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To elect eight directors, each to serve until the next annual meeting of stockholders (tentatively scheduled for May 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 To To conduct an advisory vote on the frequency of future stockholder advisory votes on the compensation of the Company’s named executive officers; ___________________________________ directors. served. 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 Company’s independent accountants, (ii) reviews and approves any major change in the Company’s 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 Company’s internal audit procedures and personnel, (vi) reviews the Company’s policies and 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 2010. of such a firm, a director who has an immediate family member who is a current employee of such a firm and who
8285 Tournament Drive, Suite 150
Memphis, Tennessee 38125
Telephone (901) 753-3200________________________
_________________________
Stockholders to be Held
May 1, 20085, 2011_________________________________________________
Mueller Industries, Inc.1, 2008,5, 2011, at 10:00 A.M. local time, for the following purposes: 1. 7, 2009)3, 2012) or until his successor is elected and qualified; 2. 27, 2008; 3. consider and act upon a stockholder proposal regarding board inclusiveness, if properly presented atconduct an advisory vote on the Annual Meeting; and 4. 5. To approve the adoption of the Company’s 2011 Annual Bonus Plan; and 6. To consider and transact such other business as may properly be brought before the Annual Meeting and any adjournment(s) thereof. 6, 2008,8, 2011, 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 Company’s 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./s/ Gary C. Wilkerson Gary C. Wilkerson Corporate Secretary 26, 200823, 2011SOLICITATION OF PROXIES 1 VOTING SECURITIES 2 PRINCIPAL STOCKHOLDERS 3 ELECTION OF DIRECTORS 5 4OWNERSHIP 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 13 Director Independence 12 13 Independent Directors 14 Audit Committee 14 15 Compensation Committee 15 16 Nominating and Corporate Governance Committee 15 16 Compensation Committee Interlocks and Insider Participation 17 18 Corporate Governance Guidelines 18 19 Code of Business Conduct and Ethics 18 19 Policies and Procedures for Approval of Related Party Transactions 18 19 Directors’ Attendance at Annual Meetings of Stockholders 19 20 Communication With the Board of Directors 19 20COMPENSATION DISCUSSION AND ANALYSIS 20 21SUMMARY COMPENSATION TABLE FOR 2007 201028 3220072010 GRANTS OF PLAN BASED AWARDS TABLE30 33OUTSTANDING EQUITY AWARDS AT FISCAL 20072010 YEAR-END31 3420072010 OPTION EXERCISES AND STOCK VESTED32 36POTENTIAL PAYMENTS UNDER EMPLOYMENT AND CONSULTING AGREEMENTS AS OF THE END OF 2007 201041 4020072010 DIRECTOR COMPENSATION42 41REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS 43 42REPORT 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 45APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS 47 STOCKHOLDER VOTE ON THE FREQUENCY OF THE STOCKHOLDER VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION 48 PROPOSAL REGARDING BOARD INCLUSIVENESS TO ADOPT THE MUELLER INDUSTRIES, INC. 2011 ANNUAL47 BONUS PLAN 49 STOCKHOLDER NOMINATIONS FOR BOARD MEMBERSHIP AND OTHER PROPOSALS FOR 20092012 ANNUAL MEETING49 53OTHER MATTERS TO COME BEFORE THE ANNUAL MEETING 50 54SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING 50 54OTHER INFORMATION 51 54NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS 51 55HOUSEHOLDING OF ANNUAL MEETING MATERIALS 52 56
8285 Tournament Drive, Suite 150
Memphis, Tennessee 38125
Telephone (901) 753-3200__________________________
___________________________________
May 1, 20085, 2011__________________________1, 2008,5, 2011, at 10:00 A.M. local time, or at any adjournment(s) thereof.29, 2007,25, 2010, is first being mailed to stockholders on or about March 26, 2008.23, 2011. 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. who arebut as unvotedand 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 Company’s 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 election of directors, the advisory vote on the compensation of the Company’s named executive officers, the advisory vote on the frequency of future stockholder proposal,advisory votes on the compensation of the Company’s named executive officers, and the adoption of the 2011 Annual Bonus Plan, absent instructions from the beneficial owners of such shares.37,096,67437,855,071 shares of Common Stock outstanding at the close of business on March 6, 2008,8, 2011, 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, 2008,8, 2011 will be entitled to notice of, and to vote at, the Annual Meeting. The Company’s Restated Certificate of Incorporation and Amended and Restated BylawsBy-laws (“Bylaws”) do not provide for cumulative voting for the election of Directors.6, 2008,8, 2011, 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 Shares Beneficially Name and Address of Beneficial Owner Owned Percent of Class Franklin Resources, Inc. 2,934,500(1) 7.80%(2) One Franklin Parkway San Mateo, CA 94403-1906 BlackRock, Inc. 3,004,067(3) 7.94%(2) 40 East 52nd Street New York, NY 10022 Wells Fargo & Company 2,204,078(4) 5.83%(2) 420 Montgomery Street San Francisco, CA 94104 (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, 2008.9, 2011. In the Schedule 13G/A, FRI reported that, with respect to the Company’s 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 2,434,3002,848,900 and 2,477,100,2,924,500, 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.amended (the “Exchange Act”). (2) The percent of class shown was based on the shares of Common Stock reported on the Schedule 13G/A and the total number of shares outstanding as of December 25, 2010. The difference in the total number of shares outstanding on December 25, 2010 and March 8, 2011 does not materially affect the percentage of ownership of the class. (6)(3)This information is based on a Schedule 13G13G/A filed by Wachovia Corporation on February 1, 2008BlackRock, Inc. with the Securities and Exchange Commission. Wachovia CorporationCommission on February 7, 2011. Blackrock Inc. filed this Schedule 13G as it is a parent holding company or control person13G/A on its own behalf and on behalf of its indirect subsidiary, Evergreensubsidiaries, BlackRock Japan Co. Ltd; BlackRock Institutional Trust Company, N.A; BlackRock Fund Advisors; BlackRock Asset Management Australia Limited; BlackRock Advisors, LLC; BlackRock Investment Management, LLC; BlackRock Asset Management Ireland Limited; and BlackRock International Limited.(4) This information is based on a Schedule 13G/A filed by Wells Fargo & Company with the Securities and Exchange Commission on January 20, 2011. Wells Fargo & Company filed this Schedule 13G/A on its own behalf and on behalf of its subsidiaries, Wells Capital Management Incorporated; Wells Fargo Funds Management, LLC; Wells Fargo Bank, N.A.; and Wells Fargo Advisors, LLC. - 4 -7, 2009)3, 2012), 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. O’HaganGregory L. Christopher (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.
RECOMMENDS THAT STOCKHOLDERS VOTE THEIR
SHARES FORSHARESFOR EACH OF THE NOMINEES.
