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0001206774-08-000593.txt : 20080326
0001206774-08-000593.hdr.sgml : 20080326
20080326080024
ACCESSION NUMBER: 0001206774-08-000593
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20080501
FILED AS OF DATE: 20080326
DATE AS OF CHANGE: 20080326
EFFECTIVENESS DATE: 20080326
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MUELLER INDUSTRIES INC
CENTRAL INDEX KEY: 0000089439
STANDARD INDUSTRIAL CLASSIFICATION: ROLLING DRAWING & EXTRUDING OF NONFERROUS METALS [3350]
IRS NUMBER: 250790410
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-06770
FILM NUMBER: 08710660
BUSINESS ADDRESS:
STREET 1: SUITE 150
STREET 2: 8285 TOURNAMENT DRIVE
CITY: MEMPHIS
STATE: TN
ZIP: 38125
BUSINESS PHONE: (901)753-3200
MAIL ADDRESS:
STREET 1: SUITE 150
STREET 2: 8285 TOURNAMENT DRIVE
CITY: MEMPHIS
STATE: TN
ZIP: 38125
FORMER COMPANY:
FORMER CONFORMED NAME: SHARON STEEL CORP
DATE OF NAME CHANGE: 19910103
DEF 14A
1
mueller_def14a.htm
DIFINITIVE PROXY STATEMENT
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section
14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
[x]
Filed by a Party other than the Registrant
[_]
Check the appropriate
box:
[_] Preliminary Proxy
Statement
[_] Soliciting Material Under
Rule
[_] Confidential, For Use of
the
14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive
Additional Materials
Mueller
Industries, Inc.
------------------------------------------------------------------------------------------------------------------------------------------------------
(Name of Registrant as Specified In Its
Charter)
------------------------------------------------------------------------------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the
appropriate box):
[x] No fee
required.
[_] Fee computed on table below per
Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of
securities to which transaction applies:
____________________________________________________________________________________
2) Aggregate number of securities to which transaction
applies:
3) Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11 (set forth the
amount on which the filing
fee is calculated
and state how it was determined):
4) Proposed maximum aggregate value of
transaction:
____________________________________________________________________________________
5) Total fee paid:
[_]
Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for
which
the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the
form or
schedule and the date of its
filing.
____________________________________________________________________________________
1) Amount previously
paid:
____________________________________________________________________________________
2) Form, Schedule or
Registration Statement No.:
____________________________________________________________________________________
3) Filing Party:
____________________________________________________________________________________
4) Date Filed:
MUELLER INDUSTRIES, INC.
8285
Tournament Drive, Suite 150
Memphis, Tennessee 38125
Telephone (901)
753-3200
________________________
Notice of Annual Meeting of
Stockholders to be Held
May 1,
2008
________________________
To the Stockholders of
Mueller
Industries, Inc.
The
Annual Meeting of Stockholders of Mueller Industries, Inc. (the Company), will
be held at the Companys headquarters at 8285 Tournament Drive, Suite 150,
Memphis, Tennessee 38125 on Thursday, May 1, 2008, at 10:00 A.M. local time, for
the following purposes:
|
1. |
|
To elect eight directors, each to
serve until the next annual meeting of stockholders (tentatively scheduled
for May 7, 2009) or until his successor is elected and
qualified; |
|
|
|
2. |
|
To consider and act upon a
proposal to approve the appointment of Ernst & Young LLP, independent
registered public accountants, as auditors of the Company for the fiscal
year ending December 27, 2008; |
|
|
|
3. |
|
To consider and act upon a
stockholder proposal regarding board inclusiveness, if properly presented
at the Annual Meeting; and |
|
|
|
4. |
|
To consider and transact such
other business as may properly be brought before the Annual Meeting and
any adjournment(s) thereof. |
Only
stockholders of record at the close of business on March 6, 2008, will be
entitled to notice of and vote at the Annual Meeting or any adjournment(s)
thereof. A complete list of stockholders entitled to vote at the Annual Meeting
will be prepared and maintained at the Companys corporate headquarters at 8285
Tournament Drive, Suite 150, Memphis, Tennessee 38125. This list will be
available for inspection by stockholders of record during normal business hours
for a period of at least 10 days prior to the Annual Meeting.
IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING REGARDLESS OF
THE SIZE OF YOUR HOLDINGS. WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE
MEETING IN PERSON, WE URGE YOU TO MARK, DATE AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT IN THE ENCLOSED SELF-ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES.
/s/ Gary C.
Wilkerson |
Gary C.
Wilkerson |
Corporate
Secretary |
March 26, 2008
TABLE OF CONTENTS
SOLICITATION OF PROXIES |
1 |
VOTING
SECURITIES |
2 |
PRINCIPAL STOCKHOLDERS |
3 |
ELECTION OF
DIRECTORS |
5 |
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE
|
|
OFFICERS AND INFORMATION ABOUT DIRECTOR NOMINEES |
5 |
Meetings and Committees of the Board of
Directors |
10 |
CORPORATE GOVERNANCE |
12 |
Director Independence |
12 |
Independent Directors |
14 |
Audit Committee |
14 |
Compensation Committee |
15 |
Nominating and Corporate Governance
Committee |
15 |
Compensation Committee Interlocks and Insider
Participation |
17 |
Corporate Governance Guidelines |
18 |
Code of Business Conduct and Ethics
|
18 |
Policies and Procedures for Approval of Related Party
Transactions |
18 |
Directors Attendance at Annual Meetings of
Stockholders |
19 |
Communication With the Board of Directors
|
19 |
COMPENSATION DISCUSSION AND ANALYSIS |
20 |
SUMMARY COMPENSATION
TABLE FOR 2007 |
28 |
2007
GRANTS OF PLAN BASED AWARDS TABLE |
30 |
OUTSTANDING EQUITY
AWARDS AT FISCAL 2007 YEAR-END |
31 |
2007
OPTION EXERCISES |
32 |
POTENTIAL PAYMENTS
UNDER EMPLOYMENT AND CONSULTING |
|
AGREEMENTS AS OF THE END OF 2007 |
41 |
2007
DIRECTOR COMPENSATION |
42 |
REPORT OF THE AUDIT
COMMITTEE OF THE BOARD OF DIRECTORS |
43 |
REPORT
OF THE COMPENSATION COMMITTEE OF THE BOARD OF |
|
DIRECTORS ON EXECUTIVE COMPENSATION |
44 |
EQUITY COMPENSATION
PLAN INFORMATION |
45 |
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM |
46 |
STOCKHOLDER PROPOSAL
REGARDING BOARD INCLUSIVENESS |
47 |
STOCKHOLDER NOMINATIONS FOR BOARD MEMBERSHIP AND OTHER
|
|
PROPOSALS FOR 2009 ANNUAL MEETING |
49 |
OTHER MATTERS TO COME
BEFORE THE ANNUAL MEETING |
50 |
SECTION
16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING |
50 |
OTHER
INFORMATION |
51 |
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS |
51 |
HOUSEHOLDING OF ANNUAL MEETING MATERIALS |
52 |
MUELLER INDUSTRIES, INC.
8285 Tournament
Drive, Suite 150
Memphis, Tennessee 38125
Telephone (901)
753-3200
__________________________
PROXY STATEMENT
Annual Meeting of Stockholders
May 1,
2008
__________________________
SOLICITATION OF PROXIES
The accompanying
proxy is solicited by the Board of Directors of Mueller Industries, Inc., a
Delaware corporation (the Company), for use at the annual meeting of
stockholders (the Annual Meeting) to be held at the Companys headquarters at
8285 Tournament Drive, Suite 150, Memphis, Tennessee 38125, on Thursday, May 1,
2008, at 10:00 A.M. local time, or at any adjournment(s) thereof.
This Proxy
Statement, together with the Companys Annual Report for the fiscal year ended
December 29, 2007, is first being mailed to stockholders on or about March 26,
2008. Pursuant to rules recently adopted by the Securities and Exchange
Commission, the Company is providing access to its proxy materials over the
Internet at http://www.proxyvote.com.
When a proxy
card is returned properly signed, the shares represented thereby will be voted
in accordance with the stockholders directions appearing on the card. If the
proxy card is signed and returned without directions, the shares will be voted
for the nominees named herein and in accordance with the recommendations of the
Companys Board of Directors as set forth herein. The discretion granted in the
accompanying proxy card includes the authority to vote on all additional matters
properly coming before the Annual Meeting as the persons named in the proxy deem
appropriate. A stockholder giving a proxy may revoke it at any time before it is
voted at the Annual Meeting by giving written notice to the secretary of the
Annual Meeting or by casting a ballot at the Annual Meeting. Votes cast by proxy
or in person at the Annual Meeting will be tabulated by election inspectors
appointed for the Annual Meeting. The election inspectors will also determine
whether a quorum is present. The holders of a majority of the shares of common
stock, $.01 par value per share (Common Stock), outstanding and entitled to
vote who are
- 1 -
present either in person or represented by
proxy will constitute a quorum for the Annual Meeting. The election inspectors
will treat abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum, but as unvoted for purposes of
determining the approval of any matter submitted. If a broker indicates on a
proxy that it does not have discretionary authority as to certain shares to vote
on a particular matter (i.e., a broker non-vote), those shares will not be
considered as present and entitled to vote with respect to that matter, but will
be treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. A broker is entitled to vote shares held
for a beneficial owner on routine matters, such as the election of directors and
the ratification of the appointment of Ernst & Young LLP as the Companys
independent registered public accounting firm, without instructions from the
beneficial owner of those shares; on the other hand, a broker may not be
entitled to vote shares held for a beneficial owner on certain non-routine
items, such as the stockholder proposal, absent instructions from the beneficial
owners of such shares.
The cost of
soliciting proxies will be borne by the Company. In addition to solicitation by
mail, directors, officers and employees of the Company may solicit proxies by
telephone or otherwise. The Company will reimburse brokers or other persons
holding stock in their names or in the names of their nominees for their charges
and expenses in forwarding proxies and proxy material to the beneficial owners
of such stock.
VOTING SECURITIES
The Company had
37,096,674 shares of Common Stock outstanding at the close of business on March
6, 2008, which are the only securities of the Company entitled to be voted at
the Annual Meeting. The record holder of each share of Common Stock is entitled
to one vote on each matter that may properly be brought before the Annual
Meeting. Only stockholders of record at the close of business on March 6, 2008,
will be entitled to notice of, and to vote at, the Annual Meeting. The Companys
Restated Certificate of Incorporation and Amended and Restated Bylaws (Bylaws)
do not provide for cumulative voting for the election of Directors.
- 2 -
PRINCIPAL STOCKHOLDERS
As of March 6,
2008, the following parties were known by the Company to be the beneficial
owner of more than five percent of the Common Stock:
|
|
Shares Beneficially |
|
|
Name and Address of Beneficial
Owner |
|
Owned |
|
Percent of Class
|
Allianz Global Investors of America L.P. |
|
3,499,485 |
(1) |
|
|
9.43%(2) |
680
Newport Center Drive, Suite 250 |
|
|
|
|
|
|
Newport Beach, CA 92660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Barclays Global Investors, NA |
|
2,666,341 |
(3) |
|
|
7.19%(2) |
45
Fremont Street |
|
|
|
|
|
|
San
Francisco, CA 94105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
AXA Financial, Inc. |
|
2,640,036 |
(4) |
|
|
7.12%(2) |
1290
Avenue of the Americas |
|
|
|
|
|
|
New
York, NY 10104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Franklin Resources, Inc. |
|
2,487,100 |
(5) |
|
|
6.70%(2) |
One
Franklin Parkway |
|
|
|
|
|
|
San
Mateo, CA 94403-1906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia Corporation |
|
1,984,792 |
(6) |
|
|
5.35%(2) |
One
Wachovia Center |
|
|
|
|
|
|
Charlotte, NC 28288-0137 |
|
|
|
|
|
|
________________
(1) |
|
This information is
based on a Schedule 13F filed by Allianz Global Investors of America L. P.
with the Securities and Exchange Commission on February 14,
2008. |
|
(2) |
|
The percent of class
shown was based on the shares of Common Stock reported on the Schedule 13G
or 13G/A and the total number of shares outstanding as of December 29,
2007. The difference in the total number of shares outstanding on December
29, 2007 and March 6, 2008 does not materially affect the percentage of
ownership of the class. |
|
(3) |
|
This information is
based on a Schedule 13G filed by Barclays Global Investors, NA with the
Securities and Exchange Commission on February 5, 2008. The Schedule 13G
was also filed by Barclays Global Fund Advisors, with the same address as
Barclays Global Investors, NA; Barclays Global Investors, Ltd., 1 Royal
Mint Court, London, EC3N 4HH; Barclays Global Investors Japan Trust and
Banking Company Limited, 1-1-39 Hiroo Shibuya-Ku, Tokyo 1500-0012 Japan;
Barclays Global Investors Japan Limited with the same address as Barclays
Global Investors Japan Trust and Banking Company Limited; Barclays Global
Investors Canada Limited, Brookfield Place 161 Bay Street, Suite 2500, P.
O. Box 614, Toronto, Ontario, Canada, M5J 2S1; Barclays Global Investors
Australia Limited, Level 43, Grosvenor Place, 225 George Street, P.O. Box
N43, Sydney, Australia, NSW 1220; and Barclays Global Investors
(Deutschland) AG, Apianstrasse 6, D-85774, Unterfohring,
Germany. |
- 3 -
(4) |
|
This information is based on a
Schedule 13G/A filed jointly by AXA Financial, Inc., AXA, AXA Assurances
I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, and AXA Courtage Assurance
Mutuelle, as a group, with the Securities and Exchange Commission on
February 14, 2008. The shares shown in the table above consist of 899,331
shares beneficially owned by AXA Rosenberg Investment Management LLC, a
subsidiary of AXA, 13,200 shares beneficially owned by AXA Konzern AG
(Germany), a subsidiary of AXA, 17,700 shares beneficially owned by
Winterthur, a subsidiary of AXA and 1,709,805 shares beneficially owned by
AllianceBernstein L.P., a subsidiary of AXA Financial, Inc. The address
for AXA Financial, Inc. is 1290 Avenue of the Americas, New York, New York
10104 and the address for AXA is 25, avenue Matignon, 75008, Paris,
France. |
|
|
|
(5) |
|
This information is based on a
Schedule 13G/A filed by Franklin Resources, Inc. (FRI) with the
Securities and Exchange Commission on February 4, 2008. In the Schedule
13G/A, FRI reported that, with respect to the Companys Common Stock, the
shares shown in the table above were beneficially owned by one or more
open or closed-end investment companies or other managed accounts that are
investment management clients of investment managers that are direct and
indirect subsidiaries of FRI. The Schedule 13G/A reported that the
investment management subsidiaries of FRI have investment and/or voting
power over the securities owned by their investment management clients.
Accordingly, such subsidiaries may be deemed to be the beneficial owner of
the shares shown in the table. The Schedule 13G/A reported that Charles B.
