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| [ ] | Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
| [X] | Definitive Proxy Statement | |||
| [ ] | Definitive Additional Materials | |||
| Mueller Industries, Inc. | ||
| (Name of Registrant as Specified In Its Charter) | ||
| (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) |
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MUELLER INDUSTRIES, INC.
8285 Tournament Drive, Suite 150
Memphis, Tennessee 38125
Telephone (901) 753-3200
_________________________
Notice of Annual Meeting of
Stockholders to be Held
May 5, 20113, 2012
_________________________
To the Stockholders of
Mueller Industries, Inc.
The Annual Meeting of Stockholders of Mueller Industries, Inc. (the “Company” or “Mueller”), will be held at the Company’s headquarters at 8285 Tournament Drive, Suite 150, Memphis, Tennessee 38125 on Thursday, May 5, 2011,3, 2012, at 10:00 A.M. local time, for the following purposes:
| 1. | To elect | ||
| 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 | ||
| 3. | To conduct an advisory vote on the compensation of the Company’s named executive officers; and | ||
| 4. | |||
| To consider and transact such other business as may properly be brought before the Annual Meeting and any adjournment(s) thereof. | |||
Only stockholders of record at the close of business on March 8, 2011,2012, 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.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING REGARDLESS OF THE SIZE OF YOUR HOLDINGS. WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON, WE URGE YOU TO MARK, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED SELF-ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
 |  |
| Gary C. Wilkerson | |
| Corporate Secretary | |
| March 21, 2012 |
TABLE OF CONTENTS
| SOLICITATION OF PROXIES | 1 | |
| VOTING SECURITIES | 2 | |
| PRINCIPAL STOCKHOLDERS | 3 | |
| ELECTION OF DIRECTORS | 5 | |
| OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE | ||
| OFFICERS AND INFORMATION ABOUT DIRECTOR NOMINEES | 5 | |
| Meetings and Committees of the Board of Directors | 11 | |
| CORPORATE GOVERNANCE | 14 | |
| Director Independence | 14 | |
| Independent Directors | 16 | |
| Audit Committee | 16 | |
| Compensation Committee | 17 | |
| Nominating and Corporate Governance Committee | 17 | |
| Compensation Committee Interlocks and Insider Participation | 20 | |
| Corporate Governance Guidelines | 20 | |
| Code of Business Conduct and Ethics | 20 | |
| Policies and Procedures for Approval of Related Party Transactions | 21 | |
| Directors’ Attendance at Annual Meetings of Stockholders | 21 | |
| Communication With the Board of Directors | 22 | |
| COMPENSATION DISCUSSION AND ANALYSIS | 22 | |
| SUMMARY COMPENSATION TABLE FOR | 33 | |
| 34 | ||
| OUTSTANDING EQUITY AWARDS AT FISCAL | 39 | |
| 41 | ||
| NONQUALIFIED DEFERRED COMPENSATION | 41 | |
| POTENTIAL PAYMENTS | ||
| 41 | ||
| 43 | ||
| REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS | 45 | |
| REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF | ||
| DIRECTORS ON EXECUTIVE COMPENSATION | 46 | |
| EQUITY COMPENSATION PLAN INFORMATION | 47 | |
| APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 47 | |
| APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED | ||
| EXECUTIVE OFFICERS | ||
| 49 | ||
| STOCKHOLDER NOMINATIONS FOR BOARD MEMBERSHIP AND OTHER | ||
| PROPOSALS FOR | 50 | |
| OTHER MATTERS TO COME BEFORE THE ANNUAL MEETING | 51 | |
| SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING | 51 | |
| OTHER INFORMATION | 51 | |
| NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS | 52 | |
| HOUSEHOLDING OF ANNUAL MEETING MATERIALS | 52 |
MUELLER INDUSTRIES, INC.
8285 Tournament Drive, Suite 150
Memphis, Tennessee 38125
Telephone (901) 753-3200___________________________________
PROXY STATEMENT
Annual Meeting of Stockholders
May 5, 20113, 2012___________________________________
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Mueller Industries, Inc., a Delaware corporation (the “Company”), for use at the annual meeting of stockholders (the “Annual Meeting”) to be held at the Company’s headquarters at 8285 Tournament Drive, Suite 150, Memphis, Tennessee 38125, on Thursday, May 5, 2011,3, 2012, at 10:00 A.M. local time, or at any adjournment(s) thereof.
This Proxy Statement, together with the Company’s Annual Report for the fiscal year ended December 25, 2010,31, 2011, is first being mailed to stockholders on or about March 23, 2011.21, 2012. Pursuant to rules recently adopted by the Securities and Exchange Commission, the Company is providing access to its proxy materials over the Internet at http://www.proxyvote.com.
When a proxy card is returned properly signed, the shares represented thereby will be voted in accordance with the stockholder’s directions appearing on the card. If the proxy card is signed and returned without directions, the shares will be voted for the nominees named herein and in accordance with the recommendations of the Company’s Board of Directors as set forth herein. The discretion granted in the accompanying proxy card includes the authority to vote on all additional matters properly coming before the Annual Meeting as the persons named in the proxy deem appropriate. A stockholder giving a proxy may revoke it at any time before it is voted at the Annual Meeting by giving written notice to the secretary of the Annual Meeting or by casting a ballot at the Annual Meeting. Votes cast by proxy or in person at the Annual Meeting will be tabulated by election inspectors appointed for the Annual Meeting. The election inspectors will also determine whether a quorum is present. The holders of a majority of the shares of common stock, $.01 par value
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per share (“Common Stock”), outstanding and entitled to vote
The cost of soliciting proxies will be borne by the Company. In addition to solicitation by mail, directors, officers and employees of the Company may solicit proxies by telephone or otherwise. The Company will reimburse brokers or other persons holding stock in their names or in the names of their nominees for their charges and expenses in forwarding proxies and proxy material to the beneficial owners of such stock.
VOTING SECURITIES
The Company had 37,855,07138,247,828 shares of Common Stock outstanding at the close of business on March 8, 2011,2012, 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 8, 20112012 will be entitled to notice of, and to vote at, the Annual Meeting. The Company’s Restated Certificate of Incorporation and Amended and Restated By-laws (“Bylaws”) do not provide for cumulative voting for the election of directors.
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PRINCIPAL STOCKHOLDERS
As of March 8, 2011,2012, 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. | 2,934,500(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 |
| Shares Beneficially | |||||||||
| Name and Address of Beneficial Owner | Owned | Percent of Class | |||||||
| Leucadia National Corporation | 10,422,859 | (1) | 27.30%(2) | ||||||
| 315 Park Avenue South | |||||||||
| New York, NY 10010 | |||||||||
| BlackRock, Inc. | 2,842,704 | (3) | 7.44%(2) | ||||||
| 40 East 52nd Street | |||||||||
| New York, NY 10022 | |||||||||
| Franklin Resources, Inc. | 2,036,400 | (4) | 5.30%(2) | ||||||
| One Franklin Parkway | |||||||||
| San Mateo, CA 94403-1906 | |||||||||
| The Vanguard Group, Inc. | 1,960,366 | (5) | 5.12%(2) | ||||||
| 100 Vanguard Blvd. | |||||||||
| Malvern, PA 19355 | |||||||||
| (1) | This information is based on a Schedule 13D/A filing filed by Leucadia National Corporation (“Leucadia”), Phlcorp Holding LLC (“Phlcorp”), Baldwin Enterprises, Inc. (“Baldwin”), BEI Arch Holdings, LLC (“BEI Arch”), and BEI-Longhorn, LLC (“BEI Longhorn”) with the Securities and Exchange Commission on September 6, 2011, and the Form 4s filed by the same parties on September 8, 2011. According to the Schedule 13G/A, all shares of the Company’s Common Stock shown above are held by BEI Longhorn. By virtue of its ownership of all of the outstanding membership interests in BEI Longhorn, BEI Arch may be deemed to be the beneficial owner of all of the shares of the Company’s Common Stock owned by BEI Longhorn shown in the table above. By virtue of its ownership of all of the outstanding membership interests in BEI Arch, Baldwin may be deemed to be the beneficial owner of all of the shares of the Company’s Common Stock owned by BEI Longhorn shown in the table above. By virtue of its ownership of all of the outstanding shares of Baldwin, Phlcorp may be deemed to be the beneficial owner of all of the shares of the Company’s Common Stock owned by BEI Longhorn shown in the table above. By virtue of its ownership of all of the outstanding membership interests in Phlcorp, Leucadia may be deemed to be the beneficial owner of all of the shares of the Company’s Common Stock owned by BEI Longhorn shown in the table above. By virtue of their ownership of Leucadia common shares and their positions as Chairman of the Board, and President and a director, respectively, of Leucadia, for purposes of this Messrs. Cumming and Steinberg may be deemed to be the beneficial owners of all of the shares of Company’s Common Stock owned by BEI Longhorn shown in the table above. |
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| (2) | The percent of class shown was based on the shares of Common Stock reported on the Schedule 13G/A and the total number of shares outstanding as of December 31, 2011. The difference in the total number of shares outstanding on December 31, 2011 and March 8, 2012 does not materially affect the percentage of ownership of the class. | |
| (3) | This information is based on a Schedule 13G/A filed by BlackRock, Inc. with the Securities and Exchange Commission on February 10, 2012. Blackrock Inc. filed this Schedule 13G/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 Canada Limited; BlackRock Asset Management Australia Limited; BlackRock Advisors, LLC; BlackRock Investment Management, LLC; BlackRock Asset Management Ireland Limited; and BlackRock International Limited. | |
| (4) | This information is based on a Schedule 13G/A filed by Franklin Resources, Inc. (“FRI”) with the Securities and Exchange Commission on February | |
| (5) | This information is based on a Schedule | |
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ELECTION OF DIRECTORS
The size of the Company’s Board of Directors is currently eightnine directors. The Board of Directors proposes to elect the following eightnine 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 3, 2012)2, 2013), or until the election and qualification of their successors: Ian M. Cumming, Alexander P. Federbush, Paul J. Flaherty, Gennaro J. Fulvio, Gary S. Gladstein, Scott J. Goldman, Terry Hermanson, Harvey L. KarpJoseph S. Steinberg 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.
