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MUELLER INDUSTRIES, INC.------------------------------------------------------------------------------------------------------------------------------------------------------
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___________________________________ ___________________________________ in person or represented by proxy will constitute a quorum for the Annual Meeting. The election inspectors will treat abstentions as shares that are present and entitled to vote for purposes of determining the presence of a quorum 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 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 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. director who is a current employee of such a firm, a director who has an immediate family member who is a current employee of such a firm and who personally works on the Company’s audit, 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
8285 Tournament Drive, Suite 150
Memphis, Tennessee 38125
Telephone (901) 753-3200
_________________________
Stockholders to be Held
May 7, 20095, 2011
_________________________
Mueller Industries, Inc.7, 2009,5, 2011, at 10:00 A.M. local time, for the following purposes:1. To elect seveneight directors, each to serve until the next annual meeting of stockholders (tentatively scheduled for May 6, 2010)3, 2012) or until his successor is elected and qualified; 2. To consider and act upon a proposal to approve the appointment of Ernst & Young LLP, independent registered public accountants, as auditors of the Company for the fiscal year ending December 26, 2009;31, 2011; 3. To consider and act upon a proposal to approveconduct an advisory vote on the Mueller Industries, Inc. 2009 Stock Incentive Plan which allows forcompensation of the issuance of a maximum of 750,000 shares of common stock;Company’s named executive officers; 4. To consider and act upon aconduct an advisory vote on the frequency of future stockholder proposal regarding board membership, if properly presented atadvisory votes on the Annual Meeting; andcompensation of the Company’s named executive officers; 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. 9, 2009,8, 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.Gary C. Wilkerson Corporate Secretary 26, 200923, 2011SOLICITATION OF PROXIES 1 VOTING SECURITIES 2 PRINCIPAL STOCKHOLDERS 3 ELECTION OF DIRECTORS 4 OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE OFFICERS AND INFORMATION ABOUT DIRECTOR NOMINEES 5 Meetings and Committees of the Board of Directors 910CORPORATE GOVERNANCE 1113 Director Independence 1113 Independent Directors 1314 Audit Committee 1315 Compensation Committee 1416 Nominating and Corporate Governance Committee 1416 Compensation Committee Interlocks and Insider Participation 1618 Corporate Governance Guidelines 1719 Code of Business Conduct and Ethics 1719 Policies and Procedures for Approval of Related Party Transactions 1719 Directors’ Attendance at Annual Meetings of Stockholders 1820 Communication With the Board of Directors 1820COMPENSATION DISCUSSION AND ANALYSIS 1921SUMMARY COMPENSATION TABLE FOR 20082010283220082010 GRANTS OF PLAN BASED AWARDS TABLE3033OUTSTANDING EQUITY AWARDS AT FISCAL 20082010 YEAR-END313420082010 OPTION EXERCISES AND STOCK VESTED3236POTENTIAL PAYMENTS UNDER EMPLOYMENT AND CONSULTING AGREEMENTS AS OF THE END OF 20082010384020082010 DIRECTOR COMPENSATION3841REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS 3942REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION 4044EQUITY COMPENSATION PLAN INFORMATION 4145APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 45 APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED 41 EXECUTIVE OFFICERS 47 STOCKHOLDER VOTE ON THE FREQUENCY OF THE STOCKHOLDER VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION 48 PROPOSAL TO APPROVEADOPT THE 2009 STOCK INCENTIVE PLANMUELLER INDUSTRIES, INC. 2011 ANNUAL43STOCKHOLDER PROPOSAL REGARDING BOARD MEMBERSHIP BONUS PLAN5049STOCKHOLDER NOMINATIONS FOR BOARD MEMBERSHIP AND OTHER PROPOSALS FOR 20102012 ANNUAL MEETING53 OTHER MATTERS TO COME BEFORE THE ANNUAL MEETING 54 SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING 54 OTHER INFORMATION 54 NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS 55 HOUSEHOLDING OF ANNUAL MEETING MATERIALS 56
8285 Tournament Drive, Suite 150
Memphis, Tennessee 38125
Telephone (901) 753-3200_____________________________
May 7, 20095, 2011_____________________________7, 2009,5, 2011, at 10:00 A.M. local time, or at any adjournment(s) thereof.27, 2008,25, 2010, is first being mailed to stockholders on or about March 26, 2009.23, 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.- 1 -but 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 proposaladvisory votes on the compensation of the Company’s named executive officers, and the approvaladoption of the stock incentive plan,2011 Annual Bonus Plan, absent instructions from the beneficial owners of such shares. The Company has also retained MacKenzie Partners, Inc. to provide proxy solicitation services for a fee of approximately $20,000 plus reimbursement of its out-of-pocket expenses. The Company will reimburse brokers or other persons holding stock in their names or in the names of their nominees for their charges and expenses in forwarding proxies and proxy material to the beneficial owners of such stock.37,143,16337,855,071 shares of Common Stock outstanding at the close of business on March 9, 2009,8, 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 9, 20098, 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.9, 2009,8, 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 Franklin Resources, Inc. 2,616,300(1) 7.04%(2) One Franklin Parkway San Mateo, CA 94403-1906 Barclays Global Investors, NA 2,604,420(3) 7.01%(2) 45 Fremont Street San Francisco, CA 94105 Wells Fargo & Company 2,114,668(4) 5.69%(2) 420 Montgomery Street San Francisco, CA 94163 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 13G/A filed by Franklin Resources, Inc. (“FRI”) with the Securities and Exchange Commission on February 5, 2009.9, 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 2,542,0002,848,900 and 2,606,300,2,924,500, 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 (the “Exchange Act”). (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 27, 2008.25, 2010. The difference in the total number of shares outstanding on December 27, 200825, 2010 and March 9, 20098, 2011 does not materially affect the percentage of ownership of the class.(3) This information is based on a Schedule 13G/A filed by Barclays Global Investors, NABlackRock, Inc. with the Securities and Exchange Commission on February 5, 2009. The7, 2011. Blackrock Inc. filed this Schedule 13G was also filed by Barclays Global13G/A on its own behalf and on behalf of its subsidiaries, BlackRock Japan Co. Ltd; BlackRock Institutional Trust Company, N.A; BlackRock Fund Advisors; BlackRock Asset Management Australia Limited; BlackRock 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 Limited, 1-1-39 Hiroo Shibuya-Ku, Tokyo 1500-0012 Japan; 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;LLC; BlackRock Investment Management, LLC; BlackRock Asset Management Ireland Limited; and Barclays Global Investors (Deutschland) AG, Apianstrasse 6, D-85774, Unterfohring, Germany.BlackRock International Limited. (4) This information is based on a Schedule 13G13G/A filed by Wells Fargo & Company on January 29, 2009 with the Securities and Exchange Commission.Commission on January 20, 2011. Wells Fargo & Company 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, Evergreen Investmentsubsidiaries, Wells Capital Management Company,Incorporated; Wells Fargo Funds Management, LLC; Wells Fargo Bank, N.A.; and Wells Fargo Advisors, LLC.seveneight directors. The Board of Directors proposes to elect the following seveneight persons, each as nominated by the Board of Directors, at the Annual Meeting to serve (subject to the Company’s Bylaws) as directors of the Company until the next Annual Meeting (tentatively scheduled for May 6, 2010)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, and Harvey L. Karp and Gregory 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 NOMINEES9, 2009,8, 2011, information about the 1,014,8881,324,067 shares of Common Stock (calculated based on 37,143,16337,855,071 shares outstanding) beneficially owned by each of the Company’s current directors, nominees for director, executive officers and named executive officers. The “named executive officers” are those individuals set forth in the “Summary Compensation Table for 2008”2010” included herein. Unless otherwise indicated, all directors, nominees for director, executive officers and named executive officers have sole voting and investment power with respect to the shares of Common Stock reported. The table and the accompanying footnotes set forth the foregoing persons’ current positions with the Company, principal occupations and employment over the preceding five years, age and directorships held in certain other publicly-owned companies.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 StockBeneficially Common Stock Beneficially Owned as of Percent of Principal Occupation, Employment, etc. March 9, 20098, 2011 Class Alexander P. Federbush 11,00013,000* Vice Chairman of the Board of Directors since January 1, 2011; Director of the Company since February 17, 2005; age 6668 (1)Paul J. Flaherty 4,0008,000* Director of the Company since August 2, 2007; age 6971 (2) Gennaro J. Fulvio 18,336 21,000 * Director of the Company since May 9, 2002; age 5254 (3)Gary S. Gladstein 35,84836,736* Director of the Company since July 1, 2000; Director of Jos. A.Senior Consultant Bank Clothiers, Inc.for Soros Fund Management, LLC and IRSA Inversiones YRepresentaciones S.A.; age 6466 (4)Scott J. Goldman 2,0006,000* Director of the Company since January 1, 2008; age 5658 (5)Terry Hermanson 12,11211,000* Director of the Company since February 13, 2003; age 6668 (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 8183 (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 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) James H. Rourke 123,945 * President, Industrial Business of the Company since December 27, 2003; age 62 (14) Gary C. Wilkerson 65,000 * Vice President, General Counsel and Secretary of the Company since May 2, 2005; age 64 (15) Executive Officers and Directors as a Group 1,324,067 3.43%** - 5 -Common Stock Beneficially Owned as of Percent of Principal Occupation, Employment, etc. March 9, 2009 Class Gregory L. Christopher 209,218 * Chief Executive Officer of the Company since October 30, 2008; age 46 (7) Richard W. Corman 45,033 * Vice President-Controller of the Company since October 28, 2004; age 52 (8) Roy C. Harris 39,660 * Vice President and Chief Information Officer of the Company since December 19, 2006; age 66 (9) Jeffrey A. Martin 15,714 * Vice President - Finance & Corporate Development since August 1, 2008; age 42 (10) Kent A. McKee 237,526 * Executive Vice President of the Company since October 13, 2005; Chief Financial Officer of the Company since April 1, 1999; age 48 (11) James H. Rourke 109,555 * President-Industrial Products Division of the Company since December 27, 2003; General Manager-Rod since January 29, 2002; age 60 (12) Larry J. Stoddard 10,000 * Former President-Standard Products Distribution Business of the Company since February 19, 2008; age 49 (13) Gary C. Wilkerson 23,000 * Vice President, General Counsel and Secretary of the Company since May 2, 2005; age 62 (14) Executive Officers and Directors as a Group 1,014,888 2.69 %** * Less than 1 %1% ** Includes 605,485760,373 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 Realty GroupCorp. 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) 2,000 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) 8,00010,000 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 2,0006,000 shares of Common Stock which are subject to currently exercisable stock options. (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 11,112(i) 10,000 shares of Common Stock which are subject to currently exercisable stock options, and 7,224(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 11,11210,000 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 2,0006,000 shares of Common Stock which are subject to currently exercisable stock options. (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 11,11210,000 shares of Common Stock which are subject to currently exercisable stock options. (7) Mr. Karp has served on boards of four New York Stock Exchange companies and many other corporations over the past fifty years. Mr. Karp’s corporate experience includes: management at the highest level; corporate finance; acquisitions; mergers; corporate organization and governance; shareholder and investor relations; and 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 - 7 -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) 159,255210,953 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. (8)(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 33,80739,583 shares of Common Stock which are subject to currently exercisable stock options. (9)(10)Mr. Hansen 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 Vice 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 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) 2,706 shares of Common Stock owned jointly between Mr. Hansen and his spouse, and (iii) 13,500 shares of 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 24,668(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. (10)(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, (ii)(iii) as Vice President-Finance of the Company from October 28, 2004 to November 20, 2006, (iii)(iv) as Director of Corporate Finance of the Company from January 1, 2002 to October 28, 2004, (iv)(v) as Manager of Corporate Finance of the Company from January 1, 2001 to December 31, 2001, (v) (vi) as Manager of Corporate Accounting of the Company from January 15, 1996 to December 31, 2000 and (vi)(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 15,71422,758 shares of Common Stock which are subject to currently exercisable stock options. (11)(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 191,376(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. (12)(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 102,329(i) 77,000 shares of Common Stock which are subject to currently exercisable stock options.- 8 -(13)As previously reported by the Company, Mr. Stoddard is no longer employed by the Company, effective March 16, 2009. Prior to joining the Company in 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,options, (ii) as Senior Vice President of Business Development 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. The number of20,000 shares of Common Stock beneficially owned by Mr. Stoddard includes 10,000non-vested restricted stock and (iii) 13,472 shares of Common Stock which are subject to currently exercisable stock options.owned by Mr. Rourke’s spouse. (14)(15)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 23,000(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.2008,2010, the Board of Directors held five meetings and acted by written consent on one occasion.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 2008,2010, no director attended fewer than 75% of the total number of meetings of the Board and all committees on which he served.(Chairman), Alexander P. Federbush and Gary S. Gladstein.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- 9 -Gary S. Gladstein.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. 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 2008,2010, the Compensation Committee and the Option Plan Committee held sixnine formal meetings.Alexander P. FederbushScott J. Goldman (Chairman), GennaroPaul J. FulvioFlaherty and Scott J. Goldman.Gary S. 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- 10 -twoone formal meetingsmeeting during fiscal year 2008.- 11 -ofAonof Aon and its affiliates, but recognizing the arms’ length nature of suchtransactions,such transactions, the absence of any managerial role or specific pecuniaryinterestpecuniary interest of Mr. Flaherty in such matters, and the de minimis percentagesuchpercentage such transactions represented in respect of the annual revenues and assetsof each of those companies; and
ofHarveyof Harvey L. Karp, the Chairman of the Board, but recognizing the distanceofdistance of this relationship.