Johnson and Rupert H. Johnson, Jr. (the FRI Principal Stockholders)
(each of whom has the same business address as FRI) each own in excess of
10% of the outstanding common stock of FRI and are the principal
stockholders of FRI and may be deemed to be the beneficial owners of
securities held by persons and entities for whom or for which the
investment management subsidiaries of FRI provide investment management
services. The Schedule 13G/A reported that one of the investment
management subsidiaries, Franklin Advisory Services, LLC (whose address is
One Parker Plaza, 9th Floor, Fort Lee, New Jersey 07024), has sole voting
and dispositive power with respect to 2,434,300 and 2,477,100,
respectively, of the shares shown. FRI, the FRI Principal Stockholders and
the investment management subsidiaries of FRI disclaim any pecuniary
interest or beneficial ownership in the shares shown in the table above
and indicate that they are of the view that they are not acting as a
group for purposes of the Securities Exchange Act of 1934, as
amended. |
|
|
|
(6) |
|
This information is based on a
Schedule 13G filed by Wachovia Corporation on February 1, 2008 with the
Securities and Exchange Commission. Wachovia Corporation filed this
Schedule 13G as it is a parent holding company or control person of its
indirect subsidiary, Evergreen Investment Management Company,
LLC. |
- 4 -
ELECTION OF DIRECTORS
The Board of
Directors proposes to elect the following eight persons, each as nominated by
the Board of Directors, at the Annual Meeting to serve (subject to the Companys
Bylaws) as directors of the Company until the next Annual Meeting (tentatively
scheduled for May 7, 2009), or until the election and qualification of their
successors: Alexander P. Federbush, Paul J. Flaherty, Gennaro J. Fulvio, Gary S.
Gladstein, Scott J. Goldman, Terry Hermanson, Harvey L. Karp and William D.
OHagan (collectively, the Nominees). If any such person should be unwilling
or unable to serve as a director of the Company, which is not anticipated, the
persons named in the proxy will vote the proxy for substitute nominees selected
by them unless the number of directors has been reduced to the number of
nominees willing and able to serve.
Directors are
elected by a plurality of the votes cast. Plurality means that the individuals
who receive the greatest number of votes cast For are elected as directors up
to the maximum number of directors to be chosen at the Annual Meeting.
Consequently, any shares not voted For a particular director (whether as a
result of a direction to withhold or a broker non-vote) will not be counted in
such directors favor.
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS VOTE THEIR
SHARES FOR EACH OF THE NOMINEES.
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND
EXECUTIVE
OFFICERS AND INFORMATION ABOUT DIRECTOR NOMINEES
The following
table sets forth, as of March 6, 2008, information about the 1,586,400 shares of
Common Stock (calculated based on 37,096,674 shares outstanding) beneficially
owned by each of the Companys current directors, nominees for director,
executive officers and Named Executive Officers (as defined under Compensation
Discussion and Analysis). Unless otherwise indicated, all directors, nominees
for director, executive officers and Named Executive Officers have sole voting
and investment power with respect to the shares of Common Stock reported. The
table and the accompanying footnotes set forth the foregoing persons current
positions with the Company, principal occupations and employment over the
preceding five years, age and directorships held in certain other publicly-owned
companies.
- 5 -
|
|
Common Stock |
|
|
|
|
Beneficially |
|
|
|
|
Owned as of |
|
Percent of |
Principal Occupation, Employment,
etc. |
|
March
6, 2008 |
|
Class |
Alexander P. Federbush |
|
7,500 |
|
|
* |
Director of the Company since February 17, 2005; age 65
(1) |
|
|
|
|
|
|
|
|
|
|
|
Paul J. Flaherty |
|
2,000 |
|
|
* |
Director of the Company since August 2, 2007; age 67
(2) |
|
|
|
|
|
|
|
|
|
|
|
Gennaro J. Fulvio |
|
16,336 |
|
|
* |
Director of the Company since May 9, 2002; age 51 (3)
|
|
|
|
|
|
|
|
|
|
|
|
Gary S. Gladstein |
|
33,848 |
|
|
* |
Director of the Company since July 1, 2000; Director of
Jos. |
|
|
|
|
|
A. Bank Clothiers, Inc.; age 63 (4) |
|
|
|
|
|
|
|
|
|
|
|
Scott J. Goldman |
|
0 |
|
|
* |
Director of the Company since January 1, 2008; age 55
(5) |
|
|
|
|
|
|
|
|
|
|
|
Terry Hermanson |
|
13,224 |
|
|
* |
Director of the Company since February 13, 2003; age 65
(6) |
|
|
|
|
|
|
|
|
|
|
|
Harvey L. Karp |
|
241,886 |
|
|
* |
Chairman of the Board of Directors since October 8,
1991; |
|
|
|
|
|
Director since August 1991; age 80 |
|
|
|
|
|
|
|
|
|
|
|
William D. OHagan |
|
679,412 |
|
|
1.83% |
Chief Executive Officer of the Company since January 1,
1994; |
|
|
|
|
|
President of the Company since December 1, 1992; Director
of |
|
|
|
|
|
the Company since January 1993; age 66 (7) |
|
|
|
|
|
|
|
|
|
|
|
Gregory L. Christopher |
|
176,994 |
|
|
* |
Chief Operating Officer of the Company since October 25,
2007; |
|
|
|
|
|
age 46 (8) |
|
|
|
|
|
|
|
|
|
|
|
Richard W. Corman |
|
39,778 |
|
|
* |
Vice President-Controller of the Company since October 28,
2004; |
|
|
|
|
|
age 51 (9) |
|
|
|
|
|
|
|
|
|
|
|
Patrick W. Donovan |
|
0 |
|
|
* |
President-European Operations of the Company since |
|
|
|
|
|
October 13, 2005; age 59 (10) |
|
|
|
|
|
|
|
|
|
|
|
Roy C. Harris |
|
42,992 |
|
|
* |
Vice President and Chief Information Officer of the Company
since |
|
|
|
|
|
December 19, 2006; age 65 (11) |
|
|
|
|
|
- 6 -
|
|
Common Stock |
|
|
|
|
Beneficially |
|
|
|
|
Owned as of |
|
Percent of |
Principal Occupation, Employment,
etc. |
|
March
6, 2008 |
|
Class |
Jeffrey A. Martin |
|
11,980 |
|
|
* |
Vice President-Operations, Standard Products Division of
the |
|
|
|
|
|
Company since November 20, 2006; age 41 (12) |
|
|
|
|
|
|
|
|
|
|
|
Kent A. McKee |
|
205,425 |
|
|
* |
Executive Vice President of the Company since October 13,
2005; |
|
|
|
|
|
Chief Financial Officer of the Company since April 1,
1999; |
|
|
|
|
|
age 47 (13) |
|
|
|
|
|
|
|
|
|
|
|
James H. Rourke |
|
104,025 |
|
|
* |
President-Industrial Products Division of the Company
since |
|
|
|
|
|
December 27, 2003; General Manager-Rod since January 29,
2002; |
|
|
|
|
|
age 59 (14) |
|
|
|
|
|
|
|
|
|
|
|
Larry J. Stoddard |
|
0 |
|
|
*
|
President-Standard Products Division of the Company
|
|
|
|
|
|
since February 19, 2008; age 48 (15) |
|
|
|
|
|
|
|
|
|
|
|
Gary C. Wilkerson |
|
11,000 |
|
|
* |
Vice President, General Counsel and Secretary of the
Company |
|
|
|
|
|
since May 2, 2005; age 61 (16) |
|
|
|
|
|
|
|
|
|
|
|
Executive Officers and Directors as a Group |
|
1,586,400 |
|
|
4.28%**
|
__________________
* |
|
Less than 1
% |
|
** |
|
Includes 1,025,909
shares of Common Stock which are subject to currently exercisable stock
options held by officers and directors of the Company. |
|
(1) |
|
Mr. Federbush served as the
President of the Queens West Development Corp., a subsidiary of the Empire
State Development Corporation, a public-benefit corporation that is a
joint venture among New York State, New York City and the Port Authority
of New York and New Jersey, for more than the past five years until his
departure from the corporation on December 31, 2007. Mr. Federbush has
served as a director of The Varick Group since 1970, including as Chairman
since 1976. The number of shares of Common Stock beneficially owned by Mr.
Federbush includes (i) 500 shares of Common Stock owned by Mr. Federbushs
spouse, (ii) 1,000 shares of Common Stock owned by a corporation in which
Mr. Federbush is an officer and (iii) 6,000 shares of Common Stock which
are subject to currently exercisable stock options. |
|
|
|
(2) |
|
Mr. Flaherty has been a member of
the Advisory Board of Aon Risk Services, Inc., a subsidiary of Aon
Corporation (Aon), the global insurance and risk management firm, since
2001. |
- 7 -
(3) |
|
Mr. Fulvio has been a
member of Fulvio & Associates, LLP, Certified Public Accountants
(formerly Speer & Fulvio, LLP), since 1987. The number of shares of
Common Stock beneficially owned by Mr. Fulvio includes 12,224 shares of
Common Stock which are subject to currently exercisable stock options and
4,112 shares of Common Stock which are owned by Mr. Fulvios
spouse. |
|
(4) |
|
Mr. Gladstein
previously served as a director of the Company from 1990 to 1994. Mr.
Gladstein is currently an independent investor and consultant. From the
beginning of 2000 to August 31, 2004, Mr. Gladstein was a Senior
Consultant at Soros Fund Management. He was Chief Operating Officer at
Soros Fund Management from 1985 until his retirement at the end of 1999.
The number of shares of Common Stock beneficially owned by Mr. Gladstein
includes 12,224 shares of Common Stock which are subject to currently
exercisable stock options. |
|
(5) |
|
Mr. Goldman has served
as founder and principal of the Goldman Group, which works with Fortune
500 companies in developing, licensing, launching and operating wireless
systems, products and services worldwide, since 1987. |
|
(6) |
|
Mr. Hermanson has been
the principal and President of Mr. Christmas, Inc., a wholesale
merchandising company, for more than the last five years. The number of
shares of Common Stock beneficially owned by Mr. Hermanson includes 12,224
shares of Common Stock which are subject to currently exercisable stock
options. |
|
(7) |
|
The number of shares of
Common Stock beneficially owned by Mr. OHagan includes (i) 515,708 shares
of Common Stock which are subject to currently exercisable stock options,
(ii) 134,866 shares of Common Stock held through family trusts (of
which 81,736 are held through a trust established for the benefit of Mr.
OHagans spouse) and (iii) 28,838 shares of Common Stock owned by a
family partnership of which Mr. OHagan is a general partner and in which
Mr. OHagan and his spouse together hold a 99% interest. Mr. OHagan
disclaims beneficial ownership of the 81,736 shares of Common Stock held
by the trust established for the benefit of his spouse. |
|
(8) |
|
Mr. Christopher served
as President of the Standard Products Division from October 13, 2005 until
October 25, 2007 and Vice President of Sales-Standard Products Division of
the Company for more than five years prior to October 13, 2005. The number
of shares of Common Stock beneficially owned by Mr. Christopher includes
(i) 142,592 shares of Common Stock which are subject to currently
exercisable stock options, and (ii) 900 shares of Common Stock owned
jointly between Mr. Christopher and his spouse. |
|
(9) |
|
Mr. Corman served as
the Companys Corporate Controller for more than five years prior to
October 28, 2004. The number of shares of Common Stock beneficially owned
by Mr. Corman includes 29,084 shares of Common Stock which are subject to
currently exercisable stock options. |
|
- 8 -
(10) |
|
Mr. Donovan
served (i) as Managing Director of Mueller Europe Ltd. from January 2003
until October 13, 2005, (ii) as Executive Director of BSS Group PLC, a
specialist distributor of pipeline, heating, ventilation, plumbing and
sanitaryware products, from April 2001 until December 2002 and (iii) as
Chief Executive of BSS Group PLC from 1997 until April 2001. |
|
(11) |
|
Mr. Harris
served (i) as Vice President and Chief Information Officer of the Standard
Products Division of the Company from October 13, 2005 until December 19,
2006, (ii) as Vice President and Chief Information Officer of the Company
from July 5, 2000 until October 13, 2005, (iii) as Division Manager of the
Companys Standard Products Division from May 1, 1997 through July 5, 2000
and (iv) as Controller, Standard Products Division, from December 1995 to
May 1, 1997. The number of shares of Common Stock beneficially owned by
Mr. Harris includes 25,863 shares of Common Stock which are subject to
currently exercisable stock options. |
|
(12) |
|
Mr. Martin
served (i) as Vice President-Finance of the Company from October 28, 2004
to November 20, 2006, (ii) as Director of Corporate Finance of the Company
from January 1, 2002 to October 28, 2004, (iii) as Manager of Corporate
Finance of the Company from January 1, 2001 to December 31, 2001, (iv) as
Manager of Corporate Accounting of the Company from January 15, 1996 to
December 31, 2000 and (v) as a Manager and other positions in audit
services with PricewaterhouseCoopers LLP, a public accounting firm, from
September 1989 to January 1996. The number of shares of Common Stock
beneficially owned by Mr. Martin includes 11,980 shares of Common Stock
which are subject to currently exercisable stock options. |
|
(13) |
|
Mr. McKee
served (i) as Vice President of the Company from February 11, 1999 until
October 13, 2005, (ii) as Vice President-Business Development/Investor
Relations of the Company from December 14, 1995 to February 11, 1999,
(iii) as Treasurer of the Company from November 8, 1991 to December 14,
1995 and (iv) as Assistant Secretary of the Company from August 28, 1991
to December 14, 1995. The number of shares of Common Stock beneficially
owned by Mr. McKee includes 159,679 shares of Common Stock which are
subject to currently exercisable stock options. |
|
(14) |
|
Mr. Rourke
served (i) as Vice President-Industrial Products Division of the Company
from December 14, 1995 to December 27, 2003, (ii) as Vice President and
General Manager-Industrial Division of the Company from November 4, 1993
to December 14, 1995 and (iii) prior thereto as Vice President and General
Manager, Industrial Products, for Mueller Brass Co. in Port Huron,
Michigan. The number of shares of Common Stock beneficially owned by Mr.
Rourke includes 87,331 shares of Common Stock which are subject to
currently exercisable stock options. |
|
(15) |
|
Prior to
joining the Company on February 19, 2008, Mr. Stoddard served in various
executive positions for Wolseley plc (Wolseley) for the past 26 years.
Most recently, Mr. Stoddard served (i) as the Chief Operations Officer of
Wolseley from January 2006 until his hiring by the Company, (ii) as Senior
Vice President of Business Development |
- 9 -
|
|
of Wolseley from
2005-2006, (iii) as Senior Vice President of Business Development for
Wolseley North America from 2005-2006 and (iv) as Senior Vice President of
Branch Operation of Ferguson Enterprises, a Wolseley company, from 2001
until 2005. |
|
(16) |
|
Mr. Wilkerson served
(i) as Of Counsel to the Memphis law firm of Pietrangelo Cook, LLP from
April 2002 to May 2005 and (ii) as Vice President and General Counsel for
Louisiana-Pacific Corporation from 1997 to January 2002. The number of
shares of Common Stock beneficially owned by Mr. Wilkerson includes 11,000
shares of Common Stock which are subject to currently exercisable stock
options. |
Meetings and Committees of the Board of
Directors
During 2007, the
Board of Directors held nine meetings. The Board of Directors established a
standing Audit Committee and a Compensation Committee at its organizational
meeting on February 13, 1991. On May 13, 1991, the Board of Directors created
two committees (the Plan Committees) to be responsible for administering the
Companys 1991 Employee Stock Purchase Plan and the Companys 1991 Incentive
Stock Option Plan. On November 16, 1993, the Board of Directors established a
standing Nominating Committee. On May 12, 1994, the Board of Directors created
two committees to be responsible for administering the Companys 1994 Stock
Option Plan and the Companys 1994 Non-Employee Director Stock Option Plan, on
February 12, 1998 created a committee to be responsible for administering the
Companys 1998 Stock Option Plan and on February 12, 2002 created a committee to
be responsible for administering the Companys 2002 Stock Option Plan
(collectively, the Option Plan Committees). On February 12, 2004, the Board of
Directors changed the name of the Nominating Committee to the Nominating and
Corporate Governance Committee. During 2007, no director attended fewer than 75%
of the total number of meetings of the Board and all committees on which he
served, except for Mr. OHagan who attended six of the nine meetings of the
Board.