Directors are elected by a plurality of the votes cast. “Plurality” means that the individuals who receive the greatest number of votes cast “For” are elected as directors up to the maximum number of directors to be chosen at the Annual Meeting. Consequently, any shares not voted “For” a particular director (whether as a result of a direction to withhold or a broker non-vote) will not be counted in such director’s favor.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARESFOR EACH OF THE NOMINEES.
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE
OFFICERS AND INFORMATION ABOUT DIRECTOR NOMINEES
The following table sets forth, as of March 8, 2011,2012, information about the 1,324,06711,746,151 shares of Common Stock (calculated based on 37,855,07138,247,828 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 2010”2011” 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, as well as, with
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respect to directors, the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board of Directors to determine that the person should serve as a director of the Company in 2011.
| Common Stock | ||||||||
| Beneficially | ||||||||
| Owned as of | Percent of | |||||||
| Principal Occupation, Employment, etc. | March 8, 2012 | Class | ||||||
| Ian M. Cumming | 10,422,859 | 27.3 | % | |||||
| Director of the Company since September 2, 2011; Chairman of | ||||||||
| Leucadia National Corporation; age 71 (1)(16) | ||||||||
| Alexander P. Federbush | 16,000 | * | ||||||
| Chairman of the Board of Directors since January 1, 2012 | ||||||||
| Director of the Company since February 17, 2005; age 69 (2) | ||||||||
| Paul J. Flaherty | 11,000 | * | ||||||
| Director of the Company since August 2, 2007; age 72 (3) | ||||||||
| Gennaro J. Fulvio | 22,081 | * | ||||||
| Director of the Company since May 9, 2002; age 55 (4) | ||||||||
| Gary S. Gladstein | 39,736 | * | ||||||
| Director of the Company since July 1, 2000; age 67 (5) | ||||||||
| Scott J. Goldman | 5,871 | * | ||||||
| Director of the Company since January 1, 2008; age 59 (6) | ||||||||
| Terry Hermanson | 12,081 | * | ||||||
| Director of the Company since February 13, 2003; age 69 (7) | ||||||||
| Joseph S. Steinberg | 10,422,859 | 27.3 | % | |||||
| Director of the Company since September 2, 2011; Director and | ||||||||
| President of Leucadia National Corporation; age 68 (8)(16) | ||||||||
| Harvey L. Karp | 241,886 | * | ||||||
| Chairman Emeritus since January 1, 2012; Former Chairman of the | ||||||||
| Board of Directors (from October 8, 1991 – December 31, 2011); | ||||||||
| former Director of the Company (from August 1991 – | ||||||||
| December 31, 2011); age 84 | ||||||||
| Gregory L. Christopher | 364,875 | * | ||||||
| Chief Executive Officer of the Company since October 30, 2008; | ||||||||
| Director of the Company since October 28, 2010; age 50 (9) | ||||||||
| Richard W. Corman | 60,715 | * | ||||||
| Vice President-Controller of the Company since October 28, 2004; | ||||||||
| age 55 (10) | ||||||||
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| Common Stock | ||||||||
| Beneficially | ||||||||
| Owned as of | Percent of | |||||||
| Principal Occupation, Employment, etc. | March 8, 2012 | Class | ||||||
| John B. Hansen | 51,933 | * | ||||||
| President, Plumbing Business of the Company since January 1, 2011; | ||||||||
| age 65 (11) | ||||||||
| Jeffrey A. Martin | 27,171 | * | ||||||
| Vice President - Corporate Development since January 11, 2011; | ||||||||
| age 45 (12) | ||||||||
| Kent A. McKee | 326,002 | * | ||||||
| Executive Vice President of the Company since October 13, 2005; | ||||||||
| Chief Financial Officer of the Company since April 1, 1999; | ||||||||
| age 51 (13) | ||||||||
| James H. Rourke | 49,441 | * | ||||||
| President, Industrial Business of the Company since December 27, | ||||||||
| 2003; age 63 (14) | ||||||||
| Gary C. Wilkerson | 94,500 | * | ||||||
| Vice President, General Counsel and Secretary of the Company since | ||||||||
| May 2, 2005; age 65 (15) | ||||||||
| Executive Officers and Directors as a Group | 11,746,151 | 30.2 | %** | |||||
| * | Less than 1% | |
| ** | Includes | |
| (1) | Mr. Cumming has served as a director and Chairman of Leucadia, a New York-based diversified company with interests in beef processing, manufacturing, land based contract oil and gas drilling, real estate activities, gaming entertainment, medical product development and winery operations, since 1978. Mr. Cumming is also a director Jefferies Group, Inc. (“Jefferies”), where he has served in such capacity since 2008; HomeFed Corporation (“HomeFed”) where he has served in such capacity since 1999; and SkyWest, Inc. (“SkyWest”), where he has served in such capacity since 1986. Mr. Cumming is also a member of the Board of Managers of Premier Entertainment Biloxi, LLC, the owner of the Hard Rock Hotel and Casino in Biloxi, Mississippi. Mr. Cumming also served as a director of AmeriCredit Corp. and The FINOVA Group, Inc., when those companies were publicly traded. The number of shares of Common Stock beneficially owned by Mr. Cumming consists of 10,422,859 shares beneficially owned by Leucadia National Corporation of which Mr. Cumming is an officer. |
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| (2) | 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 Varick Realty Corp. since 1970, including as Chairman since 1976. Mr. Federbush was nominated to serve as a director of the Company because he has extensive experience guiding complex organizations, both in commercial real estate and manufacturing and distribution. The number of shares of Common Stock beneficially owned by Mr. Federbush includes (i) | |
| (3) | 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 | |
| (4) | Mr. Fulvio has been a member of Fulvio & Associates, LLP, Certified Public Accountants, since 1987. Mr. Fulvio 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 (i) 10,000 shares of Common Stock which are subject to currently exercisable stock options, | |
| (5) | 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. In the past five years, Mr. Gladstein has also served as a director of | |
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| (6) | 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 | ||
| (7) | Mr. Hermanson has been the principal and President of Mr. Christmas | ||
| (8) | Mr. Steinberg has been a Director and President of Leucadia since 1978. He is also Chairman of the Board for HomeFed and a Director of Jefferies, Jordan Industries, Inc. and Arnhold and S. Bleichroeder Holdings, Inc. The number of shares of Common Stock beneficially owned by Mr. Steinberg consists of 10,422,859 shares beneficially owned by Leucadia National Corporation of which Mr. Steinberg is an officer. | ||
| (9) | Mr. Christopher served as (i) Chief Operating Officer from October 25, 2007 until October 30, 2008, (ii) President of the Standard Products Division from October 13, 2005 until October 25, 2007, and (iii) Vice President of Sales-Standard Products Division of the Company for more than five years prior to October 13, 2005. The number of shares of Common Stock beneficially owned by Mr. Christopher includes (i) | ||
| (10) | 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 | ||
| (11) | 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 | ||
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| 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) | ||
| (12) | Mr. Martin served (i) as Vice President-Finance & Corporate Development from August 1, 2008 to January 11, 2011, (ii) as Vice President-Operations, Standard Products Division of the Company from November 20, 2006 to August 1, 2008, (iii) as Vice President-Finance of the Company from October 28, 2004 to November 20, 2006, (iv) as Director of Corporate Finance of the Company from January 1, 2002 to October 28, 2004, (v) as Manager of Corporate Finance of the Company from January 1, 2001 to December 31, 2001, (vi) as Manager of Corporate Accounting of the Company from January 15, 1996 to December 31, 2000 and (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 | |||
| (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 (i) | |||
| (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 | |||
| (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 (i) | |||
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| (16) | Pursuant to a Standstill Agreement the Company entered into with Leucadia on September 2, 2011 (the “Standstill Agreement”), which provides, among other things, that Leucadia (i) will not acquire more than 27.5% of the Company’s outstanding common stock, subject to certain exceptions, and (ii) will forebear from taking actions concerning, among other things, business combinations with the Company or the composition of the Company’s Board, without the approval of a majority of the directors not affiliated with Leucadia, the Company increased the size of the Board of Directors by two and elected two designees selected by Leucadia to fill the new directorships. Leucadia designated Ian M. Cumming, Leucadia’s Chairman, and Joseph S. Steinberg, a director of Leucadia and its President, to fill the two newly created vacancies on the Company’s Board of Directors. The Board of Directors elected Messrs. Cumming and Steinberg to the Board on September 2, 2011. Leucadia will continue to have the right to appoint two directors for two years so long as Leucadia holds at least 20% of the Company’s outstanding common stock. Leucadia will be entitled to appoint one director for two years so long as Leucadia holds at least 15% of the Company’s outstanding common stock. The Standstill Agreement also restricts sales by Leucadia to counterparties who hold, or after giving effect to a sale would hold, in excess of 4.9% of the Company’s common stock. The Company has also agreed to file one or more registration statements with the Securities and Exchange Commission regarding the shares owned by Leucadia, if requested by Leucadia and upon certain terms and conditions. The Standstill Agreement expires on September 2, 2013 (the “Termination Date”) subject to certain events that would cause earlier termination of these restrictions; however, certain provisions, including Leucadia’s right to have its shares registered by the Company, may survive beyond the Termination Date. In addition, Leucadia has agreed to vote its shares of the Company’s common stock in favor of the slate of directors nominated by the Board for a period of two years so long as Leucadia’s designees are appointed to the Board in accordance with the terms of the Standstill Agreement. |
Meetings and Committees of the Board of Directors
During 2010,2011, the Board of Directors held fivenine 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
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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 2010,2011, no director attended fewer than 75% of the total number of meetings of the Board and all committees on which he served.
