the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009. |
| (4) | Beginning in July 2007, the Compensation Committee determined to adjust Mr. Miller’s salary on a going-forward basis to match the salary of the other Co-Chief Executive Officer in accordance with Mr. Miller’s employment agreement. |
| (5) | Amount represents the Company’s contribution to the named executive officer’s 401(k) plan under the plan’s matching program. No other amounts are indicated for perquisites and personal benefits as the value provided did not exceed $10,000. |
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Additional Discussion of Material Items in Summary Compensation Table for 2006
The Company’s executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table for was paid or awarded, are described above under “Compensation Discussion and Analysis.” A summary of certain material terms of the Company’s compensation plans and arrangements is set forth below.
Employment Agreements with Named Executive Officers
William G. Miller. In July 1997, the Company entered into an employment agreement with Mr. Miller thatwhich was amended and restated in December 2008. The employment agreement 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 unless Mr. Miller agrees to accept a lower salary.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 allows Mr. Miller to pursue other business related interests as long as they do not interfere with his duties for the Company. Employment may be terminated by either party upon three yearsyears’ 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 for a breach of Mr. Miller.
Jeffrey I. Badgley and Frank Madonia. In September 1998, the Company entered into employment agreements with Messrs. Badgley and Madonia.Madonia which were amended and restated in December 2008. 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 62ndnd birthday, the employment agreement ceases to extend automatically, and instead terminates three years from that date. The employment agreementsag reements provide for initial base salaries of $200,000 to Mr. Badgley, and $165,000 to Mr. Madonia, eachthat are subject to annual review and adjustment 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 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), the individual is entitled to certain benefits described under the heading “Potential Payments Upon Termination or Change in Control” below.
J. Vincent Mish. In December 2002, the Company entered into an employment agreement with Mr. Mish.Mish which was amended and restated in December 2008. The employment agreement provides for a rolling three-year term, extended automatically as of each annual shareholders’ meeting such that the remaining term of the employment agreement is three years as of that date. Notwithstanding the foregoing, the term of the agreement ends on Mr. Mish’s 65thth birthday. The employment agreement provides for an initial base salary of $175,000,that is subject to annual review and adjustmentadj ustment by the Board of Directors. Additionally, Mr. Mish may participate in any bonus plans or other benefits generally available to executive officers of the Company. The Company may terminate Mr. Mish pursuant to this employment agreement for any reason upon written notice. However, if termination is for other than “just cause” (as defined in the employment agreement), Mr. Mish is entitled to certain benefits described under the heading “Potential Payments Upon Termination or Change in Control” below.
2005 Equity Incentive Plan
The Company’s shareholder-approved 2005 Equity Incentive Plan is a flexible plan that provides the Compensation Committee with broad discretion to fashion the terms of awards to provide eligible participants with such equity-based incentives as the Committee deems appropriate. It permits the issuance of awards in a variety of forms, including non-qualified stock options and incentive stock options, stock appreciation rights, restricted stock awards and performance shares. During 2006,2009, no awards were granted to the Company’s named executive officers under the 2005 Equity Incentive Plan.
Contributory Retirement Plan
The Company maintains a contributory retirement plan for all full-time employees with at least 90 days of service. The plan is designed to provide tax-deferred income to the Company’s employees in accordance with the provisions of Section 401(k) of the Internal Revenue Code. The plan provides that each participant may contribute up to 15% of his or her salary. For 2006,2009, the Company matched 50% of the first 4%5% of participant contributions. Matching contributions vest over the first five years of employment.
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Outstanding Equity Awards at Fiscal Year-End 20062009
The following table provides information on the current holdings of stock options by the named executive officers, including both unexercised and unvested awards. The market value of the stock options is based upon the closing market price for the Company’s Common Stock as ofawards, at December 29, 2006, the last trading day in 2006, which was $24.00.31, 2009.