The Audit
Committee is composed of three directors who are not officers or employees of
the Company: Gennaro J. Fulvio (Chairman), Gary S. Gladstein and Terry
Hermanson. Each member of the Audit Committee has been determined by the Board
of Directors to meet the standards for independence required of audit committee
members by the New York Stock Exchange (the NYSE) and applicable SEC rules.
For more information on the NYSE standards for independence, see Corporate
Governance-Director Independence in this Proxy Statement. The Board of
Directors has further determined that (i) all members of the Audit Committee are
financially literate and (ii) Gary S. Gladstein and Gennaro J. Fulvio each
possess
- 10 -
accounting and related financial management
expertise within the meaning of the listing standards of the NYSE, and are each
audit committee financial experts within the meaning of applicable SEC rules.
The Audit Committee (i) appoints the Companys independent accountants, (ii)
reviews and approves any major change in the Companys accounting policies,
(iii) reviews the scope and results of the independent audit, (iv) reviews and
considers the independence of the accountants, (v) reviews the effectiveness of
the Companys internal audit procedures and personnel, (vi) reviews the
Companys policies and procedures for compliance with disclosure requirements
concerning conflicts of interest and the prevention of unethical, questionable
or illegal payments and (vii) makes such reports and recommendations to the
Board of Directors as it may deem appropriate. The Audit Committee held seven
formal meetings during the last fiscal year, all of which were attended by the
Companys independent auditors. At such meetings, the Audit Committee discussed
the scope and results of the annual audit and issues of accounting policy and
internal controls.
The Compensation
Committee is composed of three directors who are not officers or employees of
the Company: Terry Hermanson (Chairman), Alexander P. Federbush and Gennaro J.
Fulvio. Each member of the Compensation Committee has been determined by the
Board of Directors to meet the NYSEs standards for independence. In addition,
each member of the Compensation Committee is a Non-Employee Director as
defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
Exchange Act), and an outside director as defined in Section 162 (m) of the
Internal Revenue Code of 1986, as amended (the Code). These same directors
also serve as members of the Plan Committee and the Option Plan Committees. The
Compensation Committee (i) provides assistance to the Board of Directors in
discharging the Board of Directors responsibilities relating to management
organization, performance, compensation and succession and (ii) makes such
recommendations to the Board of Directors as it deems appropriate. During the
fiscal year 2007, the Compensation Committee and the Option Plan Committee held
five formal meetings.
The Nominating
and Corporate Governance Committee is composed of three directors who are not
officers or employees of the Company: Alexander P. Federbush (Chairman), Gary S.
Gladstein, and Paul J. Flaherty. Each member of the Nominating and Corporate
Governance Committee has been determined by the Board of Directors to meet the
NYSEs standards for independence. The Nominating and
- 11 -
Corporate Governance Committee is responsible
for the recommendation to the Board of Directors of director nominees for
election to the Board of Directors. In addition, the Nominating and Corporate
Governance Committee is responsible for recommending committee assignments and
responsibilities to the Board of Directors, overseeing the evaluation of Board
of Directors and management effectiveness, developing and recommending to the
Board of Directors corporate governance guidelines, and generally advising the
Board of Directors on corporate governance and related matters. The Nominating
and Corporate Governance Committee held four formal meetings during fiscal year
2007.
CORPORATE GOVERNANCE
The Company
operates within a comprehensive plan of corporate governance for the purpose of
defining independence, assigning responsibilities, setting high standards of
professional and personal conduct and assuring compliance with such
responsibilities and standards. The Company regularly monitors developments in
the area of corporate governance. In July 2002, Congress passed the
Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) which, among other things,
established, or provided the basis for, a number of new corporate governance
standards and disclosure requirements. In addition, following the passage of
Sarbanes-Oxley, the NYSE adopted changes to its corporate governance and listing
requirements.
Director Independence
The standards
relied upon by the Board of Directors in affirmatively determining whether a
director is independent, in compliance with the rules of the NYSE, are
comprised, in part, of those objective standards set forth in the NYSE rules,
which generally provide that (a) a director who is an employee, or whose
immediate family member (defined as a spouse, parent, child, sibling, father-
and mother-in-law, son- and daughter-in-law and anyone, other than a domestic
employee, sharing the directors home) is an executive officer of the Company,
would not be independent for a period of three years after termination of such
relationship; (b) a director who has received, or whose immediate family member
has received, during any twelve-month period within the last three years, more
than $100,000 per year in direct compensation from the Company, except for
certain permitted payments, would not be independent; (c) a director or an
immediate family member who is a current partner of a firm that is the Companys
internal or external auditor, a director who is a current employee
- 12 -
of such a firm, a director who has an
immediate family member who is a current employee of such a firm and who
participates in the firms audit, assurance or tax compliance (but not tax
planning) practice, or a director or an immediate family member who was within
the last three years (but is no longer) a partner or employee of such a firm and
personally worked on the Companys audit within that time would not be
independent; (d) a director or an immediate family member who is, or has been
within the last three years, employed as an executive officer of another company
where any of the Companys present executive officers at the same time serves or
served on the other companys compensation committee would not be independent;
and (e) a director who is a current employee, or an immediate family member is a
current executive officer, of a company that has made payments to, or received
payments from, the Company for property or services in an amount which, in any
of the last three fiscal years, exceeds the greater of $1 million, or 2% of such
other companys consolidated gross revenues, would not be independent. In
addition to these objective standards and in compliance with NYSE rules, no
director will be considered independent who has any other material relationship
with the Company that could interfere with the directors ability to exercise
independent judgment. The Board of Directors exercises appropriate discretion in
identifying and evaluating the materiality of any relationships directors may
have with the Company.
The Board of
Directors, in applying the above-referenced standards and after considering all
of the relevant facts and circumstances, has affirmatively determined that the
Companys current independent directors are: Alexander P. Federbush, Paul J.
Flaherty, Gennaro J. Fulvio, Gary S. Gladstein, Scott J. Goldman and Terry
Hermanson. In the course of the Board of Directors determination regarding the
independence of each non-management director, the Board considered
for:
- Mr. Flaherty, the fact that the Company has
utilized certain services of Aon and its affiliates, but recognizing the arms
length nature of such transactions, the absence of any managerial role or
specific pecuniary interest of Mr. Flaherty in such matters, and the de
minimis percentage such transactions represented in respect of the annual
revenues and assets of each of those companies; and
- Mr. Goldman, the fact that Mr. Goldman is engaged
to the niece of Harvey L. Karp, the Chairman of the Board, but recognizing the
distance of this relationship.
- 13 -
Independent Directors
- A majority of the members of the Companys Board
of Directors have been determined to meet the NYSEs standards for
independence. See Director Independence above.
- The Companys Corporate Governance Guidelines
provide that the Companys non-management directors shall hold annually at
least two formal meetings independent from management. The non-management
directors will choose a non-management director, as appropriate, to preside at
these executive sessions of the Board of Directors.
Audit Committee
- All members of the Audit Committee have been
determined to meet the standards of independence required of audit committee
members by the NYSE and applicable SEC rules. See Director Independence
above.
- In accordance with the rules and regulations of
the SEC, the above paragraph regarding the independence of the members of the
Audit Committee shall not be deemed to be soliciting material or to be
filed with the SEC or subject to Regulation 14A or 14C of the Exchange Act
or to the liabilities of Section 18 of the Exchange Act and shall not be
deemed to be incorporated by reference into any filing under the Securities
Act of 1933, as amended (the Securities Act), or the Exchange Act,
notwithstanding any general incorporation by reference of this Proxy Statement
into any other filed document.
- The Board of Directors has determined that all
members of the Audit Committee are financially literate. Further, the Board of
Directors has determined that Gary S. Gladstein and Gennaro J. Fulvio each
possess accounting or related financial management expertise, within the
meaning of the listing standards of the NYSE, and are each audit committee
financial experts within the meaning of applicable SEC rules.
- Ernst & Young LLP, the Companys independent
auditors, reports directly to the Audit Committee.
- The Audit Committee, consistent with the
Sarbanes-Oxley Act of 2002 and the rules adopted thereunder, meets with
management and the Companys independent auditors prior to the filing of
officers certifications
- 14 -
with the SEC to
receive information concerning, among other things, significant deficiencies in
the design or operation of internal control over financial reporting.
- The Audit Committee has adopted procedures for the
receipt, retention and treatment of complaints by Company employees regarding
the Companys accounting, internal accounting controls or auditing
matters.
- The Audit Committee operates under a formal
charter adopted by the Board of Directors that governs its duties and
standards of performance. Copies of the charter can be obtained free of charge
from the Companys website at www.muellerindustries.com or may be requested in
print by any shareholder.
Compensation Committee
- All members of the Compensation Committee have
been determined to meet the NYSE standards for independence. See Director
Independence above. Further, each member of the Compensation Committee is a
Non-Employee Director as defined in Rule 16b-3 under the Exchange Act and an
outside director as defined in Section 162(m) of the Code.
- The Compensation Committee operates under a formal
charter adopted by the Board of Directors that governs its duties and
standards of performance. Copies of the charter can be obtained free of charge
from the Companys website at www.muellerindustries.com or may be requested in
print by any shareholder.
Nominating and Corporate Governance
Committee
- All members of the Nominating and Corporate
Governance Committee have been determined to meet the NYSE standards for
independence. See Director Independence above.
- The Nominating and Corporate Governance Committee
recommends to the Board of Directors as director nominees individuals of
established personal and professional integrity, ability and judgment, and who
are chosen with the primary goal of ensuring that the entire Board of
Directors collectively serves the interests of the Companys stockholders. Due
consideration is given to assessing the qualifications of potential nominees
and any potential conflicts with the Companys interests. The
Nominating
- 15 -
and Corporate
Governance Committee also assesses the contributions of the Companys incumbent
directors in connection with their potential re-nomination. In identifying and
recommending director nominees, the Committee members take into account such
factors as they determine appropriate, including recommendations made by the
Board of Directors.
- Once the Nominating and Corporate Governance
Committee has identified prospective nominees, background information is
elicited about the candidates, following which they are investigated,
interviewed and evaluated by the Committee which then reports to the Board of
Directors.
- The Nominating and Corporate Governance Committee
operates under a formal charter adopted by the Board of Directors that governs
its duties and standards of performance. Copies of the charter can be obtained
free of charge from the Companys website at www.muellerindustries.com or may
be requested in print by any shareholder.
The Nominating
and Corporate Governance Committee does not consider individuals nominated by
stockholders for election to the Board. However, under the Companys Bylaws,
nominations for the election of directors may be made by a qualifying
stockholder, but only if written notice of such stockholders intent to make
such nomination has been received by the Secretary of the Company at the
Companys principal place of business (8285 Tournament Drive, Suite 150,
Memphis, Tennessee 38125) not less than 60 days and not more than (i) with
respect to an election to be held at an annual meeting of stockholders, 90 days
prior to the anniversary date of the immediately preceding annual meeting
(unless the annual meeting date is advanced by more than thirty days or delayed
by more than sixty days, in which case different deadlines apply) and (ii) with
respect to an election to be held at a special meeting of stockholders for the
election of directors, not earlier than 90 days prior to the special meeting and
not later than the later of (a) 60 days prior to such special meeting or (b) the
tenth day following the day on which public announcement is first made of the
date of the special meeting, provided that in the event that the number of
directors to be elected to the Board is increased and there is no public
announcement naming all of the nominees for director or specifying the size of
the increased Board made by the Company at least 70 days prior to the first
anniversary of the preceding years annual meeting, a stockholders notice shall
also be considered timely, but only with respect to nominees for any new
positions
- 16 -
created by such increase, if it is delivered
to the Secretary of the Company not later than the tenth day following the day
on which such public announcement is first made by the Company. To be a
qualifying stockholder, the stockholder must be a stockholder of record at the
time the notice was delivered to the Secretary of the Company. Each such notice
shall set forth: (a) as to each person whom the stockholder proposes to nominate
for election or reelection as a director, all information relating to such
person that is required to be disclosed in solicitations of proxies for election
of directors, or is otherwise required, in each case pursuant to Regulation 14A
(or successor provisions) under the Exchange Act, including such persons
written consent to be named in the proxy statement as a nominee and to serve as
a director if elected; (b) as to any other business that the stockholder desires
to be brought before the meeting, a brief description of the business desired to
be brought before the meeting, the reasons for conducting such business at the
meeting and any material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made; and (c) as to
the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the Companys books, and of such beneficial owner
and (ii) the class and number of shares of Common Stock which are owned
beneficially and of record by such stockholder and such beneficial owner. The
presiding officer of the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure. See Stockholder
Nominations for Board Membership and Other Proposals for 2009 Annual
Meeting.
Compensation Committee Interlocks and
Insider Participation
During fiscal
year 2007, Terry Hermanson, Alexander P. Federbush and Gennaro J. Fulvio served
on the Compensation Committee. No member of the Compensation Committee was,
during fiscal year 2007, an officer or employee of the Company or was formerly
an officer of the Company, or had any relationship requiring disclosure by the
Company as a related party transaction under Item 404 of Regulation S-K. No
executive officer of the Company served on any board of directors or
compensation committee of any other company for which any of the Companys
directors served as an executive officer at any time during fiscal year
2007.
- 17 -
Corporate Governance
Guidelines
- The Company has adopted a set of Corporate
Governance Guidelines, including specifications for director qualification and
responsibility, director access to officers and employees, director
compensation, director orientation and continuing education and the annual
performance evaluation of the Board of Directors.
- Copies of the guidelines can be obtained free of
charge from the Companys website at www.muellerindustries.com or may be
requested in print by any shareholder.
Code of Business Conduct and
Ethics
- The Company has adopted a Code of Business Conduct
and Ethics, which is designed to help officers, directors and employees
resolve ethical issues in an increasingly complex business environment. The
Code of Business Conduct and Ethics is applicable to all of the Companys
officers, directors and employees, including the Companys principal executive
officer, principal financial officer, principal accounting officer or
controller and other persons performing similar functions. The Code of
Business Conduct and Ethics covers topics, including but not limited to,
conflicts of interest, confidentiality of information and compliance with laws
and regulations.
- Waivers from the Code of Business Conduct and
Ethics are discouraged. Any waivers from the Code of Business Conduct and
Ethics that relate to the Companys directors and executive officers must be
approved by the Board of Directors and will be posted on the Companys website
at www.muellerindustries.com.
- Copies of the Code of Business Conduct and Ethics
can be obtained free of charge from the Companys website at
www.muellerindustries.com or may be requested in print by any
shareholder.
Policies and Procedures for Approval of
Related Party Transactions
Related party
transactions may present potential or actual conflicts of interest and create
the appearance that Company decisions are based on considerations other than the
best interests of the Company and its shareholders. Management carefully reviews
all proposed related party transactions (if any), other than routine banking
- 18 -
transactions, to determine if the transaction
is on terms comparable to terms that could be obtained in an arms-length
transaction with an unrelated third party. Management reports to the Audit
Committee and then to the Board of Directors on all proposed material related
party transactions. Upon the presentation of a proposed related party
transaction to the Audit Committee or the Board, the related party is excused
from participation in discussion and voting on the matter.
Directors Attendance at Annual Meetings of
Stockholders
It is the policy
of the Companys Board of Directors to expect that all directors attend annual
meetings of Stockholders except where the failure to attend is due to
unavoidable circumstances or conflicts discussed in advance with the Chairman of
the Board. All members of the Board of Directors attended the Companys 2007
Annual Meeting of Stockholders.