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havebeenhave been determined to meet the NYSE’s standards for independence. See“Director “Director Independence” above.
theCompany’sthe Company’s non-management directors shall hold annually at least twoformaltwo formal meetings independent from management. The non-managementdirectorsnon-management directors will choose a non-management director, as appropriate, to presideatpreside at these executive sessions of the Board of Directors.
thestandardsthe standards of independence required of audit committee members by theNYSE and applicable SEC rules. See “Director Independence” above.
paragraphregardingparagraph regarding the independence of the members of the Audit Committee shall notbenot be deemed to be “soliciting material” or to be “filed” with the SEC or subjecttosubject to Regulation 14A or 14C of the Exchange Act or to the liabilities of Section 18of18 of the Exchange Act and shall not be deemed to be incorporated by referenceintoreference into any filing under the Securities Act of 1933, as amended (the “SecuritiesAct”“Securities Act”), or the Exchange Act, notwithstanding any general incorporation byreference of this Proxy Statement into any other filed document.
AuditCommitteeAudit Committee are financially literate. Further, the Board of Directors hasdeterminedhas determined that Gary S. Gladstein and Gennaro J. Fulvio each possessaccountingpossess accounting or related financial management expertise, within the meaningofmeaning of the listing standards of the NYSE, and are each audit committee financialexperts within the meaning of applicable SEC rules.
andtheand the rules adopted thereunder, meets with management and the Company’sindependentCompany’s independent auditors prior to the filing of officers’ certifications with the
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SEC to receive information concerning, among other things, significant deficiencies in the design or operation of internal control over financial reporting.
bytheby the Board of Directors that governs its duties and standards of performance.Copiesperformance. Copies of the charter can be obtained free of charge from the Company’swebsiteCompany’s website at www.muellerindustries.com or may be requested in print byanyby any shareholder.
CommitteehaveCommittee have been determined to meet the NYSE standards for independence. See“Director “Director Independence” above.
totheto the Board of Directors as director nominees individuals of establishedpersonalestablished personal and professional integrity, ability and judgment, and who arechosenare chosen with the primary goal of ensuring that the entire Board of DirectorscollectivelyDirectors collectively serves the interests of the Company’s stockholders. DueconsiderationDue consideration is given to assessing the qualifications of potential nomineesandnominees and any potential conflicts with the Company’s interests. The NominatingandNominating and Corporate Governance Committee also assesses the contributionsofcontributions of the Company’s incumbent directors in connection with their potential
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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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first made by the Company. To be a qualifying stockholder, the stockholder must be a stockholder of record at the time the notice was delivered to the Secretary of the Company. Each such notice shall set forth: (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A (or successor provisions) under the Exchange Act, including such person’s written consent to be named in the proxy statement as a nominee and to serve as a director if elected; (b) as to any other business that the stockholder desires to be brought before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Company’s books, and of such beneficial owner and (ii) the class and number of shares of Common Stock which are owned beneficially and of record by such stockholder and such beneficial owner. The presiding officer of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure. See “Stockholder Nominations for Board Membership and Other Proposals for 20102012 Annual Meeting.”
2010.
in supporting the long-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. 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. banking1719 -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 20082010 Annual Meeting of Stockholders.1820 - The20082010 below, are designed to (i) motivate these key employees to achieve certain strategic and financial goals and reward them for achieving such goals, (ii) align the long-term financial interests of our named executive officers with those of our stockholders, (iii) encourage these employees to continue their service with our Company, and (iv) provide a means to attract additional talented executive officers when necessary. We believe in a pay for performance philosophy – that the performance of our named executive officers in managing our Company, considered in light of general economic and specific Company, industry, and competitive conditions, should be the basis for determining the level and composition of their compensation. This incentive element of total compensation provides a significant portion of each named executive 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- 19 -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-control compensation.- 20 -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.
In addition, in 2010 we granted shares of restricted stock to certain of our named executive officers which 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. As with stock options, we believe that granting awards of restricted stock subject to the vesting schedules described above rewards outstanding service by our named executive officers and provides us with an effective mechanism to incentivize our named executive officers to achieve long-term financial success for the Company, to provide a strong retention incentive, and to align the interests of our named executive officers with the long-term interest of our shareholders. Specifically, we believe that granting awards of restricted stock subject to a five-year vesting schedule allows us to supplement the annual option grants our named executive officers receive, while granting awards of restricted stock subject to a three-year vesting schedule provides us with an effective mechanism to incentivize our named executive officers to attain shorter-term performance goals.
May 24, 2010. the fiscal year. legal issues facing the Company. executive officers. During fiscal year 2010. 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. Karp, consulting period, Mr. Karp will be entitled to continue to participate in our health and medical benefit plans. The purpose of this agreement is to provide us with protection against competition from Mr. Karp and a transition period following his termination of employment during which he will continue to provide limited services and be available for consultation with respect to his unique industry and Company specific knowledge as needed to allow a smooth transition with his successor and minimize, to the extent possible, any succession difficulties. As with the employment agreements described in the preceding paragraph, this consulting agreement provides for a gross-up payment in the event that payments under it would be subject to the excise tax imposed by the “golden parachute” regulations under the Internal Revenue Code. Considerations Company. which his resignation without good reason occurs. The Company may terminate Mr. Karp’s employment for cause 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, advisor to the Company on matters within his areas of expertise and for which he had responsibility during his employment with the Company, provided that he will have not to devote more than twenty hours per month to consulting service during the first four years of his consulting period nor more than ten hours per month during the last two years of his consulting period. In addition, during his consulting period, Mr. Karp agrees not to engage in competitive activity (as defined in the consulting agreement). grant. 31, 2011. Terry Hermanson, Chairman auditors for the 2009. matters. accordance with this pre-approval, and the fees for the services performed to date. annual proxy statement should occur EVERY THREE YEARS.” THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARES Meeting to be held in 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. 5, 2011. Corporate Secretary Directors.2008,2010, base salary increases ranged from 0%3% to 68%15% for our named executive officers.officers, excluding Mr. Christopher’s baseKarp, whose salary for the 2007 fiscal year was $265,225, which was increased to $445,000 for the 2008 fiscal year in connection with his appointment to the positionhas remained unchanged since 2006. These adjustments were effective as of Chief Operating Officer. See “Employment and Consulting Agreements - Gregory L. Christopher” for information regarding Mr. Christopher’s base salary as Chief Executive Officer.BonusIncentive Compensationparticipatesreceived annual incentive compensation in one of two annual bonus programs. In 2008, Messrs. Karp and O’Hagan participated in the Annual Bonus Plan 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 other salaried employees.Annual Bonus Plan. Early in 2008, 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 $107$77 million (earning zero bonus)incentive) to $172$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 2008. Although2010 to Mr. Karp was entitled to receive his full bonus in the amount of $2,500,000, he declined to accept the payment of his full bonus and instead accepted a bonus equal to $1,750,000.Karp.Annual Incentive Plan and Bonus Awards.At the beginning of 2008,For all other employees, including our Compensation Committee adopted our 2008 Annual Incentive Plan. We designed our 2008 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- 22 - For 2008, 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 established operating income of $160$77 million subject to certain adjustments, as the consolidated companyCompany performance factor, for the 2008 Annual Incentive Plan, which includesapplied to Messrs. Christopher, and McKee, and Wilkerson, and established $28$38.3 million subject to certain adjustments, as the Industrial Products Division performance factor, which includesapplied to Mr. Rourke. As such, the performance factors were set at 100% for achieving operating income of $160 million for the consolidated company and $28 million for the Industrial Products Division. 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 2008,As a result of 2010 performance, the payments under the plan to Messrs. Christopher and McKee were 73% (125%191% (100% grade level factor times 58%191% performance factor), for Mr. Rourke was 182% (100% grade level factor times 182% performance factor), and for Mr. RourkeWilkerson was 159% (125%113% (75% grade level factor times 127%150% performance factor). As an inducement for joining the company,StoddardMcKee’s discretionary award was paid a $160,000 signing bonus, and Mr. Stoddard’s guaranteed bonus for 2008 was set at 125% of his base wage earnings during 2008. In addition, both Mr. Christopher and Mr. McKee were awarded discretionary bonus payments by the Compensation Committee during 2008, which are reflected in the Summary Compensation Table below. These discretionary bonuses were awarded in recognition of these individuals’his outstanding service and leadership, and Mr. Wilkerson’s discretionary award was paid in recognition of his contributions to managing the Company in light of economic uncertaintyCompany’s legal department and a downturn in financial markets during the 2008 fiscal year.2008.2010. 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- 23 -2008,2010, the named executive officers received stock options to acquire an aggregate of 280,00070,000 shares or 62%33% of the total options granted under the long-term equity incentive program in fiscal 2008.20082010 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.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, and, as of October 2008, is used exclusively for that purpose. From time to time in the past, when our boat was not being used for business reasons, we allowed our Chief Executive Officer to use our boat for personal reasons.- 24 - O’Hagan, Christopher and McKee. The agreements provide that upon a resignation for “good reason” or termination without “cause” (as each is defined in the employment agreements), the executive will be entitled to receive his then current base salary and an annual bonusincentive 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, the Companyexecutives will continue to provideparticipate in the Company’s health and medical benefit coverageplans until the executive reachesthey reach the age of 65 (or, in the case 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” (as defined in the employment agreements) and that in such event 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 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 his employment is terminated. These restrictive covenants exist to protect our business, as Mr. Christopher has longstanding relationships with a 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, McKee and Christopher would be entitled to a gross-up payment from the Company to cover such taxes.bonus)incentive compensation) during the three-year period from 2005 to 2007 and (ii) $2,000,000. In addition, during the- 25 -Post-2008 Compensation Decisions On February 12, 2009, our Compensation Committee and Board of Directors approved the Mueller Industries, Inc. 2009 Stock Incentive Plan, which provides for the grant of a variety of stock-based awards, including stock options, restricted stock, stock appreciation rights and other stock-based awards. The plan was adopted in order to expand the type of awards available under the Company’s long-term equity incentive compensation program to include restricted stock and other stock-based awards, in addition to stock options, which have been the primary form of equity compensation awarded by the Company in the past. As with stock options, we believe that restricted stock and other stock-based awards will incentivize our named executive officers to achieve long-term financial success for the Company. The 2009 Stock Incentive Plan has been submitted to the Company’s stockholders for approval as set forth in this Proxy Statement.