Number of Shares Underlying Unexercised Options | ||||||||||||||||
| Name | Option Grant Date (1) | Exercisable | Unexercisable | Option Exercise Price | Option Expiration Date | |||||||||||
| William G. Miller | - | - | $ | - | - | |||||||||||
| Jeffrey I. Badgley | 9/11/1998 | 24,000 | - | $ | 20.625 | 9/11/2008 | ||||||||||
| 3/26/2004 | - | 50,000 | 8.31 | 3/26/2014 | ||||||||||||
| Frank Madonia | 9/11/1998 | 18,000 | - | $ | 20.625 | 9/11/2008 | ||||||||||
| 3/26/2004 | - | 15,000 | 8.31 | 3/26/2014 | ||||||||||||
| J. Vincent Mish | 6/26/1998 | 1,500 | - | $ | 35.3125 | 6/26/2008 | ||||||||||
| 3/26/2004 | - | 15,000 | 8.31 | 3/26/2014 | ||||||||||||
| Number of Shares Underlying | Option | |||||||||||||||||
| Option Grant | Unexercised Options | Option | Expiration | |||||||||||||||
| Name | Date (1) | Exercisable | Unexercisable | Exercise Price | Date | |||||||||||||
| William G. Miller | – | – | – | $ | – | – | ||||||||||||
| Jeffrey I. Badgley | 3/26/2004 | 25,000 | – | $ | 8.31 | 3/26/2014 | ||||||||||||
| 11/07/2008 | 30,000 | 90,000 | 5.49 | 11/06/2018 | ||||||||||||||
| Frank Madonia | 3/26/2004 | 7,500 | – | $ | 8.31 | 3/26/2014 | ||||||||||||
| 11/07/2008 | 10,000 | 30,000 | 5.49 | 11/06/2018 | ||||||||||||||
| J. Vincent Mish | 3/26/2004 | 15,000 | – | $ | 8.31 | 3/26/2014 | ||||||||||||
| 11/07/2008 | 10,000 | 30,000 | 5.49 | 11/06/2018 | ||||||||||||||
| (1) | Vesting for each listed stock option grant occurs in 25% increments on each yearly anniversary of the date of grant. |
Option Exercises and Stock Vested in 20062009
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | |||||
| William G. Miller | - | $ | - | ||||
| Jeffery I. Badgley | 61,200 | $ | 902,100.00 | ||||
| Frank Madonia | 22,400 | $ | 414,258.50 | ||||
| J. Vincent Mish | 22,400 | $ | 335,600.00 | ||||
Potential Payments Upon Termination or Change in Control
The Company is party to employment agreements with each of its named executive officers, and has also entered into change in control agreements with twothree of its named executive officers. TheseEach of these employment and change in control agreements address, among other things, compensation and benefits that would be paid to the applicable named executive officersofficer in the event that his employment is terminated for different reasons, including termination for cause or without cause, and termination in connection with a change in control.
Employment Agreements
William G. Miller. The Company’s employment agreement with Mr. Miller provides that either the Company or Mr. Miller may terminate the agreement for any reason upon three yearsyears’ prior notice, that Mr. Miller may terminate the agreement upon 60 daysdays’ notice in the event of a change in control of the Company, and that the Company may terminate the agreement at any time for “cause,” or if Mr. Miller dies or becomes disabled. Upon any termination ofUnder the employment agreement, Mr. Miller will be entitled to receive all compensation due to him through his last day of employment. However, the agreement does not provide for any post-termination payments. agreement:
| ● | Upon any termination of Mr. Miller’s employment for “cause,” Mr. Miller will be entitled to receive all compensation due to him through his last day of employment. |
| ● | If Mr. Miller’s employment is terminated due to death or disability, the Company will have no further liability under the employment agreement. |
| ● | If Mr. Miller’s employment is terminated by the Company without “cause” without the required three year’s prior notice or, if such notice has been given, prior to the end of the three-year notice period, Mr. Miller will be entitled to receive a lump sum pro-rated bonus (based on the average monthly bonus earned by him for the three calendar years immediately preceding the year in which his employment is terminated) for the number of days he worked during the year in which his employment is terminated, and Mr. Miller will be entitled to receive, monthly over the shorter of a 36-month period or the remaining portion of the three-year notice period: (i) his then-current base salary; (ii) the average monthly bonus earned by him for the three calendar years immediately preceding the year in which his employmen t is terminated; and (iii) continued health and life insurance coverage. |
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Under the employment agreements, “cause” means: (i) willful malfeasance or gross negligence; or (ii) knowingly engaging in wrongful conduct resulting in detriment to the goodwill of the Company or damage to the Company’s relationships with its customers, suppliers or employees. The employment agreement also provides for confidentiality during employment, and for non-competition during employment and for a three-year period from termination if the Company terminates the agreement for cause or Mr. Miller terminates his employment in breach of the agreement.