Communication With the Board of
Directors
Any stockholder
or interested party who wishes to communicate with the Board of Directors, or
specific individual directors, including the non-management directors as a
group, may do so by directing a written request addressed to such directors or
director in care of the Chairman of the Nominating and Corporate Governance
Committee, Mueller Industries, Inc., 8285 Tournament Drive, Suite 150, Memphis,
Tennessee 38125. Communication(s) directed to members of the Board who are not
non-management directors will be relayed to the intended Board member(s) except
to the extent that it is deemed unnecessary or inappropriate to do so pursuant
to the procedures established by a majority of the independent directors.
Communications directed to non-management directors will be relayed to the
intended Board member(s) except to the extent that doing so would be contrary to
the instructions of the non-management directors. Any communication so withheld
will nevertheless be made available to any non-management director who wishes to
review it.
- 19 -
COMPENSATION DISCUSSION AND
ANALYSIS
Compensation Policies and
Objectives
The compensation
programs for our executive officers, including the executive officers named in
the Summary Compensation Table for 2007 below, are designed to (i) motivate
these key employees to achieve certain strategic and financial goals and reward
them for achieving such goals, (ii) align the long-term financial interests of
our named executive officers with those of our stockholders, (iii) encourage
these employees to continue their service with our Company, and (iv) provide a
means to attract additional talented executive officers when
necessary.
We believe in a
pay for performance philosophy - that the performance of our named executive
officers in managing our Company, considered in light of general economic and
specific Company, industry, and competitive conditions, should be the basis for
determining the level and composition of their compensation. This incentive
element of total compensation provides a significant portion of each named
executive officers compensation potential.
Determination of
Compensation
Compensation for
our Chairman of the Board and Chief Executive Officer is determined by our
Compensation Committee. Compensation decisions for our other named executive
officers are made by our Compensation Committee based on the joint
recommendations of our Chairman of the Board and Chief Executive Officer. Our
Compensation Committee meets at least annually to determine the adjustments, if
any, which will be made to all elements of compensation, including base salary,
annual bonus compensation, and long-term equity awards.
In determining
the levels of compensation, including the amount of base salary increases from
year to year, if any, the target levels of the annual cash bonuses and the
amounts payable thereby at the end of each year, and the number of stock options
to be awarded and when such awards will be granted, we generally do not rely on
formulaic guidelines but rather maintain a flexible compensation program that
allows us to adapt components and levels of compensation to motivate and reward
individual executives within the context of the Companys desire to attain
certain strategic and financial goals and control compensation cost. This
requires that we consider subjective factors including (i) an executives
performance against corporate objectives in recent years, (ii) the value of the
executives skills and capabilities in supporting the long-
- 20 -
term performance of the Company, (iii)
performance of each executives specific management responsibilities, (iv) each
executives contribution as a member of the executive management team, and (v)
whether each executives total compensation potential and structure is
sufficient to ensure the retention of the executive when considering the
compensation potential that may be available elsewhere. As such, we make
reasoned subjective determinations about compensation levels. Our decisions regarding the various elements of compensation are
generally independent of one another in that the decisions we make with respect to any one element do not affect decisions we make
with respect to any other element.
In making
compensation decisions, our Compensation Committee does not undertake any formal
benchmarking or review any formal surveys of compensation for our competitors
but rather relies on the members general knowledge of our industry,
supplemented by advice from Messrs. Karp and OHagan, based on their knowledge
of our industry in markets in which we participate.
The targets for
annual bonus programs are generally determined by the Compensation Committee in
December for the upcoming year. Various factors are considered when determining
the specific targets including estimated actual results for the fiscal year
being concluded, the plan for the upcoming year, economic conditions currently
prevailing as well as expected in the upcoming year, among others.
Elements of Compensation
Our compensation
program is composed of six elements: (i) base salary, (ii) annual bonus
compensation, (iii) long-term equity incentive compensation, (iv) traditional
welfare benefits, (v) perquisites, and (vi) post-employment and change in
control compensation.
Each element of
compensation plays a part in our overall compensation policies and
objectives.
-
We provide base salary and traditional
benefits such as group health, disability, and life insurance benefits, as
well as matching contributions to the Mueller Industries, Inc. 401(k) Plan, as
a means of providing a base level of compensation for services performed, to
encourage the continued service of our named executive officers and to attract
additional talented executive officers when necessary.
- 21 -
-
We offer annual cash bonus compensation to
our named executive officers to reward their success in attaining short-term
operating objectives, such as sales, operating earnings and earnings per
share. From time to time, we award discretionary bonuses to recognize and
reward individual performance regardless of corporate-wide
performance.
-
Our long-term equity incentive compensation
rewards our named executive officers for achievement of our long-term
financial success as measured by our stock price. As such, it aligns the
financial interests of our named executive officers with our stockholders and
rewards our named executive officers for increased stockholder value. We
generally grant stock options with ten-year terms that vest ratably over a
five-year period. This long-term vesting schedule provides continued
motivation and rewards executives in line with our stockholders over the
vesting period. Moreover, we generally provide for periodic option grants to
ensure that vesting periods will overlap and continue to provide incentive and
motivation over the longer term. We also believe that stock options continue
to provide long-term shareholder value beyond the vesting dates because of the
continued upside financial potential for executives and the fact that stock
options can be retained beyond the vesting date without adverse tax
consequences to the executive. Because of the five-year vesting schedule, we
regard our stock option program as a significant factor in retaining our named
executive officers.
-
We view our perquisites as an added element
of our executive compensation program designed to attract, retain and reward
our named executive officers.
-
We provide employment agreements as a reward
for achieving a certain level of seniority and accomplishments based on a
subjective determination of the executives past service and current
responsibilities. We believe that providing employment agreements at the top
executive level is generally in line with market practice and allows us to be
competitive and retain our top executives.
- 22 -
Base Salary
Base salary
adjustments are determined by making reasoned subjective determinations about
current economic conditions such as general wage inflation as well as the
executives qualifications, experience, responsibilities, and past performance.
For 2007, base salary increases ranged from 3% to 34% for our named executive
officers.
Annual Bonus Compensation
Each of our
named executive officers participates in one of two annual bonus programs.
Messrs. Karp and OHagan participate in the Annual Bonus Plan noted above that
was approved by stockholders at the May 2005 Annual Meeting of Stockholders. Our
other named executive officers participate in the Companys Annual Incentive
Plan as do all other salaried employees.
Annual Bonus
Plan. Early in 2007, the Compensation Committee
established a performance target for the year based upon EBITDA (earnings before
interest, taxes, depreciation and amortization) less certain adjustments. The
Compensation Committee established graduated EBITDA targets that ranged from
$100 million (earning zero bonus) to $165 million (earning a 200% bonus) with a
maximum bonus of $2,500,000; the actual earned percentages applied to base
salary for determination of the award were linear for actual EBITDA results
between the graduated scale. These performance targets were exceeded and
resulted in the maximum payment allowed under the plan for 2007.
Annual
Incentive Plan. At the beginning of 2007, our
Compensation Committee adopted our 2007 Annual Incentive Plan. We designed our
2007 Annual Incentive Plan to award cash bonuses for achievement of certain
corporate goals. We calculate the awards by multiplying the employees actual
base salary paid during the year, by the employees incentive grade level
factor, which in turn, is multiplied by a consolidated company and/or operating
unit performance factor each of which was set by our Compensation Committee at
the beginning of the fiscal year. For 2007, the incentive grade level factors
for all salaried employees ranged from 7.5% to 125% and were approved by our
Compensation Committee based upon the recommendations of Mr. OHagan who based
his recommendations on a subjective determination of each individual employees
past performance and responsibilities. The incentive grade level factor for the
named executive officers was established at 125%. Based upon the recommendation
of Mr. OHagan, the Compensation Committee
- 23 -
established operating income of $130 million
subject to certain adjustments, as the consolidated company performance factor
for the 2007 Annual Incentive Plan, which includes Messrs. Christopher, McKee
and Rourke. As such, the company performance factor was set at 100% for
achieving operating income of $130 million. The company and operating unit
performance factors are subject to increase by 2 percentage points for each 1
percentage point that actual performance exceeds the target (capped at 150%),
and decreased by 3 percentage points for each 1 percentage point that actual
performance is less than the target. For 2007, the payments under the plan to
each named executive officer were 165% (125% grade level factor times 132%
performance factor).
Long-Term Equity Incentive
Program
Stock Option
Awards Granted in 2007. In determining which named
executive officers will receive option awards and the size of these awards, our
Compensation Committee makes reasoned subjective determinations based upon the
prior performance of the named executive officers, the importance of retaining
their services, and the potential for their performance to help us attain our
long-term goals. There is no set formula for the granting of awards to
individual named executive officers. During fiscal year 2007, the named
executive officers received stock options to acquire an aggregate of 195,000
shares or 55% of the total options granted under the long-term equity incentive
program in fiscal 2007.
Timing of
Option Grants. Stock option awards to our named
executive officers, other than our Chief Executive Officer, are typically
granted annually by our Compensation Committee based on the recommendations of
our Chief Executive Officer and Chairman of the Board. Stock option awards to
our Chief Executive Officer are granted annually based on the recommendations of
our Chairman of the Board.
Other Compensation
The other
compensation provided to our named executive officers is composed of the
Companys matching contribution to the Mueller Industries, Inc. 401(k) Plan
(except for Mr. Karp) and various perquisites. The perquisites we provided in
fiscal 2007 were as follows: estate and tax planning, certain club memberships,
and personal use of our company airplane and company boat.
- 24 -
Estate and tax
planning is provided to certain named executive officers to complement our
various compensation elements for the purpose of ensuring they maximize the
value of the long-term equity incentive particularly as it relates to
understanding the tax complexity of such benefits. We provide certain club
memberships in part to facilitate networking with and entertainment of our
business clients. Because of the nature of such memberships, our named executive
officers gain some personal benefits. We maintain a company-owned airplane
primarily to provide efficient transportation to certain employees and customers
for business travel. From time to time, when our plane is not being used for
business purposes, we allow certain named executive officers to use the plane
for personal travel. We also maintain a company-owned boat. Our boat is
primarily for the purpose of entertaining business clients. From time to time,
when our boat is not being used for business reasons, we allow our Chief
Executive Officer to use our boat for personal reasons.
Post-Employment and Change-in-Control
Compensation
We believe that
providing employment agreements at the top executive level is generally in line
with market practice and allows us to be competitive and retain our top
executives. We have entered into employment contracts with Messrs. Karp,
OHagan, McKee and Christopher. In the event that one of these executives
resigns for good reason, as defined in the employment agreement, or is
terminated without cause, as defined in the employment agreement, the
executive will be entitled to receive his then current base salary and a bonus
equal to the average annual bonus actually paid in the immediately preceding
three years for the remainder of the term of the agreement, and all unvested
stock option awards will immediately vest. In addition, following any such
termination, (i) Mr. Karp will be entitled to participate in our health and
medical benefit plans, and will be entitled to the use of an office and
secretarial services in New York City for the remainder of the term of the
agreement and (ii) Messrs. OHagan, McKee and Christopher will be entitled to
participate in our health and medical benefit plans until they reach the age of
65. In the event of a change in control, as defined in the employment
agreements, the executives may resign within six months following such event and
they will be entitled to the same payments as discussed above but the payments
will be made in a lump sum within 30 days following such termination. We provide
this ability to resign following a change in control as an added incentive and
reward for the executives to remain employed through the consummation of the
change in control and to ensure the
- 25 -
completion of such event which should
ultimately deliver value to our stockholders. Our employment agreement with Mr.
Christopher also provides us with a certain level of protection against
competition and solicitation of customers and employees if he terminates
employment with us. In the event that any payment (as defined in the
employment agreements) would be subject to the excise tax imposed by the golden
parachute regulations under the Internal Revenue Code, Messrs. Karp, OHagan,
McKee and Christopher would be entitled to a gross-up payment from the Company
to cover such taxes.
We have also
entered into consulting agreements with Messrs. Karp and OHagan. Mr. OHagans
consulting agreement will become effective upon the earliest of (i) termination
of his employment by us without cause, (ii) termination by him for good reason
or (iii) termination within six months following a change in control. Mr. Karps
consulting agreement will become effective upon the termination of his
employment, provided such termination is not for cause or by reason of Mr.
Karps death or disability. The agreements provide for the consulting services
of these executives for a period of six years following their termination of
employment. The executives are also prohibited from competing with us during
this period.
During their
consulting and non-compete period, Messrs. Karp and OHagan are entitled to
receive an annual consulting fee equal to (i) two-thirds of their final base
compensation for the first four years of such periods and one-third of their
final base compensation for the last two years of such periods. The final base
compensation for Messrs. Karp and OHagan is the lesser of: (i) their respective
highest annual cash compensation (consisting of base salary and annual bonus)
during the last three years of their employment with us (or, in the case of Mr.
Karp, for the three-year period from 2005 to 2007) and (ii) $2,000,000. In
addition, Mr. OHagan will be entitled to participate in the same health, major
medical, hospitalization and dental insurance coverage as is generally available
to the executive officers of the Company from time to time during his consulting
and non-compete period. We will also provide Mr. OHagan with the same office
space provided under his employment agreement (or such other comparable office
space anywhere in the United States designated by and acceptable to them) and
secretarial services and he will continue to have access to our private airplane
on the same basis available to him while employed with us, provided he
reimburses us for any personal use of such airplane. We will pay Mr. Karp an
amount equal to the cost of
- 26 -
his obtaining health insurance coverage having
terms, substantially equivalent to the health coverage provided to other
executive officers during his consulting and non-compete period.
The purpose of
these agreements is to provide us with protection against competition from these
executives and a transition period following their termination of employment
during which they will continue to provide limited services and be available for
consultation with respect to their unique industry and Company specific
knowledge as needed to allow a smooth transition with their successors and
minimize, to the extent possible, any succession difficulties. As with the
employment agreements described in the preceding paragraph, these consulting
agreements provide for gross-up payments in the event that payments under them
would be subject to the excise tax imposed by the golden parachute regulations
under the Internal Revenue Code.
Tax and Accounting Impact
Section 162(m)
of the Code generally disallows a tax deduction to public companies for
compensation in excess of $1,000,000 paid to each of our chief executive officer
and our next four most highly paid executive officers. Qualifying
performance-based compensation is not subject to this deduction limitation if
certain requirements are met. In December of 2004, our board of directors
adopted the Mueller Industries, Inc. Annual Bonus Plan, which was subsequently
approved by our stockholders at our Annual Meeting of Stockholders in May of
2005. Annual bonus awards paid under this plan will qualify as performance-based
compensation and thus will be fully deductible by us. Taxable compensation
pursuant to stock options granted under our stock option plans will also qualify
as performance-based compensation and will be fully deductible by us at the time
of exercise. Although the base salary compensation paid to Mr. Karp exceeds
$1,000,000 and the amount in excess thereof is not deductible by us for tax
purposes, we believe that the impact of this is immaterial and necessary to
adequately compensate Mr. Karp in light of his past and continuing contributions
to our growth. We periodically review the potential consequences of Section
162(m) with respect to compensatory elements. In the future we may authorize
other compensation payments to our named executive officers that do not comply
with the exemptions in Section 162(m) if we judge that such payments are
appropriate and in the best interests of the stockholders, after taking into
consideration changing business conditions and/or any particular executives
- 27 -
particular circumstances. This is consistent
with our general compensation policy to remain flexible in order to address
business and/or financial challenges as they present themselves.