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- 26 -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 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 taking Other provisionsInternal Revenue Code 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 Internal Revenue 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.2731 -20082010 Non-Equity Option Incentive Plan Change in All Other Year Salary Bonus Awards Compensation Pension Compensation Total Name and Principal Position (a) (b) ($)(c) ($)(d) ($)(f)(1) ($)(g) ($)(h) ($)(i) ($)(j) Harvey L. Karp 2008 $ 1,500,000 — — $ 1,750,000 — $ 49,501 (2) $ 3,299,501 Chairman of the Board 2007 $ 1,500,000 — — $ 2,500,000 — $ 40,733 $ 4,040,733 2006 $ 1,381,488 — — $ 2,500,000 — $ 51,065 $ 3,932,553 William D. O’Hagan 2008 $ 926,923 — $ 527,141 $ 2,000,000 — $ 38,039 (4) $ 3,492,103 Former President and Chief 2007 $ 1,000,000 — $ 1,139,234 $ 2,000,000 — $ 132,215 $ 4,271,449 Executive Officer (3) 2006 $ 745,280 — $ 1,248,580 $ 1,490,560 — $ 111,028 $ 3,595,448 Gregory L. Christopher 2008 $ 445,000 $ 250,000 (6) $ 354,003 $ 322,625 — $ 49,130 (7) $ 1,420,758 Chief Executive Officer (5) 2007 $ 265,255 $ 197,105 $ 306,584 $ 437,621 — $ 23,570 $ 1,230,135 2006 $ 257,500 — $ 282,392 $ 614,781 — $ 31,012 $ 1,185,685 Larry J. Stoddard 2008 $ 317,308 $ 556,635 (8) $ 87,265 — — $ 69,727 (9) $ 1,030,935 Former President–Standard Products Distribution Business Kent A. McKee 2008 $ 300,000 $ 157,500 (10) $ 342,691 $ 217,500 — $ 16,684 (11) $ 1,034,375 Executive Vice President and 2007 $ 278,210 — $ 338,284 $ 459,046 — $ 21,084 $ 1,096,624 Chief Financial Officer 2006 $ 270,107 — $ 355,475 $ 644,880 — $ 15,762 $ 1,286,224 James H. Rourke 2008 $ 250,000 — $ 261,441 $ 396,875 — $ 13,688 (12) $ 922,004 President–Industrial 2007 $ 232,974 — $ 262,605 $ 384,407 — $ 12,179 $ 892,165 Products Division 2006 $ 226,188 — $ 324,696 $ 305,354 — $ 8,800 $ 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) For information regardingThese columns represent 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 27, 2008.25, 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 $30,838 of club memberships plus other perquisites consisting of a car allowance and personal use of the Company’s aircraft.a club membership. (3) Mr. O’Hagan served as the Company’s President and Chief Executive Officer until October 27, 2008, when he passed away. Effective October 30, 2008, Mr. Christopher was appointed as the Company’s Chief Executive Officer.(4)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 car allowance, 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, personal use of the Company’s boat, club memberships, and health insurance costs.planning. (5)Mr. Christopher was appointed as the Company’s Chief Executive Officer effective October 30, 2008 and, immediately prior to such time, served as our Chief Operating Officer.(4) (6)Represents the discretionary bonus payment awarded by the Compensation Committee to Mr. Christopher.- 28 -(7)Includes perquisites consisting of an income tax gross-up, matching contribution to the Company’s 401(k) Plan, personal tax and estate planning, personal use of the Company’s aircraft, and club memberships.(8)Represents Mr. Stoddard’s signing bonus and his guaranteed bonus for 2008.(9)Includes $37,979 in reimbursement of moving expenses plus other perquisites consisting of an income tax gross-up, reimbursement of commuting expenses, and club memberships.(10)Represents the discretionary bonus payment awarded by the Compensation Committee to Mr. McKee.(11)Includes a matching contribution to the Company’s 401(k) Plan, club membership, personal tax and estate planning, and club memberships.restricted stock dividends. (12)(5) Includes an income tax gross-up and other perquisites consisting of a matching contribution to the Company’s 401(k) Plan, reimbursement for Mr. Rourke’s spouse’s travel to Company functions, and personal tax and estate planning. (6) Includes an income tax gross-up and other perquisites consisting of a matching contribution to the Company’s 401(k) Plan, and personal tax and estate planning.reimbursement for Mr. Wilkerson’s spouse’s travel to Company functions.2008.2010. For 2008,2010, salaries paid to our named executives accounted for the following percentages of their total compensation: Mr. Karp (45%), Mr. O’Hagan (27%(37%), Mr. Christopher (31%), Mr. Stoddard (31%(24%), Mr. McKee (29%(23%), Mr. Rourke (26%), and Mr. Rourke (27%Wilkerson (30%).- 29 -2008 Estimated Possible Payouts All Other Under Non-Equity Incentive Option Plan Awards (1) Awards: Exercise or Closing Number of Base Price Price of Securities of Option Stock on Grant Date Underlying Awards Grant Fair Value Grant Date Threshold Target Maximum Options (#) ($/Sh) Date of Option Name (a) (b) ($)(c) ($)(d) ($)(e) (j)(3) (k)(3) ($/Sh) Awards ($) Harvey L. Karp — N/A(2) N/A (2) $ 2,500,000 — — — — William D. O’Hagan 07/25/2008 N/A(2) N/A (2) $ 2,000,000 75,000 $ 26.49 $ 26.39 $ 560,700 Gregory L. Christopher 07/25/2008 N/A(2) $ 556,250 $ 834,375 60,000 $ 26.49 $ 26.39 $ 448,560 Larry J. Stoddard 07/25/2008 N/A(2) N/A (2) — 30,000 $ 26.49 $ 26.39 $ 224,280 02/19/2008 50,000 $ 29.22 $ 29.14 $ 411,450 Kent A. McKee 07/25/2008 N/A(2) $ 375,000 $ 562,500 35,000 $ 26.49 $ 26.39 $ 261,660 James H. Rourke 07/25/2008 N/A(2) $ 312,500 $ 468,750 30,000 $ 26.49 $ 26.39 $ 224,280 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 $172,000,000. Messrs. McKee, Christopher and$77 million. Mr. Rourke received a cash bonus awards under our 2008 Annual Incentive Plan.incentive award based upon the Industrial Products Division exceeding its operating income target of $38.3 million. See our discussion of the Annual Bonus Plan and the 2008 Incentive Plan under the heading “Compensation Discussion and Analysis-Annual BonusIncentive Compensation” above for a more thorough discussion of these plans.discussion.(2) Because of the nature of the formulas used for determining bonusannual incentive compensation, under both the Annual Bonus Plan and the 2008 Annual Incentive Plan, there are no threshold amounts. There areis also no target amounts under the Annual Bonus Plan.amount for Mr. Karp’s annual incentive compensation. (3) Shares of restricted stock will vest either (i) 20% per year on each of the first five anniversaries of the date of grant or (ii) 50% on each of the second and third anniversaries of the date of grant. (4) The per share exercise price of the options was set at the fair market value of the Company’s Common Stock on the grant date, which under the terms of the 2002 Stock IncentiveOption Plan is the mean between the highest and lowest sales prices of the Common Stock reported on the NYSE on the date immediately prior to the grant date. The options will vest and become exercisable at the rate of 20% of the underlying Common Stock per year on each of the first five anniversaries of the grant date and will expire on the tenth anniversary of the grant date.- 30 -20082010 YEAR-END Option Awards Number of Number of Securities Securities Underlying Underlying Unexercised Unexercised Option Options Options Exercise Option (#) (#) Price Expiration Exercisable Unexercisable ($/Sh) Date Name (a) Grant Date (b) (c)(1) (e) (f) Harvey L. Karp — — — — — Estate of William D. O’Hagan 02/13/2002 155,610 — $ 20.40 10/27/2009 02/13/2003 155,610 — $ 16.13 10/27/2009 02/10/2004 124,488 — $ 20.72 10/27/2009 02/23/2005 60,000 — $ 31.22 10/27/2009 07/28/2006 40,000 — $ 35.05 10/27/2009 07/27/2007 20,000 — $ 36.91 10/27/2009 Gregory L. Christopher 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 19,451 — $ 16.62 02/10/2013 02/10/2004 24,898 6,224 $ 20.72 02/10/2014 02/23/2005 12,000 8,000 $ 31.22 02/23/2015 12/28/2005 18,000 27,000 $ 28.04 12/28/2015 07/28/2006 12,000 18,000 $ 35.05 07/28/2016 07/27/2007 7,000 28,000 $ 36.91 07/27/2017 07/25/2008 — 60,000 $ 26.49 07/25/2018 Larry J. Stoddard 02/19/2008 — 50,000 $ 29.22 02/19/2018 07/25/2008 — 30,000 $ 26.49 07/25/2018 Kent A. McKee 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 31,122 — $ 16.62 02/10/2013 02/10/2004 31,122 7,780 $ 20.72 02/10/2014 02/23/2005 15,000 10,000 $ 31.22 02/23/2015 12/28/2005 18,000 27,000 $ 28.04 12/28/2015 07/28/2006 10,000 15,000 $ 35.05 07/28/2016 07/27/2007 6,000 24,000 $ 36.91 07/27/2017 07/25/2008 — 35,000 $ 26.49 07/25/2018 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 12/13/1999 4,527 — $ 22.09 12/13/2009 Kent A. McKee 11/06/2001 11,755 — $ 18.70 11/06/2011 — — 12/21/2000 3,113 — $ 15.20 12/21/2010 02/13/2002 19,451 — $ 20.40 02/13/2012 — — 11/06/2001 4,668 — $ 18.70 11/06/2011 02/10/2003 31,122 — $ 16.62 02/10/2013 — — 02/13/2002 12,449 — $ 20.40 02/13/2012 02/10/2004 38,902 — $ 20.72 02/10/2014 — — 02/10/2003 18,674 — $ 16.62 02/10/2013 02/23/2005 25,000 — $ 31.22 02/23/2015 — — 02/10/2004 18,673 6,225 $ 20.72 02/10/2014 12/28/2005 36,000 9,000 $ 28.04 12/28/2015 — — 02/23/2005 12,000 8,000 $ 31.22 02/23/2015 07/28/2006 20,000 5,000 $ 35.05 07/28/2016 — — 07/28/2006 12,000 18,000 $ 35.05 07/28/2016 07/27/2007 18,000 12,000 $ 36.91 07/27/2017 — — 07/27/2007 6,000 24,000 $ 36.91 07/27/2017 07/25/2008 14,000 21,000 $ 26.49 07/25/2018 — — 07/25/2008 — 30,000 $ 26.49 07/25/2018 07/30/2009 4,000 16,000 $ 23.83 07/30/2019 14,000 $ 462,560 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) The options reflected 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. (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. 2008 Option 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 15,561 $ 200,453 9,741 $ 108,903 2,000 $ 49,180 Larry J. Stoddard — — Kent A. McKee 1,082 $ 15,636 9,783 $ 136,734 1,000 $ 24,590 James H. Rourke 7,226 $ 66,481 63,802 $ 691,043 — — Gary L. Wilkerson — — — — - 32 -which was furtherdated September 17, 1997, as amended effectiveon June 21, 2004, February 17, 2005, October 25, 2007, and December 2, 2008 in order to bring the agreement into compliance with Section 409A of the Internal Revenue Code.2008. The term of the agreement ends on December 31, 2009,2011, and will automatically extend 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 agreement provides that Mr. Karp will serve as Chairman of the Board of Directors of the Company. Under the terms of the agreement, Mr. Karp is entitled to receive 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 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.an annual bonusincentive compensation for the remainder of the then-current term equal to the average bonusincentive compensation for the three calendar years immediately preceding the- 33 -bonusincentive compensation and any other compensation and benefits to which he would otherwise be entitled under the agreement shall be forfeited as of the date of termination. Mr. Karp may resign his employment for any reason following a change in control. In such event, the Company will pay to Mr. Karp a lump sum amount equal to (i) his then-current base salary multiplied by the number of full and partial years remaining in the term of employment and (ii) his average annual bonusincentive compensation 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 employment. In addition, all outstanding unvested optionsequity awards then held by Mr. Karp shall become immediately exercisable. In the event that any payment becomes subject to the excise tax imposed by the “golden parachute” regulations under the Internal Revenue Code, Mr. Karp is entitled to a gross-up payment from the Company to cover such taxes.William D. O’Hagan During the 2008 fiscal year we were also party to an amended and restated employment agreement with Mr. O’Hagan, which was further amended effective November 26, 2008 in order to bring the agreement into compliance with Section 409A of the Internal Revenue Code. Pursuant to the agreement Mr. O’Hagan served as President and Chief Executive Officer of the Company. The term of Mr. O’Hagan’s agreement was set to expire on December 31, 2008. Thereafter, Mr. O’Hagan would have remained employed by the Company as a special advisor through March 31, 2009. The agreement provided that during his initial term of employment (expiring on December 31, 2008), Mr. O’Hagan was entitled to receive 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 a performance-based cash bonus under the terms and conditions of the Annual Bonus Plan. During the period that he would have served as a special advisor, Mr. O’Hagan would have been entitled to an amount equal to $1,000,000. The agreement also provided that Mr. O’Hagan was entitled to receive reimbursement for reasonable business and travel expenses incurred in the performance of his duties and 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. The terms- 34 -of Mr. O’Hagan’s employment agreement relating to the compensation and benefits to which he was entitled upon various terminations of employment (including gross-up payments) were identical to those contained in Mr. Karp’s employment agreement, described above, except that Mr. O’Hagan was entitled to continued participation in the Company’s benefit plans following a qualifying termination of employment until age 65. Effective October 30, 2008, we entered intopursuant to which Mr. Christopher (who had served as our Chief Operating Officer since October 25, 2007) would serve as our Chief Executive Officer, fordated October 30, 2008. The agreement contains 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 agreement entitles Mr. Christopher to an annual base salary of $600,000 (to be adjusted upward annually at a rate commensurate with increases granted to other key executives) and a discretionary cash incentive bonuscompensation in an amount consistent with the executive bonusincentive compensation program which the Company establishes for other- 35 - Effective as of October 17, 2002, theentered intois party to an employment agreement with Kent A. McKee, the Company’s Executive Vice President and Chief Financial Officer. The agreement wasOfficer, dated October 17, 2002, as amended effectiveon December 10, 2008 in order to bring it into compliance with Section 409A of the Internal Revenue Code.2008. The agreement provides that Mr. McKee will 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. 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 bonuscompensation consistent with the executive bonusincentive 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-upgross-which was furtherdated October 25, 2007, as amended effectiveon December 2, 2008 in order to bring the agreement into compliance with Section 409A of the Internal Revenue Code.2008. The term of Mr. Karp’s consulting agreement 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. During his consulting period, Mr. Karp will serve as independent consultant and- 36 -bonus)incentive compensation) during the three-year period from 2005 to 2007)2007 and (ii) $2,000,000. In addition, during the consulting period, Mr. Karp will be entitled to continue to participate in our health and medical benefit plans provided he bears the full cost of such participation, and the Company will pay to him an amount equal to his monthly cost of continuation coverage under COBRA for each month during the consulting period.the Company is requiredMr. Karp will continue to make a lump sum severance payment equal toreceive the balance of all amounts that Such lump sum amount will be discounted for present value. In addition, in such event, the Company will continue to provide the other benefits that would have been provided under the consulting agreement for the remainder of the consulting period. In the event that any payment would be subject to the excise tax imposed by the “golden parachute” regulations under the Internal Revenue Code, Mr. Karp will be entitled to a gross-up payment from the Company to cover such taxes.- 37 -