Jeffrey I. Badgley, Frank Madonia and J. Vincent Mish. The Company’s employment agreements with Messrs. Badgley, Madonia and Mish address the rights and obligations of the Company in connection with the termination of the executive’s employment in different situations including in connection with a change in control.control of the Company. Under each agreement:
| Upon any termination of the executive’s employment, including if the executive terminates his employment voluntarily, or if the Company terminates the executive’s employment for “just cause,” the executive will be entitled to receive all compensation due to him through his last day of employment. |
| If the executive’s employment is terminated due to death, the executive’s beneficiary will be entitled to receive, in one lump sum, an amount equal to: (i) 12 months of his then-current base salary; (ii) 12 months of the average monthly bonus earned by him for the three calendar years immediately preceding the year in which his employment is terminated; and (iii) a pro-rated bonus, based on the average monthly bonus earned by him for the three calendar years immediately preceding the year in which his employment is terminated, for the number of days he worked during the year in which his employment is terminated. |
| If the executive’s employment is terminated due to disability, all of the executive’s outstanding stock options will vest and become exercisable, the executive (or his beneficiary) will be entitled to receive a lump sum pro-rated bonus (based on the average monthly bonus earned by him for the three calendar years immediately preceding the year in which his employment is terminated) for the number of days he worked during the year in which his employment is terminated, and the executive (or his beneficiary) will be entitled to receive, monthly over a period of 24 months from the last day of employment: (i) his then-current base salary; (ii) the average monthly bonus earned by him for the three calendar years immediately preceding the year in which his employment is terminated; and (iii) continued health and life insurance coverage. |
| If the executive’s employment is terminated by the Company without “just cause,” or if the executive’s employment is terminated under circumstances that would entitle him to receive benefits under his change in control agreement (i.e., in connection with a change in control of the Company) with the Company, if any, all of the executive’s outstanding stock options will vest and become exercisable, the executive will be entitled to receive a lump sum pro-rated bonus (based on the average monthly bonus earned by him for the three calendar years immediately preceding the year in which his employment is terminated) for the number of days he worked during the year in which his employment is terminated, and the executive will be entitled to receive, monthly over the shorter of a 36-month period or the remaining term of the |
Under the employment agreements, “just cause” means: (i) executive’s material fraud, malfeasance, gross negligence or willful misconduct with respect to the business affairs of the Company which is directly or materially harmful to the business or reputation of the Company or its subsidiaries, and which is incapable of being remedied or not remedied within 30 days of notice from the Company; (ii) executive’s conviction of or failure to contest prosecution for a felony or a crime involving moral turpitude; or (iii) executive’s material breach of the employment agreement which is incapable of being remedied or not remedied within 30 days of notice from the Company.
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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).