Other provisions
of the Code can also affect compensation decisions. Under Sections 280G and 4999
of the Code, a 20% excise tax is imposed upon individuals who receive payments
upon a change in control to the extent the payments received by them exceed an
amount approximating three times their average annual compensation. A company
will also lose its tax deduction for such excess payments. In our employment
agreements with executive officers, we provide for tax gross-up payments to
cover the cost of this excise tax. We believe it is important that the effects
of these tax code provisions not negate the protections which we intend to
provide to executive officers in the event of a change in control.
SUMMARY COMPENSATION TABLE FOR
2007
|
|
|
|
|
|
|
|
|
|
|
|
Non- Equity |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option |
|
Incentive
Plan |
|
in |
|
All Other |
|
|
|
|
|
Year |
|
Salary |
|
Bonus |
|
Awards |
|
Compensation |
|
Pension |
|
Compensation |
|
Total |
Name and Principal Position
(a) |
|
(b) |
|
($)(c) |
|
($)(d) |
|
($)(f)(6) |
|
($)(g) |
|
($)(h) |
|
($)(i) |
|
($)(j) |
Harvey L. Karp |
|
2007 |
|
$ |
1,500,000 |
|
|
|
|
|
|
$ |
2,500,000 |
|
|
|
$ |
40,733 |
(1)
|
|
$ |
4,040,733 |
Chairman of the Board |
|
2006 |
|
$ |
1,381,488 |
|
|
|
|
|
|
$ |
2,500,000 |
|
|
|
$ |
51,065 |
(1) |
|
$ |
3,932,553 |
William D.
OHagan |
|
2007 |
|
$ |
1,000,000
|
|
|
|
$ |
1,139,234
|
|
$ |
2,000,000 |
|
|
|
$ |
132,215
|
(2) |
|
$ |
4,271,449
|
President and Chief |
|
2006 |
|
$ |
745,280
|
|
|
|
$ |
1,248,580
|
|
$ |
1,490,560 |
|
|
|
$ |
111,028
|
(2) |
|
$ |
3,595,448
|
Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory L. Christopher |
|
2007 |
|
$ |
265,225 |
|
$197,154 |
|
$ |
306,584 |
|
$ |
437,621 |
|
|
|
$ |
23,570 |
(3)
|
|
$ |
1,230,154 |
Chief Operating
Officer |
|
2006 |
|
$ |
257,500 |
|
|
|
$ |
282,392 |
|
$ |
614,781 |
|
|
|
$ |
31,012 |
(3) |
|
$ |
1,185,685 |
Kent A.
McKee |
|
2007 |
|
$ |
278,210
|
|
|
|
$ |
338,284
|
|
$ |
459,046 |
|
|
|
$ |
21,084
|
(4) |
|
$ |
1,096,624
|
Executive Vice President and
|
|
2006 |
|
$ |
270,107
|
|
|
|
$ |
355,475
|
|
$ |
644,880 |
|
|
|
$ |
15,762
|
(4) |
|
$ |
1,286,224
|
Chief
Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James H. Rourke |
|
2007 |
|
$ |
232,974 |
|
|
|
$ |
262,605 |
|
$ |
384,407 |
|
|
|
$ |
12,179 |
(5)
|
|
$ |
892,165 |
PresidentIndustrial
Products |
|
2006 |
|
$ |
226,188 |
|
|
|
$ |
324,696 |
|
$ |
305,354 |
|
|
|
$ |
8,800 |
(5) |
|
$ |
865,038
|
____________________
(1) |
Includes $28,733 of club
memberships plus other perquisites consisting of a car allowance in 2007
and $28,169 of club memberships plus other perquisites consisting of a car
allowance, personal use of the Companys aircraft, and sporting event
tickets in 2006. |
|
(2) |
Includes $103,402 for personal
use of the Companys aircraft, $2,242 for income tax gross-up plus other
perquisites consisting of, a car allowance, matching contribution to the
Companys 401(k) Plan, personal tax and estate planning, personal use of
the Companys boat, and club membership in 2007 and $80,375 for personal
use of the Companys aircraft |
- 28 -
|
plus other perquisites consisting
of a car allowance, matching contribution to the Companys 401(k) Plan,
personal tax and estate planning, personal use of the Companys boat, and
club membership in 2006. The calculation of the cost for personal use of
company aircraft includes only those variable costs incurred as a result
of personal flight activity and excludes non-variable costs, such as
pilots salaries, purchase costs of the aircraft and non trip-related
hangar expenses which would have been incurred regardless of whether there
was any personal use of the aircraft. |
|
(3) |
Includes reimbursement for income
tax gross-up of $373 plus other perquisites consisting of matching
contribution to the Companys 401(k) Plan, personal tax and estate
planning, personal use of the Companys aircraft, and club membership in
2007 and reimbursement for income tax gross-up of $1,071 plus other
perquisites consisting of matching contribution to the Companys 401(k)
Plan, personal tax and estate planning, personal use of the Companys
aircraft, and club membership in 2006. |
|
(4) |
Includes reimbursement for income
tax gross-up of $1,066 plus other perquisites consisting of matching
contribution to the Companys 401(k) Plan, personal tax and estate
planning, club membership and spouse travel to Company functions in 2007
and matching contribution to the Companys 401(k) Plan, personal tax and
estate planning, and club membership in 2006. |
|
(5) |
Includes reimbursement for income
tax gross-up of $618 plus other perquisites consisting of matching
contribution to the Companys 401(k) Plan, personal tax and estate
planning and spouse travel to Company functions in 2007 and matching
contribution to the Companys 401(k) Plan in 2006. |
|
(6) |
For information regarding the key
assumptions used in determining the fair value of options granted, see
Note 12 - Stock-Based Compensation to the Companys Consolidated Financial
Statements filed with its Annual Report on Form 10-K for the fiscal year
ended December 29, 2007. |
Salaries paid to
our named executives are set forth in the Summary Compensation Table for 2007.
For 2007, salaries paid to our named executives accounted for the following
percentages of their total compensation: Mr. Karp (37%), Mr. OHagan (23%), Mr.
McKee (25%), Mr. Christopher (22%), and Mr. Rourke (26%).
- 29 -
2007 GRANTS OF PLAN BASED AWARDS
TABLE
|
|
|
|
Estimated Possible Payouts |
|
All
Other |
|
|
|
|
|
|
|
|
|
|
|
Under Non-Equity Incentive |
|
Option |
|
|
|
|
|
|
|
|
|
|
|
Plan Awards (1) |
|
Awards: |
|
Exercise
or |
|
Closing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of |
|
Base
Price |
|
Price
of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
|
of
Option |
|
Stock
on |
|
Grant Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying |
|
Awards |
|
Grant |
|
Fair Value |
|
|
Grant
Date |
|
Threshold |
|
Target |
|
Maximum |
|
Options
(#) |
|
($/Sh) |
|
Date |
|
of
Option |
Name (a) |
|
(b) |
|
($)(c) |
|
($)(d) |
|
($)(e) |
|
(j) |
|
(k)(2)
|
|
($/Sh)
|
|
Awards ($)(2) |
Harvey L. Karp |
|
|
|
N/A(3) |
|
|
N/A |
(3) |
|
$ |
2,500,000 |
|
|
|
|
|
|
|
|
|
William D.
OHagan |
|
07/27/2007 |
|
|
|
|
|
|
|
|
|
|
100,000 |
|
$36.91
|
|
$36.08 |
|
$
|
1,140,900 |
|
|
|
|
N/A(3)
|
|
|
N/A
|
(3) |
|
$ |
2,000,000
|
|
|
|
|
|
|
|
|
|
Gregory L. Christopher |
|
07/27/2007 |
|
|
|
|
|
|
|
|
|
|
35,000 |
|
$36.91 |
|
$36.08 |
|
$ |
399,315 |
|
|
|
|
N/A(3) |
|
$ |
331,531 |
|
|
$ |
497,297 |
|
|
|
|
|
|
|
|
|
Kent A.
McKee |
|
07/27/2007 |
|
|
|
|
|
|
|
|
|
|
30,000 |
|
$36.91 |
|
$36.08 |
|
$ |
342,270 |
|
|
|
|
N/A(3)
|
|
$ |
347,762
|
|
|
$ |
521,644
|
|
|
|
|
|
|
|
|
|
James H. Rourke |
|
07/27/2007 |
|
|
|
|
|
|
|
|
|
|
30,000 |
|
$36.91 |
|
$36.08 |
|
$ |
342,270 |
|
|
|
|
N/A(3) |
|
$ |
291,217 |
|
|
$ |
436,826 |
|
|
|
|
|
|
|
|
|
____________________
(1) |
Messrs. Karp and OHagan received
cash bonus awards under our Annual Bonus Plan based on our exceeding an
EBITDA target of $165,000,000. Messrs. McKee, Christopher and Rourke
received cash bonus awards under our 2007 Annual Incentive Plan. See our
discussion of the Annual Bonus Plan and the 2007 Incentive Plan under the
heading Compensation Discussion and Analysis-Annual Bonus Compensation
above for a more thorough discussion of these plans. |
|
(2) |
The per share exercise price of
the options was set at the fair market value of our Common Stock on the
grant date, which under the terms of our 2002 Stock Incentive Plan is the
mean between the highest and lowest sale prices of our Common Stock
reported on the NYSE on the date immediately prior to the grant date. The
options will vest and become exercisable at the rate of 20% of the
underlying Common Stock per year on each of the first five anniversaries
of the grant date and will expire on the tenth anniversary of the grant
date. |
|
(3) |
Because of the nature of the
formulas for determining bonus compensation under both the Annual Bonus
Plan and the 2007 Annual Incentive Plan, there are no threshold amounts.
There are also no target amounts under the Annual Bonus
Plan. |
- 30 -
OUTSTANDING EQUITY AWARDS AT FISCAL 2007
YEAR-END
|
|
Option Awards |
|
|
|
|
Number of |
|
Number of |
|
|
|
|
|
|
|
|
|
Securities |
|
Securities |
|
|
|
|
|
|
|
|
|
Underlying |
|
Underlying |
|
|
|
|
|
|
|
|
|
Unexercised |
|
Unexercised |
|
Option |
|
|
|
|
|
|
Options |
|
Options |
|
Exercise |
|
Option |
|
|
|
|
(#) |
|
(#) |
|
Price |
|
Expiration |
|
|
|
|
Exercisable |
|
Unexercisable |
|
($/Sh) |
|
Date |
Name (a) |
|
Grant Date |
|
(b) |
|
(c)(1) |
|
(e) |
|
(f) |
Harvey L. Karp |
|
|
|
|
|
|
|
|
|
|
|
|
|
William D.
OHagan |
|
02/13/2002 |
|
155,610
|
|
|
|
|
|
$ |
20.40 |
|
02/13/2012 |
|
|
02/13/2003 |
|
124,488
|
|
|
31,122
|
|
|
$ |
16.13 |
|
02/13/2013 |
|
|
02/10/2004 |
|
93,366
|
|
|
62,244
|
|
|
$ |
20.72 |
|
02/10/2014 |
|
|
02/23/2005 |
|
40,000
|
|
|
60,000
|
|
|
$ |
31.22 |
|
02/23/2015 |
|
|
07/28/2006 |
|
20,000
|
|
|
80,000
|
|
|
$ |
35.05 |
|
07/28/2016 |
|
|
07/27/2007 |
|
|
|
|
100,000
|
|
|
$ |
36.91 |
|
07/27/2017 |
Gregory L. Christopher |
|
10/29/1998 |
|
15,561 |
|
|
|
|
|
$ |
14.07 |
|
10/29/2008 |
|
|
12/13/1999 |
|
15,561 |
|
|
|
|
|
$ |
22.09 |
|
12/13/2009 |
|
|
12/21/2000 |
|
7,780 |
|
|
|
|
|
$ |
15.20 |
|
12/21/2010 |
|
|
11/06/2001 |
|
7,780 |
|
|
|
|
|
$ |
18.70 |
|
11/06/2011 |
|
|
02/13/2002 |
|
15,561 |
|
|
|
|
|
$ |
20.40 |
|
02/13/2012 |
|
|
02/10/2003 |
|
15,561 |
|
|
3,890 |
|
|
$ |
16.62 |
|
02/10/2013 |
|
|
02/10/2004 |
|
18,673 |
|
|
12,449 |
|
|
$ |
20.72 |
|
02/10/2014 |
|
|
02/23/2005 |
|
8,000 |
|
|
12,000 |
|
|
$ |
31.22 |
|
02/23/2015 |
|
|
12/28/2005 |
|
18,000 |
|
|
27,000 |
|
|
$ |
28.04 |
|
12/28/2015 |
|
|
07/28/2006 |
|
6,000 |
|
|
24,000 |
|
|
$ |
35.05 |
|
07/28/2016 |
|
|
07/27/2007 |
|
|
|
|
35,000 |
|
|
$ |
36.91 |
|
07/27/2017 |
Kent A.
McKee |
|
10/29/1998 |
|
1,083 |
|
|
|
|
|
$ |
14.07 |
|
10/29/2008 |
|
|
12/13/1999 |
|
11,670
|
|
|
|
|
|
$ |
22.09 |
|
12/13/2009 |
|
|
12/21/2000 |
|
11,670
|
|
|
|
|
|
$ |
15.20 |
|
12/21/2010 |
|
|
11/06/2001 |
|
15,561
|
|
|
|
|
|
$ |
18.70 |
|
11/06/2011 |
|
|
02/13/2002 |
|
19,451
|
|
|
|
|
|
$ |
20.40 |
|
02/13/2012 |
|
|
02/10/2003 |
|
24,897
|
|
|
6,225 |
|
|
$ |
16.62 |
|
02/10/2013 |
|
|
02/10/2004 |
|
23,341
|
|
|
15,561
|
|
|
$ |
20.72 |
|
02/10/2014 |
|
|
02/23/2005 |
|
10,000
|
|
|
15,000
|
|
|
$ |
31.22 |
|
02/23/2015 |
|
|
12/28/2005 |
|
18,000
|
|
|
27,000
|
|
|
$ |
28.04 |
|
12/28/2015 |
|
|
07/28/2006 |
|
5,000 |
|
|
20,000
|
|
|
$ |
35.05 |
|
07/28/2016 |
|
|
07/27/2007 |
|
|
|
|
30,000
|
|
|
$ |
36.91 |
|
07/27/2017 |
- 31 -
|
|
Option Awards |
|
|
|
|
Number of |
|
Number of |
|
|
|
|
|
|
|
|
|
Securities |
|
Securities |
|
|
|
|
|
|
|
|
|
Underlying |
|
Underlying |
|
|
|
|
|
|
|
|
|
Unexercised |
|
Unexercised |
|
Option |
|
|
|
|
|
|
Options |
|
Options |
|
Exercise |
|
Option |
|
|
|
|
(#) |
|
(#) |
|
Price |
|
Expiration |
|
|
|
|
Exercisable |
|
Unexercisable |
|
($/Sh) |
|
Date |
Name (a) |
|
Grant Date |
|
(b) |
|
(c)(1) |
|
(e) |
|
(f) |
James H. Rourke |
|
07/01/1998 |
|
5,387 |
|
|
|
|
|
$ |
23.80 |
|
07/01/2008 |
|
|
10/29/1998 |
|
1,840 |
|
|
|
|
|
$ |
14.07 |
|
10/29/2008 |
|
|
12/13/1999 |
|
4,527 |
|
|
|
|
|
$ |
22.09 |
|
12/13/2009 |
|
|
12/21/2000 |
|
3,113 |
|
|
|
|
|
$ |
15.20 |
|
12/21/2010 |
|
|
11/06/2001 |
|
4,668 |
|
|
|
|
|
$ |
18.70 |
|
11/06/2011 |
|
|
02/13/2002 |
|
12,449 |
|
|
|
|
|
$ |
20.40 |
|
02/13/2012 |
|
|
02/10/2003 |
|
12,449 |
|
|
6,225 |
|
|
$ |
16.62 |
|
02/10/2013 |
|
|
02/10/2004 |
|
12,449 |
|
|
12,449 |
|
|
$ |
20.72 |
|
02/10/2014 |
|
|
02/23/2005 |
|
8,000 |
|
|
12,000 |
|
|
$ |
31.22 |
|
02/23/2015 |
|
|
07/28/2006 |
|
6,000 |
|
|
24,000 |
|
|
$ |
35.05 |
|
07/28/2016 |
|
|
07/27/2007 |
|
|
|
|
30,000 |
|
|
$ |
36.91 |
|
07/27/2017 |
____________________
(1) |
|
All of these options
will vest and become exercisable with respect to the underlying shares at
the rate of 20% per year on the first five anniversaries of their
respective dates of grant. |
2007 OPTION EXERCISES
|
|
Option Awards |
|
|
Number of |
|
Value |
|
|
Shares Acquired |
|
Realized |
|
|
on
Exercise |
|
on
Exercise |
Name (a) |
|
(#)(b) |
|
($)(c) |
Harvey L. Karp |
|
|
|
|
|
|
|
William D.