OFFICERS AND INFORMATION ABOUT DIRECTOR NOMINEES6, 2008,8, 2011, information about the 1,586,4001,324,067 shares of Common Stock (calculated based on 37,096,67437,855,071 shares outstanding) beneficially owned by each of the Company’s current directors, nominees for director, executive officers and Named Executive Officers (as defined under “Compensation Discussion and Analysis”).named executive officers. The “named executive officers” are those individuals set forth in the “Summary Compensation Table for 2010” included herein. Unless otherwise indicated, all directors, nominees for director, executive officers and Named Executive Officersnamed 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. O’Hagan 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 -
companies, as well as, with respect to directors, the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board of Directors to determine that the person should serve as a director of the Company in 2011. Common Stock BeneficiallyOwned as ofPercent ofPrincipal Occupation, Employment, etc. March 6, 2008ClassJeffrey A. Martin 11,980 *Vice President-Operations, Standard Products Division of the Company since November 20, 2006; age 41 (12) Beneficially Owned as of Percent of Principal Occupation, Employment, etc. March 8, 2011 Class Alexander P. Federbush 13,000 * Vice Chairman of the Board of Directors since January 1, 2011; Director of the Company since February 17, 2005; age 68 (1) Paul J. Flaherty 8,000 * Director of the Company since August 2, 2007; age 71 (2) Gennaro J. Fulvio 21,000 * Director of the Company since May 9, 2002; age 54 (3) Gary S. Gladstein 36,736 * Director of the Company since July 1, 2000; Senior Consultant for Soros Fund Management, LLC and IRSA Inversiones Y Representaciones S.A.; age 66 (4) Scott J. Goldman 6,000 * Director of the Company since January 1, 2008; age 58 (5) Terry Hermanson 11,000 * Director of the Company since February 13, 2003; age 68 (6) Common Stock Beneficially Owned as of Percent of Principal Occupation, Employment, etc. March 8, 2011 Class Harvey L. Karp 241,886 * Chairman of the Board of Directors since October 8, 1991; Director since August 1991; age 83 (7) Gregory L. Christopher 311,635 * Chief Executive Officer of the Company since October 30, 2008; Director of the Company since October 28, 2010; age 49 (8) Richard W. Corman 52,673 * Vice President-Controller of the Company since October 28, 2004; age 54 (9) John B. Hansen 43,158 * President, Plumbing Business of the Company since January 1, 2010; age 64 (10) Roy C. Harris 57,660 * Vice President and Chief Information Officer of the Company since December 19, 2006; age 68 (11) Jeffrey A. Martin 23,261 * Vice President - Corporate Development since January 11, 2011; age 44 (12) Kent A. McKee 205,425 309,113 * Executive Vice President of the Company since October 13, 2005; Chief Financial Officer of the Company since April 1, 1999; age 50 (13) age 47 (13) James H. Rourke 104,025 123,945 * President-Industrial Products DivisionPresident, Industrial Business of the Company since December 27, 2003; General Manager-Rod since January 29, 2002; age 62 (14) 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 65,000 * Vice President, General Counsel and Secretary of the Company since since May 2, 2005; age 61 (16) 64 (15) Executive Officers and Directors as a Group 1,586,400 1,324,067 4.28%3.43%** __________________* Less than 1 %1% ** Includes 1,025,909760,373 shares of Common Stock which are subject to currently exercisable stock options and 114,700 shares of non-vested restricted stock held by executive 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 GroupRealty Corp. since 1970, including as Chairman since 1976. Mr. Federbush was nominated to serve as a director of the Company because he has extensive experience guiding complex organizations, both in commercial real estate and manufacturing and distribution. The number of shares of Common Stock beneficially owned by Mr. Federbush includes (i) 5002,000 shares of Common Stock owned by Mr. Federbush’s spouse, (ii) 1,000 shares of Common Stock owned by a corporation in which Mr. Federbush is an officer and (iii) 6,00010,000 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. Prior to his tenure with Aon, Mr. Flaherty was associated with Burson-Marsteller-WPP, a global public affairs and public relations firm. Mr. Flaherty was nominated to serve as a director of the Company because of his years of experience counseling boards and senior management. In addition, his experience in insurance and risk management enable him to assist the Board of Directors in performing its risk oversight function. The number of shares of Common Stock beneficially owned by Mr. Flaherty includes 6,000 shares of Common Stock which are subject to currently exercisable stock options. - 7 -(3) Mr. Fulvio has been a member of Fulvio & Associates, LLP, Certified Public Accountants, (formerly Speer &since 1987. Mr. Fulvio LLP), since 1987.was nominated to serve as a director of the Company because of his strength in the area of accounting, his knowledge of and experience with tax matters, and his financial acumen. The number of shares of Common Stock beneficially owned by Mr. Fulvio includes 12,224(i) 10,000 shares of Common Stock which are subject to currently exercisable stock options, and 4,112(ii) 11,000 shares of Common Stock which are owned by Mr. Fulvio’s 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. Mr. Gladstein also served as a director of Jos. A. Bank Clothiers until June, 2010. Mr. Gladstein was nominated to serve as a director of the Company because of his financial and accounting expertise and his years of experience providing strategic advisory services to complex organizations. In addition, having been a member of the compensation, audit and other committees of public company boards, Mr. Gladstein is familiar with a full range of corporate and board functions. The number of shares of Common Stock beneficially owned by Mr. Gladstein includes 12,22410,000 shares of Common Stock which are subject to currently exercisable stock options.(5) Mr. Goldman has served as the co-founder and Chief Executive Officer of TextPower, Inc., which creates business solutions by using a proprietary library of vertical market text messaging software, since February 17, 2009. From 1987 to February 17, 2009, Mr. Goldman served as founder and principal of the Goldman Group, a company that works with Fortune 500 companies in developing and operating wireless systems. Mr. Goldman was nominated to serve as a director of the Company because of his extensive experience with global companies and strategic planning, as well as his expertise in the technology field. The number of shares of Common Stock beneficially owned by Mr. Goldman includes 6,000 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. Mr. Hermanson was nominated to serve as a director of the Company because he has extensive experience in management, strategic planning, as well as a thorough knowledge of wholesale merchandising and international business issues. The number of shares of Common Stock beneficially owned by Mr. Hermanson includes 12,22410,000 shares of Common Stock which are subject to currently exercisable stock options. (7) The numberMr. Karp has served on boards of shares of Commonfour New York Stock beneficially owned byExchange companies and many other corporations over the past fifty years. Mr. O’Hagan 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 forKarp’s corporate experience includes: management at the benefit of Mr. O’Hagan’s spouse)highest level; corporate finance; acquisitions; mergers; corporate organization and (iii) 28,838 shares of Common Stock owned by a family partnership of which Mr. O’Hagan is a general partnergovernance; shareholder and in which Mr. O’Haganinvestor relations; and his spouse together hold a 99% interest. Mr. O’Hagan disclaims beneficial ownership of the 81,736 shares of Common Stock held by the trust established for the benefit of his spouse.investments. (8) Mr. Christopher served as (i) Chief Operating Officer from October 25, 2007 until October 30, 2008, (ii) President of the Standard Products Division from October 13, 2005 until October 25, 2007, and (iii) 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) 142,592210,953 shares of Common Stock which are subject to currently exercisable stock options, and (ii) 46,200 shares of non-vested restricted stock, (iii) 900 shares of Common Stock owned jointly between Mr. Christopher and his spouse.spouse and (iv) 2,100 shares of Common Stock which are owned by Mr. Christopher’s children. (9) Mr. Corman served as the Company’s 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 29,08439,583 shares of Common Stock which are subject to currently exercisable stock options. - 8 -(10) Mr. DonovanHansen served as (i) President-Manufacturing Operations from May 18, 2009 until January 1, 2011 (ii) Senior Vice President-Strategy and Industry Relations from February 18, 2008 to May 18, 2009, (iii) as Managing DirectorVice President-Administration and Operations, Standard Products Division from October 24, 2005 to February 18, 2008, (iv) as Vice President-Marketing and Product Line Strategy, Standard Products Division from February 24, 2003 to October 24, 2005, and prior thereto as Vice President-Marketing, Standard Products Division. The number of Mueller Europe Ltd. from January 2003 until October 13, 2005,shares of Common Stock beneficially owned by Mr. Hansen includes (i) 25,181 shares of Common Stock which are subject to currently exercisable stock options, (ii) as Executive Director2,706 shares of BSS Group PLC, a specialist distributor of pipeline, heating, ventilation, plumbingCommon Stock owned jointly between Mr. Hansen and sanitaryware products, from April 2001 until December 2002his spouse, and (iii) as Chief Executive13,500 shares of BSS Group PLC from 1997 until April 2001.non-vested restricted stock.(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 Company’s 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(i) 44,668 shares of Common Stock which are subject to currently exercisable stock options.options and (ii) 3,000 shares of non-vested restricted stock. (12) Mr. Martin served (i) as Vice President-Finance & Corporate Development from August 1, 2008 to January 11, 2011, (ii) as Vice President-Operations, Standard Products Division of the Company from November 20, 2006 to August 1, 2008, (iii) as Vice President-Finance of the Company from October 28, 2004 to November 20, 2006, (ii)(iv) as Director of Corporate Finance of the Company from January 1, 2002 to October 28, 2004, (iii)(v) as Manager of Corporate Finance of the Company from January 1, 2001 to December 31, 2001, (iv) (vi) as Manager of Corporate Accounting of the Company from January 15, 1996 to December 31, 2000 and (v)(vii) 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 11,98022,758 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(i) 227,230 shares of Common Stock which are subject to currently exercisable stock options.options, and (ii) 28,000 shares of non-vested restricted stock. (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 Products 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(i) 77,000 shares of Common Stock which are subject to currently exercisable stock options.options, (ii) 20,000 shares of non-vested restricted stock and (iii) 13,472 shares of Common Stock which are owned by Mr. Rourke’s spouse. (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(i) 61,000 shares of Common Stock which are subject to currently exercisable stock options.options and (ii) 4,000 shares of non-vested restricted stock.2007,2010, the Board of Directors held ninefive 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 Company’s 1991 Employee Stock Purchase Plan and the Company’s 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 Company’s 1994 Stock Option Plan and the Company’s 1994 Non-Employee Director Stock Option Plan, on February 12, 1998 created a committee to be responsible for administering the Company’s 1998 Stock Option Plan and on February 12, 2002 created a committee to be responsible for administering the Company’s 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 2007,2010, 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. O’Hagan who attended six of the nine meetings of the Board. (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 -Alexander P. FederbushPaul J. Flaherty and Gennaro J. Fulvio. Each member of the Compensation Committee has been determined by the Board of Directors to meet the NYSE’s 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 2007,2010, the Compensation Committee and the Option Plan Committee held fivenine formal meetings.Alexander P. FederbushScott J. Goldman (Chairman), Paul J. Flaherty and Gary S. Gladstein, and Paul J. Flaherty.Gladstein. Each member of the Nominating and Corporate Governance Committee has been determined by the Board of Directors to meet the NYSE’s standards for independence. The Nominating and- 11 -fourone formal meetingsmeeting during fiscal year 2007.$100,000$120,000 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 Company’s internal or external auditor, a director who is a current employee- 12 -participates inpersonally works on the firm’sCompany’s 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 Company’s 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 Company’s present executive officers at the same time serves or served on the other company’s 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
engagedmarried to the niece of Harvey L. Karp, the Chairman of the Board, but recognizing the distance of this relationship.
