EMPLOYMENTAGREEMENT

 

 

          THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into effective as of the 30th day of December, 2008 (the “Effective Date”), by and between Miller Industries, Inc., a corporation organized under the laws of the State of Tennessee, USA (the “Company”), and Jeffrey I. Badgley (the “Executive”).

 

          WHEREAS, Executive and the Company entered into an employment agreement (the “Original Agreement”) as of September, 1998, embodying the terms of Executive’s employment and pursuant to which Executive has been serving as President and Co-Chief Executive Officer of the Company; and

 

          WHEREAS, this Agreement amends and restates the Original Agreement as of the Effective Date in order, inter alia, to evidence formal compliance with Section 409A of the Internal Revenue Code of 1986, as amended, and the guidance thereunder (such Section, referenced herein as “Section 409A”; and such code, referenced herein as the “Code”).

 

          NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties hereto agree as follows:

 

          1.          Employment. Subject to the terms and conditions of this Agreement, Executive shall be employed by the Company as President and Co-Chief Executive Officer, and shall perform such duties and functions for the Company and any company controlling, controlled by or under common control with the Company (such companies hereinafter collectively called “Affiliates”) as shall be specified from time to time by the Chairman of the Board; Executive hereby accepts such employment and agrees to perform such executive duties as may be assigned to him.

 

          2.          Duties. Executive shall devote his full business related time and best efforts to accomplishing such executive duties at such locations as may be requested by the Chairman of the Board of the Company. While employed by the Company, Executive shall not serve as a principal, partner, employee, officer or director of, or consultant to, any other business or entity conducting business for profit without the prior written approval of the Chairman of the Board of the Company. In addition, under no circumstances will Executive have any financial interest in any competitor of the Company; provided, however, that Executive may invest in no more than 2% of the outstanding stock or securities of any competitor whose stock or securities are traded on a national stock exchange of any country.

 

 

          3.           Term. The term of this Agreement shall be for a rolling, three (3) year term commencing on the date hereof, and shall be deemed automatically (without further action by either the Company or the Executive) to extend each day for an additional day such that the remaining term of the Agreement shall continue to be three (3) years; provided, however, that on Executive’s 62nd birthday this Agreement shall cease to extend automatically and, on such date, the remaining “term” of this Agreement shall be three (3) years; provided, further, that the Company may, by notice to the Executive, cause this Agreement to cease to extend automatically and, upon such notice, the “Term” of this Agreement shall be three (3) years following such notice.

 

          4.           Compensation and Benefits. As compensation for his services during the Term of this Agreement, Executive shall be paid and receive the amounts and benefits set forth in subsections (a), (b), and (c) below:

 

          (a)          Base Salary. An annual base salary (“Base Salary”) of $312,033 prorated for any partial year of employment. Executive’s Base Salary shall be subject to annual review, for adjustments at such time as the Company conducts salary reviews for its executive officers generally. Executive’s salary shall be payable in accordance with the Company’s regular payroll practices in effect from time to time for executive officers of the Company.

 

          (b)          Bonus. In addition to the Base Salary, the Executive shall be entitled to participate in any of the Company’s present and future stock or cash based bonus plans that are generally available to its executive officers, as such plans may exist or be changed from time to time at the discretion of the Company

 

          (c)          Other Benefits. Executive shall be entitled to vacation with pay, life insurance, health insurance, fringe benefits, and such other employee benefits generally made available by the Company to its executive officers, in accordance with the established plans and policies of the Company, as in effect from time to time.

 

          5.           Termination.

 

          (a)          By Executive. Executive may voluntarily terminate his employment hereunder at any time, to be effective 60 days after delivery to the Company of his signed, written resignation; Company may accept said resignation and pay Executive in lieu of waiting for passage of the notice period. Executive hereby agrees and acknowledges that if he voluntarily resigns from his employment prior to the end of the Term of this Agreement, then he shall be entitled to no payment or compensation whatsoever from the Company under this Agreement, other than as may be due him through his last day of employment.