OHagan |
|
|
|
|
|
|
|
Gregory L. Christopher |
|
387 |
|
|
$ |
7,151 |
|
Kent A.
McKee |
|
|
|
|
|
|
|
James H. Rourke |
|
|
|
|
|
|
|
Employment and Consulting Agreements
We have entered
into employment agreements with Messrs. Karp, OHagan, McKee and
Christopher.
- 32 -
Karp and OHagan Agreements
Effective as of
October 27, 2007, we amended Harvey L. Karps then existing Amended and Restated
Employment Agreement (as amended, the Karp Employment Agreement) to extend the
term of the agreement to December 31, 2008 as well as to bring the agreement
into compliance with Section 409A of the Code. The amendment also provided that
the term of the agreement will automatically extend until December 31, 2009, and
for successive one year terms thereafter, unless Mr. Karp gives us at least 4
months prior written notice of his intention not to renew the term, or we give
Mr. Karp at least 4 months prior written notice of our intention not to renew
the term. The Karp Employment Agreement provides for Mr. Karp to serve as
Chairman of the Board of Directors of the Company. Under the terms of the Karp
Employment Agreement, Mr. Karp is to receive (i) an annual base salary of at
least $606,373 (to be adjusted upward annually at a rate at least commensurate
with increases granted to other key executives) and (ii) a performance-based
cash bonus under the terms and conditions of the Annual Bonus Plan. Mr. Karp is
also entitled to receive reimbursement for reasonable business and travel
expenses incurred in the performance of his duties and will participate in all
bonus, incentive, stock option, pension, disability and health plans and
programs and all fringe benefit plans maintained by the Company in which senior
executives participate.
Under the terms
of the Karp Employment Agreement, Mr. Karps employment may be terminated by the
Company without cause (as defined in the Karp Employment Agreement) or by Mr.
Karp for good reason (as defined in the Karp Employment Agreement) upon
appropriate written notice. In either such event, Mr. Karp will continue to
receive his then-current base salary as if his employment had continued for the
remainder of the then-current term and an annual bonus for the remainder of the
then-current term equal to the average bonus for the three calendar years
immediately preceding the written notice of termination. In addition, all
outstanding unvested Company stock options then held by Mr. Karp will
immediately vest and become exercisable and Mr. Karp will continue to
participate in our health plans and programs at our expense and we will furnish
Mr. Karp with an office in New York City and a secretary for the remainder of
such term.
Mr. Karp may
resign voluntarily without good reason upon appropriate written notice. In such
event, Mr. Karp will be entitled to receive any accrued but unpaid base salary
and, at the Companys discretion, a bonus for the calendar year in which his
resignation without good reason occurs. The Company may terminate Mr. Karps
- 33 -
employment for cause (as defined in the Karp
Employment Agreement) upon appropriate written notice. In addition, if Mr.
Karps employment is terminated for cause or if Mr. Karp voluntarily resigns for
any reason other than good reason, his right to receive his base salary, bonus
and any other compensation and benefits to which he would otherwise be entitled
under the Karp Employment Agreement shall be forfeited as of the date of
termination. Mr. Karp may terminate his employment for any reason within six
months following a Change in Control (as defined in the Karp Employment
Agreement). In such event, the Company will pay to Mr. Karp a lump sum amount
equal to (i) his then-current base salary multiplied by the number of full and
partial years remaining in the term of the Karp Employment Agreement and (ii)
his average annual bonus for the three calendar years immediately preceding the
date of termination multiplied by the number of full and partial years remaining
in the term of the Karp Employment Agreement. In addition, all outstanding
unvested options then held by Mr. Karp shall become immediately exercisable. In
the event that any Payment (as defined in the Karp Employment Agreement) would
be subject to the excise tax imposed by the golden parachute regulations under
the Code, Mr. Karp would be entitled to a gross-up payment from the Company to
cover such taxes.
We are party to
an Amended and Restated Employment Agreement with Mr. OHagan (the OHagan
Employment Agreement). The OHagan Employment Agreement provides for Mr.
OHagan to serve as President and Chief Executive Officer of the Company for a
rolling three-year term, which is automatically extended so that the unexpired
term on any date is always three years, unless either party gives written notice
of his or its intention not to extend the term (the OHagan Employment
Period). Under the terms of the OHagan Employment Agreement, Mr. OHagan is to
receive (i) an annual base salary of at least $413,430 (to be adjusted upward
annually at a rate at least commensurate with increases granted to other key
executives) and (ii) a performance-based cash bonus under the terms and
conditions of the Annual Bonus Plan. Mr. OHagan is also entitled to receive
reimbursement for reasonable business and travel expenses incurred in the
performance of his duties and will participate in all bonus, incentive, stock
option, pension, disability and health plans and programs and all fringe benefit
plans maintained by the Company in which senior executives
participate.
- 34 -
Under the terms
of the OHagan Employment Agreement, Mr. OHagans employment may be terminated
by the Company without cause (as defined in the OHagan Employment Agreement) or
by Mr. OHagan for good reason (as defined in the OHagan Employment Agreement)
upon appropriate written notice. In either such event, Mr. OHagan will continue
to receive his then-current base salary as if his employment had continued for
the remainder of the OHagan Employment Period and an annual bonus for the
remainder of the OHagan Employment Period equal to the average bonus for the
three calendar years immediately preceding the written notice of termination. In
addition, all outstanding unvested Company stock options then held by Mr.
OHagan will immediately vest and become exercisable.
Mr. OHagan may
resign voluntarily without good reason upon appropriate written notice. In such
event, Mr. OHagan will be entitled to receive any accrued but unpaid base
salary and, at the Companys discretion, a bonus for the calendar year in which
his resignation without good reason occurs. The Company may terminate Mr.
OHagans employment for cause (as defined in the OHagan Employment Agreement)
upon appropriate written notice. In addition, if Mr. OHagans employment is
terminated for cause or if Mr. OHagan voluntarily resigns for any reason other
than good reason, his right to receive his base salary, bonus and any other
compensation and benefits to which he would otherwise be entitled under the
OHagan Employment Agreement shall be forfeited as of the date of termination.
Mr. OHagan may terminate his employment for any reason within six months
following a Change in Control (as defined in the OHagan Employment Agreement).
In such event, the Company will pay to Mr. OHagan a lump sum amount equal to
(i) his then current base salary multiplied by the number of years (including
partial years) then remaining in the OHagan Employment Period and (ii) his
average annual bonus for the three calendar years immediately preceding the date
of termination multiplied by the number of years (including partial years) then
remaining in the OHagan Employment Period. In addition, all remaining unvested
options previously granted to Mr. OHagan shall become immediately exercisable.
In the event that any Payment (as defined in the OHagan Employment Agreement)
would be subject to the excise tax imposed by the Golden Parachute regulations
under the Code, Mr. OHagan would be entitled to a gross-up payment from the
Company to cover such taxes.
- 35 -
On June 21,
2004, the Company entered into consulting and non-compete agreements with
Messrs. Karp and OHagan to provide for post-employment consulting services to
the Company (the Karp Consulting Agreement and the OHagan Consulting
Agreement, respectively, and collectively, the Consulting Agreements). We
amended the Karp Consulting Agreement effective October 25, 2007.
The consulting
period under the Karp Consulting Agreement, as amended, will begin upon the
termination of his employment, provided such termination is not for cause or by
reason of Mr. Karps death or disability, and will end on the sixth anniversary
of such commencement.
The consulting
period under the OHagan Consulting Agreement will begin on the earliest of (i)
the termination of Mr. OHagans employment by the Company without cause (as
defined in the OHagan Employment Agreement), (ii) the termination of Mr.
OHagans employment upon a Change in Control (as defined in the OHagan
Employment Agreement) or (iii) the resignation of Mr. OHagan for good reason
(as defined in the OHagan Employment Agreement), and will end on the sixth
anniversary of such commencement.
During their
respective consulting periods, Messrs. Karp and OHagan will serve as
independent consultants and advisors to the Company on matters within their
respective areas of expertise and for which they had responsibility during their
employment with the Company, provided that neither will have to devote more than
twenty hours per month during the first four years of their consulting period
nor more than ten hours per month during the last two years of their consulting
period. During the respective term of the Consulting Agreements, each executive
agrees not to engage in Competitive Activity (as defined in the Consulting
Agreements).
As compensation,
Messrs. Karp and OHagan will each be entitled to receive an annual consulting
fee equal to (i) two-thirds of their Final Base Compensation for the first four
years of such periods and one-third of their Final Base Compensation for the
last two years of such periods. The Final Base Compensation for Messrs. Karp and
OHagan is the lesser of: (i) their respective highest annual cash compensation
(consisting of base salary and annual bonus) during the last three years of
their employment with us (or, in the case of Mr. Karp, for the three-year period
from 2005 to 2007) and (ii) $2,000,000. In addition, Mr. OHagan will be
entitled to participate in the same health, major medical, hospitalization and
dental insurance coverage as is generally available to the executive officers of
the Company from
- 36 -
time to time during his consulting and
non-compete period. We will also provide Mr. OHagan with the same office space
provided under the OHagan Employment Agreement (or such other comparable office
space anywhere in the United States designated by and acceptable to them) and
secretarial services and he will continue to have access to our private airplane
on the same basis available to him while employed with us, provided he
reimburses us for any personal use of such airplane. We will pay Mr. Karp an
amount equal to the cost of his obtaining health insurance coverage having
terms, substantially equivalent to the health coverage provided to other
executive officers during his consulting and non-compete period.
In the event
that during the consulting period their respective consulting relationships are
terminated by the Company without cause (as defined in the Consulting
Agreements) or Messrs. Karp or OHagan terminate their consulting relationship
for good reason (as defined in the Consulting Agreements), the Company is
required to make a lump sum severance payment equal to the balance of all
amounts that would have been payable under their respective Consulting Agreement
for the remainder of their respective consulting period. Such lump sum amount
will be discounted for present value. In addition, in such event, the Company
will continue to provide the benefits (such as health insurance) that would have
been provided under their respective Consulting Agreement for the remainder of
their respective consulting period. In the event that any Payment (as defined in
the Consulting Agreements) would be subject to the excise tax imposed by the
Golden Parachute regulations under the Code, Messrs. Karp and OHagan would be
entitled to a gross-up payment from the Company to cover such taxes.
McKee and Christopher
Agreements
Effective as of
October 17, 2002, the Company entered into an employment agreement with Kent A.
McKee, the Companys Executive Vice President and Chief Financial Officer (the
McKee Employment Agreement). The McKee Employment Agreement provides for Mr.
McKee to serve as Vice President and Chief Financial Officer of the Company (Mr.
McKee was subsequently appointed Executive Vice President on October 13, 2005)
for a rolling three-year term, which is automatically extended so that the
unexpired term on any date is always three years, unless either party gives
written notice of his or its intention not to extend the term (the McKee
Employment Period). Under the terms of the McKee Employment Agreement, Mr.
McKee is to receive (i) an annual base salary of $240,000 (to be adjusted upward
annually at a rate commensurate with increases granted to other key executives)
and
- 37 -
(ii) a discretionary cash incentive bonus
consistent with the executive bonus program which the Company establishes for
other key executives. In addition, Mr. McKee is to receive reimbursement for
reasonable business and travel expenses incurred in the performance of his
duties and will participate in all bonus, incentive, stock option, pension,
disability and health plans and programs and all fringe benefit plans maintained
by the Company in which senior executives participate.
Under the terms
of the McKee Employment Agreement, Mr. McKees employment may be terminated by
the Company without cause (as defined in the McKee Employment Agreement) or by
Mr. McKee for good reason (as defined in the McKee Employment Agreement) upon
appropriate written notice. In either such event, Mr. McKee will continue to
receive his then-current base salary as if his employment had continued for the
remainder of the McKee Employment Period and an annual bonus for the remainder
of the McKee Employment Period equal to the average bonus for the three calendar
years immediately preceding the written notice of termination. In addition, all
outstanding unvested Company stock options then held by Mr. McKee will
immediately vest and become exercisable and Mr. McKee will continue to
participate in the Companys health plans and programs at the Companys expense
until he reaches age 65. In the event that any Payment (as defined in the McKee
Employment Agreement) would be subject to the excise tax imposed by the Golden
Parachute regulations under the Code, Mr. McKee would be entitled to a gross-up
payment from the Company to cover such taxes.
Mr. McKee may
resign voluntarily without good reason upon appropriate written notice to the
Company. In such event, Mr. McKee will be entitled to receive any accrued but
unpaid base salary and, at the Companys discretion, a bonus for the calendar
year in which his resignation without good reason occurs. The Company may
terminate Mr. McKees employment for cause (as defined in the McKee Employment
Agreement) upon appropriate written notice. If Mr. McKees employment is
terminated for cause or if Mr. McKee voluntarily resigns for any reason other
than good reason, his right to receive his base salary, bonus and any other
compensation and benefits to which he would otherwise be entitled under the
McKee Employment Agreement shall be forfeited as of the date of termination. Mr.
McKee may terminate his employment for any reason within six months following a
Change in Control (as defined in the McKee Employment Agreement). In such event,
the Company will pay to Mr. McKee a lump sum amount equal to (i) his then
current base salary multiplied by the number of years (including partial
- 38 -
years) then remaining in the McKee Employment
Period and (ii) his average annual bonus for the three calendar years
immediately preceding the date of termination multiplied by the number of years
(including partial years) then remaining in the McKee Employment Period. In
addition, all remaining unvested options previously granted to Mr. McKee shall
become immediately exercisable.
Effective as of
November 9, 2006, the Company entered into an employment agreement with Gregory
L. Christopher (the Christopher Employment Agreement). The Christopher
Employment Agreement provides for Mr. Christopher to serve as the President of
the Standard Products Division of the Company for a rolling three-year term,
which is automatically extended so that the unexpired term on any date is always
three years, unless either party gives written notice of his or its intention
not to extend the term (the Christopher Employment Period). Under the terms of
the Christopher Employment Agreement, Mr. Christopher is to receive (i) an
annual base salary of $257,500 (to be adjusted upward annually at a rate
commensurate with increases granted to other key executives) and (ii) a
discretionary cash incentive bonus consistent with the executive bonus program
which the Company establishes for other key executives. In addition, Mr.