AGREEMENTS AS OF THE END OF 20082010 Termination Without Cause Change in Control Intrinsic Intrinsic Value Value Salary & of Stock Consulting Salary & of Stock Consulting Bonus Benefits Options Agreement Bonus Benefits Options Agreement Name (a) ($)(b) ($)(c) ($)(d) ($)(e) ($)(f) ($)(g) ($)(h) ($)(i) Harvey L. Karp $ 3,750,000 $ 31,821 — $ 6,666,667 $ 3,750,000 $ 31,821 — $ 6,622,865 William D. O’Hagan — — — — — — — — Gregory L. Christopher $ 3,622,181 $ 337,662 $ 13,021 — $ 4,678,068 $ 337,662 $ 13,021 — Larry J. Stoddard — — — — — — — — Kent A. McKee $ 2,558,926 $ 318,903 $ 16,276 — $ 3,243,108 $ 318,903 $ 16,276 — 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 — — — — — — — — — — — — — — — — — — — — — — 2008(1) Includes the value of base salary continuation and annual incentive compensation equal to the average annual incentive compensation actually paid in the immediately preceding three years for the remainder of the term 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) Includes the value of health insurance continuation coverage under COBRA for the term of Mr. Karp’s consulting agreement. (3) Includes the value of continued participation in the Company’s benefit plans following termination of employment until age 65. (4) Includes 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 $33.04. (5) Includes the value of Mr. Karp’s consulting fee. The amounts shown in columns (e) and (j) assume a termination of Mr. Karp’s employment agreement other than for cause or by reason of death or disability as of December 25, 2010, at which point Mr. Karp’s consulting agreement would have gone into effect. Payment of Mr. Karp’s consulting fee is contingent upon the continued provision of consulting services in accordance with the terms of the consulting agreement, provided, however, that if the consulting period is terminated by the Company without cause or by Mr. Karp for good reason, Mr. Karp will continue to receive the amounts that would have been payable under the consulting agreement for the remainder of the consulting period. (6) Gross-up payment to cover the excise tax imposed by the “golden parachute” regulations under the Internal Revenue Code. Change in Pension Value and Fees Nonqualified Earned Non-Equity Deferred or Paid Stock Option Incentive Plan Compensation All Other in Cash Awards Awards Compensation Earnings Compensation Total Name (a) ($)(b) ($)(c) ($)(d) ($)(e) (f) ($)(g) ($)(h) Alexander P. Federbush $ 63,500 — $ 13,168 — — — $ 76,668 Paul J. Flaherty $ 53,000 — $ 13,168 — — — $ 66,168 Gennaro J. Fulvio $ 70,750 — $ 13,168 — — — $ 83,918 Gary S. Gladstein $ 60,500 — $ 13,168 — — — $ 73,668 Scott J. Goldman $ 49,000 — $ 13,168 — — — $ 62,168 Terry Hermanson $ 64,750 — $ 13,168 — — — $ 77,918 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 From(1) Represents the aggregate grant date fair value of awards granted to our directors in 2010, determined under Financial Accounting Standards Board Accounting 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 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. 30, 2007 through December 27, 2008,25, 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.- 38 - 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 Common Stock on thetheir date the option is granted. As of March 9, 2009, options to purchase 45,336 shares of Common Stock were outstanding under the Company’s 1994 Non-Employee Director Stock Option Plan.
OF THE BOARD OF DIRECTORS(1)- 39 -27, 200825, 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 26, 2009.Gennaro J. Fulvio,Gary S. Gladstein, Chairman Gennaro J. Fulvio Terry Hermanson Alexander P. FederbushGary S. Gladstein____________________(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 REPORTPaul J. Flaherty Gary S. GladsteinGennaro J. Fulvio 4044 -27, 200825, 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 1,773 $ 27.86 304 Equity compensation plans not approved by security holders 311 (1) 18.27 — Total 2,084 $ 26.43 304 (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
(1) On February 13, 2002 Mr. William D. O’Hagan, President and Chief Executive Officer, was granted an option to acquire 155,610 sharesOf 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 commonrestricted stock, at an exercise pricestock appreciation rights, or stock options. The remaining securities are available for issuance 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). The O’Hagan Treasury Options may only be exercised for shares of common stock held in treasury by the Company and will remain exercisable by his estate for a period of up to 12 months following Mr. O’Hagan’s death on October 27, 2008.options only.
ACCOUNTING FIRM26, 2009,31, 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- 41 -20092011 fiscal year without further stockholder action. Further, even if27, 200825, 2010 and December 29, 200726, 2009 and fees for other services rendered by E&Y during those periods:2008 2007 Audit Fees $ 1,992,300 $ 2,132,922 Audit-Related Fees 262,714 269,944 Tax Fees 374,676 341,447 All Other Fees 2,710 3,500 $ 2,632,400 $ 2,747,813 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 20082010 and 2007.matters and audits of employee benefit plans.- 42 -2008years 2010 and 2007,2009, respectively, under the categories Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees described above were pre-approved.
EXECUTIVE OFFICERSPROPOSALTO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORSAPPROVAL OF THE COMPANY.PROPOSAL TO APPROVECOMPENSATION OF THE 2009 STOCK INCENTIVE PLANCOMPANY’S NAMED EXECUTIVE OFFICERS.
VOTE ON NAMED EXECUTIVE OFFICER COMPENSATIONhas adopted, uponbelieves that stockholders should have the recommendationopportunity to vote on the compensation of ournamed executive officers every three years. The Board of Directors believes an advisory vote every three years will allow the Company adequate time to respond to stockholder feedback on executive compensation and to implement any desired changes to the Company’s executive officer compensation programs. Additionally, the Board of Directors believes that an advisory vote at this frequency will provide the Company’s stockholders with sufficient time to evaluate the effectiveness of the Company’s overall compensation philosophy, policies, and practices in the context of the Company’s short- and long-term business results, and will permit the stockholders to observe and evaluate the impact of any changes to the Company’s executive compensation policies and practices which have occurred since the last advisory vote on executive compensation.Mueller Industries, Inc. 2009 Stock Incentive Plan (the “Plan”). The Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based awards (collectively, “Awards”) to our current and prospective employees, non-employee membersresults of the Board,vote and other service providers. The Plan is subjecttake them into consideration in determining how often to conduct the approvalstockholder vote on the compensation of the Company’s named executive officers.Company. No Awards will be granted pursuant toCompany approve, on an advisory basis, whether the Plan until it is approved bystockholder vote on the compensation of the Company’s stockholders. The following is a summary ofnamed executive officers listed in the material features of the Plan, the complete text of which is attached to thisannual proxy statement as Appendix I.Purpose The Plan is designed to aid inshould occur EVERY YEAR.”Company’s ability to attract, retain and motivate qualified individuals to become and remain employees, officers, directors and consultantsstockholders of the Company and to promoteapprove, on an advisory basis, whether the creationstockholder vote on the compensation of long-term value for the Company’s stockholders by aligningnamed executive officers listed in the interests of such individuals with those ofannual proxy statement should occur EVERY TWO YEARS.”stockholders. Given the entrepreneurial culturestockholders of the Company approve, on an advisory basis, whether the Compensation Committee and Board believe that talented employees create a competitive advantage and that recruiting, motivating, and retaining such talented employees requires that such individuals have a vested interest instockholder vote on the long-term success of the business. Accordingly, the Board has adopted the Plan as a part its broader compensation strategy, which has been and will continue to have a material portion of compensation in the form of equity-based long-term incentive opportunities.- 43 -Administration The Plan will be administered by the Compensation Committee. The Compensation Committee will have the authority to, among other things, designate participants, grant Awards, determine the number of shares of Common Stock to be covered by Awards and determine the terms and conditions of any Awards, and construe and interpret the Plan and related Award agreements. The Compensation Committee is also permitted to delegate its authority under the Plan to officers or employees of the Company, although any Award granted to any person who is not an employee of the Company or who is subject to Section 16 of the Exchange Act must be expressly approved by the Compensation Committee.Shares Subject to the Plan The Company has authorized 750,000 shares of the Company’s Common Stock for issuance pursuant to Awards under the Plan. This proposed share reserve is based on the Company’s projections of internal share requirements over the next several years to provide competitive and meaningful long-term incentive opportunities to employees of the Company. Awards and the shares authorized under the Plan are subject to adjustment as described below under “Changes in Capital Structure.” If any Award granted under the Plan expires or is canceled, forfeited, settled in cash or otherwise terminated without delivery of shares to a participant, the undelivered shares will again become available for Awards under the Plan.Eligibility The following individuals will be eligible to participatenamed executive officers listed in the Plan: (i) each employee of the Company or its affiliates, of which there were approximately 4,086 at December 27, 2008, (ii) each non-employee director of the Company or its affiliates, of which there are currently 6, (iii) individuals who are not employees or directors of the Company or its affiliates but nonetheless provide substantial services to the Company or its affiliates, and who are designated as eligible by the Compensation Committee, and (iv) prospective employees of the Company or its affiliates, although such individuals may not receive any payment or exercise any rights relating to Awards until they have actually commenced employment.- 44 -Grants of Awards The Compensation Committee may grant awards of non-qualified stock options, incentive stock options, restricted stock awards, performance awards, stock appreciation rights, restricted stock unit awards, and other stock-based awards.Stock Options. The Plan provides for the grant of both incentive stock options, within the meaning of Section 422(b) of the Internal Revenue Code, and non-qualified stock options. A stock option granted under the Plan provides a participant with the right to purchase, within a specified period of time, a stated number of shares of Common Stock at the price specified in the applicable Award agreement. The exercise price applicable to a stock option will be set by the Compensation Committee at the time of grant, and to the extent intended to avoid treatment as nonqualified deferred compensation under Section 409A of the Internal Revenue Code or to be considered “performance based compensation” under Section 162(m) of the Internal Revenue Code, will not be less than the fair market value of a share of Common Stock on the date of grant. Further, stock options may not be repriced without stockholder approval. Stock options will vest in accordance with the terms of the applicable Award agreement. The maximum term of an option granted under the Plan is ten years from the date of grant (or five years in the case of an incentive stock option granted to a 10% stockholder). Payment of the exercise price of an option may be made in cash, Common Stock, pursuant to a delivery of a notice of “net exercise,” or in any other form of consideration approved by the Compensation Committee. The Plan provides that participants terminated for “cause” (as such term is defined in the Plan) will forfeit all of their stock options, whether or not vested. In addition, participants terminated by reason of a “qualifying retirement” (as such term is defined in the Plan) will have their stock options continue to vest according to schedule and such options will remain exercisable until they expire. Participants terminated for any other reason will forfeit their unvested options, retain their vested options, and will have one year (in the case of a termination by reason of death or disability) or 90 days (in all other cases) following their termination date to exercise their vested options.Restricted Stock. An award of restricted stock is a grant of shares of Common Stock which are subject to limitations on transfer during a restricted period established in the applicable Award agreement. Except under