The Audit Committee is currently composed of three directors who are not officers or employees of the Company: Gary S. Gladstein (Chairman), Gennaro J. Fulvio and Terry Hermanson. Each member of the Audit Committee has been determined by the Board of Directors to meet the standards for independence required of audit committee members by the New York Stock Exchange (the “NYSE”) and applicable SEC rules. For more information on the NYSE standards for independence, see “Corporate Governance-Director Independence” in this Proxy Statement. The Board of Directors has further determined that (i) all members of the Audit Committee are financially literate and (ii) Gary S. Gladstein and Gennaro J. Fulvio each possess 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
The Compensation Committee is currently composed of threefour directors who are not officers or employees of the Company: Terry Hermanson (Chairman), Ian M. Cumming, Paul J. Flaherty and Gennaro J. Fulvio. Each member of the Compensation Committee has been determined by the Board of Directors to meet
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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 fiscal year 2010,2011, the Compensation Committee and the Option Plan Committee held nineseven formal meetings.
The Nominating and Corporate Governance Committee is currently composed of threefour directors who are not officers or employees of the Company: Scott J. Goldman (Chairman), Paul J. Flaherty, and Gary S. Gladstein.Gladstein and Joseph S. Steinberg. Each member of the Nominating and Corporate Governance Committee has been determined by the Board of Directors to meet the NYSE’s standards for independence. The Nominating and 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 onefive formal meeting during fiscal year 2010.
The Board of Directors has currently implemented a leadership structure consistingthat separates the role of an Executive Chairman position and a separatethe Chief Executive Officer position, bothand the Chairman of whom serve on the Board. These officers are in constant contact with the Executive Officers
The Board of Directors is actively involved in oversight of risks that could affect the Company. The full Board of Directors has retained the responsibility for general oversight of risks, but the Audit Committee primarily oversees those risks that may directly or indirectly impact the Company’s financial statements. The Board of Directors receives reports directly from officers responsible for
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oversight of particular risks within the Company, as well as full reports by the chair of the Audit Committee regarding the Audit Committee’s considerations and actions. The Board believes that through such open communication and access to information, it can sufficiently manage the risks facing the Company. The Board of Director’s administration of its risk oversight function has not affected the Board’s leadership structure.
CORPORATE GOVERNANCE
The Company operates within a comprehensive plan of corporate governance for the purpose of defining independence, assigning responsibilities, setting high standards of professional and personal conduct and assuring compliance with such responsibilities and standards. The Company regularly monitors developments in the area of corporate governance. In July 2002, Congress passed the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) which, among other things, established, or provided the basis for, a number of new corporate governance standards and disclosure requirements. In addition, following the passage of Sarbanes-Oxley, the NYSE adopted changes to its corporate governance and listing requirements.
Director Independence
The standards relied upon by the Board of Directors in affirmatively determining whether a director is “independent,” in compliance with the rules of the NYSE, are comprised, in part, of those objective standards set forth in the NYSE rules, which generally provide that (a) a director who is an employee, or whose immediate family member (defined as a spouse, parent, child, sibling, father- and mother-in-law, son- and daughter-in-law and anyone, other than a domestic employee, sharing the director’s home) is an executive officer of the Company, would not be independent for a period of three years after termination of such relationship; (b) a director who has received, or whose immediate family member has received, during any twelve-month period within the last three years, more than $120,000 per year in direct compensation from the Company, except for certain permitted payments, would not be independent; (c) a director or an immediate family member who is a current partner of a firm that is the Company’s internal or external auditor, a director who is a current employee 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
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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
The Board of Directors, in applying the above-referenced standards and after considering all of the relevant facts and circumstances, has affirmatively determined that the Company’s current “independent” directors are: Ian M. Cumming, Alexander P. Federbush, Paul J. Flaherty, Gennaro J. Fulvio, Gary S. Gladstein, Scott J. Goldman and Terry Hermanson.Hermanson and Joseph S. Steinberg. In the course of the Board of Director’s determination regarding the independence of each non-management director, the Board considered for:
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Independent Directors
Audit Committee
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with the SEC to receive information concerning, among other things, significant deficiencies in the design or operation of internal control over financial reporting.
Compensation Committee
Nominating and Corporate Governance Committee
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of the Company’s incumbent directors in connection with their potential re-nomination. In identifying and recommending director nominees, the Committee members take into account such factors as they determine appropriate, including recommendations made by the Board of Directors.
The Nominating and Corporate Governance Committee does not consider individuals nominated by stockholders for election to the Board. The Board believes that this is an appropriate policy because the Company’s Bylaws allow a qualifying stockholder to nominate an individual to the Board. In order for a qualifying stockholder to nominate an individual to the Board, written notice of such stockholder’s intent to make such nomination must be received by the Secretary of the Company at the Company’s principal place of business (8285 Tournament Drive, Suite 150, Memphis, Tennessee 38125) not less than 60 days and not more
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than (i) with respect to an election to be held at an annual meeting of stockholders, 90 days prior to the anniversary date of the immediately preceding annual meeting (unless the annual meeting date is advanced by more than thirty days or delayed by more than sixty days, in which case different deadlines apply) and (ii) with respect to an election to be held at a special meeting of stockholders for the election of directors, not earlier than 90 days prior to the special meeting and not later than the later of (a) 60 days prior to such special meeting or (b) the tenth day following the day on which public announcement is first made of the date of the special meeting, provided that in the event that the number of directors to be elected to the Board is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board made by the Company at least 70 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is delivered to the Secretary of
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Compensation Committee Interlocks and Insider Participation
During fiscal year 2010, Alexander P. Federbush,2011, Terry Hermanson, Ian M. Cumming (appointed November 3, 2011), Paul J. Flaherty and Gary S. GladsteinGennaro J. Fulvio served on the Compensation Committee. No member of the Compensation Committee was, during fiscal year 2010,2011, an officer or employee of the Company or was formerly an officer of the Company, except that Gary S. Gladstein served as Chief Financial Officer of the Company from December 28, 1990 to February 13, 1991.Company. In addition, no member of the Compensation Committee, during fiscal year 2010,2011, had any relationship requiring disclosure by the Company as a related party transaction under Item 404 of Regulation S-K.S-K, except for Mr. Cumming, who is the Chairman and Chief Executive Officer of Leucadia, which is a party to that certain Standstill Agreement with the Company as more fully described in Note 16 to the table under the heading “Ownership of Common Stock By Directors and Executive Officers and Information About Director Nominees”. No executive officer of the Company served on any board of directors or compensation committee of any other company for which any of the Company’s directors served as an executive officer at any time during fiscal year 2010.
Corporate Governance Guidelines
Code of Business Conduct and Ethics
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Conduct and Ethics covers topics, including but not limited to, conflicts of interest, confidentiality of information and compliance with laws and regulations.
Policies and Procedures for Approval of Related Party Transactions
Related party transactions may present potential or actual conflicts of interest and create the appearance that Company decisions are based on considerations other than the best interests of the Company and its shareholders. Management carefully reviews all proposed related party transactions (if any), other than routine
Directors’ Attendance at Annual Meetings of Stockholders
It is the policy of the Company’s Board of Directors to expect that all directors attend annual meetings of stockholders except where the failure to attend is due to unavoidable circumstances or conflicts discussed in advance with the Chairman of the Board. All members of the Board of Directors attended the Company’s 20102011 Annual Meeting of Stockholders.Stockholders, with the exception of Messrs. Cumming and Steinberg, who were appointed to the Board in September 2011.
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Communication With the Board of Directors
Any stockholder or interested party who wishes to communicate with the Board of Directors, or specific individual directors, including the non-management directors as a group, may do so by directing a written request addressed to such directors or director in care of the Chairman of the Nominating and Corporate Governance Committee, Mueller Industries, Inc., 8285 Tournament Drive, Suite 150, Memphis, Tennessee 38125. Communication(s) directed to members of the Board who are not non-management directors will be relayed to the intended Board member(s) except to the extent that it is deemed unnecessary or inappropriate to do so pursuant to the procedures established by a majority of the independent directors. Communications directed to non-management directors will be relayed to the intended Board member(s) except to the extent that doing so would be contrary to the instructions of the non-management directors. Any communication so withheld will nevertheless be made available to any non-management director who wishes to review it.
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
This Compensation Discussion and Analysis provides an overview of how our named executive officers were compensated in 2010,2011, as well as how this compensation furthers our established compensation philosophy and objectives.
As discussed more fully below, we believe in a pay for performance philosophy, such that a material portion of a named executive officer’s compensation is dependent upon the achievement of both short-term and long-term strategic and financial performance. For 2010,2011, we continued to reward named executive officers in a manner consistent with this philosophy by setting annual incentive targets for the achievement of EBITDA and operating income. For the long-term component of compensation, we continued to grant equity awards, (both stock options and restricted stock), such that any long-term compensation opportunity will bybe directly tied to our stock performance.
During 2010,2011, the Company’s performance wasimproved substantially improved compared with the prior year. For 2010,2011, the Company’s operating income, excluding certain one-time items, increased $51.4$15.9 million, or 83%14%, to $113.4$129.3 million. Although overall industry shipments in our core product lines areremain at approximately half
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of peak levels, we remainedcontinued to be solidly profitable throughout the recession and our profitability targets for 20102011 were exceeded. As a result ofWhile our exemplary performance, ourimprovement in consolidated earnings resulted in an increase in annual incentive payouts to many of our employees, including ourcertain named executive officers, increased overMr. Rourke’s incentive compensation decreased from the prior years.