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with the SEC to receive information concerning, among other things, significant deficiencies in the design or operation of internal control over financial reporting.
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.
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and Corporate Governance Committee also assesses the contributions of the Company’s 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.
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created by such increase, if it is delivered to the Secretary of
2010.
21 - 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. We offer annual cash 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. Historically we have granted stock options to our named executive officers, although in 2009 we adopted, and our shareholders approved, the 2009 Stock Incentive Plan which provides for the grant of a variety of stock-based awards and cash incentive awards. We generally grant stock options with ten-year terms that vest ratably over a five-year period. This long-term vesting schedule provides continued 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 executive’s 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. banking1819 -Stockholdersstockholders 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 Company’s 20072010 Annual Meeting of Stockholders.1920 - The20072010 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’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 officer’s compensation potential.bonusincentive compensation, and long-term equity awards.bonusesincentives and the amounts payable thereby at the end of each year, and the number of stock optionsequity awards 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 Company’s desire to attain certain strategic and financial goals and control compensation cost. This requires that we consider subjective factors including (i) an executive’s performance against corporate objectives in recent years, (ii) the value of the executive’s skills and capabilities in supporting the long-- 20 -termlong-term performance of the Company, (iii) performance of each executive’s specific management responsibilities, (iv) each executive’s contribution as a member of the executive management team, and (v) whether each executive’s 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 necessarily affect decisions we make with respect to any other element.Messrs. Karpour Chairman and O’Hagan,Chief Executive Officer based on their knowledge of our industry in markets in which we participate.bonus programsincentive compensation are generally determined by the Compensation Committee in December or January 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 then currently prevailing as well as expected in the upcoming year, among others.bonusincentive compensation, (iii) long-term equity incentive compensation, (iv) traditional welfare benefits, (v) perquisites, and (vi) post-employment and change in controlchange-in-control compensation.- 21 -bonusincentive 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 and incentives to recognize and reward individual performance regardless of corporate-wide performance.
officers, excluding Mr. Karp, whose salary has remained unchanged since 2006. These adjustments were effective as of May 24, 2010. established operating income of As with stock options, in determining which named executive officers should receive restricted stock awards during 2010, and the size of these awards, our Compensation Committee made reasoned subjective determinations based upon the performance of the named executive officers, the importance of retaining their services, and their role in helping us attain our long-term goals. There was no set formula for the granting of awards to individual named executive officers. During fiscal year 2010, the named executive officers received restricted stock grants covering an aggregate of 51,200 shares. income tax gross-ups. purposes. 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 us. During benefit plans. The purpose of Considerations 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. Company. Company (Mr. McKee was subsequently appointed Executive Vice President on October 13, 2005) for a rolling three-year term. The agreement entitles Mr. McKee to receive an annual base salary of $240,000 (to be adjusted upward annually at a rate commensurate with increases granted to other key executives) and a discretionary cash incentive compensation consistent with the executive incentive compensation 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. The terms of Mr. McKee’s employment agreement relating to the compensation and benefits to which he is entitled upon various terminations of employment (including gross- grant. Form 10-K for the year ended December 31, 2011. includes fees for professional services rendered for the audits of internal control over financial reporting in 2009. matters. Plan. 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 5, 2011. Directors.2007,2010, base salary increases ranged from 3% to 34%15% for our named executive officers.BonusIncentive Compensationparticipatesreceived annual incentive compensation in one of two annual bonus programs. Messrs. Karp and O’Hagan 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 in2010, based upon the Company’s Annual Incentive Plan as do all other salaried employees.Annual Bonus Plan. Early in 2007, the Compensation Committee established aactual performance target for the yearperiod relative to the pre-established targets (as described below). Consistent with past practices, Mr. Karp’s annual incentive compensation was based upon adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) less, and for all other employees, including the other named executive officers, annual incentive compensation was based upon adjusted operating income. The Compensation Committee’s intent was that the incentive compensation payable to Messrs. Karp, Christopher and McKee will qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code, with awards being made under the Company’s 2009 Stock Incentive Plan.TheFor Mr. Karp, the Compensation Committee established graduated EBITDA targets that ranged from $100$77 million (earning zero bonus)incentive) to $165$142 million (earning a 200% bonus)incentive) with a maximum bonusincentive 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. TheseActual performance targets were exceeded and resulted in the maximum payment allowed under the plan for 2007.2010 to Mr. Karp.Annual Incentive Plan.At the beginning of 2007,For all other employees, including 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 calculatenamed executive officers, we calculated the awards by multiplying the employee’s actual base salary paid during the year, by the employee’s incentive grade level factor, which in turn, is multiplied by a consolidated companyCompany 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. O’Hagan who based his recommendations on a subjective determination of each individual employee’s past performance and responsibilities. The incentive grade level factor for the named executive officers was established at 125%.O’Hagan,Christopher, the Compensation Committee- 23 -$130$77 million subject to certain adjustments, as the consolidated companyCompany performance factor, for the 2007 Annual Incentive Plan, which includesapplied to Messrs. Christopher, McKee, and Rourke. As such,Wilkerson, and established $38.3 million subject to certain adjustments, as the companyIndustrial Products Division performance factor, was set at 100% for achieving operating income of $130 million.which applied to Mr. Rourke. The companyCompany 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 200% for Messrs. Christopher, McKee, and Rourke and capped at 150%) for Mr. Wilkerson), and decreased by 3 percentage points for each 1 percentage point that actual performance is less than the target. For 2007,As a result of 2010 performance, the payments under the plan to each named executive officerMessrs. Christopher and McKee were 165% (125%191% (100% grade level factor times 132%191% performance factor), for Mr. Rourke was 182% (100% grade level factor times 182% performance factor), and for Mr. Wilkerson was 113% (75% grade level factor times 150% performance factor).2007.2010. 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 2007,2010, the named executive officers received stock options to acquire an aggregate of 195,00070,000 shares or 55%33% of the total options granted under the long-term equity incentive program in fiscal 2007.2010.20072010 were as follows: estate and tax planning, certain club memberships, and personal use of our companyCompany airplane, car allowances, spousal travel reimbursements, and company boat.