extraordinary circumstances, no restricted stock Award may vest earlier than the first anniversary of the date of grant. Generally speaking, holders of restricted stock will generally have the rights- 45 -and privileges of a stockholder with respect to their restricted stock. In the event a participant is terminated for any reason, the vesting with respect to the participant’s restricted stock will cease, and as soon as practicable following the termination, the Company will repurchase all of such participant’s unvested shares of restricted stock at a purchase price equal to the original purchase price paid for the restricted stock, or if the original purchase price is equal to $0, the unvested shares of restricted stock will be forfeited by the participant to the Company for no consideration.Performance Awards. Performance awards (classified as either performance shares or performance units) represent the right to receive certain amounts based on the achievement of pre-determined performance goals during a designated performance period. The terms of each performance award will be set forth in the applicable Award agreement. The Compensation Committee will be responsible for setting the applicable performance goals, which will be limited to specific levels of or increases in one or more of the following: return on equity; diluted earnings per share; net earnings; total earnings; earnings growth; return on capital; working capital turnover; return on assets; earnings before interest and taxes (EBIT); earnings before interest, taxes, depreciation and amortization (EBITDA); sales; sales growth; gross margin; return on investment; increase in the fair market value per share; share price (including but not limited to, growth measures and total stockholder return); operating profit; cash flow (including, but not limited to, operating cash flow and free cash flow); cash flow return on investment (which equals net cash flow divided by total capital); inventory turns; financial return ratios; total return to stockholders; market share; earnings measures/ratios; economic value added; balance sheet measurements including (but not limited to receivable turnover); internal rate of return; or expense targets. Performance awards which have been earned as a result of the relevant performance goals being achieved may be paid in the form of cash, Common Stock or other Awards under the Plan (or some combination thereof). If a participant is terminated, the participant will forfeit all performance awards held by such participant.Other Stock-Based Awards. The Plan authorizes the Compensation Committee to grant other Awards that may be denominated in, payable in, valued in, or otherwise related to shares of Common Stock, including, but not limited to, restricted stock units and stock appreciation rights. Such awards and the terms applicable to such Awards will be set forth in Award agreements.- 46 -General. All Awards granted under the Plan will be subject to incentive compensation clawback and recoupment policies implemented by the Board from time to time. In addition, the Compensation Committee may modify the terms of any Awards granted to participants located outside the United States in a manner deemed by the Compensation Committee to be necessary or appropriate in order that such Awards confirm with the laws of the country or countries where such participants are located.Changes in Capital Structure In the event of any change in the outstanding Common Stock or the capital structure of the Company, the declaration of any extraordinary dividend, or any change in applicable laws or circumstances which results or could result in the substantial dilution or enlargement of participants’ rights under the Plan, the Compensation Committee shall adjust the aggregate number of shares of Common Stock which may be granted pursuant to Awards, the number of shares of Common Stock covered by outstanding Awards under the Plan, and the per-share price of outstanding Awards under the Plan.Corporate Events Under the Plan, unless otherwise provided in an Award agreement, in the event of a “corporate event” (as defined in the Plan), the Compensation Committee may, in its discretion, provide for any one or more of the following: (i) require that outstanding Awards be assumed or substituted in connection with such event, (ii) accelerate the vesting of any outstanding Awards upon the consummation of such event, (iii) cancel outstanding Awards upon the consummation of such event and provide Award holders with the per-share consideration being received by the Company’s stockholders in connection with such event in exchange for their Awards, or (iv) replace outstanding Awards with a cash incentive program that preserves the value of the replaced Awards and contains identical vesting conditions.Non-Transferability of Awards Except as otherwise provided by the Compensation Committee, the Plan provides that stock options and performance awards are generally nontransferable other than by will or the laws of descent and distribution, and that restricted stock is generally nontransferable.- 47 -Termination and Amendment The Board may amend or terminate the Plan at any time, except that no amendment may, without stockholder approval, violate the stockholder approval requirements of the national securities exchange on which the Common Stock is principally listed. Unless sooner terminated, the Plan will terminate on the date before the tenth anniversary of the date the Plan was adopted by the Board.U.S. Federal Income Tax Consequences Related to Options The following is a brief discussion of the U.S. federal income tax consequences for options granted under the Plan. The Plan is not qualified under Section 401(a) of the Internal Revenue Code. This discussion is not intended to be exhaustive and does not describe state or local taxes consequences, and holders of options under the Plan should consult with their own tax advisors. Except as noted below for corporate “insiders,” with respect to nonqualified stock options, (i) no income is realized by the optionee at the time the option is granted; (ii) generally, at exercise, ordinary income is realized by the optionee in an amount equal to the difference between the option price paid for the shares and the fair market value of the shares, if unrestricted, on the date of exercise, and the optionee’s employer is generally entitled to a tax deduction in the same amount subject to applicable tax withholding requirements; and (iii) upon a subsequent sale of the stock received on exercise, appreciation (or depreciation) after the date of exercise is treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held. No taxable income is realized by an optionee upon the grant or exercise of an incentive stock option. If stock is issued to an optionee pursuant to the exercise of an incentive stock option, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to such optionee, then (i) upon sale of such shares, any amount realized in excess of the option price will be taxed to such optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) no deduction will be allowed to the optionee’s employer for federal income tax purposes. Except as noted below for corporate “insiders,” if the stock acquired upon the exercise of an incentive stock option is disposed of prior to the expiration of either holding period described above, generally (i) the optionee will realize ordinary- 48 -income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at exercise (or, if less, the amount realized on the disposition of such shares) over the option price paid for such shares and (ii) the optionee’s employer will be entitled to deduct such amount for federal income tax purposes if the amount represents an ordinary and necessary business expense. Any further gain (or loss) realized by the optionee will be taxed as short-term or long-term capital gain (or loss), as the case may be, and will not result in any deduction by the employer. Subject to certain exceptions for disability or death, if an incentive stock option is exercised more than three months following termination of employment, the exercise of the option will generally be taxed as the exercise of a nonqualified stock option. For purposes of determining whether an optionee is subject to any alternative minimum tax liability, an optionee who exercises an incentive stock option will generally be required to increase his alternative minimum taxable income and compute the tax basis in the stock so acquired, in the same manner as if the optionee had exercised a nonqualified stock option. Each optionee is potentially subject to the alternative minimum tax. In substance, a taxpayer is required to pay the higher of his alternative minimum tax liability and his “regular” income tax liability. As a result, a taxpayer has to determine his potential liability under both tax schemes. As a result of the rules under Section 16(b) of the Exchange Act, depending upon the particular exemption from the provisions of Section 16(b) utilized, “insiders” (as defined in Section 16(b)) may not receive the same tax treatment as set forth above with respect to the grant and/or exercise of options. Generally, insiders will not be subject to taxation until the expiration of any period during which they are subject to the liability provisions of Section 16(b) with respect to any particular option. Insiders should check with their own tax advisers to ascertain the appropriate tax treatment for any particular option.New Plan Benefits Because awards to be granted in the future under the Plan are at the discretion of the Compensation Committee, it is not possible to determine the benefits or the amounts received or that will be received under the Plan by eligible participants.- 49 -Proposed Action Approval of the Plan proposal requires the affirmative vote of a majority of the votes cast at the Annual Meeting by the stockholders present in person or by proxy and entitled to vote thereon, provided that the total vote cast on the proposal represents over 50% in interest of all securities entitled to vote on the proposal.THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARESFOR THE PROPOSALOF THE ADOPTION OF THE 2009 STOCK INCENTIVE PLAN.STOCKHOLDER PROPOSAL REGARDING BOARD MEMBERSHIP The Domestic and Foreign Missionary Society of the Episcopal Church, 815 Second Avenue, New York, New York 10017, which beneficially holds 16,000 shares of Common Stock, has given notice of its intention to present the following stockholder proposal at the Annual Meeting. In accordance with the rules of the Securities and Exchange Commission, the text of their resolution and supporting statement is set forth verbatim below. Approval of this stockholder proposal requires the affirmative vote of a majority of the votes cast at the Annual Meeting by the stockholders present in person or by proxy and entitled to vote thereon.Board inclusiveness WHEREAS: In response to the recent corporate scandals, the U.S. Congress (Sarbanes-Oxley Act), the stock exchanges and the SEC each have taken actions to enhance the independence, accountability and responsiveness of corporate boards, including requiring greater board and committee independence. We believe that in order to achieve such independence it is necessary for corporations to abandon the cozy clubbiness that has all too often characterized boards in the past. As companies seek new board members to meet the new independence standards, there is a unique opportunity to enhance diversity on the board. A number of corporations have included their commitment to board diversity (by sex and race) in the Charter for their nominating committees (a charter now being required for NYSE and NASDAQ listed companies). We believe that the judgments and perspectives that women and members of minority groups bring to board- 50 -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; 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 2009:a. On its efforts to encourage diversified representation on the board- 51 -b.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.BOARD OF DIRECTORS STATEMENT AND RECOMMENDATIONAGAINST STOCKHOLDER PROPOSAL Mueller seeks the most qualified directors it can find based on integrity, experience, competence, specific skills and knowledge and a commitment to the interests of our company and its various constituencies. We do not exclude any potential candidate based on gender, color of skin, ethnic origin, political affiliation, religious preference, sexual orientation, etc. We consider all qualified candidates in our search for the best persons to serve as directors. Should the election of the best available candidates result in women or persons of color being added to our Board, that would be entirely consistent with our objective of having the most qualified persons serve on our Board. Mueller has no prejudice against anyone. The record shows that we have been successful in attracting an outstanding Board. We believe Mueller is the most successful and admired company in our industry. Moreover, several years ago Forbes Magazine listed the 100 Most Trustworthy Companies in America. Mueller had the honor of being chosen as No. 7 on the list, only 1 point shy of tying for the No. 1 position. We are proud of our Board’s record and commitment to excellence. For example, Mueller had the foresight to prepare for the current financial turbulence by aggressively strengthening its balance sheet. Consequently, Mueller has a strong balance sheet with limited leverage and, as of December 27, 2008, had over $275 million in cash on hand. The Board believes a fixed timeline for implementing the proposed shareholder resolution would not achieve the best possible Board for Mueller and would result in incremental costs without providing corresponding benefits to Mueller and its- 52 -stockholders. The proposal is not in the best interests of Mueller and its stockholders, which interests are best served by permitting the Board the flexibility to seek highly qualified directors. Mueller’s stockholders should continue to elect to our Board the very best available director candidates. Attracting and selecting the best people has been the key to Mueller’s success and we must not compromise that principle. The proposed resolution is neither necessary nor wise because Mueller is already committed to nominating the best director candidates, and that includes women and persons of color.AGAINST FOR A STOCKHOLDER VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION TO OCCUR EVERY THREE YEARS.