Compensation Policies and Objectives
We believe in a pay for performance philosophy, such that the compensation of our executive officers is materially tied to both the short-term and long-term performance of the Company, considered in light of general economic and specific Company, industry, and competitive conditions. In light of this, we have designed our compensation programs for our executive officers including the executive officers named in the Summary Compensation Table for 2010 below, to (i) motivate these key employeesour executive officers 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 employeesour executive officers to continue their service with ourthe Company, and (iv) provide a means to attract additional talented executive officers when necessary.
Determination of Compensation
The following individuals served as our named executive officers in 2011: (i) Harvey L. Karp, our former Chairman of the Board, who resigned from this position effective as of the close of business on December 31, 2011, (ii) Gregory L. Christopher, our Chief Executive Officer, (iii) Kent A. McKee, our Executive Vice President and Chief Financial Officer, (iv) James H. Rourke, the President of our Industrial Business, and (v) Gary C. Wilkerson, our Vice President, General Counsel and Secretary.
For 2011, compensation for our Chairman of the Board and Chief Executive Officer iswas determined by our Compensation Committee. CompensationFor 2011, compensation decisions for our other named executive officers arewere made by our Compensation Committee based onafter consideration of the joint recommendations of our Chairman of the Board and Chief Executive Officer. Our Compensation Committee meets at least annually to determine the adjustments, if any, which will be made to all elements of our named executive officers’ compensation, including base salary, annual incentive compensation, and long-term equity awards.
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Each element of compensation plays an important role in our compensation program, and we make compensation decisions regarding each element in the context of total compensation with a view to the aggregate value and effect of all other elements.
In determining the levels of compensation, including the amount of base salary increases from year to year, if any, the target levels of the annual cash incentives and the amounts payable thereby at the end of each year, and the number and type of equity 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’sour desire to attain certain strategic and financial goals and control compensation cost. This requires that we consider subjective factors including (i) an executive’sexecutive officer’s performance against corporate objectives in recent years, (ii) the value of the executive’sexecutive officer’s skills and capabilities in supporting the long-term performance of the Company, (iii) performance of each executive’sexecutive officer’s specific management responsibilities, (iv) each executive’sexecutive officer’s contribution as a member of the executive management team, and (v) whether each executive’sexecutive officer’s total compensation potential and structure is sufficient to ensure the retention of the executive officer 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.
In 2010,2011, Mr. Karp’s compensation was determined based on his individual performance in (i) setting the strategic direction of the Company; (ii) providing advice and counsel to management including the Chief Executive Officer, Chief Financial Officer, and General Counsel; (iii) participating in management meetings; (iv) meeting with major customers; (v) meeting with management and principals of businesses regarding possible business combinations; and (vi)(v) monitoring financial,
In 2010,2011, Mr. Christopher’s compensation was determined based on his successful management of the day-to-day activities of the Company and its subsidiaries, including but not limited to cost containment, manufacturing, purchasing, sales, marketing, distribution, finance, legal, and trade association activities. His incentive compensation was determined by the Company meeting specific adjusted consolidated operating income goals for the Company, as discussed below under the heading under the heading “Annual Incentive Compensation.”
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In 2010,2011, Mr. McKee’s compensation was determined based on his strategic leadership of financial operations, which resulted in the strong financial position of the Company. His duties include, but are not limited to, day-to-day management of corporate accounting, finance, credit, tax, business development, shared services and investor relations. His incentive compensation was determined by the Company meeting specific adjusted consolidated operating income targets, as discussed below under the heading under the heading “Annual Incentive Compensation.”
In 2010,2011, Mr. Rourke’s compensation was determined based on his successful management of the Industrial Business,Businesses, including but not limited to cost containment, manufacturing, purchasing, sales, marketing and trade association activities. His incentive compensation was determined by the Industrial BusinessBusinesses meeting specific adjusted operating income targets, as discussed below under the heading under the heading “Annual Incentive Compensation.”
In 2010,2011, Mr. Wilkerson’s compensation was determined based on his management of the day-to-day activities of the Legal, Human Resources and Risk Management Departments and his successful resolution of, among other things, certain litigation, environmental and antidumping matters. His incentive compensation was determined by the Company meeting specific adjusted consolidated operating income targets, as discussed below under the heading under the heading “Annual Incentive Compensation.”
In making compensation decisions, our Compensation Committee does not undertake any formal benchmarking or review any formal surveys of compensation for our competitors but rather relies on the members’ general knowledge of our industry, supplemented by advice from our Chairman and Chief Executive Officer based on their knowledge of our industry in markets in which we participate.
At our 2011 Annual Meeting, we held our first non-binding stockholder advisory vote on executive compensation. As reported in the Company’s Form 8-K, filed on May 6, 2011, a substantial number of shares voted were in favor of the compensation of our named executive officers as disclosed in the proxy statement for the 2011 Annual Meeting. The targetsCompensation Committee believes that the vote confirms its view that the Company’s compensation programs are centered on a pay for annual incentive compensationperformance philosophy and are generally determined byappropriate and effective in creating value. Accordingly, the Compensation Committee made no direct changes to the Company’s executive compensation program as a result of the vote. Our Compensation Committee will consider the outcome of this year’s stockholder advisory vote on executive compensation as it makes future compensation decisions.
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In addition, a substantial number of our shares voted were in December or January forfavor of holding the upcoming year. Various factors are considered when determiningnon-binding stockholder advisory vote on executive compensation on an annual basis. Although the specific targets including estimated actual results forBoard of Directors had recommended holding this vote every three years, the fiscal year being concluded,Board of Directors subsequently determined that it would follow the plan forstockholders’ recommendation and hold the upcoming year, economic conditions then currently prevailing as well as expected in the upcoming year, among others.
Elements of Compensation
Our compensation program is composed of six elements: (i) base salary, (ii) traditional benefits, (iii) annual incentive compensation, (iii)(iv) long-term equity incentive compensation, (iv) traditional welfare benefits, (v) perquisites, and (vi) post-employment and change-in-controlchange-incontrol compensation.
Base Salary and Traditional Benefits
We provide base salary and traditional benefits such as group health, disability, and life insurance benefits, as well as matching contributions to the Mueller Industries, Inc.our 401(k) Plan,plan (except for Mr. Karp), as a means of providing a base level of compensation for services performed, to encourage the continued service of our named executive officers and to attract additional talented executive officers when necessary.
Annual Incentive Compensation
Each of our named executive officers received annual incentive compensation in 2011, based upon the Company’s actual performance for the period 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
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interest, taxes, depreciation and amortization), and the other named executive officers’ annual incentive compensation was based upon adjusted operating income targets. 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 2011 Annual Bonus Plan.
For 2011, the Compensation Committee established performance targets for the year in January, 2011. For Mr. Karp, the Compensation Committee established graduated EBITDA targets that ranged from $92 million (earning zero incentive) to $157 million (earning a 200% incentive) with a maximum incentive 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. Actual performance resulted in the maximum payment under the plan for 2011 to Mr. Karp.
For all other employees, including our named 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 Company and/or operating unit performance factor each of which was set by our Compensation Committee at the beginning of the fiscal year. The incentive grade level factor for the named executive officers was established at 100% for Messrs. Christopher, McKee, and Rourke, and at 75% for Mr. Wilkerson. Based upon the recommendation of Mr. Christopher, the Compensation Committee established operating income of $93 million subject to certain adjustments, as the consolidated Company performance factor, which applied to Messrs. Christopher, McKee, and Wilkerson, and established $48 million subject to certain adjustments, as the Industrial Products Division performance factor, which applied to Mr. Rourke. The Company and operating unit performance factors are subject to increase by 2 percentage points for each 1 percentage point that actual performance exceeds the target (capped at 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. As a result of 2011 performance, the payments to Messrs. Christopher and McKee were 193% (100% grade level factor times 193% performance factor), for Mr. Rourke was 164% (100% grade level factor times 164% performance factor), and for Mr. Wilkerson was 113% (75% grade level factor times 150% performance factor).
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Special One-Time Bonus Award
In 2011, in addition to receiving annual incentive compensation, the Company entered into a letter agreement with Mr. Karp pursuant to which Mr. Karp became entitled to a special bonus in an amount equal to $2,000,000 based on his continued employment with the Company through December 15, 2011. The special bonus is payable on the earlier of (i) the calendar year following Mr. Karp’s separation from service (subject to a six-month delay) and (ii) the occurrence of a change in control. Mr. Karp’s special bonus was paid to retain Mr. Karp’s services through December 15, 2011 and to make Mr. Karp whole for bonuses he voluntarily elected to forego in prior years. The Compensation Committee felt it appropriate to reward their success in attaining short-term operating objectives, such as sales, operating earningsMr. Karp for his exceptional service and earnings per share. From timeunwavering commitment to time, we award discretionary bonuses and incentivesthe well-being of the Company, even to recognize and reward individual performance regardless of corporate-wide performance.his personal detriment.
Long-Term Equity Incentive Program
Our long-term equity incentive compensation rewards our named executive officers for achievement of our long-term financial success as measured by our stock price. As such, it aligns the financial interests of our named executive officers with our stockholders and rewards our named executive officers for increased stockholder value. Historically, we have granted stock options to our named executive officers, although in 2009 we adopted, and our shareholders approved, the 2009 Stock Incentive Plan which provides for the grant of a variety of stock-based awards and cash incentive awards. We generally grant stock options with ten-year terms that vest ratably over a five-year period. This long-term vesting schedule provides continued
Long-term equity incentive program in fiscal 2010.