Change in Control Agreements
In September 1998, the Company entered into change in control agreements with Messrs. Badgley and Madonia, and in December 2002, the Company entered into a change in control agreement with Mr. Mish. The change in control agreements with Messrs. Badgley, Madonia and Mish were amended and restated in December 2008. Under each agreement, if the executive’s employment is terminated within six months before, or 24 months after, a “change in control,”control” of the Company, and the termination was either involuntary onby the part of the executiveCompany (other than byfor cause, disability or death), or “voluntary” on the part of the executive, then all of the executive’s outstanding stock options will vest and become exercisable, and the executive will be entitled to receive:
| a lump sum payment equal to the present value of 36 months of: |
| his then-current base salary; and |
| the average monthly bonus earned by him for the three calendar years immediately preceding the year in which his employment is terminated; |
| a lump sum pro-rated bonus, based on the average monthly bonus earned by him for the three calendar years immediately preceding the year in which his employment is terminated, for the number of days he worked during the year in which his employment is terminated, discounted to present value; and |
| health and life insurance benefits over the shorter of a 36-month period or the remaining term of the employment agreement. |
However, any amounts paid under the change in control agreements will be reduced to the extent that the executive receives or is entitled to receive payments in respect of the change in control under the executive’s employment agreement. If the executive does not actually receive payments under the employment agreement, or the employment agreement is breached by the Company, payments will be made under the change in control agreement. Additionally, under the change in control agreements, the Company has agreed to provide the executive with a gross-up payment for federal and state income taxes and federal excise taxes imposed on any “excess parachute payment.”
Under the change in control agreements, “voluntary” termination by the executive means termination of employment that is voluntary on the part of the executive, and, in the judgment of the executive, is due to: (i) a reduction of the executive’s responsibilities, title or status resulting from a formal change in title or status, or from the assignment to the executive of any duties inconsistent with his title, duties or responsibilities in effect within the year prior to the change in control;control, (ii) a reduction in the executive’s compensation or benefits, or (iii) a Company-required involuntary relocation or the executive’s place of residence or a significant increase in the executive’s travel requirements.
Potential Payments
Assuming that a termination event or change in control occurred on December 31, 2006,2009, the value of potential payments and benefits payable to each named executive officer who was employed by the Company on such date is summarized in the following tables.table. The price per share of Common Stock used for purposes of the following calculation is the closing market price on the NYSE as of December 29, 2006,31, 2009, the last trading day in 2006,2009, which was $24.00.$11.35. The tables excludetable excludes (i) amounts accrued through December 31, 20062009 that would be paid in the normal course of continued employment, such as accrued but unpaid salary, (ii) vested account balances in the Company’s contributory retirement plan that are generally available to all of the Company’s U.S. salaried employees, and (iii) any amounts to be provided under any arrangement that does not discriminate in scope, terms or operation in favor of named executive officers and that is available generally to all salaried employees. Actual amounts to be paid can only be determined at the time of such executive’s termination.
Name and payment or benefit | Termination by Company without just cause | Involuntary termination by Company or “voluntary” termination by executive after change in control | Disability | Death | |||||||||
William G. Miller | |||||||||||||
| Payments and benefits | $ | - | $ | - | $ | - | $ | - | |||||
Jeffrey I. Badgley | |||||||||||||
| Salary and bonus | $ | 914,276 (1 | ) | $ | 914,276 (1 | ) | $ | 612,906 (2 | ) | $ | 311,536 (3 | ) | |
| Healthcare and life insurance coverage | 40,750 (4 | ) | 40,750 (4 | ) | 27,167 (5 | ) | - | ||||||
| Tax gross-up | - | 388,278 (6 | ) | - | - | ||||||||
| Market value of stock options vesting on termination | 784,500 | 784,500 | �� | 784,500 | - | ||||||||
Frank Madonia | |||||||||||||
| Salary and bonus | $ | 638,439 (1 | ) | $ | 638,439 (1 | ) | $ | 427,904 (2 | ) | $ | 217,369 (3 | ) | |
| Healthcare and life insurance coverage | 28,507 (4 | ) | 28,507 (4 | ) | 19,005 (5 | ) | - | ||||||
| Tax gross-up | - | 251,689 (6 | ) | - | - | ||||||||