 

           (b)        By Company. Subject to the terms of this Paragraph and Paragraph 5(c) below, the Company may terminate Executive’s employment hereunder, in its sole discretion, whether with or without just cause (as defined in Paragraph 5(b)(viii) below and subject to the notice periods described therein), at any time upon written notice to Executive. If the Company terminates Executive’s employment for just cause (as defined in (viii) below), Executive shall be entitled to no payment or compensation whatsoever from the Company under this Agreement, other than as may be due him through his last day of employment. If, prior to the end of the Term of this Agreement, the Company terminates Executive’s employment without just cause (as defined in (viii) below), the Executive shall be entitled to receive, as damages payable as a result of, and arising from, a breach of this Agreement, the compensation and benefits set forth in (i) through (iv) below. Except to the extent provided in (vii) below, Executive shall not be required to mitigate damages by reducing the amounts he is entitled to receive hereunder by earnings from subsequent employment. The time periods in (i) through (iii) below shall be the lesser of the 36-month period stated therein or the time period remaining from the date of Executive’s termination to the end of the Term of this Agreement. All compensation payable under (i) through (iv) below shall be subject to the terms of Paragraph 8 below, which may delay the payment of the compensation for up to 6 months.

 

 

 

            (c)     By Death. If Executive’s employment is terminated due to Executive’s death, the Executive’s surviving spouse, or if none, his estate, shall receive the benefits payable under (i) and (ii) of Paragraph 5(b) above; provided, however, such payments shall be for a period of 12 months rather than 36 months and such payments shall be made in a lump sum payment within 60 days of the Executive’s death.

 

          (d)         For Disability. If Executive’s employment is terminated due to Executive’s disability (as defined in the Company’s long-term disability plan or insurance policy, or if no such plan or policy, as determined in good faith by the Company), Executive shall be entitled to the benefits payable or to be provided under (i), (ii), (iii) and (iv) of Paragraph 5(b); provided, however, the benefits under (i), (ii) or (iii) of Paragraph 5(b) shall be payable or to be provided for a period of 24 months. Executive or his estate, as the case may be, shall not by operation of this paragraph forfeit any rights in which he is vested at the time of his death or disability.

 

          (e)         Survival of Restrictive Covenants. Upon termination of Executive’s employment for any reason whatsoever (whether voluntary on the part of Executive, for just cause, or other reasons), the obligations of Executive pursuant to Paragraphs 6 and 7 hereof shall survive and remain in effect for the periods described in Paragraph 6.

 

          6.          Competition, Confidentiality, and Nonsolicitation. Executive agrees to be bound by the terms and conditions of the Noncompetition Agreement attached hereto as Exhibit “A”, which is hereby made a part of this Agreement.

 

          7.          Injunctive Relief. The Executive acknowledges that his services to be rendered to the Company are of a special and unusual character which have a unique value to the Company, the loss of which cannot adequately be compensated by damages in an action at law. Executive further acknowledges that any breach of the terms of Paragraph 6, including Exhibit ”A”, would result in material damage to the Company, although it might be difficult to establish the monetary value of the damage. Executive therefore agrees that the Company, in addition to any other rights and remedies available to it, shall be entitled to obtain an immediate injunction (whether temporary or permanent) from any court of appropriate jurisdiction in the event of any such breach thereof by Executive, or threatened breach which the Company in good faith believes will or is likely to result in irreparable harm to the Company. The existence of any claim or cause of action by Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of Executive’s agreement under this Paragraph and Paragraph 6 above.

 

          8.          Section 409A.

 

          (a)         Meaning of Termination of Employment. Solely as necessary to comply with Section 409A, for purposes of Paragraph 5(b) and Paragraph 5(d), “termination of employment” or “employment termination” or similar terms shall have the same meaning as “separation from service” under Section 409A(a)(2)(A)(i) of the Code.

 

          (b)         Installment Payments. For purposes of Paragraph 5(b) with respect to amounts payable in the event of termination of employment by the Company without just cause and Paragraph 5(d) with respect to amount payable in the event of termination of Executive’s employment for Disability, each such payment is a separate payment within the meaning of the final regulations under Section 409A. Each such payment that is made within 2-1/2 months following the end of the year that contains the date of Executive’s termination of employment is intended to be exempt from Section 409A as a short-term deferral within the meaning of the final regulations under Section 409A, each such payment that is made later than 2-1/2 months following the end of the year that contains the date of Executive’s termination of employment is intended to be exempt under the two-times separation pay exception of Treasury Reg. § 1.409A-1(b)(9)(iii) up to the limitation on the availability of such exception specified in such regulation, and each such payment that is made after the two-times separation pay exception ceases to be available shall be subject to delay in accordance with Paragraph 8(c) below.