- 24 -they maximize the valuenamed executive officers understand the complexity of the long-term equity incentive particularly as it relatesincentives and are thereby able to understandingmaximize the tax complexityvalue 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-ownedCompany-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-ownedCompany-owned boat. Our boat is primarily for the purpose of entertaining business clients. From time to time, when our boat is not beingexclusively used for business reasons, we allow our Chief Executive Officer to use our boat for personal reasons.contractsagreements with Messrs. Karp, O’Hagan, McKeeChristopher and Christopher. In the eventMcKee. The agreements provide that one of these executives resignsupon a resignation for “good reason,” asreason” or termination without “cause” (as each is defined in the employment agreement, or is terminated without “cause,” as defined in the employment agreement,agreements), the executive will be entitled to receive his then current base salary and a bonusannual incentive compensation equal to the average annual bonusincentive compensation actually paid in the immediately preceding three years for the remainder of the term of the agreement, and all unvested stock optionequity awards will immediately vest. In addition, following any such termination, (i) Mr. Karpthe executives will be entitledcontinue 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. O’Hagan, McKee and Christopher will be entitled to participate in ourCompany’s health and medical benefit plans until they reach the age of 65. In65 (or, in the eventcase or Mr. Karp, for the remainder of the term of employment), and the Company will pay to the executives an amount equal to the monthly cost of continuation coverage under COBRA for such period of time. The agreements also provide that an executive may resign in connection with a “change in control,” ascontrol” (as defined in the employment agreements, the executives may resign within six months followingagreements) and that in 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 -he terminateshis employment is terminated. These restrictive covenants exist to protect our business, as Mr. Christopher has longstanding relationships with us. Ina number of our customers. Finally, in the event that any “payment” (as defined in the employment agreements) under the employment agreements would be subject to the excise tax imposed by the “golden parachute” regulations under the Internal Revenue Code, Messrs. Karp, O’Hagan, McKee and Christopher would be entitled to a gross-up payment from the Company to cover such taxes.consulting agreements with Messrs. Karp and O’Hagan. Mr. O’Hagan’sa 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.with Mr. Karp’s consulting agreementKarp, which will become effective upon the termination of his employment, provided such termination is not for cause or by reason of Mr. Karp’s death or disability. The agreements provide for theagreement provides that Mr. Karp will render consulting services of these executives for a periodfollowing their termination of employment. The executives are alsoduring which period he will be prohibited from competing with us during this period.theirthe consulting and non-compete period, Messrs.Mr. Karp and O’Hagan areis entitled to receive an annual consulting fee equal to (i) two-thirds of theirhis “final base compensation” for the first four years of such periodsperiod and one-third of theirhis final base compensation for the last two years of such periods.period. The final base compensation for Messrs. Karp and O’Hagan is equal to the lesser of: (i) their respectiveMr. Karp’s highest annual cash compensation (consisting of base salary and annual bonus)incentive compensation) 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)2007 and (ii) $2,000,000. In addition, during the consulting period, Mr. O’HaganKarp will be entitled to continue to participate in the sameour health majorand 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. O’Hagan 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.these agreementsthis agreement is to provide us with protection against competition from these executivesMr. Karp and a transition period following theirhis termination of employment during which theyhe will continue to provide limited services and be available for consultation with respect to theirhis unique industry and Company specific knowledge as needed to allow a smooth transition with their successorshis successor and minimize, to the extent possible, any succession difficulties. As with the employment agreements described in the preceding paragraph, thesethis consulting agreements provideagreement provides for a gross-up paymentspayment in the event that payments under themit would be subject to the excise tax imposed by the “golden parachute” regulations under the Internal Revenue Code.and Accounting Impactchief executive officerChief 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 byMay 2009, our stockholders at our Annual Meeting of Stockholders in May of 2005. Annual bonus awardsapproved the 2009 Stock Incentive Plan. Compensation 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.the Company’s performance. 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 takingparticularspecific executive’s- 27 - Other provisionsCode can also affectCompany, respectively, consider the potential effect(s) of such programs on the Company, as well as whether such programs create appropriate incentives. The only component of employee compensation decisions. Under Sections 280Gthat might pose a risk of having an adverse effect is annual cash incentive compensation, which is intended to incentivize our employees to achieve short-term financial performance objectives, and 4999ties a portion of an employee’s compensation to the achievement of such objectives. While annual cash incentive compensation encourages risk taking on the part of the Code,Company’s employees in their efforts to achieve these objectives, the Company believes that the risk is well managed and the level of risk is acceptable. Moreover, certain senior management members have a 20% excise tax is imposed upon individuals who receive payments upon a changesubstantial portion of their compensation 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 costform of this excise tax.equity awards that are long-term in nature. We believe it is importantthis counter balances any motivation to unduly favor excessive short-term risk taking. We also believe that the effectsapplicable performance objectives create appropriate incentives for our employees from year-to-year. Risk is further reduced by the fact that annual cash incentives are awarded on a discretionary basis; any known excessive risk taking could result in a reduction or elimination of the annual payment.tax code provisionsreasons we believe that our compensation policies and practices are not negatelikely to have a material adverse effect on the protections which we intend to provide to executive officers in the event of a change in control.20072010Non- 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. O’Hagan 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 President–Industrial Products 2006 $ 226,188 — $ 324,696 $ 305,354 — $ 8,800 (5) $ 865,038 Non-Equity Stock Option Incentive Plan All Other Year Salary Bonus Awards Awards Compensation Compensation Total Name and Principal Position (a) (b) ($)(c) ($)(d) ($)(e)(1) ($)(f)(1) ($)(g) ($)(i) ($)(j) Harvey L. Karp 2010 $ 1,500,000 — — — $ 2,500,000 $ 15,021 (2) $ 4,015,021 Chairman of the Board 2009 $ 1,500,000 — — — $ 598,600 $ 21,538 $ 2,120,138 2008 $ 1,500,000 — — — $ 1,750,000 $ 49,501 $ 3,299,501 Gregory L. Christopher 2010 $ 651,923 — $ 570,720 $ 238,650 $ 1,245,173 $ 50,380 (3) $ 2,756,846 Chief Executive Officer 2009 $ 600,000 — $ 606,250 $ 191,400 — $ 60,826 $ 1,458,476 and Director 2008 $ 445,000 $ 250,000 — $ 448,560 $ 322,625 $ 49,130 $ 1,515,315 Kent A. McKee 2010 $ 377,308 $ 34,000 $ 344,400 $ 159,100 $ 720,658 $ 19,420 (4) $ 1,654,886 Executive Vice President and 2009 $ 360,000 — $ 363,750 $ 153,120 — $ 19,277 $ 896,147 Chief Financial Officer 2008 $ 300,000 $ 157,500 — $ 261,660 $ 217,500 $ 16,684 $ 953,344 James H. Rourke 2010 $ 269,587 — $ 246,000 — $ 490,648 $ 18,622 (5) $ 1,024,857 President, Industrial Business 2009 $ 265,000 — $ 242,500 $ 114,840 $ 76,850 $ 11,906 $ 711,096 2008 $ 250,000 — — $ 224,280 $ 396,875 $ 13,688 $ 884,843 Gary C. Wilkerson 2010 $ 244,143 $ 15,000 $ 98,400 $ 159,100 $ 274,661 $ 10,092 (6) $ 801,396 Vice President, General Counsel and Secretary