2011 ANNUAL BONUS PLANNew 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 STOCKHOLDERTHE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARES FOR THE PROPOSAL REGARDING BOARD MEMBERSHIP. PROXIES RECEIVED BYTO APPROVE THE COMPANY WILL BE VOTED AGAINSTMUELLER INDUSTRIES, INC. 2011 ANNUAL BONUS PLAN.THIS PROPOSAL UNLESS THE STOCKHOLDER SPECIFIES OTHERWISE IN THE PROXY.
AND OTHER PROPOSALS FOR 20102012 ANNUAL MEETING7, 20095, 2011 will be held on or about May 6, 2010.3, 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 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 2010,2012, no earlier than February 6, 20105, 2012 and no later than March 8, 2010.6, 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.- 53 -2010,2012, such proposal must be received by the Secretary of the Company by November 26, 200924, 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 20102012 is changed to a date more than 30 days earlier or later than May 7, 2010,3, 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 20082010 all filing requirements applicable to its officers, directors and ten percent stockholders were complied with. On July 25, 2008, Messrs. O’Hagan and McKee were granted employee stock options under the Company’s long-term equity incentive program, but we inadvertently failed to timely file a Section 16(a) report for each of them. The stock option awards were reported on August 20, 2008.27, 200825, 2010 that accompanies this Proxy Statement. These financial statements are also on file with the SEC,- 54 -27, 200825, 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.20092011 Annual General Meeting to be held on May 7, 2009.
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 “Proposal to ApproveAdopt the 2009 Stock Incentive Plan” and “Stockholder Proposal Regarding Board Membership.Mueller Industries, Inc. 2011 Annual Bonus Plan.”nnYou have the same last name and exact address as another investor(s).By order of the Board of Directors Gary C. Wilkerson Appendix IMUELLER INDUSTRIES, INC.2009 STOCK INCENTIVE PLAN 1.Purpose. The purpose of the Plan is to assist the Company in attracting, retaining, motivating and rewarding certain key employees, officers, directors and consultants of the Company and its Affiliates, and promoting the creation of long-term value for stockholders of the Company by closely aligning the interests of such individuals with those of such stockholders. The Plan authorizes the award of Stock-based incentives to Eligible Persons to encourage such persons to expend their maximum efforts in the creation of stockholder value. 2.Definitions. For purposes of the Plan, the following terms shall be defined as set forth below:(a) “Affiliate” means, with respect to any entity, any other entity that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such entity.(b) “Award” means any Option, Restricted Stock, Restricted Stock Unit, Stock Appreciation Right, Performance Award or other Stock-based award granted under the Plan. (c) “Board” means the Board of Directors of the Company.(d) “Cause” means, in the absence of an effective employment agreement between a Participant and the Employer otherwise defining Cause, (i) a Participant’s conviction of or indictment for any crime (whether or not involving the Company or its Affiliates) (A) constituting a felony or (B) that has, or could reasonably be expected to result in, an adverse impact on the performance of Holder’s duties to the Employer, or otherwise has, or could reasonably be expected to result in, an adverse impact to the business or reputation of the Company or its Affiliates; (ii) conduct of the Holder, in connection with his or her employment,A-1that has, or could reasonably be expected to result in, material injury to the business or reputation of the Company or its Affiliates; (iii) any material violation of the policies of the Company or its Affiliates, including, but not limited to those relating to sexual harassment, the disclosure or misuse of confidential information, or those set forth in the manuals or statements of policy of the Company or its Affiliates; or (v) willful neglect in the performance of the Holder’s duties for the Employer or willful or repeated failure or refusal to perform such duties;provided,however, that if, subsequent to the Holder’s termination of employment (whether voluntary or involuntary) without Cause, it is discovered that the Holder’s employment could have been terminated for Cause, such Holder’s employment shall be deemed to have been terminated for Cause. In the event there is an effective employment agreement between a Participant and the Employer defining Cause, “Cause” shall have the meaning provided in such agreement, and a termination by the Employer for Cause hereunder shall not be deemed to have occurred unless all applicable notice and cure periods in such employment agreement are complied with. (e) “Change in Control” means: (i) a change in ownership or control of the Company effected through a transaction or series of transactions (other than an offering of Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” (as defined in Section 3(a)(9) of the Exchange Act) or any two or more persons deemed to be one “person” (as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than the Company or any of its Affiliates, or an employee benefit plan maintained by the Company or any of its Affiliates, directly or indirectly acquire “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s securities outstanding immediately after such acquisition;(ii) the date upon which individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”), cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprisingA-2the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or (iii) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” (as defined in Section 3(a)(9) of the Exchange Act) or to any two or more persons deemed to be one “person” (as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Company’s Affiliates.(f) “Code” means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto.(g) “Committee” means the Board or such other committee appointed by the Board consisting of two or more individuals.(h) “Company” means Mueller Industries, Inc., a Delaware corporation.(i) “Disability” means, in the absence of any employment agreement between a Participant and the Employer otherwise defining Disability, the permanent and total disability of such Participant within the meaning of Section 22(e)(3) of the Code. In the event there is an employment agreement between a Participant and the Employer defining Disability, “Disability” shall have the meaning provided in such agreement.(j) “Disqualifying Disposition” means any disposition (including any sale) of Stock acquired by exercise of an Incentive Stock Option made within the period which is either (i) two years after the date the Participant was granted the Incentive Stock Option, or (ii) one year after the date the Participant acquired Stock by exercising the Incentive Stock Option. (k) “Effective Date” shall mean February 12, 2009.A-3(l) “Eligible Person” means (i) each employee of the Company or of any of its Affiliates, including each such person who may also be a director of the Company and/or its Affiliates; (ii) each non-employee director of the Company and/or its Affiliates; (iii) each other person who provides substantial services to the Company and/or its Affiliates and who is designated as eligible by the Committee; and (iv) any person who has been offered employment by the Company or its Affiliates; provided, that such prospective employee may not receive any payment or exercise any right relating to an Award until such person has commenced employment with the Company or its Affiliates. An employee on an approved leave of absence may be considered as still in the employ of the Company or its Affiliates for purposes of eligibility for participation in the Plan.(m) “Employer” means either the Company or an Affiliate of the Company that the Participant (determined without regard to any transfer of an Award) is principally employed by or provides services to, as applicable.(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and rules thereto.(o) “Expiration Date” means the date upon which the term of an Option expires, as determined under Section 5(b) hereof.(p) “Fair Market Value” means, as of any date when the Stock is listed on one or more national securities exchanges, the closing price reported on the principal national securities exchange on which such Stock is listed and traded on the date of determination. If the Stock is not listed on an exchange, or representative quotes are not otherwise available, the Fair Market Value shall mean the amount determined by the Board in good faith, and in a manner consistent with Section 409A of the Code, to be the fair market value per share of Stock.(q) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.(r) “Nonqualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.A-4(s) “Option” means a conditional right, granted to a Participant under Section 5 hereof, to purchase Stock at a specified price during specified time periods. Certain Options granted under the Plan are intended to qualify as Incentive Stock Options.(t) “Option Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an individual Option grant.(u) “Participant” means an Eligible Person who has been granted an Award under the Plan, or if applicable, such other person or entity who holds an Award.(v) “Performance Award” means an Award granted to a Participant under Section 7 hereof, which is subject to the achievement of Performance Objectives during a Performance Period. A Performance Award shall be designated as a “Performance Share” or a “Performance Unit” at the time of grant.(w) “Performance Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an individual Performance Award grant.(x) “Performance Objectives” means the performance objectives established pursuant to this Plan for Participants who have received Performance Awards.(y) “Performance Period” means the period designated for the achievement of Performance Objectives.(z) “Plan” means this Mueller Industries, Inc. 2009 Stock Incentive Plan.(aa) “Qualified Member” means a member of the Committee who is a “Non-Employee Director” within the meaning of Rule 16b-3 and an “outside director” within the meaning of Regulation 1.162-27(c) under Code Section 162(m).A-5(bb) “Qualifying Retirement” means the Termination by a Participant who has (i) attained age 65 and has completed ten or more years of service with the Company or its Affiliates, or (ii) had such Termination approved by the Board as a Qualifying Retirement under the Plan.(cc) “Restricted Stock” means Stock granted to a Participant under Section 6 hereof that is subject to certain restrictions and to a risk of forfeiture.(dd) “Restricted Stock Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an individual Restricted Stock grant.(ee) “Restricted Stock Unit” means a notional unit representing the right to receive one share of Stock (or the cash value of one share of Stock, if so determined by the Committee) on a specified settlement date.(ff) “Securities Act” means the Securities Act of 1933, as amended from time to time, including rules thereunder and successor provisions and rules thereto.(gg) “Stock” means the Company’s Common Stock, par value $0.01 per share, and such other securities as may be substituted for such stock pursuant to Section 9 hereof.(hh) “Stock Appreciation Right” means a conditional right to receive an amount equal to the value of the appreciation in the Stock over a specified period. Except in the event of extraordinary circumstances, as determined in the sole discretion of the Committee, or pursuant to Section 9(b) below, Stock Appreciation Rights shall be settled in Stock.(ii) “Termination” means the termination of a Participant’s employment or service, as applicable, with the Employer;provided, however, that, if so determined by the Committee at the time of any change in status in relation to the Employer (e.g., a Participant ceases to be an employee and begins providing services as a consultant, or vice versa), such change in status will not be deemed to be a Termination hereunder. Unless otherwise determined by the Committee, in the event that any Employer ceases to be an Affiliate of the Company (by reasonA-6of sale, divesture, spin-off or other similar transaction), unless a Participant’s employment or service is transferred to another entity that would constitute an Employer immediately following such transaction, any Participants employed by or providing services to such former Employer shall be deemed to have suffered a Termination hereunder as of the date of the consummation of such transaction. 3.Administration.(a)Authority of the Committee. Except as otherwise provided below, the Plan shall be administered by the Committee. The Committee shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to (i) select Eligible Persons to become Participants; (ii) grant Awards; (iii) determine the type, number of shares of Stock subject to, and other terms and conditions of, and all other matters relating to, Awards; (iv) prescribe Award agreements (which need not be identical for each Participant) and rules and regulations for the administration of the Plan; (v) construe and interpret the Plan and Award agreements and correct defects, supply omissions, or reconcile inconsistencies therein; (vi) suspend the right to exercise Awards during any period that the Committee deems appropriate to comply with applicable securities laws, and thereafter extend the exercise period of an Award by an equivalent period of time; and (vii) make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. Any action of the Committee shall be final, conclusive and binding on all persons, including, without limitation, the Company, its Affiliates, Eligible Persons, Participants and beneficiaries of Participants.(b)Manner of Exercise of Committee Authority. At any time that a member of the Committee is not a Qualified Member, (i) any action of the Committee relating to an Award intended by the Committee to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code may be taken by a subcommittee, designated by the Committee or the Board, composed solely of two or more Qualified Members (a “Qualifying Committee”); and (ii) any action relating to an Award granted or to be granted to a Participant who is then subject to Section 16 of the Exchange Act in respect of the Company may be taken either by such a Qualifying Committee, or by the Committee but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action; provided, that upon such abstention or recusal, the Committee remains composed of two or more Qualified Members. Any action authorized by such aA-7Qualifying Committee or by the Committee upon the abstention or recusal of such non-Qualified Member(s) shall be deemed to be the action of the Committee for purposes of the Plan. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee.(c)Delegation. To the extent permitted by applicable law, the Committee may delegate to officers or employees of the Company or any of its Affiliates, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions, including but not limited to administrative functions, as the Committee may determine appropriate. The Committee may appoint agents to assist it in administering the Plan. Notwithstanding the foregoing or any other provision of the Plan to the contrary, any Award granted under the Plan to any person or entity who is not an employee of the Company or any of its Affiliates or to any person who is subject to Section 16 of the Exchange Act shall be expressly approved by the Committee.(d)Section 409A. The Committee shall take into account compliance with Section 409A of the Code in connection with any grant of an Award under the Plan, to the extent applicable. 4.Shares Available Under the Plan.