 

          (c)          Six Month Delay. This Agreement will be construed and administered to preserve the exemption from Section 409A of payments that qualify as a short-term deferral or that qualify for the two-times separation pay exception. With respect to other amounts that are subject to Section 409A, it is intended, and this Agreement will be so construed, that any such amounts payable under this Agreement and the Company’s and Executive’s exercise of authority or discretion hereunder shall comply with the provisions of Section 409A and the treasury regulations relating thereto so as not to subject Executive to the payment of interest and additional tax that may be imposed under Section 409A. As a result, in the event Executive is a “specified employee” on the date of Executive’s termination of employment (with such status determined by the Company in accordance with rules established by the Company in writing in advance of the “specified employee identification date” that relates to the date of Executive’s termination of employment, or in the absence of such rules established by the Company, under the default rules for identifying specified employees under Section 409A), any payment that is subject to Section 409A, that is payable to Executive in connection with Executive’s termination of employment, shall not be paid earlier than six months after such termination of employment (if Executive dies after the date of Executive’s termination of employment but before any payment has been made, such remaining payments that were or could have been delayed will be paid to Executive’s estate without regard to such six-month delay).

 

          9.          Miscellaneous.

 

          (a)         Notice. Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to have been duly given when delivered personally or seven days after mailing if mailed first class by registered or certified mail, postage prepaid, addressed as follows:

 

or to such other address as any party may designate by notice to the others.

 

          (b)          Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the Executive’s employment by the Company, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to the Executive’s employment.

 

          (c)          Amendment. This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed by the party or parties against whom or which enforcement of such waiver is sought. The failure of either party hereto to comply with any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by either party hereto of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision, or a waiver of the provision itself, or a waiver of any other provision of this Agreement.

 

          (d)          Binding Effect. This Agreement is binding on and is for the benefit of the parties hereto and their respective successors, heirs, executors, administrators and other legal representatives. Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive or the Company, except for assignment by the Company to any wholly owned subsidiary.

 

          (e)          Severability and Modification. If any provision of this Agreement or portion thereof is so broad, in scope or duration, so as to be unenforceable, such provision or portion thereof shall be interpreted to be only so broad as is enforceable. In addition, to the extent that any provision of this Agreement as applied to either party or to any circumstances shall be adjudged by a court of competent jurisdiction to be void or unenforceable, the same shall in no way affect any other provision of this Agreement or the validity or enforceability of this Agreement.

 

          (f)           Interpretation. This Agreement shall be interpreted, construed and governed by and under the laws of the State of Tennessee. Each party irrevocably (i) consents to the exclusive jurisdiction and venue of the courts of Hamilton County, State of Tennessee and federal courts in the Eastern District of Tennessee, in any action arising under or relating to this Agreement (including Exhibit “A” hereto), and (ii) waives any jurisdictional defenses (including personal jurisdiction and venue) to any such action. If any provision of this Agreement is deemed or held to be illegal, invalid, or unenforceable under present or future laws effective during the term hereof, this Agreement shall be considered divisible and inoperative as to such provision to the extent it is deemed to be illegal, invalid or unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any provision of this Agreement is deemed or held to be illegal, invalid or unenforceable there shall be added hereto automatically a provision as similar as possible to such illegal, invalid or unenforceable provision as shall be legal, valid or enforceable. Further, should any provision contained in this Agreement ever be reformed or rewritten by any judicial body of competent jurisdiction, such provision as so reformed or rewritten shall be binding upon the Executive and the Company.

 

          (g)          Failure to Enforce. The failure of either party hereto at any time, or for any period of time, to enforce any of the provisions of this Agreement shall not be construed as a waiver of such provision(s) or of the right of such party hereafter to enforce each and every such provision.

 

          (h)          Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

 

          (i)           No Conflicting Agreement. The Executive represents and warrants that he is not party to any agreement, contract or understanding which would prohibit him from entering into this Agreement or performing fully his obligations hereunder.

 

          IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date first written above.