(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 Company’s aircraft, and sporting event tickets in 2006.(2)Includes $103,402 for personal use of the Company’s aircraft, $2,242 for income tax gross-up plus other perquisites consisting of, a car allowance, matching contribution to the Company’s 401(k) Plan, personal tax and estate planning, personal use of the Company’s boat, and club membership in 2007 and $80,375 for personal use of the Company’s aircraft- 28 - plus other perquisites consisting of a car allowance, matching contribution toThese columns represent the Company’s 401(k) Plan, personal tax and estate planning, personal use of the Company’s 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 Company’s 401(k) Plan, personal tax and estate planning, personal use of the Company’s 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 Company’s 401(k) Plan, personal tax and estate planning, personal use of the Company’s 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 Company’s 401(k) Plan, personal tax and estate planning, club membership and spouse travel to Company functions in 2007 and matching contribution to the Company’s 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 Company’s 401(k) Plan, personal tax and estate planning and spouse travel to Company functions in 2007 and matching contribution to the Company’s 401(k) Plan in 2006.(6)For information regarding the key assumptions used in determining theaggregate grant date fair value of optionsawards granted seeto our named executive officers in 2010, determined under Financial Accounting Standards Board Accounting Standards Codification 718. For information on the valuation assumptions with respect to awards made, refer to Note 12 - Stock-Based Compensation to the Company’s Consolidated Financial Statements filed with its Annual Report on Form 10-K for the fiscal year ended December 29, 2007.25, 2010. The amounts above reflect the Company’s aggregate accounting expense for these awards and do not necessarily correspond to the actual value that will be recognized by the named executive officers.(2) Includes perquisites consisting of a car allowance and a club membership. (3) Includes personal use of the Company’s aircraft (valued at $10,041, representing the incremental cost incurred by the Company to operate the aircraft), an income tax gross-up and other perquisites consisting of a matching contribution to the Company’s 401(k) Plan, club membership, reimbursement for Mr. Christopher’s spouse’s travel to Company functions, restricted stock dividends and personal tax and estate planning. (4) Includes other perquisites consisting of a matching contribution to the Company’s 401(k) Plan, club membership, personal tax and estate planning, and restricted stock dividends. (5) Includes an income tax gross-up and other perquisites consisting of a matching contribution to the Company’s 401(k) Plan, reimbursement for Mr. Rourke’s spouse’s travel to Company functions, and personal tax and estate planning. (6) Includes an income tax gross-up and other perquisites consisting of a matching contribution to the Company’s 401(k) Plan, and reimbursement for Mr. Wilkerson’s spouse’s travel to Company functions. executivesexecutive officers are set forth in the Summary Compensation Table for 2007.2010. For 2007,2010, salaries paid to our named executives accounted for the following percentages of their total compensation: Mr. Karp (37%), Mr. O’HaganChristopher (24%), Mr. McKee (23%), Mr. McKee (25%), Mr. Christopher (22%Rourke (26%), and Mr. Rourke (26%Wilkerson (30%).- 29 -2007Estimated Possible Payouts All Other Under Non-Equity Incentive Option Plan Awards (1) Awards: Exercise or Closing Number of Base Price Price of Securities of Option Stock on Grant Date Underlying Awards Grant Fair Value Grant Date Threshold Target Maximum Options (#) ($/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. O’Hagan 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 All Other All Other Estimated Possible Payouts Stock Option Under Non-Equity Incentive Awards: Awards: Plan Awards (1) Number of Number of Exercise or Shares of Securities Base Price Closing Grant Date Stock or Underlying of Option Price of Fair Value Grant Threshold Units Options Awards Stock on of Stock Date ($) Target Maximum (#) (#) ($/Sh) Grant Date and Option Name (a) (b) (c) ($)(d) ($)(e) (i)(3) (j)(4) (k) ($/Sh) Awards ($) Harvey L. Karp — N/A (2) N/A (2) $ 2,500,000 — — — — — Gregory L. Christopher — N/A (2) $ 651,293 $ 1,303,846 — — — — — 7/23/2010 — — — 23,200 — — $ 24.60 $ 570,720 7/23/2010 — — — — 30,000 $ 24.48 — $ 238,650 Kent A. McKee — N/A (2) $ 377,308 $ 754,616 — — — — — 7/23/2010 — — — 14,000 — — $ 24.60 $ 344,400 7/23/2010 — — — — 20,000 $ 24.48 — $ 159,100 James H. Rourke — N/A (2) $ 269,587 $ 539,174 — — — — — 7/23/2010 — — — 10,000 — — $ 24.60 $ 246,000 Gary C. Wilkerson — N/A (2) $ 183,107 $ 274,660 — — — — 7/23/2010 — — — 4,000 — — $ 24.60 $ 98,400 7/23/2010 — — — — 20,000 $ 24.48 — $ 159,100
(1) Messrs.Mr. Karp received a cash incentive award based on achieving EBITDA, subject to certain adjustments, within the targeted range of $77 million to $142 million. Mr. Christopher, Mr. McKee, and O’HaganMr. Wilkerson received cash bonusincentive awards under our Annual Bonus Plan based on ourupon exceeding an EBITDAthe consolidated operating income target of $165,000,000. Messrs. McKee, Christopher and$77 million. Mr. Rourke received a cash bonus awards under our 2007 Annual Incentive Plan.incentive award based upon the Industrial Products Division exceeding its operating income target of $38.3 million. See our discussion of the Annual Bonus Plan and the 2007 Incentive Plan under the heading “Compensation Discussion and Analysis-Annual BonusIncentive Compensation” above for a more thorough discussiondiscussion.(2) Because of these plans.the nature of the formulas used for determining annual incentive compensation, there are no threshold amounts. There is also no target amount for Mr. Karp’s annual incentive compensation. (2)(3)Shares of restricted stock will vest either (i) 20% per year on each of the first five anniversaries of the date of grant or (ii) 50% on each of the second and third anniversaries of the date of grant. (4) The per share exercise price of the options was set at the fair market value of ourthe Company’s Common Stock on the grant date, which under the terms of ourthe 2002 Stock IncentiveOption Plan is the mean between the highest and lowest salesales prices of ourthe Common Stock reported on the NYSE on the date immediately prior to the grant date. The options will vest and become exercisable at the rate of 20% of the underlying Common Stock per year on each of the first five anniversaries of the grant date and will expire on the tenth anniversary of the grant date.(3)Because of the nature of the formulas for determining bonus compensation under both the Annual Bonus Plan and the 2007 Annual Incentive Plan, there are no threshold amounts. There are also no target amounts under the Annual Bonus Plan.- 30 -20072010 YEAR-ENDOption Awards Number of Number of Securities Securities Underlying Underlying Unexercised Unexercised Option Options Options Exercise Option (#) (#) Price Expiration Exercisable Unexercisable ($/Sh) Date Name (a) Grant Date (b) (c)(1) (e) (f) Harvey L. Karp — — — — — William D. O’Hagan 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 Option Awards (1) Stock Awards (2) Number of Number of Number of Securities Securities Shares or Market Value Underlying Underlying Units of of Shares or Unexercised Unexercised Option Stock Units of Stock Options Options Exercise That Have That Have (#) (#) Price Option Not Vested Not Vested Exercisable Unexercisable ($) Expiration (#) ($) Name (a) Grant Date (b) (c) (e) Date (f) (g) (h) Harvey L. Karp — — — — — — — Gregory L. Christopher 11/06/2001 5,819 — $ 18.70 11/06/2011 — — 02/13/2002 15,561 — $ 20.40 02/13/2012 — — 02/10/2003 19,451 — $ 16.62 02/10/2013 — — 02/10/2004 31,122 — $ 20.72 02/10/2014 — — 02/23/2005 20,000 — $ 31.22 02/23/2015 — — 12/28/2005 36,000 9,000 $ 28.04 12/28/2015 — — 07/28/2006 24,000 6,000 $ 35.05 07/28/2016 — — 07/27/2007 21,000 14,000 $ 36.91 07/27/2017 — — 07/25/2008 24,000 36,000 $ 26.49 07/25/2018 — — 07/30/2009 5,000 20,000 $ 23.83 07/30/2019 23,000 $ 759,920 07/23/2010 — 30,000 $ 24.48 07/23/2020 23,200 $ 766,528 3134 -Option Awards Option Awards (1) Stock Awards (2) Number of Number of Number of Number of Number of Securities Securities Securities Securities Shares or Market Value Underlying Underlying Underlying Underlying Units of of Shares or Unexercised Unexercised Option Unexercised Unexercised Option Stock Units of Stock Options Options Exercise Option Options Options Exercise That Have That Have (#) (#) Price Expiration (#) (#) Price Option Not Vested Not Vested Exercisable Unexercisable ($/Sh) Date Exercisable Unexercisable ($) Expiration (#) ($) Name (a) Grant Date (b) (c)(1) (e) (f) Grant Date (b) (c) (e) Date (f) (g) (h) James H. Rourke 07/01/1998 5,387 — $ 23.80 07/01/2008 Kent A. McKee 11/06/2001 11,755 — $ 18.70 11/06/2011 — — 10/29/1998 1,840 — $ 14.07 10/29/2008 02/13/2002 19,451 — $ 20.40 02/13/2012 — — 12/13/1999 4,527 — $ 22.09 12/13/2009 02/10/2003 31,122 — $ 16.62 02/10/2013 — — 12/21/2000 3,113 — $ 15.20 12/21/2010 02/10/2004 38,902 — $ 20.72 02/10/2014 — — 11/06/2001 4,668 — $ 18.70 11/06/2011 02/23/2005 25,000 — $ 31.22 02/23/2015 — — 02/13/2002 12,449 — $ 20.40 02/13/2012 12/28/2005 36,000 9,000 $ 28.04 12/28/2015 — — 02/10/2003 12,449 6,225 $ 16.62 02/10/2013 07/28/2006 20,000 5,000 $ 35.05 07/28/2016 — — 02/10/2004 12,449 12,449 $ 20.72 02/10/2014 07/27/2007 18,000 12,000 $ 36.91 07/27/2017 — — 02/23/2005 8,000 12,000 $ 31.22 02/23/2015 07/25/2008 14,000 21,000 $ 26.49 07/25/2018 — — 07/28/2006 6,000 24,000 $ 35.05 07/28/2016 07/30/2009 4,000 16,000 $ 23.83 07/30/2019 14,000 $ 462,560 07/27/2007 — 30,000 $ 36.91 07/27/2017 07/23/2010 — 20,000 $ 24.48 07/23/2020 14,000 $ 462,560 James H. Rourke 02/23/2005 20,000 — $ 31.22 02/23/2015 — — 07/28/2006 24,000 6,000 $ 35.05 07/28/2016 — — 07/27/2007 18,000 12,000 $ 36.91 07/27/2017 — — 07/25/2008 12,000 18,000 $ 26.49 07/25/2018 — — 07/30/2009 3,000 12,000 $ 23.83 07/30/2019 10,000 $ 330,400 07/23/2010 — — — — 10,000 $ 330,400 Gary L. Wilkerson 05/05/2005 15,000 — $ 26.52 05/05/2015 — — 07/28/2006 20,000 5,000 $ 35.05 07/28/2016 — — 07/27/2007 12,000 8,000 $ 36.91 07/27/2017 — — 07/25/2008 10,000 15,000 $ 26.49 07/25/2018 — — 07/30/2009 4,000 16,000 $ 23.83 07/30/2019 — — 07/23/2010 — 20,000 $ 24.48 07/23/2020 4,000 $ 132,160 (1) All of theseThe options reflected will vest and become exercisable with respect to the underlying shares at the rate of 20% of the underlying Common Stock per year on each of the first five anniversaries of their respective datesthe grant date and will expire on the tenth anniversary of the grant date.