| Market value of stock options vesting on termination | 235,350 | 235,350 | 235,350 | - | |||||||||
J. Vincent Mish | |||||||||||||
| Salary and bonus | $ | 598,092 (1 | ) | $ | 600,939 (1 | ) | $ | 402,904 (2 | ) | $ | 204,869 (3 | ) | |
| Healthcare and life insurance coverage | 39,165 (4 | ) | 39,165 (4 | ) | 26,111 (5 | ) | - | ||||||
| Tax gross-up | - | 245,542 (6 | ) | - | - | ||||||||
| Market value of stock options vesting on termination | 235,350 | 235,350 | 235,350 | - | |||||||||
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Name and payment or benefit | Termination by Company without just cause | Involuntary termination by Company or “voluntary” termination by executive after change in control | Disability | Death | ||||||||||||
| William G. Miller | ||||||||||||||||
| Salary and bonus | $ | 879,258 | (1) | $ | 879,258 | (1) | $ | – | $ | – | ||||||
| Healthcare and life insurance coverage | 15,782 | (2) | 15,782 | (2) | – | – | ||||||||||
| Market value of stock options vesting on termination | – | – | – | – | ||||||||||||
| Jeffrey I. Badgley | ||||||||||||||||
| Salary and bonus | $ | 1,038,258 | (1) | $ | 1,038,258 | (1) | $ | 705,122 | (3) | $ | 371,986 | (4) | ||||
| Healthcare and life insurance coverage | 42,068 | (2) | 42,068 | (2) | 28,045 | (5) | – | |||||||||
| Tax gross-up | – | – | – | – | ||||||||||||
| Market value of stock options vesting on termination | 1,021,500 | 1,021,500 | 1,021,500 | 1,021,500 | ||||||||||||
| Frank Madonia | ||||||||||||||||
| Salary and bonus | $ | 709,781 | (1) | $ | 709,781 | (1) | $ | 482,026 | (3) | $ | 254,271 | (4) | ||||
| Healthcare and life insurance coverage | 29,341 | (2) | 29,341 | (2) | 19,560 | (5) | – | |||||||||
| Tax gross-up | – | – | – | – | ||||||||||||
| Market value of stock options vesting on termination | 340,500 | 340,500 | 340,500 | 340,500 | ||||||||||||
| J. Vincent Mish | ||||||||||||||||
| Salary and bonus | $ | 709,781 | (1) | $ | 709,781 | (1) | $ | 482,026 | (3) | $ | 254,271 | (4) | ||||
| Healthcare and life insurance coverage | 40,158 | (2) | 40,158 | (2) | 26,772 | (5) | – | |||||||||
| Tax gross-up | – | – | – | – | ||||||||||||
| Market value of stock options vesting on termination | 340,500 | 340,500 | 340,500 | 340,500 | ||||||||||||
| (1) | Reflects the value of (i) monthly payments over the shorter of 36 months or the remaining term of the executive’s employment agreement of salary and average monthly bonus and (ii) a lump sum pro-rated bonus, based on average monthly bonus, for the number of days worked by the executive during the year in which his employment is terminated. |
| (2) | Reflects the employer share of premiums for continued healthcare and life insurance coverage for 36 months. |
| Reflects the value of (i) monthly payments over 24 months of salary and average monthly bonus and (ii) a lump sum pro-rated bonus, based on average monthly bonus, for the number of days worked by the executive during the year in which his employment is terminated. |
| Reflects the value of a lump sum payment of (i) 12 months of salary and average monthly bonus and (ii) pro-rated bonus, based on average monthly bonus, for the number of days worked by the executive during the year in which his employment is terminated. |
| (5) | Reflects the employer share of premiums for continued healthcare and life insurance coverage for 24 months. |
Non-Employee Director Compensation for 20062009
The current compensation program for the Company’s non-employee directors is designed to pay directors for work required for a company of Miller Industries’ size and scope and to align the director’s interests with the long-term interests of Company shareholders.
Non-employee directors receive annual compensation comprised of a cash component and an equity component. Under the cash component, each non-employee director receives an annual cash payment of $25,000 as compensation for service on the Board of Directors. Additionally, each non-employee director receives a cash payment of $3,000 for each Board of Directors meeting that he attends and a cash payment of $1,000 for each committee meeting that he attends. In March 2009, in light of the current economic conditions and expectations for the Company’s financial performance in 2009, the non-employee directors reduced by 10% the compensation that each of them receives for attendance at Board of Directors and committee meetings. From the effectiveness of such reduction in March 2009 throu gh October 2009, each non-employee director received a cash payment of $2,700 for each Board of Directors meeting that he attended and a cash payment of $900 for each committee meeting that he attended. Beginning in November 2009, based on the improvement in economic conditions and expectations for the Company’s financial performance for the remainder of 2009 and 2010, the annual compensation for non-employee directors was restored to the level of compensation that such non-employee directors received prior to the voluntary compensation reduction in 2009.