Christopher is to receive reimbursement for reasonable business and travel
expenses incurred in the performance of his duties and will participate in all
bonus, incentive, stock option, pension, disability and health plans and
programs and all fringe benefit plans maintained by the Company in which senior
executives participate.
Under the terms
of the Christopher Employment Agreement, Mr. Christophers employment may be
terminated by the Company without cause (as defined in the Christopher
Employment Agreement) or by Mr. Christopher for good reason (as defined in the
Christopher Employment Agreement) upon appropriate written notice. In either
such event, Mr. Christopher will continue to receive his then-current base
salary as if his employment had continued for the remainder of the Christopher
Employment Period and an annual bonus for the remainder of the Christopher
Employment Period equal to the average bonus for the three calendar years
immediately preceding the written notice of termination. In addition, all
outstanding unvested Company stock options then held by Mr. Christopher will
immediately vest and become exercisable and Mr. Christopher will continue to
participate in the Companys health plans and programs at the Companys expense
until he reaches age 65. In the event that any Payment (as defined in the
Christopher Employment
- 39 -
Agreement) would be subject to the excise tax
imposed by the Golden Parachute regulations under the Code, Mr. Christopher
would be entitled to a gross-up payment from the Company to cover such
taxes.
Mr. Christopher
may resign voluntarily without good reason upon appropriate written notice to
the Company. In such event, Mr. Christopher will be entitled to receive any
accrued but unpaid base salary and, at the Companys discretion, a bonus for the
calendar year in which his resignation without good reason occurs. The Company
may terminate Mr. Christophers employment for cause (as defined in the
Christopher Employment Agreement) upon appropriate written notice. If Mr.
Christophers employment is terminated for cause or if Mr. Christopher
voluntarily resigns for any reason other than good reason, his right to receive
his base salary, bonus and any other compensation and benefits to which he would
otherwise be entitled under the Christopher Employment Agreement shall be
forfeited as of the date of termination. Mr. Christopher may terminate his
employment for any reason within six months following a Change in Control (as
defined in the Christopher Employment Agreement). In such event, the Company
will pay to Mr. Christopher a lump sum amount equal to (i) his then current base
salary multiplied by the number of years (including partial years) then
remaining in the Christopher Employment Period and (ii) his average annual bonus
for the three calendar years immediately preceding the date of termination
multiplied by the number of years (including partial years) then remaining in
the Christopher Employment Period. In addition, all remaining unvested options
previously granted to Mr. Christopher shall become immediately
exercisable.
During the term
of employment and ending on the 18-month anniversary following any termination
of employment, Mr. Christopher will be subject to non-competition and
non-solicitation covenants. Generally, the non-competition covenant prevents Mr.
Christopher from engaging in activities that are competitive with the business
of the Company in any geographic area in which the Company does business and the
non-solicitation covenant prevents Mr. Christopher from soliciting or hiring any
person who was a full-time employee of the Company during the 24-month period
preceding the termination of his employment. The Christopher Employment
Agreement also contains standard confidentiality provisions.
On October 25,
2007, Mr. Christopher was promoted to the position of Chief Operating Officer of the Company.
- 40 -
The Company does
not have any other employment agreements with Named Executive Officers. Except
as set forth above, the Company has no compensatory plan or arrangement with
respect to any named executive officer which would result in severance or Change
in Control payments in excess of $100,000.
POTENTIAL PAYMENTS UNDER EMPLOYMENT AND
CONSULTING
AGREEMENTS AS OF THE END OF 2007
|
|
Termination Without Cause
|
|
Change in Control |
|
|
|
|
|
|
|
|
Intrinsic |
|
|
|
|
|
|
|
|
|
|
Intrinsic |
|
|
|
|
|
|
|
|
|
|
|
Value |
|
|
|
|
|
|
|
|
|
|
Value of |
|
|
|
|
|
Salary & |
|
|
|
|
of
Stock |
|
Consulting |
|
Salary & |
|
|
|
|
Stock |
|
Consulting |
|
|
Bonus |
|
Benefits |
|
Options |
|
Agreement |
|
Bonus |
|
Benefits |
|
Options |
|
Agreement |
Name (a) |
|
($)(b) |
|
($)(c)(1) |
|
($)(d)(2) |
|
($)(e)(3) |
|
($)(f)(4) |
|
($)(g)(1) |
|
($)(h)(2) |
|
($)(i)(5) |
Harvey L. Karp |
|
$ |
9,000,000 |
|
$ |
30,000 |
|
|
|
|
$ |
6,666,667 |
|
$ |
9,000,000 |
|
$ |
30,000 |
|
|
|
|
$ |
5,973,978 |
William D.
OHagan |
|
$ |
7,937,706
|
|
$ |
74,094
|
|
$ |
969,264
|
|
$ |
6,666,667
|
|
$ |
7,937,706
|
|
$ |
74,094
|
|
$ |
969,264
|
|
$ |
5,973,978
|
Gregory L. Christopher |
|
$ |
2,833,579 |
|
$ |
336,053 |
|
$ |
201,903 |
|
|
|
|
$ |
3,665,848 |
|
$ |
336,053 |
|
$ |
201,903 |
|
|
|
Kent A.
McKee |
|
$ |
2,303,666
|
|
$ |
318,366
|
|
$ |
259,701
|
|
|
|
|
$ |
2,930,762
|
|
$ |
318,366
|
|
$ |
259,701
|
|
|
|
James H. Rourke |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________
(1) |
|
Represents the cost of
health care benefits for the entire term, quantified using current
premiums charged to COBRA participants. |
|
(2) |
|
Represents the
intrinsic value of stock options where vesting is accelerated upon
termination of employment based upon the closing price of the Companys
Common Stock on December 28, 2007 of $29.57. |
|
(3) |
|
In the event of
termination of employment, payments under the consulting agreements are
$1,333,333 annually for the first four years subsequent to termination and
$666,667 annually for the fifth and sixth years subsequent to
termination. |
|
(4) |
|
Includes gross-up for
certain taxes, where applicable. |
|
(5) |
|
In the event of a
change of control, the consulting agreements provide for lump sum
payments, discounted using the federal funds
rate. |
- 41 -
2007 DIRECTOR COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
Change
in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
and |
|
|
|
|
|
|
|
|
|
Fees |
|
|
|
|
|
|
|
|
Nonqualified |
|
|
|
|
|
|
|
|
|
Earned |
|
|
|
|
|
|
Non-Equity |
|
Deferred |
|
|
|
|
|
|
|
|
|
or
Paid |
|
Stock |
|
Option |
|
Incentive
Plan |
|
Compensation |
|
All Other |
|
|
|
|
|
in
Cash |
|
Awards |
|
Awards |
|
Compensation |
|
Earnings |
|
Compensation |
|
Total |
Name (a) |
|
($)(b) |
|
($)(c) |
|
($)(d)(1) |
|
($)(e) |
|
(f) |
|
($)(g) |
|
($)(h) |
Alexander P. Federbush |
|
$ |
64,500 |
|
|
|
$ |
12,680 |
|
|
|
|
|
$ |
493 |
(2) |
|
$ |
77,673 |
Paul J.
Flaherty |
|
$ |
17,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
17,250
|
Gennaro J. Fulvio |
|
$ |
71,000 |
|
|
|
$ |
12,680 |
|
|
|
|
|
$ |
493 |
(2) |
|
$ |
84,173 |
Gary S.
Gladstein |
|
$ |
60,500 |
|
|
|
$ |
12,680 |
|
|
|
|
|
|
|
|
|
$ |
73,180
|
Scott J. Goldman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry
Hermanson |
|
$ |
64,250 |
|
|
|
$ |
12,680 |
|
|
|
|
|
|
|
|
|
$ |
76,930
|
____________________
(1) |
|
On May 3, 2007 each director was
granted options to purchase 2,000 shares of the Companys Common Stock.
The grant date fair value of each option is $6.34, computed under the
provisions of SFAS No. 123(R). |
|
(2) |
|
Includes reimbursement for income
tax gross-up of $493. |
From January 1,
2007 through December 29, 2007, directors of the Company who were not employed
by the Company received an annual fee for serving on the Companys Board of
Directors of $45,000, plus a fee of $1,000 per Board and $750 per Audit,
Compensation or Nominating and Corporate Governance Committee meeting attended
by such director, plus reimbursement for such directors expenses incurred in
connection with any such Board or Committee meeting, and each Committee fee was
paid whether or not such committee meeting was held in conjunction with a Board
of Directors meeting. In addition, the Chairman of the Audit Committee received
an annual fee of $5,000 while the Chairman of each of the Compensation and
Nominating and Corporate Governance Committees received an annual fee of
$3,000.
Under the
Companys 1994 Non-Employee Director Stock Option Plan, each member of the
Companys Board of Directors who is neither an employee nor an officer of the
Company is automatically granted each year on the date of the Companys Annual
Meeting of Stockholders, without further action by the Board, an option to
purchase 2,000 shares of Common Stock at the fair market value of the
- 42 -
Common Stock on the date the option is
granted. As of March 6, 2008, options to purchase 42,672 shares of Common Stock
were outstanding under the Companys 1994 Non-Employee Director Stock Option
Plan.
REPORT OF THE AUDIT COMMITTEE
OF THE
BOARD OF DIRECTORS(1)
The Audit
Committee of the Board of Directors oversees the Companys financial reporting
process on behalf of the Board of Directors. Management has the primary
responsibility for the financial statements and the reporting process including
the systems of internal controls. In fulfilling its oversight responsibilities,
the Audit Committee reviewed the audited financial statements in the Annual
Report on Form 10-K with management, including a discussion of the quality, not
just the acceptability, of the accounting principles, the reasonableness of
significant judgments and the clarity of disclosures in the financial
statements.
The Audit
Committee reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles, their judgments as to the
quality, not just the acceptability, of the Companys accounting principles and
such other matters as are required to be discussed with the Audit Committee by
Statement on Auditing Standards No. 61, as amended by Statement on Auditing
Standards No. 90 (Communication With Audit Committee). In addition, the Audit
Committee discussed with the independent auditors the auditors independence
from management and the Company, including the matters in the written
disclosures required by the Independence Standards Board Standard No. 1, and
considered the compatibility of non-audit services provided by the independent
auditors with the auditors independence.
The Audit
Committee discussed with the Companys internal and independent auditors the
overall scope and plans for their respective audits. The Audit Committee meets
with the internal and independent auditors, with and without management present,
to discuss the results of their examinations, their evaluations of the Companys
internal controls, and the overall quality of the Companys financial
reporting.
In reliance on
the reviews and discussions referred to above, the Audit Committee recommended
to the Board of Directors (and the Board of Directors has approved) that the
audited financial statements be included in the Companys Annual Report on
- 43 -
Form 10-K for the year ended December 29, 2007
for filing with the SEC. The Audit Committee and the Board has re-appointed,
subject to shareholder approval, Ernst & Young LLP, independent auditors, to
audit the consolidated financial statements of the Company for the fiscal year
ending December 27, 2008.
The Audit
Committee is governed by a formal charter which can be accessed from the
Companys website at www.muellerindustries.com or may be requested in print by
any shareholder. The members of the Audit Committee are considered independent
because they satisfy the independence requirements for Board members prescribed
by the NYSE listing standards and Rule 10A-3 of the Exchange Act.
Gennaro J. Fulvio, Chairman
Gary S.
Gladstein
Terry Hermanson
____________________
(1) |
|
This Section is not soliciting
material, is not deemed filed with the SEC and is not to be
incorporated by reference in any filing of the Company under the
Securities Act or the Exchange Act, whether made before or after the date
hereof and irrespective of any general incorporation language in any such
filing. |
REPORT OF THE COMPENSATION COMMITTEE
OF
THE BOARD OF DIRECTORS
ON EXECUTIVE
COMPENSATION
COMPENSATION COMMITTEE REPORT
The Compensation
Committee has reviewed and discussed with the Companys management the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K.
Based on such review and discussions, the Compensation Committee recommended to
the Board of Directors that the Compensation Discussion and Analysis be included
in this Proxy Statement.
Terry Hermanson,
Chairman |
Alexander P.
Federbush |
Gennaro J.
Fulvio |
- 44 -
EQUITY COMPENSATION PLAN
INFORMATION
The following
table discloses information regarding the securities to be issued and the
securities remaining available for issuance under the Companys stock-based
incentive plans as of December 29, 2007 (shares in thousands):
|
|
(a) |
|
(b) |
|
(c) |
|
|
|
|
|
|
Number
of |
|
|
|
|
|
|
securities |
|
|
|
|
|
|
remaining |
|
|
Number
of |
|
Weighted |
|
available
for |
|
|
securities
to |
|
average |
|
future
issuance |
|
|
be issued
upon |
|
exercise
price |
|
under
equity |
|
|
exercise
of |
|
of
outstanding |
|
compensation |
|
|
outstanding |
|
options, |
|
plans
(excluding |
|
|
options,
warrants |
|
warrants
and |
|
securities
reflected |
Plan Category |
|
and rights |
|
rights |
|
in column (a)) |
Equity compensation plans approved by |
|
|
|
|
|
|
security holders |
|
1,692 |
|
$28.42 |
|
470 |
Equity
compensation plans not approved |
|
|
|
|
|
|
by security holders |
|
311 |
|
$18.29 |
|
|
Total |
|
2,003 |
|
$26.85 |
|
470
|
Arrangements Not Approved by Security
Holders
On February 13,
2002, Mr. OHagan was granted an option to acquire 155,610 shares of Common
Stock at an exercise price of $20.40 per share and on February 13, 2003, Mr.
OHagan was granted an option to acquire 155,610 shares of Common Stock at an
exercise price of $16.13 per share (collectively, the OHagan Treasury
Options). Each of the OHagan Treasury Options has a term of ten years, subject
to earlier expiration upon termination of employment, and vests ratably over a
five-year period from the date of the grant, except that if there is a Change in
Control (as defined in the OHagan Employment Agreement), all of the OHagan
Treasury Options will become immediately exercisable on the later to occur of
(i) the day Mr. OHagan notifies the Company he is terminating his employment
with the Company as a result of said change, and (ii) ten days prior to the date
Mr. OHagans employment with the Company is terminated by the Company. In
addition, all outstanding unvested OHagan Treasury Options will immediately
vest and become exercisable if Mr. OHagans employment is terminated by the
Company without cause (as defined in the OHagan Employment Agreement) or by
- 45 -
Mr. OHagan for good reason (as defined in the
OHagan Employment Agreement). The OHagan Treasury Options may only be
exercised for shares of Common Stock held in treasury by the Company.
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst &
Young LLP (E&Y) has been reappointed by the Audit Committee to audit and
certify the Companys financial statements for the fiscal year ending December
27, 2008, subject to ratification by the Companys stockholders. Ratification of
the appointment of the Companys independent registered public accounting firm
requires the affirmative vote of a majority of the votes cast at the Annual
Meeting by the stockholders present in person or by proxy and entitled to vote
thereon. If the appointment of E&Y is not ratified by the stockholders at
the Annual Meeting, the Audit Committee will reconsider its action and will
appoint auditors for the 2008 fiscal year without further stockholder action.
Further, even if the appointment is ratified by stockholder action, the Audit
Committee may at any time in the future in its discretion reconsider the
appointment without submitting the matter to a vote of stockholders. It is
expected that representatives of E&Y will be in attendance at the Annual
Meeting and will be available to answer questions and to make a statement if
they desire to do so.