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Company’s practice to issue option awards and stocklong-term equity incentive awards to certain executives and other employees in late July following release of the Company’s second quarter and six-month operating results. Director awards have been made onIn view of our stock’s performance during the same date aseconomic recession, the annual meeting of stockholders.
Perquisites
We offer certain perquisites to our named executive officers, which we view as an added element of our executive compensation program designed to attract, retain and reward our named executive officers. The perquisites we provided in fiscal 20102011 were as follows: estate and tax planning, certain club memberships, personal use of our Company airplane, car allowances, spousal travel reimbursements, executive physicals and income tax gross-ups.
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Estate and tax planning is provided to certain named executive officers to complement our various compensation elements for the purpose of ensuring the named executive officers understand the complexity of the long-term equity incentives and are thereby able to maximize the value of such benefits. We provide certain club memberships in part to facilitate networking with and entertainment of our business clients. Because of the nature of such memberships, our named executive officers gain some personal benefits. We maintain a Company-owned airplane primarily to provide efficient transportation to certain employees and customers for business travel. From time to time, when our plane is not being used for business purposes, we allow certain named executive officers to use the plane for personal travel. We also maintain a Company-owned boat. Our boat is exclusively usedIn addition, the Company provides gross-up payments as reimbursement of the income tax for business purposes.
Post-Employment and Change-in-Control Compensation
We believe that providingare party to employment agreements at the top executive level is generallywith each of Messrs. Karp, Christopher and McKee. When entered into, these agreements were thought to be in line with market practice and allowsenabled us to be competitive and retain our top executives. In addition, we are party to a consulting agreement with Mr. Karp, which became effective upon the termination of his employment agreement on December 31, 2011. We have entered into Mr. Karp’s agreement to provide us with protection against competition from Mr. Karp and a transition period following his termination of employment agreementsduring which he will continue to provide limited services and be available for consultation with Messrs. Karp, Christopherrespect to his unique industry and McKee. TheCompany specific knowledge as needed to allow a smooth transition with his successor and minimize, to the extent possible, any succession difficulties.
As discussed below under the heading “Narrative Disclosure to Summary Compensation Table and Grant of Plan Based Awards Table - Employment and Consulting Agreements,” the agreements provide that our named executive officers will be entitled to receive certain severance payments and benefits upon a resignation for “good reason” orreason,” a termination without “cause” (as each is defined in the employmentemployment/consulting agreements), the executive will be entitled to receive his then current base salary and annual incentive compensation equalor, solely with respect to the average annual incentive compensation actually paid in the immediately preceding three years for the remainder of the term of the agreement, and all unvested equity awards will immediately vest. In addition, following any such termination, the executives will continue to participate in the Company’s health and medical benefit plans until they 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. Theemployment agreements, also provide that an executive may resignupon a resignation 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
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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.
Tax Considerations
Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation in excess of $1,000,000 paid to each of our Chief Executive Officer and our next four most highly paid executive officers. Qualifying “performance-based compensation” is not subject to this deduction limitation if certain requirements are met. In May 2011, our stockholders at our Annual Meeting approved the Mueller Industries, Inc. 2011 Annual Bonus Plan, and in May 2009, our stockholders at our Annual Meeting of Stockholders approved the 2009 Stock Incentive Plan. Compensation paid under this planthese plans will qualify as performance-based compensation and thus will be fully deductible by us. Additionally, payment of Mr. Karp’s special bonus was intentionally delayed until such time as Mr. Karp would no longer be an executive officer of the Company to enable the Company to deduct this amount. 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 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
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Compensation Risk Management
In establishing compensation programs for the Company’s executive officers and non-executive employees, the Compensation Committee and senior management of the Company, 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 that 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 ties 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 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 substantial portion of their compensation in the form of equity awards that are long-term in nature. We believe this counter balances any motivation to unduly favor excessive short-term risk taking. We also believe that the applicable 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.
For these reasons we believe that our compensation policies and practices are not likely to have a material adverse effect on the Company.
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SUMMARY COMPENSATION TABLE FOR 2010
| 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 | ||||||||||||||||||||||||||||
| 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 | 2011 | $ | 1,500,000 | — | — | — | $ | 2,500,000 | $ | 2,086,565 | (2) | $ | 6,086,565 | |||||||||||||||||
| Chairman of the Board | 2010 | $ | 1,500,000 | — | — | — | $ | 2,500,000 | $ | 15,021 | $ | 4,015,021 | ||||||||||||||||||
| 2009 | $ | 1,500,000 | — | — | — | $ | 598,600 | $ | 21,538 | $ | 2,120,138 | |||||||||||||||||||
| Gregory L. Christopher | 2011 | $ | 704,862 | — | $ | 1,175,210 | — | $ | 1,360,383 | $ | 91,836 | (3) | $ | 3,332,291 | ||||||||||||||||
| Chief Executive Officer | 2010 | $ | 651,923 | — | $ | 570,720 | $ | 238,650 | $ | 1,245,173 | $ | 50,380 | $ | 2,756,846 | ||||||||||||||||
| and Director | 2009 | $ | 600,000 | — | $ | 606,250 | $ | 191,400 | — | $ | 60,826 | $ | 1,458,476 | |||||||||||||||||
| Kent A. McKee | 2011 | $ | 399,000 | — | $ | 663,425 | — | $ | 770,070 | $ | 24,663 | (4) | $ | 1,857,158 | ||||||||||||||||
| Executive Vice President and | 2010 | $ | 377,308 | $ | 34,000 | $ | 344,400 | $ | 159,100 | $ | 720,658 | $ | 19,420 | $ | 1,654,886 | |||||||||||||||
| Chief Financial Officer | 2009 | $ | 360,000 | — | $ | 363,750 | $ | 153,120 | — | $ | 19,277 | $ | 896,147 | |||||||||||||||||
| James H. Rourke | 2011 | $ | 285,548 | — | $ | 379,100 | — | $ | 468,299 | $ | 19,880 | (5) | $ | 1,152,827 | ||||||||||||||||
| President, Industrial Business | 2010 | $ | 269,587 | — | $ | 246,000 | — | $ | 490,648 | $ | 18,622 | $ | 1,024,857 | |||||||||||||||||
| 2009 | $ | 265,000 | — | $ | 242,500 | $ | 114,840 | $ | 76,850 | $ | 11,906 | $ | 711,096 | |||||||||||||||||
| Gary C. Wilkerson | 2011 | $ | 255,769 | — | $ | 284,325 | — | $ | 287,740 | $ | 17,095 | (6) | $ | 844,929 | ||||||||||||||||
| Vice President, General | 2010 | $ | 244,143 | $ | 15,000 | $ | 98,400 | $ | 159,100 | $ | 274,661 | $ | 10,092 | $ | 801,396 | |||||||||||||||
| Counsel and Secretary | ||||||||||||||||||||||||||||||
| (1) | These columns represent the aggregate grant date fair value of awards granted to our named executive officers in | |
| (2) | ||
| (3) | Includes personal use of the Company’s aircraft (valued at | |
| (4) | Includes other perquisites consisting of a matching contribution to the Company’s 401(k) Plan, club membership, personal tax and estate planning, and restricted stock dividends. | |
- 33 -
| (5) | Includes an income tax gross-up and other perquisites consisting of a matching contribution to the Company’s 401(k) Plan, restricted stock dividends, personal tax and estate planning, club membership and reimbursement for Mr. Rourke’s spouse’s travel to Company | |
| (6) | Includes an income tax gross-up and other perquisites consisting of a matching contribution to the Company’s 401(k) Plan, an executive physical and reimbursement for Mr. Wilkerson’s spouse’s travel to Company functions. | |
2011 GRANTS OF PLAN BASED AWARDS TABLE
| 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 | |||||||||||||||||||||||||||
| All Other | All Other | |||||||||||||||||||||||||||||||
| Stock | Option | |||||||||||||||||||||||||||||||
| Awards: | Awards: | |||||||||||||||||||||||||||||||
| Estimated Possible Payouts | Number of | Number of | Exercise or | Closing | ||||||||||||||||||||||||||||
| Under Non-Equity Incentive | Shares of | Securities | Base Price | Price of | Grant Date | |||||||||||||||||||||||||||
| Plan Awards (1) | Stock or | Underlying | of Option | Stock on | Fair Value | |||||||||||||||||||||||||||
| Grant | Threshold | Units | Options | Awards | Grant | of Stock | ||||||||||||||||||||||||||
| Date | ($) | Target | Maximum | (#) | (#) | ($/Sh) | 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) | $ | 704,862 | $ | 1,409,724 | — | — | — | — | — | ||||||||||||||||||||
| 7/28/2011 | — | — | — | 31,000 | — | — | $ | 37.91 | $ | 1,175,210 | ||||||||||||||||||||||
| Kent A. McKee | — | N/A | (2) | $ | 399,000 | $ | 798,000 | — | — | — | — | — | ||||||||||||||||||||
| 7/28/2011 | — | — | — | 17,500 | — | — | $ | 37.91 | $ | 663,425 | ||||||||||||||||||||||
| James H. Rourke | — | N/A | (2) | $ | 285,548 | $ | 571,096 | — | — | — | — | — | ||||||||||||||||||||
| 7/28/2011 | — | — | — | 10,000 | — | — | $ | 37.91 | $ | 379,100 | ||||||||||||||||||||||
| Gary C. Wilkerson | — | N/A | (2) | $ | 191,827 | $ | 287,741 | — | — | — | — | — | ||||||||||||||||||||
| 7/28/2011 | — | — | — | 7,500 | — | — | $ | 37.91 | $ | 284,325 | ||||||||||||||||||||||
| (1) | Mr. Karp received a cash incentive award based on achieving EBITDA, subject to certain adjustments, within the targeted range of |
| (2) | Because of the nature of the formulas used for determining annual incentive compensation, there are no threshold amounts. There is also no target amount for Mr. Karp’s annual incentive compensation. | |
| (3) | Shares of restricted stock will vest | |
| 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 | ||||||||||||||||||
- 34 -
| 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) | |||||||||||||||||||
| Kent A. McKee | 11/06/2001 | 11,755 | — | $ | 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 | 38,902 | — | $ | 20.72 | 02/10/2014 | — | — | |||||||||||||||||||
| 02/23/2005 | 25,000 | — | $ | 31.22 | 02/23/2015 | — | — | |||||||||||||||||||
| 12/28/2005 | 36,000 | 9,000 | $ | 28.04 | 12/28/2015 | — | — | |||||||||||||||||||
| 07/28/2006 | 20,000 | 5,000 | $ | 35.05 | 07/28/2016 | — | — | |||||||||||||||||||
| 07/27/2007 | 18,000 | 12,000 | $ | 36.91 | 07/27/2017 | — | — | |||||||||||||||||||
| 07/25/2008 | 14,000 | 21,000 | $ | 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 | ||||||||||||||||||