(2) Shares of restricted stock will vest either (i) 20% per year on each of the first five anniversaries of the date of grant or (ii) 50% on each of the second and third anniversaries of the date of grant. 2007Option Awards Option Awards Stock Awards Number of Value Number of Value Number of Value Shares Acquired Realized Shares Acquired Realized Shares Acquired Realized on Exercise on Exercise on Exercise on Exercise on Vesting on Vesting Name (a) (#)(b) ($)(c) (#)(b) ($)(c) (#)(d) ($)(e) Harvey L. Karp — — — — — — William D. O’Hagan — — Gregory L. Christopher 387 $ 7,151 9,741 $ 108,903 2,000 $ 49,180 Kent A. McKee — — 9,783 $ 136,734 1,000 $ 24,590 James H. Rourke — — 63,802 $ 691,043 — — Gary L. Wilkerson — — — — We have entered into employment agreements with Messrs. Karp, O’Hagan, McKee and Christopher.- 32 -Karp and O’Hagan Effective as of October 27, 2007, we amendedKarp’s then existing AmendedKarpRestated Employment Agreement (asrestated employment agreement with Mr. Karp, dated September 17, 1997, as amended the “Karp Employment Agreement”) to extend theon June 21, 2004, February 17, 2005, October 25, 2007, and December 2, 2008. The term of the agreement toends on 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 agreement2011, and 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 Agreementagreement provides forthat Mr. Karp towill serve as Chairman of the Board of Directors of the Company. Under the terms of the Karp Employment Agreement,agreement, Mr. Karp is entitled 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.incentive payment. Mr. Karp is also entitled to receive reimbursement for reasonable business and travel expenses incurred in the performance of his duties and is also entitled to 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 The terms of the Karp Employment Agreement, Mr. Karp’sChristopher’s 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 equalagreement relating 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 Company’s discretion, a bonus for the calendar year in which his resignation without good reason occurs. The Company may terminate Mr. Karp’s- 33 -employment for cause (as defined in the Karp Employment Agreement) upon appropriate written notice. In addition, if Mr. Karp’s 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 beis entitled under the Karp Employment Agreement shall be forfeited asupon various terminations of the date of termination.employment (including gross-up payments) are identical to those contained in Mr. Karp may terminate hisKarp’s 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 toagreement, described above, except that 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 beChristopher is 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. O’Hagan (the “O’Hagan Employment Agreement”). The O’Hagan Employment Agreement provides for Mr. O’Hagan 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 “O’Hagan Employment Period”). Under the terms of the O’Hagan Employment Agreement, Mr. O’Hagan 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. O’Hagan 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 O’Hagan Employment Agreement, Mr. O’Hagan’s employment may be terminated by the Company without cause (as defined in the O’Hagan Employment Agreement) or by Mr. O’Hagan for good reason (as defined in the O’Hagan Employment Agreement) upon appropriate written notice. In either such event, Mr. O’Hagan will continue to receive his then-current base salary as if his employment had continued for the remainder of the O’Hagan Employment Period and an annual bonus for the remainder of the O’Hagan 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. O’Hagan will immediately vest and become exercisable. Mr. O’Hagan may resign voluntarily without good reason upon appropriate written notice. In such event, Mr. O’Hagan will be entitled to receive any accrued but unpaid base salary and, at the Company’s discretion, a bonus for the calendar year in which his resignation without good reason occurs. The Company may terminate Mr. O’Hagan’s employment for cause (as defined in the O’Hagan Employment Agreement) upon appropriate written notice. In addition, if Mr. O’Hagan’s employment is terminated for cause or if Mr. O’Hagan 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 O’Hagan Employment Agreement shall be forfeited as of the date of termination. Mr. O’Hagan may terminate his employment for any reason within six months following a Change in Control (as defined in the O’Hagan Employment Agreement). In such event, the Company will pay to Mr. O’Hagan 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 O’Hagan 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 O’Hagan Employment Period. In addition, all remaining unvested options previously granted to Mr. O’Hagan shall become immediately exercisable. In the event that any Payment (as defined in the O’Hagan Employment Agreement) would be subject to the excise tax imposed by the “Golden Parachute” regulations under the Code, Mr. O’Hagan 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 O’Hagan to provide for post-employment consulting services to the Company (the “Karp Consulting Agreement” and the “O’Hagan 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. Karp’s death or disability, and will end on the sixth anniversary of such commencement. The consulting period under the O’Hagan Consulting Agreement will begin on the earliest of (i) the termination of Mr. O’Hagan’s employment by the Company without cause (as defined in the O’Hagan Employment Agreement), (ii) the termination of Mr. O’Hagan’s employment upon a Change in Control (as defined in the O’Hagan Employment Agreement) or (iii) the resignation of Mr. O’Hagan for good reason (as defined in the O’Hagan Employment Agreement), and will end on the sixth anniversary of such commencement. During their respective consulting periods, Messrs. Karp and O’Hagan 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 O’Hagan 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 O’Hagan 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. O’Hagan 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. O’Hagan with the same office space provided under the O’Hagan 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 O’Hagan 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 O’Hagan 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 Company’s 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. McKee’s 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 participateparticipation in the Company’s healthbenefit plans and programs at the Company’s 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 Company’s discretion, a bonus for the calendar year in which his resignation without good reason occurs. The Company may terminate Mr. McKee’s employment for cause (as defined in the McKee Employment Agreement) upon appropriate written notice. If Mr. McKee’s 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 numberqualifying termination 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,until age 65. Mr. Christopher’s 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 continueagreement also subjects him to receive his then-current base salary as if his employment had continued for the remainder of the Christopher Employment Periodnon-competition 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 Company’s health plans and programs at the Company’s 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 Company’s discretion, a bonus for the calendar year in which his resignation without good reason occurs. The Company may terminate Mr. Christopher’s employment for cause (as defined in the Christopher Employment Agreement) upon appropriate written notice. If Mr. Christopher’s 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. Duringnon-solicitation covenants during the term of employment and ending on the 18-month12-month anniversary following any termination of employment, Mr. Christopher will be subject to non-competition and non-solicitation covenants.employment. 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 AgreementMr. Christopher’s employment agreement also contains standard confidentiality provisions. On25, 2007,17, 2002, as amended on December 10, 2008. The agreement provides that Mr. Christopher was promoted to the position of ChiefOperatingMcKee will serve as Vice President and Chief Financial Officer of the Company.4038 -Named Executive Officers.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 Changechange in Controlcontrol payments in excess of $100,000.