The following
table sets forth fees for professional services rendered by E&Y for the
audit of the Companys annual financial statements for each of the two fiscal
years ended December 29, 2007 and December 30, 2006 and fees for other services
rendered by E&Y during those periods:
|
|
2007 |
|
2006 |
Audit Fees |
|
$ |
2,132,922 |
|
$ |
1,736,075 |
Audit-Related
Fees |
|
|
269,944
|
|
|
143,757
|
Tax Fees |
|
|
341,447 |
|
|
532,545 |
All Other
Fees |
|
|
3,500 |
|
|
3,500 |
|
|
$ |
2,747,813 |
|
$ |
2,415,877
|
Audit Fees
consist of fees for professional services rendered for the audit of the
Companys consolidated annual financial statements and review of the interim
consolidated financial statements included in quarterly reports and services
that are normally provided by E&Y in connection with statutory filings.
Audit Fees also
- 46 -
includes fees for professional services
rendered for the audits of internal control over financial reporting in 2007 and
2006, and audit of managements assessment of the effectiveness of internal
control over financial reporting in 2006.
Audit-Related
Fees include fees billed for consultation on certain accounting matters and
audits of employee benefit plans.
Tax Fees include
fees billed for tax compliance, tax advice and tax planning matters.
The Audit
Committees policy is to pre-approve all audit and non-audit services provided
by the independent auditors. These services may include audit services,
audit-related services, tax services and other services. Pre-approval is
generally provided for up to one year and any pre-approval is detailed as to the
particular service or category of services. The Audit Committee has delegated
pre-approval authority to its Chairman when expedition of services is necessary.
The independent auditors and management are required periodically to report to
the full Audit Committee regarding the extent of services provided by the
independent auditors in accordance with this pre-approval, and the fees for the
services performed to date. All of the services provided by the independent
auditors during fiscal 2007 and 2006, respectively, under the categories Audit
Fees, Audit-Related Fees, Tax Fees and All Other Fees described above were
pre-approved.
THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE THEIR SHARES
FOR THE PROPOSAL
TO RATIFY THE
APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS OF THE
COMPANY.
STOCKHOLDER PROPOSAL REGARDING BOARD
INCLUSIVENESS
The Domestic and
Foreign Missionary Society of the Episcopal Church, 815 Second Avenue, New York,
New York 10017, which beneficially holds 12,330 shares of Common Stock, has
given notice of its intention to present the following stockholder proposal at
the Annual Meeting. In accordance with the rules of the Securities and Exchange
Commission, the text of their resolution and supporting statement is set forth
verbatim below. Approval of this stockholder proposal requires the affirmative
vote of a majority of the votes cast at the Annual Meeting by the stockholders
present in person or by proxy and entitled to vote thereon.
- 47 -
Board inclusiveness
WHEREAS:
In response to
the recent corporate scandals, the U.S. Congress (Sarbanes-Oxley Act), the stock
exchanges and the SEC each have taken actions to enhance the independence,
accountability and responsiveness of corporate boards, including requiring
greater board and committee independence. We believe that in order to achieve
such independence it is necessary for corporations to abandon the cozy
clubbiness that has all too often characterized boards in the past.
As companies
seek new board members to meet the new independence standards, there is a unique
opportunity to enhance diversity on the board. A number of corporations have
included their commitment to board diversity (by sex and race) in the Charter
for their nominating committees (a charter now being required for NYSE and
NASDAQ listed companies). We believe that the judgments and perspectives that
women and members of minority groups bring to board deliberations improve the
quality of board decision making, are likely to reduce the clubbiness of the
board, and will enhance business performance by enabling a company to respond
more effectively to the needs of customers worldwide.
We note that a
minority of companies in the S&P 500 have all white male boards and that
many have several women and/or minorities on their board. We believe that many
publicly held corporations have benefited from the perspectives brought by their
many well-qualified board members who are women or minority group members. Thus,
Sun Oils former CEO, Robert Campbell, stated (Wall Street Journal, 8/12/96):
Often what a woman or minority person can bring to the board is some
perspective a company has not had before-adding some modern-day reality to the
deliberation process. Those perspectives are of great value, and often missing
from an excluded gathering. They can also be inspirational to the companys
diverse workforce.
Increasingly,
institutional investors have supported the call for greater board diversity. For
example, the 2003 corporate governance guidelines of Americas largest
institutional investor (TIAA-CREF) call for diversity of directors by
experience, sex, age, and race.
WHEREAS
Mueller
Industries currently has a distinguished board of seven persons (eight as of
January 1, 2008), all of whom are white males;
- 48 -
We believe that
our Board should take every reasonable step to ensure that women and persons
from minority racial groups are in the pool from which Board nominees are
chosen; therefore be it
RESOLVED that
the shareholders request the Board:
|
1. |
|
In connection with its search
for suitable Board candidates, to ensure that women and persons from
minority racial groups are among those it considers for nomination to the
Board. |
|
|
|
2. |
|
To publicly commit itself to a
policy of board inclusiveness, including steps to be taken and a timeline
for implementing that policy. |
|
|
|
3. |
|
To report to shareholders, at
reasonable expense, by September 2008: |
|
|
|
|
|
a. |
|
On its efforts to encourage diversified
representation on the board |
|
|
|
|
|
b. |
|
Whether, in the nominating committees
charter or its procedures, diversity is included as a criterion in
selecting the total membership of the Board. |
SUPPORTING STATEMENT
We urge the
Board to enlarge its search for qualified members by casting a wider net for
qualified candidates.
THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE THEIR SHARES
AGAINST THE
STOCKHOLDER PROPOSAL
REGARDING BOARD INCLUSIVENESS.
PROXIES RECEIVED BY THE COMPANY WILL BE VOTED
AGAINST
THIS PROPOSAL UNLESS THE STOCKHOLDER
SPECIFIES
OTHERWISE IN THE PROXY.
STOCKHOLDER NOMINATIONS FOR BOARD
MEMBERSHIP
AND OTHER PROPOSALS FOR 2009 ANNUAL MEETING
It is
anticipated that the next Annual Meeting after the one scheduled for May 1, 2008
will be held on or about May 7, 2009. The Companys Bylaws require that, for
nominations of directors or other business to be properly brought before an
Annual Meeting, written notice of such nomination or proposal for other business
must be furnished to the Company. Such notice must contain certain information
concerning the nominating or proposing stockholder and information concerning
- 49 -
the nominee and must be furnished by the
stockholder (who must be entitled to vote at the meeting) to the Secretary of
the Company, in the case of the Annual Meeting to be held in 2009, no earlier
than January 31, 2009 and no later than March 2, 2009. A copy of the applicable
provisions of the Bylaws may be obtained by any stockholder, without charge,
upon written request to the Secretary of the Company at the address set forth
below.
In addition to
the foregoing, and in accordance with the rules of the SEC, in order for a
stockholder proposal, relating to a proper subject, to be considered for
inclusion in the Companys proxy statement and form of proxy relating to the
Annual Meeting to be held in 2009, such proposal must be received by the
Secretary of the Company by November 26, 2008 in the form required under and
subject to the other requirements of the applicable rules of the SEC. If the
date of the Annual Meeting to be held in 2009 is changed to a date more than 30
days earlier or later than May 1, 2009, the Company will inform the stockholders
in a timely fashion of such change and the date by which proposals of
stockholders must be received for inclusion in the proxy materials. Any such
proposal should be submitted by certified mail, return receipt requested, or
other means, including electronic means, that allow the stockholder to prove the
date of delivery.
OTHER MATTERS TO COME BEFORE THE ANNUAL
MEETING
If any matter
not described herein should properly come before the Annual Meeting, the persons
named in the proxy will vote the shares represented by them as they deem
appropriate. At the date of this Proxy Statement, the Company knew of no other
matters which might be presented for stockholder action at the Annual
Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP
COMPLIANCE REPORTING
Based solely
upon its review of Forms 3 and 4 received by it and written representations from
certain reporting persons that no Forms 5 were required for those persons, the
Company believes that (except as set forth below) during 2007 all filing
requirements applicable to its officers, directors and ten percent stockholders
were complied with.
In February
2007, Mr. Fulvio exercised stock options (without disposing of the underlying
shares) directly held by him, but we inadvertently failed to file a Section
16(a) report. The stock option exercise was thereafter reported on March 24,
2008.
- 50 -
OTHER INFORMATION
Consolidated
financial statements for the Company are included in the Annual Report to
Stockholders for the year ended December 29, 2007 that accompanies this Proxy
Statement. These financial statements are also on file with the SEC, 100 F
Street, N.E., Washington, D.C. 20549 and with the NYSE. The Companys SEC
filings are also available at the Companys website at www.muellerindustries.com
or the SECs website at www.sec.gov.
A COPY OF THE
COMPANYS ANNUAL REPORT ON FORM 10-K AS FILED FOR THE YEAR ENDED DECEMBER 29,
2007 (EXCLUDING EXHIBITS) OR, AS NOTED HEREIN, ANY OF THE COMPANYS BOARD
COMMITTEE CHARTERS, CORPORATE GOVERNANCE GUIDELINES, OR CODE OF ETHICS WILL BE
FURNISHED, WITHOUT CHARGE, BY WRITING TO GARY C. WILKERSON, SECRETARY, MUELLER
INDUSTRIES, INC., AT THE COMPANYS PRINCIPAL PLACE OF BUSINESS (8285 TOURNAMENT
DRIVE, SUITE 150, MEMPHIS, TENNESSEE 38125). UPON RECEIPT BY WRITING TO THE
FOREGOING ADDRESS, THE COMPANY WILL ALSO FURNISH ANY OTHER EXHIBIT OF THE ANNUAL
REPORT ON FORM 10-K UPON ADVANCE PAYMENT OF THE REASONABLE OUT-OF-POCKET
EXPENSES OF THE COMPANY RELATED TO THE COMPANYS FURNISHING OF SUCH
EXHIBIT.
NOTICE OF
INTERNET AVAILABILITY OF PROXY MATERIALS
Important Notice Regarding the Availability
of Proxy Materials for the 2008 Annual General Meeting to be held on May 1,
2008.
The Proxy Statement and Annual Report are
available at
HTTP://WWW.PROXYVOTE.COM
You will need
the Control Number included on your proxy card. For the date, time, and location
of the Annual General Meeting, please refer to Solicitation of Proxies. For
information on how to attend and vote in person at the Annual General Meeting,
an identification of the matters to be voted upon at the Annual General Meeting
and the Boards recommendations regarding those matters, please refer to
Solicitation of Proxies, Election of Directors, Appointment of Independent
Registered Accounting Firm, and Stockholder Proposal Regarding Board
Inclusiveness.
- 51 -
HOUSEHOLDING OF ANNUAL MEETING
MATERIALS
The SEC has
enacted a rule that allows multiple investors residing at the same address the
convenience of receiving a single copy of annual reports, proxy statements,
prospectuses and other disclosure documents if they consent to do so. This is
known as Householding. Please note, if you do not respond, Householding will
start 60 days after the mailing of this notice. We will allow Householding only
upon certain conditions. Some of those conditions are:
- You agree to or do not object to the Householding of your
materials,
- You have the same last name and exact address as another
investor(s).
If these
conditions are met, and SEC regulations allow, your household will receive a
single copy of annual reports, proxy statements, prospectuses and other
disclosure documents.
The
HOUSEHOLDING ELECTION, which appears on the enclosed proxy card, provides a
means for you to notify us whether or not you consent to participate in
Householding. By marking Yes in the block provided, you will consent to
participate in Householding. By marking No, you will withhold your consent to
participate. If you do nothing, you will be deemed to have given your consent to
participate. Your consent to Householding will be perpetual unless you withhold
or revoke it. You may revoke your consent at any time by contacting Broadridge,
either by calling toll-free at (800) 542-1061, or by writing to Broadridge,
Householding Department, 51 Mercedes Way, Edgewood, New York, 11717. We will
remove you from the Householding program within 30 days of receipt of your
response, following which you will receive an individual copy of our disclosure
document.
By order of the Board
of Directors, |
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/s/ Gary C. Wilkerson |
Gary C.
Wilkerson |
Corporate
Secretary |
- 52 -
![](proxyx1x1.jpg) |
AMERICAN STOCK TRANSER & TRUST
COMPANY 6201 15TH STREET BROOKLYN, NY
11219 |
VOTE BY INTERNET - www.proxyvote.com |
Use the Internet to transmit your voting instructions and
for electronic delivery of information up until 11:59 P.M. Eastern Time
the day before the cut-off date or meeting date. Have your proxy card in
hand when you access the web site and follow the instructions to obtain
your records and to create an electronic voting instruction form. |
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ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER
COMMUNICATIONS |
If you would like to reduce the costs incurred by Mueller
Industries, Inc. in mailing proxy materials, you can consent to receiving
all future proxy statements, proxy cards and annual reports electronically
via e-mail or the Internet. To sign up for electronic delivery, please
follow the instructions above to vote using the Internet and, when
prompted, indicate that you agree to receive or access shareholder
communications electronically in future years. |
|
VOTE BY PHONE - 1-800-690-6903 |
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 P.M. Eastern Time the day before the cut-off
date or meeting date. Have your proxy card in hand when you call and then
follow the instructions. |
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VOTE BY MAIL |
Mark, sign and date your proxy card and return it in the
postage-paid envelope we have provided or return it to Mueller Industries,
Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
MUIND1 |
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KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION
ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED. |
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MUELLER INDUSTRIES,
INC. |
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The Board of Directors recommends
a vote FOR all the Nominees listed and FOR Proposal
2. |
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1. |
Election of
Directors |
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Nominees: |
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01) |
Alexander P. Federbush |
05) |
Scott J. Goldman |
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02) |
Paul J. Flaherty |
06) |
Terry Hermanson |
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03) |
Gennaro J. Fulvio |
07) |
Harvey L. Karp |
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04) |
Gary S. Gladstein |
08) |
William D. O'Hagan |
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For All |
Withhold All |
For
All Except |
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To withhold authority to vote for any
individual nominee(s), mark For All Except and write the number(s) of
the nominee(s) on the line below. |
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o |
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For |
Against |
Abstain |
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2. |
Approve the appointment of Ernst & Young
LLP as independent auditors of the Company. |
o |
o |
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The Board of Directors
recommends a vote AGAINST Proposal 3. |
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o |
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3. |
Stockholder proposal regarding Board
inclusiveness. |
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*Note* Such other business as may
properly come before the meeting or any adjournment thereof |
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE SIGNED STOCKHOLDER. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" ALL NOMINEES IN ITEM 1,
"FOR" ITEM 2 AND "AGAINST" ITEM 3. |
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Please sign exactly as your name appears to the right. When
shares are held jointly, each stockholder named should sign. When signing
as attorney, executor, administrator, trustee or guardian, you should so
indicate when signing. If a corporation, please sign in full corporate
name by duly authorized officer. If a partnership, please sign in
partnership name by duly authorized person. |
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Signature [PLEASE SIGN WITHIN BOX] |
Date |
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Signature (Joint Owners) |
Date |
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Important Notice Regarding
Internet Availability of Proxy Materials for the Annual
Meeting:
The Notice and Proxy Statement and
Annual Report are available at www.proxyvote.com.
MUELLER INDUSTRIES,
INC.
PROXY FOR ANNUAL MEETING OF
STOCKHOLDERS - MAY 1, 2008
This Proxy is Solicited on Behalf of the Board of
Directors
The
undersigned hereby appoints Gary C. Wilkerson and Kent A. McKee, and each of
them, Proxies, with full power of substitution in each, to represent and to
vote, as designated, all shares of Common Stock of Mueller Industries, Inc. that
the undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held on May 1, 2008, and at all adjournments thereof, upon and in respect of the
matters set forth on the reverse side hereof, and in their discretion, upon any
other matter that may properly come before said meeting.
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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-----END PRIVACY-ENHANCED MESSAGE-----