Narrative Disclosure to Summary Compensation Table and Grant of Plan Employment and Consulting Agreements Harvey L. Karp We We are also party to an amended and restated consulting agreement with Mr. Karp, As compensation, Mr. Karp is entitled to receive an annual consulting fee equal to (i) two-thirds of his - 35 - In the event that during the consulting period Mr. Karp’s consulting relationship is terminated by the Company without cause or Mr. Karp terminates his consulting relationship 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 Gregory L. Christopher We are party to an amended and restated employment agreement with Gregory L. Christopher, our Chief Executive Officer, dated 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 discretionary cash incentive compensation in an amount consistent with the executive incentive compensation program which the Company establishes for other Mr. Christopher’s employment - 36 - plans and programs at his expense until he reaches age 65. In addition, we will pay Mr. Christopher an amount equal to the monthly cost of continuation coverage under COBRA until he reaches age 65. Mr. Christopher may resign voluntarily without good reason upon appropriate written notice. In such event, Mr. Christopher will be entitled to receive any accrued but unpaid base salary and, at the Company’s discretion, a bonus or incentive compensation for the calendar year in which his resignation without good reason occurs. The Company may terminate Mr. Christopher’s employment for cause upon appropriate written notice. In addition, if Mr. Christopher’s employment is terminated for cause or if Mr. Christopher voluntarily resigns for any reason other than good reason, his right to receive his base salary, incentive compensation and any other compensation and benefits to which he Mr. Christopher’s employment agreement also subjects him to non-competition and non-solicitation covenants during the term of employment and ending on the 12-month anniversary following any termination of employment. Generally, the non-competition covenant prevents Mr. Christopher from engaging in activities that are competitive with the business of the Company in any geographic area in which the Company does business and the non-solicitation covenant prevents Mr. Christopher from soliciting or hiring any person who was a full-time employee of the Company during the 24-month period preceding the termination of his employment. Mr. Christopher’s employment agreement also contains standard confidentiality provisions. - 37 - Kent A. McKee The Company is party to an employment agreement with Kent A. McKee, the Company’s Executive Vice President and Chief Financial Officer, dated October 17, 2002, as amended on December 10, 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 The Company does not have any other employment agreements with named executive officers. Except as set forth above, the Company has no compensatory plan or arrangement with respect to any named executive officer which would result in severance or change in control payments in excess of $100,000. 2011 Annual Bonus Plan We - 38 - 2009 Stock Incentive Plan We maintain the 2009 Stock Incentive Plan, which was approved by our stockholders at our Annual Meeting in May 2009. Our Compensation Committee administers the 2009 Stock Incentive Plan and is authorized 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 2009 Stock Incentive Plan and related award agreements. The OUTSTANDING EQUITY AWARDS AT FISCAL 2011 YEAR-END - 39 - 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, subject to earlier vesting in connection with a change in control. Shares of restricted stock granted to Messrs. Christopher and McKee 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, subject to earlier vesting in connection with a change in control or a termination of employment due to death, disability, by us without cause or by the executive officer for good reason. Shares of restricted stock granted to Messrs. Rourke and Wilkerson 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, and shares of restricted stock granted in 2011 will be subject to earlier vesting in connection with a change in control or a termination of employment due to death or disability. - 40 - 2011 OPTION EXERCISES AND STOCK VESTED NONQUALIFIED DEFERRED COMPENSATION Pursuant to the terms of Mr. Karp’s POTENTIAL PAYMENTS Pursuant to the employment, consulting, and - 41 - named executive officer in the event of (i) an involuntary termination without cause or a resignation for good reason or (ii) a - 42 - 2011 DIRECTOR COMPENSATION - 43 - 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. As of December During the In - 44 - REPORT OF THE AUDIT COMMITTEE The Audit Committee of the Board of Directors oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements in the Annual Report on Form 10-K with management, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements. The Audit Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the Audit Committee The Audit Committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits. The Audit Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board of Directors has approved) that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December - 45 - The Audit Committee is governed by a formal charter which can be accessed from the Company’s website at www.muellerindustries.com or may be requested in print by any shareholder. The members of the Audit Committee are considered independent because they satisfy the independence requirements for Board members prescribed by the NYSE listing standards and Rule 10A-3 of the Exchange Act. REPORT OF THE COMPENSATION COMMITTEE The Compensation Committee has reviewed and discussed with the Company’s management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement. - EQUITY COMPENSATION PLAN INFORMATION The following table discloses information regarding the securities to be issued and the securities remaining available for issuance under the Registrant’s stock-based incentive plans as of December APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC Ernst & Young LLP (“E&Y”) has been reappointed by the Audit Committee to audit and certify the Company’s financial statements for the fiscal year ending December - 47 - time in the future in its discretion reconsider the appointment without submitting the matter to a vote of stockholders. It is expected that representatives of E&Y will be in attendance at the Annual Meeting and will be available to answer questions and to make a statement if they desire to do so. The following table sets forth fees for professional services rendered by E&Y for the audit of the Company’s annual financial statements for each of the two fiscal years ended December Audit Fees consist of fees for professional services rendered for the audit of the Company’s consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by E&Y in connection with statutory filings. Audit Fees also includes fees for professional services rendered for the audits of internal control over financial reporting in Audit-Related Fees include fees billed for consultation on certain accounting matters. Tax Fees include fees billed for tax compliance, tax advice and tax planning matters. The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services. The Audit Committee has delegated pre-approval authority to its Chairman when expedition of services is necessary. The independent auditors and management are required periodically to report to the full Audit Committee regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to - date. All of the services provided by the independent auditors during fiscal years THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARESFOR THE APPROVAL OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED In accordance with Section 14A of the Exchange Act, stockholders are being asked to vote on an advisory, non-binding basis, on the compensation of the Company’s named executive officers. This advisory vote gives stockholders another mechanism to convey their views about the Company’s compensation programs and policies. The Company’s Compensation Committee is composed of knowledgeable and experienced independent directors, who are committed to regular review and effective oversight of our compensation programs. The Company’s executive compensation program has been designed to motivate the Company’s key employees to achieve the Company’s strategic and financial goals and to support the creation of long-term value for stockholders. The Company’s compensation policies and practices are centered on a pay for performance philosophy and reflect the belief that the Company’s success continues to depend in substantial part upon its ability to attract and retain qualified executive officers. We encourage stockholders to read the Executive Compensation section of this proxy statement, including the Compensation Discussion and Analysis and compensation tables, for a more detailed discussion of the Company’s compensation programs and policies and how they are appropriate and effective in creating value. The following resolution will be submitted for a stockholder vote at the Annual Meeting. Although the stockholder vote on executive compensation is not binding on the Board of Directors or the Company, the Company values the views of its stockholders. The Board of Directors and Compensation Committee will review the results of the vote and take them into consideration in addressing future compensation policies and decisions. - “RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers listed in the THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARESFOR THE APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS. It is anticipated that the next Annual Meeting after the one scheduled for May In addition to the foregoing, and in accordance with the rules of the SEC, in order for a stockholder proposal, relating to a proper subject, to be considered for inclusion in the Company’s proxy statement and form of proxy relating to the Annual Meeting to be held in - 50 - timely fashion of such change and the date by which proposals of stockholders must be received for inclusion in the proxy materials. Any such proposal should be submitted by certified mail, return receipt requested, or other means, including electronic means, that allow the stockholder to prove the date of delivery. OTHER MATTERS TO COME BEFORE THE ANNUAL MEETING If any matter not described herein should properly come before the Annual Meeting, the persons named in the proxy will vote the shares represented by them as they deem appropriate. At the date of this Proxy Statement, the Company knew of no other matters which might be presented for stockholder action at the Annual Meeting. SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING Based solely upon its review of Forms 3 and 4 received by it and written representations from certain reporting persons that no Forms 5 were required for those persons, the Company believes that during OTHER INFORMATION Consolidated financial statements for the Company are included in the Annual Report to Stockholders for the year ended December A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K AS FILED FOR THE YEAR ENDED DECEMBER - 51 - 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. NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS Important Notice Regarding the Availability of Proxy Materials for the The Proxy Statement and Annual Report are available at You will need the Control Number included on your proxy card. For the date, time, and location of the Annual General Meeting, please refer to “Solicitation of Proxies.” For information on how to attend and vote in person at the Annual General Meeting, an identification of the matters to be voted upon at the Annual General Meeting and the Board’s recommendations regarding those matters, please refer to “Solicitation of Proxies,” “Election of Directors,” “Appointment of Independent Registered Accounting HOUSEHOLDING OF ANNUAL MEETING MATERIALS The SEC has enacted a rule that allows multiple investors residing at the same address the convenience of receiving a single copy of annual reports, proxy statements, prospectuses and other disclosure documents if they consent to do so. This is known as “Householding.” Please note, if you do not respond, Householding will start 60 days after the mailing of this notice. We will allow Householding only upon certain conditions. Some of those conditions are: If these conditions are met, and SEC regulations allow, your household will receive a single copy of annual reports, proxy statements, prospectuses and other disclosure documents. - 52 - You may revoke a prior Householding consent at any time by contacting Broadridge, either by calling toll-free at (800) 542-1061, or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York, 11717. We will remove you from the Householding program within 30 days of receipt of your response, following which you will receive an individual copy of our disclosure document. Gary C. Wilkerson Corporate Secretary - MUELLER INDUSTRIES, INC. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE SIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" ALL NOMINEES LISTED, "FOR" PROPOSAL 2, and "FOR" PROPOSAL 3.(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.- 35 -2010 OPTION EXERCISES AND STOCK VESTED Option Awards Stock Awards Number of Value Number of Value Shares Acquired Realized Shares Acquired Realized on Exercise on Exercise on Vesting on Vesting Name (a) (#)(b) ($)(c) (#)(d) ($)(e) Harvey L. Karp — — — — Gregory L. Christopher 9,741 $ 108,903 2,000 $ 49,180 Kent A. McKee 9,783 $ 136,734 1,000 $ 24,590 James H. Rourke 63,802 $ 691,043 — — Gary L. Wilkerson — — — — Based Awards TableEmployment Agreementsarewere party to an amended and restated employment agreement with Mr. Karp, dated September 17, 1997, as amended on June 21, 2004, February 17, 2005, October 25, 2007, and December 2, 2008. The term of the agreement endsended on December 31, 2011, and will automatically extend for successive one year terms thereafter, unless2011. Pursuant to the agreement, 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 serveserved as Chairman of the Board of Directors of the Company. Under the terms of the agreement, Mr. Karp is entitled to receivereceived 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 incentive payment. Mr. Karp iswas 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. Mr. Karp’s employment may be terminated by the Company without cause or byfor good reasondated October 25, 2007, as amended on December 2, 2008, which became effective upon appropriate written notice. In either such event,the termination of his employment agreement on December 31, 2011. The agreement provides that Mr. Karp will continueserve as an independent consultant and advisor to the Company for a period of six years on matters within his areas of expertise and for which he had responsibility during his employment with the Company, provided that he will not have to devote more than twenty hours per month to consulting services 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).then-current“final base salary as if his employment had continuedcompensation” for the remainderfirst four years of the then-current termconsulting period and annual incentiveone-third of his final base compensation for the remainderlast two years of the then-current term equal to the average incentivesuch period. The final base compensation for the three calendar years immediately preceding the- 36 -written notice of termination.Mr. Karp is $2,000,000. In addition, all outstanding unvested Company stock options then held byduring the consulting period, Mr. Karp will immediately vest and become exercisable and Mr. Karp willis entitled to continue to participate in our health and medical benefit plans provided he bears the full cost of such participation, and programs at his expense for the remainder of the term of employment. In addition, weCompany will pay Mr. Karpto him an amount equal to thehis monthly cost of continuation coverage under COBRA for each month during the consulting period.term of employment. Mr. Karp may resign voluntarily without good reason upon appropriate written notice. In such event, Mr. Karp will be entitled to receive any accrued but unpaid base salary and, at the Company’s discretion, a bonus or incentive for the calendar year in which his resignation without good reason occurs. The Company may terminate Mr. Karp’s employment for cause upon appropriate written notice.consulting period. 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, incentive 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 paycontinue to Mr. Karp a lump sum amount equal to (i) his then-current base salary multiplied byprovide the number of full and partial years remaining inother benefits that would have been provided under the term of employment and (ii) his average annual incentive compensationconsulting agreement for the three calendar years immediately precedingremainder of the date of termination multiplied by the number of full and partial years remaining in the term of employment. In addition, all outstanding unvested equity awards then held by Mr. Karp shall become immediately exercisable.consulting period. In the event that any payment becomeswould be subject to the excise tax imposed by the “golden parachute” regulations under the Internal Revenue Code, Mr. Karp iswill be entitled to a gross-up payment from the Company to cover such taxes.- 37 -key executives. In addition, Mr. Christopher is entitled to receive reimbursement for reasonable business and travel expenses incurred in the performance of his duties and will participate in all bonus, incentive, stock option, pension, disability and health plans and programs and all fringe benefit plans maintained by the Company in which senior executives participate. The terms ofagreement relatingmay be terminated by the Company without cause or by Mr. Christopher for good reason upon appropriate written notice. In either such event, Mr. Christopher will continue to receive his then-current base salary as if his employment had continued for the remainder of the then-current term and annual incentive compensation for the remainder of the then-current term equal to the average incentive compensation for the three calendar years immediately preceding the written notice of termination. In addition, all outstanding unvested Company stock options then held by Mr. Christopher will immediately vest and become exercisable and Mr. Christopher will continue to participate in our healthiswould otherwise be entitled upon various terminationsunder the agreement shall be forfeited as of the date of termination. Mr. Christopher may resign his employment for any reason following a change in control. In such event, the Company will pay to Mr. Christopher a lump sum amount equal to (i) his then-current base salary multiplied by the number of full and partial years remaining in the term of employment (including gross-up payments) are identicaland (ii) his average annual incentive 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, we will pay Mr. Christopher an amount equal to those contained inthe monthly cost of continuation coverage under COBRA until he reaches age 65, and all outstanding unvested stock options then held by Mr. Karp’s employment agreement, described above, exceptChristopher 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. Christopher is entitled to continued participation ina gross-up payment from the Company’s benefit plans following a qualifying termination of employment until age 65.Company to cover such taxes.a discretionary cash incentive compensation consistent with the executive incentive compensation program which the Company establishes for other key executives. In addition, Mr. McKee is to receive reimbursement for reasonable business and travel expenses incurred in the performance of his duties and will participate in all bonus, incentive, stock option, pension, disability and health plans and programs and all fringe benefit plans maintained by the Company in which senior executives participate. The terms of Mr. McKee’s employment agreement relating to the compensation and benefits to which he is entitled upon various terminations of employment (including gross-- 38 -upgross-up payments) are identical to those contained in Mr. Karp’sChristopher’s employment agreement, described above, except that Mr. McKee is entitled to continued participation in the Company’s benefit plans following a qualifying termination of employment until age 65.above.Consulting Agreementare also partymaintain the 2011 Annual Bonus Plan, which was approved by our stockholders at our Annual Meeting in May 2011. The 2011 Annual Bonus Plan is designed to an amendedcomply with the performance-based compensation exemption from Section 162(m) of the Code by providing certain employees of the Company with incentive compensation based upon achievement of pre-established performance goals. Our Compensation Committee administers the 2011 Annual Bonus Plan and restated consulting agreement with Mr. Karp, dated October 25, 2007, as amendedis empowered to set performance goals and select participants that will be eligible to earn a bonus of incentive compensation based on December 2, 2008.the attainment of these pre-established performance goals.term2009 Stock Incentive Plan reserves 750,000 shares of our Common Stock for issuance, subject to adjustment in the event of any change in the outstanding Common Stock or the capital structure of the Company or any other similar corporate transaction or event.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 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 45,000 — $ 28.04 12/28/2015 — — 07/28/2006 30,000 — $ 35.05 07/28/2016 — — 07/27/2007 28,000 7,000 $ 36.91 07/27/2017 — — 07/25/2008 36,000 24,000 $ 26.49 07/25/2018 — — 07/30/2009 10,000 15,000 $ 23.83 07/30/2019 13,500 $ 523,530 07/23/2010 6,000 24,000 $ 24.48 07/23/2020 21,200 $ 822,136 07/28/2011 — — — — 31,000 $ 1,202,180
____________________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) Kent A. McKee 02/10/2004 38,902 — $ 20.72 02/10/2014 — — 02/23/2005 25,000 — $ 31.22 02/23/2015 — — 12/28/2005 45,000 — $ 28.04 12/28/2015 — — 07/28/2006 25,000 — $ 35.05 07/28/2016 — — 07/27/2007 24,000 6,000 $ 36.91 07/27/2017 — — 07/25/2008 21,000 14,000 $ 26.49 07/25/2018 — — 07/30/2009 8,000 12,000 $ 23.83 07/30/2019 8,000 $ 310,240 07/23/2010 4,000 16,000 $ 24.48 07/23/2020 12,800 $ 496,384 07/28/2011 — — — — 17,500 $ 678,650 James H. Rourke 07/27/2007 — 6,000 $ 36.91 07/27/2017 — — 07/25/2008 — 12,000 $ 26.49 07/25/2018 — — 07/30/2009 — 9,000 $ 23.83 07/30/2019 5,000 $ 193,900 07/23/2010 — — — — 8,000 $ 310,240 07/28/2011 — — — — 10,000 $ 387,800 Gary L. Wilkerson 05/05/2005 15,000 — $ 26.52 05/05/2015 — — 07/28/2006 25,000 — $ 35.05 07/28/2016 — — 07/27/2007 16,000 4,000 $ 36.91 07/27/2017 — — 07/25/2008 15,000 10,000 $ 26.49 07/25/2018 — — 07/30/2009 8,000 12,000 $ 23.83 07/30/2019 — — 07/23/2010 4,000 16,000 $ 24.48 07/23/2020 4,000 $ 155,120 07/28/2011 — — — — 7,500 $ 290,850 (1) (2) Option Awards Stock Awards Number of Value Number of Value Shares Acquired Realized Shares Acquired Realized on Exercise on Exercise on Vesting on Vesting Name (a) (#)(b) ($)(c) (#)(d) ($)(e) Harvey L. Karp — — — — Gregory L. Christopher 21,380 $ 550,968 11,500 $ 442,943 Kent A. McKee 62,328 $ 1,661,213 7,200 $ 276,870 James H. Rourke 98,000 $ 867,940 7,000 $ 276,375 Gary L. Wilkerson — — — — consultingletter agreement, will begin upon the terminationas described above under “Compensation Discussion and Analysis – Elements 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,Compensation – Special One-Time Bonus Award,” Mr. Karp will serve as independent consultant and advisorbecame entitled to the Companya special bonus in an amount equal to $2,000,000 based on matters within his areas of expertise and for which he had responsibility during hiscontinued employment with the Company provided that hethrough December 15, 2011. The payment of Mr. Karp’s special bonus will have not to devote more than twenty hours per month to consulting service duringbe delayed until the first four yearssix-month anniversary 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 agreesDecember 31, 2011 separation from service. Our other executive officers do not to engage in competitive activity (as defined in the consulting agreement). As compensation, Mr. Karp will be entitled to receive an annual consulting fee equal to (i) two-thirds of his final base compensation for the first four years of the consulting period and one-third of his final base compensation for the last two years of such period. The final base compensation for Mr. Karp is the lesser of: (i) his highest annual cash compensation (consisting of base salary and annual incentive compensation) during the three-year period from 2005 to 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. In the event that during the consulting period Mr. Karp’s consulting relationship is terminated by the Company without cause or Mr. Karp terminates his consulting relationship for good reason, Mr. Karp will continue to receive the amounts that- 39 -would have been payable under the consulting agreement for the remainder of the consulting period. 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.nonqualified deferred compensation.