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Under the equity component, each non-employee director is entitled to an annual award under the Company’s Non-Employee Director Stock Plan, to be paid in fully-vested shares of Common Stock, equal to $25,000 divided by the closing price of the Common Stock on the first trading day of such year. On January 1, 2006,2009, each of Messrs. Chandler, Drack and Roberts was granted 1,2564,854 shares of Common Stock, which number of shares was determined by dividing $25,000 by $19.90,$5.15, the closing price per share of Common Stock as reported on the NYSE on January 2, 2006,2009, the first trading day in 2006.2009. Mr. Ashford was not elected to the Board until April 2010 and thus was not granted shares of Common Stock in 2009. Each of Messrs. Chandler, Drack and Roberts has been granted an aggregate of 14,80222,509 shares of Common Stock and Mr. Ashford has been granted zero shares of Common Stock under the terms of the Company’s Non-Employee Director Stock Plan through the end of 2006.2009.
The members of the Board of Directors who are employees of the Company do not receive additional compensation for Board or committee service.
Name | Fees Earned or Paid in Cash | Stock Awards | Total | |||||||
| A. Russell Chandler, III (1) | $ | 36,000 | $ | 25,000 | $ | 61,000 | ||||
| Paul E. Drack (1) | $ | 36,000 | $ | 25,000 | $ | 61,000 | ||||
| Richard H. Roberts (1) | $ | 36,000 | $ | 25,000 | $ | 61,000 | ||||
Name | Fees Earned or Paid in Cash | Stock Awards | Total | |||||||||
A. Russell Chandler, III (1) | $ | 49,300 | $ | 25,000 | $ | 74,300 | ||||||
Paul E. Drack (1) | $ | 49,300 | $ | 25,000 | $ | 74,300 | ||||||
Richard H. Roberts (1) | $ | 49,300 | $ | 25,000 | $ | 74,300 | ||||||
| (1) | Member of the Audit, Compensation and Nominating Committees of the Board of Directors. |
ACCOUNTING MATTERS
Audit Committee Report
The Company’s Audit Committee is comprised of three independent members, as required by applicable listing standards of the NYSE. The Audit Committee acts pursuant to a written Charter, which was amended and restated by the Board of Directors in March 2007. The Company’s management is responsible for its internal accounting controls and the financial reporting process. The Company’s independent accountants, Joseph Decosimo and Company, PLLC, are responsible for performing an audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB) and for expressing an opinion as to their conformity with generally accepted accounting principles. The Audit Committee’s responsibility is to monitor and oversee these processes.
In keeping with that responsibility, the Audit Committee has reviewed and discussed the Company’s audited consolidated financial statements with management and the independent accountants. In addition, the Audit Committee has discussed with the Company’s independent accountants the matters required to be discussed by Statement on Auditing Standards No. 61, “CommunicationsAU Section 380 (Communication with Audit Committee,”Committees) as currentlyadopted by the PCAOB in effect.Rule 3200T. In addition, the Audit Committee has received the written disclosures from the independent accountants required by Independence Standards Board Standard No. 1, “Independence Discussionsapplicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committees,”Committee concerning independence, and has discussed with the independent accountants their independence. The Audit Committee has also considered whether the provision of non-audit services by the independent accountants is compatible with maintaining such accountants’ independence.
The members of the Audit Committee are not professionally engaged in the practice of auditing or accounting and are not experts in the fields of accounting or auditing, including in respect of auditor independence. Members of the Committee rely without independent verification on the information provided to them and on the representations made by management and the independent accountants. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal control and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to aboveabo ve do not assure that the audit of the Company’s consolidated financial statements has been carried out in accordance with the standards of the Public Company Accounting Oversight Board (United States),PCAOB, that the consolidated financial statements are presented in accordance with generally accepted accounting principles, or that the Company’s auditors are in fact “independent.”