(a)Number of Shares Available for Delivery. Subject to adjustment as provided in Section 9 hereof, the total number of shares of Stock reserved and available for delivery in connection with Awards under the Plan shall be 750,000, all of which may be issued or transferred upon exercise or settlement of Incentive Stock Options. Shares of Stock delivered under the Plan shall consist of authorized and unissued shares or previously issued shares of Stock reacquired by the Company on the open market or by private purchase.(b)Share Counting Rules. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award. To the extent that an Award expires or is canceled, forfeited, settled in cash or otherwise terminated without a delivery to the Participant of the full number of shares to which the Award related, the undelivered shares will again be available for grant. Shares withheld in paymentA-8of the exercise price or taxes relating to an Award and shares equal to the number surrendered in payment of any exercise price or taxes relating to an Award shall be deemed to constitute shares not delivered to the Participant and shall be deemed to again be available for Awards under the Plan;provided,however, that, where shares are withheld or surrendered more than ten years after the date of the most recent stockholder approval of the Plan or any other transaction occurs that would result in shares becoming available under this Section 4(b), such shares shall not become available if and to the extent that it would constitute a material revision of the Plan subject to stockholder approval under then applicable rules of the national securities exchange on which the Stock is listed.(c)162(m) Limitation. Notwithstanding anything to the contrary herein, during any time that the Company is subject to Section 162(m) of the Code, the maximum number of shares of Stock with respect to which Options, Performance Awards and Stock Appreciation Rights (to the extent granted as an Award under the Plan) may be granted to any individual in any one year shall not exceed 100,000. 5.Options.(a)General. Options may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate;provided,however, that Incentive Stock Options may only be granted to Eligible Persons who are employed by the Employer. The provisions of separate Options shall be set forth in an Option Agreement, which agreements need not be identical.(b)Term. The term of each Option shall be set by the Committee at the time of grant;provided,however, that no Option granted hereunder shall be exercisable after the expiration of ten (10) years from the date it was granted.(c)Exercise Price. The exercise price per share of Stock for each Option shall be set by the Committee at the time of grant;provided, however, that if an Option is intended (i) to not be considered “nonqualified deferred compensation” within the meaning of Section 409A of the Code, (ii) to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code and regulations thereunder, or (iii) to be an Incentive Stock Option, in each case, the applicable exercise price shall not be less than the Fair Market Value, subject to subsection (h) below in the case of any Incentive Stock Option.A-9(d)Payment for Stock. Payment for shares of Stock acquired pursuant to Options granted hereunder shall be made in full, upon exercise of the Options, (i) in immediately available funds in United States dollars, or by certified or bank cashier’s check; (ii) by delivery of a notice of “net exercise” to the Company, pursuant to which the Participant shall receive the number of shares of Stock underlying the Options so exercised reduced by the number of shares of Stock equal to the aggregate exercise price of the Options divided by the Fair Market Value on the date of exercise; (iii) by delivery of shares of Stock having a value equal to the exercise price, or (iv) by any other means approved by the Committee. Anything herein to the contrary notwithstanding, if the Committee determines that any form of payment available hereunder would be in violation of Section 402 of the Sarbanes-Oxley Act of 2002, such form of payment shall not be available.(e)Vesting. Options shall vest and become exercisable in such manner, on such date or dates, or upon the achievement of performance or other conditions, in each case, as may be determined by the Committee and set forth in the Option Agreement;provided, however, that notwithstanding any such vesting dates, the Committee may in its sole discretion accelerate the vesting of any Option, which acceleration shall not affect the terms and conditions of any such Option other than with respect to vesting. Unless otherwise specifically determined by the Committee, the vesting of an Option shall occur only while the Participant is employed or rendering services to the Employer, and all vesting shall cease upon a Participant’s termination of employment or services with the Employer for any reason. If an Option is exercisable in installments, such installments or portions thereof which become exercisable shall remain exercisable until the Option expires.(f)Transferability of Options. An Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant. Notwithstanding the foregoing, Nonqualified Stock Options shall be transferable to the extent provided in the Option Agreement or otherwise determined by the Committee.(g)Termination of Employment or Service. Except as may otherwise be provided by the Committee in the Option Agreement: (i) In the event of a Participant’s Termination with the Employer prior to the Expiration Date for any reason other than (A) by the Employer for Cause, (B) by reason of the Participant’s death or Disability, orA-10(C) by reason of a Qualifying Retirement, (1) all vesting with respect to such Participant’s Options shall cease, (2) all of such Participant’s unvested Options shall expire as of the date of such Termination, and (3) all of such Participant’s vested Options shall remain exercisable until the earlier of the Expiration Date or the date that is ninety (90) days after the date of such Termination. (ii) In the event of a Participant’s Termination with the Employer prior to the Expiration Date by reason of such Participant’s death or Disability, (A) all vesting with respect to such Participant’s Options shall cease, (B) all of such Participant’s unvested Options shall expire as of the date of such Termination, and (C) all of such Participant’s vested Options shall expire on the earlier of the Expiration Date or the date that is twelve (12) months after the date of such Termination due to death or Disability of the Participant. In the event of a Participant’s death, such Participant’s Options shall remain exercisable by the person or persons to whom a Participant’s rights under the Options pass by will or the applicable laws of descent and distribution until its expiration, but only to the extent the Options were vested by such Participant at the time of such Termination due to death. (iii) In the event of a Participant’s Termination with the Employer prior to the Expiration Date by reason of a Qualifying Retirement, (A) all of such Participant’s Options shall continue to vest in accordance with their original vesting schedule as if no such termination had occurred, and (B) such Options shall remain exercisable until the Expiration Date. (iv) In the event of a Participant’s Termination with the Employer prior to the Expiration Date by the Employer for Cause, all of such Participant’s Options (whether or not vested) shall immediately expire as of the date of such Termination. (h)Special Provisions Applicable to Incentive Stock Options. (i) No Incentive Stock Option may be granted to any Participant who, at the time the option is granted, owns directly, or indirectly within the meaning of Section 424(d) of the Code, stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any parent or subsidiary thereof, unless such IncentiveA-11Stock Option (A) has an exercise price of at least one hundred ten percent (110%) of the Fair Market Value on the date of the grant of such Option and (B) cannot be exercised more than five (5) years after the date it is granted. (ii) To the extent the aggregate Fair Market Value (determined as of the date of grant) of Stock for which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, such excess Incentive Stock Options shall be treated as Nonqualified Stock Options. (iii) Each Participant who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Participant makes a Disqualifying Disposition of any Stock acquired pursuant to the exercise of an Incentive Stock Option. 6.Restricted Stock.(a)General. Restricted Stock granted hereunder shall be in such form and shall contain such terms and conditions as the Committee shall deem appropriate. The terms and conditions of each Restricted Stock grant shall be evidenced by a Restricted Stock Agreement, which agreements need not be identical. Subject to the restrictions set forth in Section 6(b), except as otherwise set forth in the applicable Restricted Stock Agreement, the Participant shall generally have the rights and privileges of a stockholder as to such Restricted Stock, including the right to vote such Restricted Stock. Unless otherwise set forth in a Participant’s Restricted Stock Agreement, cash dividends and stock dividends, if any, with respect to the Restricted Stock shall be withheld by the Company for the Participant’s account, and shall be subject to forfeiture to the same degree as the shares of Restricted Stock to which such dividends relate. Except as otherwise determined by the Committee, no interest will accrue or be paid on the amount of any cash dividends withheld.(b)Restrictions on Transfer. In addition to any other restrictions set forth in a Participant’s Restricted Stock Agreement, until such time that the Restricted Stock has vested pursuant to the terms of the Restricted Stock Agreement, which vesting the Committee may in its sole discretion accelerate at any time, the Participant shall not be permitted to sell, transfer, pledge, or otherwise encumber the Restricted Stock. Notwithstanding anything contained herein to the contrary, theA-12Committee shall have the authority to remove any or all of the restrictions on the Restricted Stock whenever it may determine that, by reason of changes in applicable laws or other changes in circumstances arising after the date of the Restricted Stock Award, such action is appropriate.(c)Certificates. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, that the Restricted Stock shall be held in book entry form rather than delivered to the Participant pending the release of the applicable restrictions.(d)Termination of Employment or Service. Except as may otherwise be provided by the Committee in the Restricted Stock Agreement, in the event of a Participant’s Termination with the Employer for any reason prior to the time that such Participant’s Restricted Stock has vested, (i) all vesting with respect to such Participant’s Restricted Stock shall cease, and (ii) as soon as practicable following such Termination, the Company shall repurchase from the Participant, and the Participant shall sell, all of such Participant’s unvested shares of Restricted Stock at a purchase price equal to the original purchase price paid for the Restricted Stock, or if the original purchase price is equal to $0, such unvested shares of Restricted Stock shall be forfeited by the Participant to the Company for no consideration as of the date of such Termination. 7.Performance Awards.(a)General. The Board may from time to time authorize grants of Performance Awards to Participants upon such terms and conditions as the Board may determine in accordance with provisions of this Section 7. The terms and conditions of each Performance Award grant shall be evidenced by a Performance Award Agreement, which agreements need not be identical.A-13(b)Value of Performance Units and Performance Shares. Each Performance Unit shall have an initial value that is established by the Committee at the time of grant. Each Performance Share shall have an initial value equal to the Fair Market Value of the Stock on the date of grant. In addition to any other non-performance terms included in the Performance Award Agreement, the Committee shall set the applicable Performance Objectives in its discretion which, depending on the extent to which they are met, will determine the value and/or number of Performance Units or Performance Shares, as the case may be, that will be paid out to the Participant.(c)Earning of Performance Units and Performance Shares. Upon the expiration of the applicable Performance Period, the holder of Performance Units or Performance Shares, as the case may be, shall be entitled to receive payout on the value and number of the applicable Performance Units or Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved and any other non-performance terms met.(d)Form and Timing of Payment of Performance Units and Performance Shares. Payment of earned Performance Units and Performance Shares shall be as determined by the Committee and as evidenced in the Performance Award Agreement. Subject to the terms of the Plan, the Committee, in its sole discretion, may pay earned Performance Units and Performance Shares in the form of cash, Stock or other Awards (or in a combination thereof) equal to the value of the earned Performance Units or Performance Shares, as the case may be, at the close of the applicable Performance Period, or as soon as practicable after the end of the Performance Period. Any Stock may be granted subject to any restrictions deemed appropriate by the Committee. The determination of the Committee with respect to the form of payout of such Awards shall be set forth in the Performance Award Agreement pertaining to the grant of the Performance Award.(e)Nontransferability. Except as otherwise provided in a Performance Award Agreement or otherwise at any time by the Committee, Performance Units and Performance Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, except as otherwise provided in a Performance Award Agreement or otherwise determined at any time by the Committee, a Participant’s rights under the Plan shall be exercisable during his or her lifetime only by such Participant.A-14(f)Termination of Employment or Service. Except as may otherwise be provided by the Committee in the Performance Award Agreement, if, prior to the time that the applicable Performance Period has expired, a Participant undergoes a Termination with the Employer for any reason, all of such Participant’s Performance Awards shall be forfeited by the Participant to the Company for no consideration. (g)Performance Objectives. (i) Each Performance Award shall specify the Performance Objectives that must be achieved before such Award shall become vested and payable. The Committee may adjust such Performance Objectives if, in the sole judgment of the Committee, events or transactions have occurred after the grant that are unrelated to the performance of the Company and/or Participant and result in distortion of the Performance Objectives. The Company also may specify a minimum acceptable level of achievement below which no payment will be made and may set forth a formula for determining the amount of any payment to be made if performance is at or above such minimum acceptable level but falls short of the maximum achievement of the specified Performance Objectives. (ii) Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of an individual Participant or the Employer, division, department or function within the Company or Employer in which the Participant is employed. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by comparison to a group of peer companies or to a financial market index. Performance Objectives shall be limited to specified levels of or increases in one or more of the following: return on equity; diluted earnings per share; net earnings; total earnings; earnings growth; return on capital; working capital turnover; return on assets; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; sales; sales growth; gross margin; return on investment; increase in the fair market value per share; share price (including but not limited to, growth measures and total stockholder return); operating profit; cash flow (including, but not limited to, operating cash flow and free cash flow); cash flow return on investment (which equals net cash flow divided by total capital); inventory turns; financial return ratios; total returnA-15to stockholders; market share; earnings measures/ratios; economic value added; balance sheet measurements including (but not limited to receivable turnover); internal rate of return; or expense targets. (iii) The Committee shall adjust Performance Objectives and the related minimum acceptable level of achievement if, in the sole judgment of the Committee, events or transactions have occurred after the applicable date of grant of a Performance Award that are unrelated to the performance of the Company and/or Participant and result in distortion of the Performance Objectives or the related minimum acceptable level of achievement. Potential transactions or events giving rise to adjustment include but are not limited to (i) restructurings, discontinued operations, extraordinary items or events, and other unusual or non-recurring charges; (ii) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; or (iii) a change in tax law or accounting standards required by generally accepted accounting principles. 8.Other Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, Restricted Stock Units and Stock Appreciation Rights. The Committee may also grant Stock as a bonus, or may grant other awards in lieu of obligations of the Company or an Affiliate to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Committee. The terms and conditions applicable to such Awards shall be determined by the Committee and evidenced by Award agreements, which agreements need not be identical. 9.Adjustment for Recapitalization, Merger, etc.(a)Capitalization Adjustments. The aggregate number of shares of Stock which may be granted or purchased pursuant to Awards (as set forth in Section 4 hereof), the number of shares of Stock covered by each outstanding Award, and the price per share thereof in each such Award shall be equitably and proportionallyA-16adjusted or substituted, as determined by the Committee, as to the number, price or kind of a share of Stock or other consideration subject to such Awards (i) in the event of changes in the outstanding Stock or in the capital structure of the Company by reason of stock dividends, stock splits, reverse stock splits, recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges, or other relevant changes in capitalization occurring after the date of grant of any such Award (including any Corporate Event (as defined below)); (ii) in connection with any extraordinary dividend declared and paid in respect of shares of Stock, whether payable in the form of cash, stock or any other form of consideration; or(iii) in the event of any change in applicable laws or any change in circumstances which results in or would result in any substantial dilution or enlargement of the rights granted to, or available for, Participants in the Plan.(b)Corporate Events. Notwithstanding the foregoing, except as may otherwise be provided in an Award agreement, in connection with (i) a merger or consolidation involving the Company in which the Company is not the surviving corporation; (ii) a merger or consolidation involving the Company in which the Company is the surviving corporation but the holders of shares of Stock receive securities of another corporation and/or other property, including cash; (iii) a Change in Control; or (iv) the reorganization or liquidation of the Company (each, a “Corporate Event”), the Committee may, in its discretion, provide for any one or more of the following: (1) that such Awards be assumed or substituted in connection with such Corporate Event, in which case, the Awards shall be subject to the adjustment set forth in subsection (a) above, and to the extent such Awards are Performance Awards or other Awards that vest subject to the achievement of performance criteria, such Performance Objectives or similar performance criteria shall be appropriately adjusted to reflect the Corporate Event; (2) that the vesting of any Awards shall be accelerated, subject to the consummation of such Corporate Event; (3) that any or all vested and/or unvested Awards be cancelled as of the consummation of such Corporate Event, and provide that holders of vested Awards (including any Awards that would vest on theA-17Corporate Event but for cancellation) so cancelled will receive a payment in respect of cancellation of their Awards based on the amount of the per-share consideration being paid for the Stock in connection with such Corporate Event, less, in the case of Options and other Awards subject to exercise, the applicable exercise price;provided, however, that holders of Options, Stock Appreciation Rights and other Awards subject to exercise shall only be entitled to consideration in respect of cancellation of such Awards if the per-share consideration less the applicable exercise price is greater than zero (and to the extent the per-share consideration is less than or equal to the applicable exercise price, such Awards shall be cancelled for no consideration); or (4) that Awards (other than Awards which are “stock rights” within the meaning of Section 409A of the Code) be replaced with a cash incentive program that preserves the value of the Awards so replaced (determined as of the consummation of the Corporate Event), with subsequent payment of cash incentives subject to the same vesting conditions as applicable to the Awards so replaced, and payment to be made within thirty (30) days of the applicable vesting date.Payments to holders pursuant to clause (3) above shall be made in cash, or, in the sole discretion of the Committee, in the form of such other consideration necessary for a Participant to receive property, cash or securities (or combination thereof) as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the Participant of the number of shares of Stock covered by the Award at such time (less any applicable exercise price). In addition, in connection with any Corporate Event, prior to any payment or adjustment contemplated under this subsection (b), the Committee may require a Participant to (i) represent and warrant as to the unencumbered title to his or her Awards, (ii) bear such Participant’s pro rata share of any post-closing indemnity obligations, and be subject to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms, and similar conditions as the other holders of Stock; and (iv) deliver customary transfer documentation as reasonably determined by the Committee.(c)Fractional Shares. Any adjustment provided under this Section 9 may provide for the elimination of any fractional share which might otherwise become subject to an Award.A-18 10.Use of Proceeds. The proceeds received from the sale of Stock pursuant to the Plan shall be used for general corporate purposes. 11.Rights and Privileges as a Stockholder. Except as otherwise specifically provided in the Plan, no person shall be entitled to the rights and privileges of stock ownership in respect of shares of Stock which are subject to Awards hereunder until such shares have been issued to that person. 12.Employment or Service Rights. No individual shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for a grant of any other Award. Neither the Plan nor any action taken hereunder shall be construed as giving any individual any right to be retained in the employ or service of the Company or an Affiliate of the Company. 13.Compliance With Laws. The obligation of the Company to deliver Stock upon vesting and/or exercise of any Award shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell and shall be prohibited from offering to sell or selling any shares of Stock pursuant to an Award unless such shares have been properly registered for sale with the Securities and Exchange Commission pursuant to the Securities Act or unless the Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale or resale under the Securities Act any of the shares of Stock to be offered or sold under the Plan or any shares of Stock issued upon exercise or settlement of Awards. If the shares of Stock offered for sale or sold under the Plan are offered or sold pursuant to an exemption from registration under the Securities Act, the Company may restrict the transfer of such shares and may legend the Stock certificates representing such shares in such manner as it deems advisable to ensure the availability of any such exemption.A-19 14.Withholding Obligations.As a condition to the vesting and/or exercise of any Award, the Committee may require that a Participant satisfy, through deduction or withholding from any payment of any kind otherwise due to the Participant, or through such other arrangements as are satisfactory to the Committee, the minimum amount of all federal, state and local income and other taxes of any kind required or permitted to be withheld in connection with such vesting and/or exercise. The Committee, in its discretion, may permit shares of Stock to be used to satisfy tax withholding requirements and such shares shall be valued at their Fair Market Value as of the settlement date of the Award;provided, however, that the aggregate Fair Market Value of the number of shares of Stock that may be used to satisfy tax withholding requirements may not exceed the minimum statutorily required withholding amount with respect to such Award. 15.Amendment of the Plan or Awards.(a)Amendment of Plan. The Board at any time, and from time to time, may amend the Plan;provided,however, that the Board shall not, without stockholder approval, make any amendment to the Plan that requires stockholder approval pursuant to applicable law or the applicable rules of the national securities exchange on which the Stock is principally listed.(b)Amendment of Awards. The Board or the Committee, at any time, and from time to time, may amend the terms of any one or more Awards;provided, however, that the rights under any Award shall not be impaired by any such amendment unless the Participant consents in writing (it being understood that no action taken by the Board or the Committee that is expressly permitted under the Plan, including, without limitation, any actions described in Section 9 hereof, shall constitute an amendment of an Award for such purpose). Notwithstanding the foregoing, subject to the limitations of applicable law, if any, and without an affected Participant’s consent, the Board or the Committee may amend the terms of any one or more Awards if necessary to bring the Award into compliance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued or amended after the Effective Date.A-20(c)No Repricing of Awards without Stockholder Approval. Notwithstanding subsection (a) or (b) above, or any other provision of the Plan, repricing of Awards shall not be permitted without stockholder approval. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following): (i) changing the terms of an Award to lower its exercise price (other than on account of capital adjustments resulting from share splits, etc., as described in Section 9(a)); (ii) any other action that is treated as “repricing” under generally accepted accounting principals; and (iii) repurchasing for cash or canceling an Award in exchange for another Award at a time when its exercise price is greater than the Fair Market Value of the underlying Stock, unless the cancellation and exchange occurs in connection with an event set forth in Section 9(b). 16.Termination or Suspension of the Plan.The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated. 17.Effective Date of the Plan. The Plan is effective as of the Effective Date. 18.Miscellaneous.(a)Clawback/Recoupment Policy. Notwithstanding anything contained herein to the contrary, all Awards granted under the Plan shall be and remain subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board, and in each case, as may be amended from time to time. Any such policy adoption or amendment shall in no event require the prior consent of any Participant.(b)Participants Outside of the United States. The Committee may modify the terms of any Award under the Plan made to or held by a Participant who is then a resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that such Award shall conform to laws, regulations and customs of the country in which the Participant is then a resident or primarily employed, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and otherA-21restrictions applicable as a result of the Participant’s residence or employment abroad, shall be comparable to the value of such Award to a Participant who is a resident or primarily employed in the United States. An Award may be modified under this Section 18(a) in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation or result in actual liability under Section 16(b) of the Exchange Act for the Participant whose Award is modified.(c)No Liability of Committee Members. No member of the Committee shall be personally liable by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a member of the Committee or for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each member of the Committee and each other employee, officer or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against all costs and expenses (including counsel fees) and liabilities (including all sums paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud or willful bad faith;provided, however, that approval of the Board shall be required for the payment of any amount in settlement of a claim against any such person. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s certificate or articles of incorporation or by-laws, each as may be amended from time to time, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.(d)Payments Following Accidents or Illness. If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.A-22(e)Governing Law. The Plan shall be governed by and construed in accordance with the internal laws of the State of Delaware without reference to the principles of conflicts of laws thereof.(f)Funding. No provision of the Plan shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under general law.(g)Reliance on Reports. Each member of the Committee and each member of the Board shall be fully justified in relying, acting or failing to act, and shall not be liable for having so relied, acted or failed to act in good faith, upon any report made by the independent public accountant of the Company and its Affiliates and upon any other information furnished in connection with the Plan by any person or persons other than such member.(h)Titles and Headings. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.* * *A-23AMERICAN STOCK TRANSFER & TRUST COMPANYMUELLER INDUSTRIES, INC.6201 15TH STREETATTN: GARY WILKERSONBROOKLYN, NY 112198285 TOURNAMENT DRIVE-STE. 150
MEMPHIS, 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,FOR Proposal 2,FOR Proposal 3, andAGAINST Proposal 4. 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
The Board of Directors recommends you vote FOR the following:1. Election of Directors Nominees For
AllWithhold
AllFor All
ExceptTo 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 The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain oooForAgainstAbstain 2.2 Approve the appointment of Ernst & Young LLP as independent auditors of the Company. o o o 3.3 Approve the Mueller Industries, Inc. 2009 Stock Incentive Plan.To approve, on an advisory basis by non-binding vote, executive compensation.o o o The Board of Directors recommends ayou voteAGAINST Proposal 4. 3 YEARS on the following proposal: 1 year 2 years 3 years Abstain 4.Stockholder proposal regarding Board membership.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 *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""FOR" ALL NOMINEES LISTED, "FOR""FOR" PROPOSAL 2, "FOR""FOR" PROPOSAL 3, FOR "3 YEARS" FOR PROPOSAL 4 AND "AGAINST""FOR" PROPOSAL 4.5. 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 the 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. –- MAY 7, 20095, 2011
This Proxy is Solicited on Behalf of the Board of Directors7, 2009,5, 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.