AGREEMENTS AS OF THE END OF 20072010Termination Without Cause Change in Control Intrinsic Intrinsic Value Value of Salary & of Stock Consulting Salary & Stock Consulting Bonus Benefits Options Agreement Bonus Benefits Options Agreement Name (a) ($)(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. O’Hagan $ 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 — — — — — — — — Termination Without Cause or for Good Reason Termination Following a Change in Control Accelerated Accelerated Vesting Vesting Salary & of Stock Consulting Salary & of Stock Consulting Bonus Benefits Options Agreement Bonus Benefits Options Agreement Gross Up ($)(1) ($) ($)(4) ($)(5) Total ($) ($)(1) ($) ($)(4) ($)(5) ($)(6) Name (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Total ($) (l) $ 3,116,200 $ 32,345 (2) — $ 6,666,667 $ 9,815,212 $ 3,116,200 $ 32,345 (2) — $ 6,666,667 — $ 9,815,212 Gregory L. Christopher $ 3,887,798 $ 305,174 (3) $ 722,080 — $ 4,915,052 $ 3,887,798 $ 305,174 (3) $ 722,080 — $ 1,101,805 $ 6,016,857 $ 2,299,658 $ 286,101 (3) $ 501,295 — $ 3,087,054 $ 2,299,658 $ 286,101 (3) $ 501,295 — — $ 3,087,054 — — — — — — — — — — — — — — — — — — — — — — (1) RepresentsIncludes the costvalue of health care benefitsbase salary continuation and annual incentive compensation equal to the average annual incentive compensation actually paid in the immediately preceding three years for the entireremainder of the term quantified using current premiums charged to COBRA participants.of the agreement as of December 25, 2010. If an executive resigns following a change in control, the amounts will be paid in a lump sum within 30 days following termination. (2) RepresentsIncludes the intrinsic value of stock options where vesting is accelerated upon terminationhealth insurance continuation coverage under COBRA for the term of employment based upon the closing price of the Company’s Common Stock on December 28, 2007 of $29.57.Mr. Karp’s consulting agreement. (3) InIncludes the eventvalue of continued participation in the Company’s benefit plans following 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.until age 65. (4) Includes gross-up for certain taxes, where applicable.the value of accelerated vesting of unvested shares of restricted stock and unvested stock options as of December 25, 2010, based on a per share value of $33.04. (5) InIncludes the eventvalue of Mr. Karp’s consulting fee. The amounts shown in columns (e) and (j) assume a changetermination of control,Mr. Karp’s employment agreement other than for cause or by reason of death or disability as of December 25, 2010, at which point Mr. Karp’s consulting agreement would have gone into effect. Payment of Mr. Karp’s consulting fee is contingent upon the continued provision of consulting services in accordance with the terms of the consulting agreements provideagreement, provided, however, that if the consulting period is terminated by the Company without cause or by Mr. Karp for lump sum payments, discounted usinggood reason, Mr. Karp will continue to receive the federal funds rate.amounts that would have been payable under the consulting agreement for the remainder of the consulting period.(6) Gross-up payment to cover the excise tax imposed by the “golden parachute” regulations under the Internal Revenue Code. - 41 -2007Change in Pension Value and Fees Nonqualified Earned Non-Equity Deferred or Paid Stock Option Incentive Plan Compensation All Other in Cash Awards Awards Compensation Earnings Compensation Total Name (a) ($)(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 Fees Earned or Paid in Cash Option Awards Total ($) ($)(1) ($) Name (a) (b) (d) (h) Alexander P. Federbush $62,750 $17,080 $79,830 Paul J. Flaherty $56,000 $17,080 $73,080 Gennaro J. Fulvio $61,000 $17,080 $78,080 Gary S. Gladstein $61,250 $17,080 $78,330 Scott J. Goldman $50,750 $17,080 $67,830 Terry Hermanson $55,250 $17,080 $72,330 (1) On May 3, 2007 each director was granted options to purchase 2,000 shares ofRepresents the Company’s Common Stock. Theaggregate grant date fair value of each option is $6.34, computedawards granted to our directors in 2010, determined under Financial Accounting Standards Board Accounting Codification 718. For information on the provisions of SFAS No. 123(R).(2)Includes reimbursementvaluation assumptions with respect to awards made, refer to Note 12 - Stock-Based Compensation to the Company’s Consolidated Financial Statements filed with its Annual Report on Form 10-K for income tax gross-up of $493.the fiscal year ended December 25, 2010. The amounts above reflect the Company’s aggregate accounting expense for these awards and do not necessarily correspond to the actual value that will be recognized by the directors. From January 1, 2007 through29, 2007,25, 2010, the aggregate number of shares of our common stock subject to outstanding options held by our non-employee directors was as follows: Mr. Federbush, 10,000 shares, Mr. Flaherty, 6,000 shares, Mr. Fulvio, 10,000 shares, Mr. Gladstein, 10,000 shares, Mr. Goldman, 6,000 shares, and Mr. Hermanson, 10,000 shares. Under the Company’s 1994 Non-Employee Director Stock Option Plan,memberdirector received a grant of the Company’s Board of Directors who is neither an employee nor an officer of the Company is automatically granted each year on the date of the Company’s Annual Meeting of Stockholders, without further action by the Board, an optionoptions to purchase 2,000 shares of our Common Stock at the fair market valuepursuant to our 2009 Stock Incentive Plan, which were fully vested as of the- 42 -Common Stock on thetheir date the option is granted. As of March 6, 2008, options to purchase 42,672 shares of Common Stock were outstanding under the Company’s 1994 Non-Employee Director Stock Option Plan.
OF THE BOARD OF DIRECTORS(1)61,114, The Auditor’s Communication With Those Chargedamended by Statement on Auditing Standards No. 90 (Communication With Audit Committee).currently in effect. 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,Public Company Accounting Oversight Board’s Rule 3526, and considered the compatibility of non-audit services provided by the independent auditors with the auditor’s independence.- 43 -29, 200725, 2010 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.Gennaro J. Fulvio,Gary S. Gladstein, Chairman Gennaro J. Fulvio Terry Hermanson Gary S. GladsteinTerry 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.
OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATIONCOMPENSATION COMMITTEE REPORTTerry Hermanson, Chairman Alexander P. Federbush Paul J. FlahertyGennaro J. Fulvio Company’sRegistrant’s stock-based incentive plans as of December 29, 200725, 2010 (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 (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 1,659 $27.87 �� 732 (1) Equity compensation plans - not approved by security holders — — — Total 1,659 $27.87 732 Arrangements Not Approved by Security Holders On February 13, 2002, Mr. O’Hagan 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. O’Hagan was granted an option to acquire 155,610 shares of Common Stock at an exercise price of $16.13 per share (collectively, the “O’Hagan Treasury Options”). Each of the O’Hagan 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 O’Hagan Employment Agreement), all of the O’Hagan Treasury Options will become immediately exercisable on the later to occur of (i) the day Mr. O’Hagan 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. O’Hagan’s employment with the Company is terminated by the Company. In addition, all outstanding unvested O’Hagan Treasury Options will immediately vest and become exercisable if Mr. O’Hagan’s employment is terminated by the Company without cause (as defined in the O’Hagan Employment Agreement) or by- 45 -Mr. O’Hagan for good reason (as defined in the O’Hagan Employment Agreement). The O’Hagan Treasury Options may only be exercised for shares of Common Stock held in treasury by the Company.(1) Of the 732 thousand securities remaining available for issuance under the equity compensation plans, 603 thousand are available under the Company’s 2009 Stock Incentive Plan for issuance of restricted stock, stock appreciation rights, or stock options. The remaining securities are available for issuance of stock options only.
ACCOUNTING FIRM27, 2008,31, 2011, subject to ratification by the Company’s stockholders. Ratification of the appointment of the Company’s independent registered public accounting firm requires the affirmative vote of a majority of the votes cast atoutstanding shares of the Annual Meeting by the stockholdersCompany present in person or by proxy at the Annual Meeting 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 20082011 fiscal year without further stockholder action. Further, even if29, 200725, 2010 and December 30, 200626, 2009 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 2010 2009 Audit Fees $ 2,045,861 $ 2,141,904 Audit-Related Fees 94,197 69,000 Tax Fees 423,076 562,551 All Other Fees 1,945 3,625 $ 2,565,079 $ 2,777,080 - 46 -20072010 and 2006, and audit of management’s assessment of the effectiveness of internal control over financial reporting in 2006.matters and audits of employee benefit plans.2007years 2010 and 2006,2009, respectively, under the categories Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees described above were pre-approved.