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Based on the reports and discussions described in this report, and subject to the limitations on the role and responsibilities of the Committee referred to above and in the Audit Committee Charter, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements of the Company be included in the Annual Report on Form 10-K for the year ended December 31, 20062009 for filing with the SEC.
This report is respectfully submitted by the Audit Committee of the Board of Directors.
Audit Committee Paul E. Drack A. Russell Chandler, III Richard H. Roberts |
Independent Public Accountants
General
Joseph Decosimo and Company, PLLC were the Company’s independent public accountants for 2006,2009, and the Company anticipates that Joseph Decosimo and Company, PLLC will be retained as the Company’s independent public accountants for 2007.2010. Representatives of Joseph Decosimo and Company, PLLC are expected to be present at the Annual Meeting, and will have the opportunity to make statements and to respond to appropriate questions.
The decision to engage Joseph Decosimo and Company, PLLC was made upon the recommendation of the Company’s Audit Committee and the approval of the Board of Directors.
Audit Fees
Joseph Decosimo and Company, PLLC billed fees of $268,864,$287,100 and expects to bill up to an additional $10,000 in fees,$322,000 for 2006,2009 and billed $275,000 for 2005,2008, respectively, for professional services rendered for the audit of the Company’s consolidated financial statements included within the Company’s Form 10-K, and review of interim consolidated financial statements included within Form 10-Qs during such periods, and for the audit of management’s assessment ofthe Company’s internal controlscontrol over financial reporting.
Audit-Related Fees
Joseph Decosimo and Company, PLLC did not perform any, or bill the Company for, assurance and related services related to the performance of the audit and review of financial statements for 20062009 or 2005.2008.
Tax Fees
Joseph Decosimo and Company, PLLC billed fees of $3,485$91,630 and $86,600 for tax services for 2006, but did not perform or bill the Company for any tax services during 2005.2009 and 2008, respectively.
All Other Fees
Joseph Decosimo and Company, PLLC did not perform or bill the Company for any other services during 2005.2009 or 2008.
Approval of Audit and Non-Audit Services
The Audit Committee of the Board of Directors pre-approves all audit and non-audit services performed by the Company’s independent auditor. The Audit Committee specifically approves the annual audit services engagement. Certain non-audit services that are permitted under the federal securities laws may be approved from time to time by the Audit Committee.
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CODE OF BUSINESS CONDUCT AND ETHICS
The Company has adopted a Code of Business Conduct and Ethics that applies to its directors, officers and employees. A copy of the Code is available on the Company’s website at www.millerind.com through the “Investor Relations” link. A copy of the Code can also be obtained upon request from the Company’s Corporate Secretary.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth aggregate information as of December 31, 20062009 about all of the Company’s compensation plans, including individual compensation arrangements, under which the Company’s equity securities are authorized for issuance.
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | ||||||
Equity compensation plans approved by security holders | 304,060 (1 | ) | $ | 17.39 (1 | ) | See Note (2) | |||
Equity compensation plans not approved by security holders | 0 | 0 | See Note (3) | ||||||
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | |||||||||
| Equity compensation plans approved by security holders | 304,075 | (1) | $ | 6.50 | (1) | See Note | (2) | |||||
| Equity compensation plans not approved by security holders | 0 | 0 | 0 | |||||||||
| (1) | Includes only options outstanding under the Company’s 1994 Stock Option Plan and 2005 Equity Incentive Plan. Does not include shares of common stock issued to non-employee directors under the Company’s Non-Employee Director Stock Plan, which shares are fully vested and exercisable upon |
| (2) | The 1994 Stock Option Plan expired in August 2004, therefore no securities are available for future issuance under this plan. As of December 31, 2009, there were 569,425 securities available for future issuance under the 2005 Equity Incentive Plan. Grants are made annually to non-employee directors under the Non-Employee Director Stock Plan, and the number of shares of common stock to be granted to each non-employee director for a particular year is determined by dividing $25,000 by the closing price of a share of the Company common stock on the first trading day of such year. Therefore, the number of securities remaining available for future issuance under the Non-Employee Director Stock Plan is not presently determinable. |
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 NYSE 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 2006,2009, all Section 16(a) filing requirements were met.
OTHER MATTERS
Deadline for Shareholder Proposals for 20082011 Annual Meeting
Any proposal intended to be presented for action at the 2008 Annual Meeting2011 annual meeting of Shareholdersshareholders by any shareholder of the Company must be received by the Secretary of the Company not later than December 31, 200724, 2010 in order for such proposal to be considered for inclusion in the Company’s proxy statement and proxy relating to that meeting. Any such shareholder proposal must meet all the requirements for such inclusion established by the Securities and Exchange Commission in effect at the time.
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In addition, any proposal intended to be presented for action at the 20082011 annual meeting of shareholders (other than a proposal submitted for inclusion in the Company’s proxy statement and proxy) by any shareholder of the Company must be received by the Secretary of the Company no later than 90 nor more than 120 days before that annual meeting (which deadline is currently expected to be between January 27, 2011 and February 26, 2011) in the case of a nomination for director, and no later than 60 days prior to that annual meeting (which deadline currently is expected to be March 26, 2008),28, 2011) in the case of any other proposal, otherwise proxies may be voted on such proposal will not be considered at the discretion2011 annual meeting of the person or persons holding these proxies, whether or not the matter is included 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.shareholders.
Expenses of Solicitation
The cost of solicitation of proxies will be borne by the Company, including expenses in connection with preparing, assembling and mailing this proxy statement. The Company’s executive officers or employees, who will not receive compensation for their services other than their regular salaries, may solicit proxies personally or by telephone. The Company does not anticipate paying any other compensation to any other party for solicitation of proxies, but may reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation material to beneficial owners.
A COPY OF THE COMPANY’S ANNUAL REPORT TO SHAREHOLDERS FOR 20062009 IS ENCLOSED WITH THIS PROXY STATEMENT. COPIES OF EXHIBITS FILED WITH THE COMPANY’S ANNUAL REPORT ON FORM 10-K AND OTHER REPORTS OF THE COMPANY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ARE AVAILABLE UPON WRITTEN REQUEST AT NO COST TO THE REQUESTING SHAREHOLDER. 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.
 |
| MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated |
X 000004 C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext Electronic Voting Instructions You can vote by Internet or telephone! Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on May 28, 2010. Vote by Internet • Log on to the Internet and go to www.investorvote.com/MLR • Follow the steps outlined on the secured website. Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone. There is NO CHARGE to you for the call. • Follow the instructions provided by the recorded message. Annual Meeting Proxy Card 1234 5678 9012 345 . IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. . A Election of Directors — The Board of Directors recommends a vote FOR all the nominees listed. 1. Nominees: For Withhold For Withhold For Withhold | ||||||||
03 - A. Russell Chandler, III | 04 - Paul E. Drack | |||||||
05 - William G. Miller | 06 - Richard H. Roberts |
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.
2. Other Business:
| 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. |
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 April 14, 2010 and the Proxy Statement furnished therewith.
B Non-Voting Items
Change of Address — Please print new address below.
C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
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.
| Date (mm/dd/yyyy) | Signature 1 | Signature 2 | ||
C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE NNNNNNN 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND + MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND 60AV 0255561 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND <STOCK#> 016N2A |
 | IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. . Proxy — Miller Industries, Inc. This Proxy is Solicited by the Board of Directors for the Annual Meeting of Shareholders to be Held on May 28, 2010 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 at 879 College Drive, Dalton, Georgia 30720, on Friday, the 28th of May, 2010, at 9:00 a.m., and at any and all adjournments thereof as indicated on the reverse side. This proxy is revocable at or at any time prior to the meeting. Please sign and return this proxy to Computershare Investor Services, LLC, P.O. Box 43102, Providence, RI 02940-5067, in the accompanying prepaid envelope. |