EXECUTIVE OFFICERS
THAT STOCKHOLDERS VOTE THEIR SHARESFOR THE PROPOSALTO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP ASINDEPENDENT AUDITORSAPPROVAL OF THE COMPANY.COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.PROPOSAL REGARDING BOARD INCLUSIVENESS The Domestic and Foreign Missionary SocietyVOTE ON THE FREQUENCY OF THE STOCKHOLDER
VOTE ON NAMED EXECUTIVE OFFICER COMPENSATIONEpiscopal Church, 815 Second Avenue, New York, New York 10017,Company’s named executive officers should occur every one, two, or three years. The Company is providing its stockholders with an advisory vote on the frequency of the stockholder vote on the compensation of the Company’s named executive officers as required pursuant to Section 14A of the Securities Exchange Act of 1934. This advisory vote is another mechanism for stockholders to provide input on the Company’s compensation programs.beneficially holds 12,330 shares of Common Stock, has given notice of its intention to presenthave occurred since the last advisory vote on executive compensation.proposalvote at the Annual Meeting. In accordance withAlthough the rulesstockholder vote on the frequency of the Securitiesstockholder vote on the compensation of the Company’s named executive officers is not binding on the Board of Directors or the Company, the Company values the views of its stockholders. The Board of Directors and Exchange Commission,Compensation Committee will review the results of the vote and take them into consideration in determining how often to conduct the stockholder vote on the compensation of the Company’s named executive officers.
2011 ANNUAL BONUS PLANtheir resolutionthe Plan as filed with the SEC.supporting statementany of the four other most highly compensated executive officers, unless such compensation is performance-based and paid pursuant to a plan approved by the Company’s stockholders. Historically, the Company awarded performance-based compensation under its standalone Annual Bonus Plan. In 2010, the Company awarded performance-based compensation under its newly adopted 2009 Stock Incentive Plan, and it was the Company’s intent to continue this practice in future years. However, after making awards of performance-based compensation under the 2009 Stock Incentive Plan for one year, the Company determined that from an administrative perspective, a standalone annual bonus plan was warranted. Accordingly, the Board adopted the Plan, subject to stockholder approval.verbatim below. Approval of this stockholder proposal requires the amounts that would have been earned under the Plan for the Company’s 2010 fiscal year, based on the performance targets and award levels set for the Company’s 2011 fiscal year and on the Company’s actual performance for the 2010 fiscal year, as if the Plan had been in effect for the Company’s 2010 fiscal year.New Plan Benefits 2011 Annual Bonus Plan Name and Position Dollar Value Harvey L. Karp Chairman of the Board $ 2,500,000 Gregory L. Christopher Chief Executive Officer and Director $ 919,211 Kent A. McKee Executive Vice President and Chief Financial Officer $ 532,004 James H. Rourke President, Industrial Business n/a Gary C. Wilkerson Vice President, General Counsel and Secretary n/a Executive Group $ 3,951,215 Non-Executive Director Group n/a Non-Executive Officer Employee Group n/a votes cast at the Annual Meeting by the stockholders presentshares of Common Stock voting, in person or by proxy, and entitledat the Annual Meeting will be required to vote thereon.- 47 -Board inclusiveness WHEREAS: In response toapprove 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 Oil’s 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 company’s diverse workforce.” Increasingly, institutional investors have supported the call for greater board diversity. For example, the 2003 corporate governance guidelines of America’s 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 boardb.Whether, in the nominating committee’s 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.UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE THEIR SHARESAGAINSTFOR THESTOCKHOLDER PROPOSAL REGARDING BOARD INCLUSIVENESS.PROXIES RECEIVED BYTO APPROVE THE COMPANY WILL BE VOTED AGAINST
MUELLER INDUSTRIES, INC. 2011 ANNUAL BONUS PLAN.THIS PROPOSAL UNLESS THE STOCKHOLDER SPECIFIESOTHERWISE IN THE PROXY.
AND OTHER PROPOSALS FOR 20092012 ANNUAL MEETING1, 20085, 2011 will be held on or about May 7, 2009.3, 2012. The Company’s 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 -2009,2012, no earlier than January 31, 2009February 5, 2012 and no later than March 2, 2009.6, 2012. 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.2009,2012, such proposal must be received by the Secretary of the Company by November 26, 200824, 2011 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 20092012 is changed to a date more than 30 days earlier or later than May 1, 2009,3, 2012, 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.(except as set forth below) during 20072010 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 -29, 200725, 2010 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 Company’s SEC filings are also available at the Company’s website at www.muellerindustries.com or the SEC’s website at www.sec.gov.29, 200725, 2010 (EXCLUDING EXHIBITS) OR, AS NOTED HEREIN, ANY OF THE COMPANY’S 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 COMPANY’S 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 COMPANY’S FURNISHING OF SUCH EXHIBIT.20082011 Annual General Meeting to be held on May 1, 2008.
HTTP://WWW.PROXYVOTE.COMDirectors”,Directors,” “Appointment of Independent Registered Accounting Firm”,Firm,” “Approval of the Compensation of the Company’s Named Executive Officers,” “Stockholder Vote on the Frequency of the Stockholder Vote on Named Executive Officer Compensation” and “Stockholder Proposal Regarding Board Inclusiveness.“Proposal to Adopt the Mueller Industries, Inc. 2011 Annual Bonus Plan.”5155 -
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.youra prior Householding 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 /s/ Gary C. Wilkerson Gary C. Wilkerson Corporate Secretary 5256 -MUELLER INDUSTRIES, INC. AMERICAN STOCK TRANSER & TRUST COMPANYATTN: GARY WILKERSON6201 15TH STREET8285 TOURNAMENT DRIVE-STE. 150BROOKLYN, NY 11219MEMPHIS, TN 38125VOTE 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. ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONSElectronic Delivery of Future PROXY MATERIALSIf you would like to reduce the costs incurred by Mueller Industries, Inc.our company 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 communicationsproxy materials 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. 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.,Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: MUIND1KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. MUELLER INDUSTRIES, INC. The Board of Directors recommends a voteFOR all the Nominees listed andFOR Proposal 2. 1. Election of Directors Nominees: 01) Alexander P. Federbush 05) Scott J. Goldman 02) Paul J. Flaherty 06) Terry Hermanson 03) Gennaro J. Fulvio 07) Harvey L. Karp 04) Gary S. Gladstein 08) William D. O'Hagan
The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees For
AllWithhold
AllFor All
Except 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. o o o 01 Alexander P. Federbush 02 Paul J. Flaherty 03 Gennaro J. Fulvio 04 Gary S. Gladstein 05 Scott J. Goldman 06 Terry Hermanson 07 Harvey L. Karp 08 Gregory L. Christopher For AgainstAbstain 2.The Board of Directors recommends you vote FOR proposals 2 and 3.For Against Abstain 2 Approve the appointment of Ernst & Young LLP as independent auditors of the Company. o o o 3 To approve, on an advisory basis by non-binding vote, executive compensation. o o o The Board of Directors recommends ayou voteAGAINST Proposal 3. 3 YEARS on the following proposal: 1 year 2 years 3 years Abstain 4 To approve, on an advisory basis by non-binding vote, the frequency of holding future advisory votes on executive compensation. o o o o 3. Stockholder proposal regarding Board inclusiveness. *Note*The Board of Directors recommends you vote FOR the following proposal:For Against Abstain 5 To approve the adoption of the Company's 2011 Annual Bonus Plan. o o o NOTE: Such other business as may properly come before the meeting or any adjournment thereofthereof. 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,LISTED, "FOR" ITEMPROPOSAL 2, "FOR" PROPOSAL 3, FOR "3 YEARS" FOR PROPOSAL 4 AND "AGAINST" ITEM 3."FOR" PROPOSAL 5. Please sign exactly as your name appears to the right. When shares are held jointly, each stockholder named should sign.name(s) appear(s) hereon. When signing as attorney, executor, administrator, trustee or guardian, youother fiduciary, please give full title as such. Joint owners should so indicate when signing.each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate name by duly authorized officer. If a partnership, please sign inor partnership name, by duly authorized person.officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 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.Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/are available at www.proxyvote.com.
1, 20085, 2011
This Proxy is Solicited on Behalf of the Board of Directors1, 2008,5, 2011, 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.