____________________Executive Registrant Aggregate Aggregate Contributions in Contributions in Earnings in Last Withdrawals/ Aggregate Balance Name (a) Last FY $ (b) Last FY $ (c) FY $ (d) Distributions ($)(e) at Last FYE ($)(f) Harvey L. Karp — $2,000,000(1) — — $2,000,000 (1) This amount is included in Mr. Karp’s “All Other Compensation” in the “Summary Compensation Table.” UNDERUPON TERMINATION OF EMPLOYMENT AND CONSULTINGORAGREEMENTSCHANGE OF CONTROL AS OF THE END OF 20102011consultingequity grant agreements with certain of our named executive officers, upon certain terminations of employment, our named executive officers are entitled to payments of compensation and benefits as described above under “Narrative Disclosure to Summary Compensation Table and Grant of Plan-Based Awards Table—Employment and Consulting Agreements.” The table below reflects the amount of compensation and benefits payable to eachresignation for any reason following a change in control. The amounts shown assume the applicable triggering event occurred on December 25, 2010,31, 2011, and therefore are estimates of the amounts that would be paid to the named executive officers upon the occurrence of such triggering event. Messrs. Rourke and Wilkerson are not party to employment agreements and are not eligible to receive payments and benefits upon a termination of employment or in connection with a change in control. Termination Without Cause or for Good Reason Termination Following a Change in Control Accelerated Accelerated Vesting Vesting Salary & of Stock Consulting Salary & of Stock Consulting Bonus Benefits Options Agreement Bonus Benefits Options Agreement Gross Up ($)(1) ($) ($)(4) ($)(5) Total ($) ($)(1) ($) ($)(4) ($)(5) ($)(6) Name (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Total ($) (l) Harvey L. Karp $ 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 Kent A. McKee $ 2,299,658 $ 286,101 (3) $ 501,295 — $ 3,087,054 $ 2,299,658 $ 286,101 (3) $ 501,295 — — $ 3,087,054 James H. Rourke — — — — — — — — — — — Gary C. Wilkerson — — — — — — — — — — — - 40 -
____________________Termination Without Cause or for Good Reason Change in Control Accelerated Accelerated Vesting Vesting Salary & of Equity Consulting Salary & of Equity Consulting Bonus Benefits Awards Agreement Bonus Benefits Awards Agreement Gross Up ($) ($) ($)(5) ($)(6) Total ($) ($) ($) ($)(5) ($)(6) ($)(7) Total ($) Name (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Harvey L. Karp $ 2,000,000 (1) $ 30,394 (3) — $ 6,666,667 $ 8,697,061 $ 2,000,000 (1) $ 30,394 (3) — $ 6,666,667 — $ 8,697,061 Gregory L. Christopher $ 4,733,516 (2) $ 268,758 (4) $3,424,241 — $ 8,426,515 $ 4,733,516 (2) $ 268,758 (4) $ 3,424,241 — $ 1,248,065 $ 9,674,580 Kent A. McKee $ 2,729,828 (2) $ 250,841 (4) $2,077,364 — $ 5,058,033 $ 2,729,828 (2) $ 250,841 (4) $ 2,077,364 — — $ 5,058,033 James H. Rourke — — — — — — — $ 1,185,565 — — $ 1,185,565 Gary C. Wilkerson — — — — — — — $ 985,080 — — $ 985,080 (1) Represents Mr. Karp’s special bonus amount, which is payable on the earlier of (i) the calendar year following Mr. Karp’s separation from service and (ii) the occurrence of a change in control. Because Mr. Karp’s special bonus amount was earned on December 15, 2011, it is also reflected in the “Bonus” column of the 2011 Summary Compensation Table. Mr. Karp will not be entitled to receive the special bonus if his employment or service is terminated by the Company for “cause” prior to the applicable payment date. (2) 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, 2010.31, 2011, which is payable on an involuntary termination without cause or a resignation for good reason or a resignation for any reason following a change in control. If an executive resigns following a change in control, the amounts will be paid in a lump sum within 30 days following termination. (2)(3)Includes the value of health insurance continuation coverage under COBRA for the term of Mr. Karp’s consulting agreement.agreement, which is payable if the consulting period is terminated by the Company without cause or by Mr. Karp for good reason.(3)(4) Includes the value of continued participation in the Company’s benefit plans following termination of employment until age 65.65, which is payable on an involuntary termination without cause or a resignation for good reason or a resignation for any reason following a change in control. (4)(5)Includes the value of accelerated vesting of unvested shares of restricted stock and unvested stock options as of December 25, 2010,31, 2011, based on a per share value of $33.04.$38.79. Unvested stock options, unvested shares of restricted stock granted in 2011, and unvested shares of restricted stock granted to Messrs. Christopher and McKee will vest automatically in connection with a change in control. In addition, pursuant to their employment agreements, all outstanding stock options held by Messrs. Christopher and McKee will vest in connection with a termination by us without Cause or a resignation by the executive officer for good reason or for any reason following a change in control. (5)(6)Includes the value of Mr. Karp’s consulting fee. The amounts shown in columns (e) and (j) assume a terminationfee for the term of Mr. Karp’s employment agreement other than for cause or by reason of death or disability as of December 25, 2010, at which point Mr. Karp’s consulting agreement, would have gonewhich went into effect.effect as of December 31, 2011. Payment of Mr. Karp’s consulting fee is contingent upon the continued provision of consulting services in accordance with the terms of the consulting agreement, provided, however, that if the consulting period is terminated by the Company without cause or by Mr. Karp for good reason, Mr. Karp will continue to receive the amounts that would have been payable under the consulting agreement for the remainder of the consulting period. (6)(7)Gross-up payment to cover the excise tax imposed by the “golden parachute” regulations under the Internal Revenue Code. 2010 Fees Earned or Paid in Cash Option Awards Total ($) ($)(1) ($) 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 $72,330
____________________Fees Earned or Paid in Cash Stock Awards Option Awards Total ($) ($) ($)(1) ($) Name (a) (b) (c) (d) (h) Ian M. Cumming $ 13,750 — — $ 13,750 Alexander P. Federbush $ 215,500 $36,940 $24,528 $ 276,968 Paul J. Flaherty $ 65,500 $36,940 $24,528 $ 126,968 Gennaro J. Fulvio $ 70,500 $36,940 $24,528 $ 131,968 Gary S. Gladstein $ 70,250 $36,940 $24,528 $ 131,718 Scott J. Goldman $ 64,750 $36,940 $24,528 $ 126,218 Terry Hermanson $ 70,000 $36,940 $24,528 $ 131,468 Joseph S. Steinberg $ 13,750 — — $ 13,750 (1) Represents the aggregate grant date fair value of awards granted to our directors in 2010,2011, 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, 2010.31, 2011. 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.- 41 -25, 2010,31, 2011, the aggregate number of shares of our common stockCommon Stock subject to outstanding options held by our non-employee directors was as follows: Mr. Federbush, 10,000 shares, Mr. Flaherty, 6,0008,000 shares, Mr. Fulvio, 10,000 shares, Mr. Gladstein, 10,000 shares, Mr. Goldman, 6,0008,000 shares, and Mr. Hermanson, 10,000 shares. Each of these directors also held 1,000 shares of non-vested restricted stock. As of December 31, 2011, neither Mr. Cumming nor Mr. Steinberg held outstanding stock-based awards.20102011 fiscal year, directors of the Company who were not employed by the Companyvice chairman received an annual fee for serving on the Company’s Board of Directors of $45,000, plus$200,000 and the remaining non-employee directors received an annual fee of $50,000. Messrs. Cumming and Steinberg, after being appointed to the Board of Directors on September 2, 2011, each received $13,750. In addition, each director received a fee of $1,000 per Board meeting during the first half of the year and $2,000 per Board meeting for the second half of the year. Also, each director received $750 per Audit, Compensation orand Nominating and Corporate Governance Committee meeting attended by such director, plus reimbursement for such director’s expenses incurred in connection with any such Board or Committee meeting, and each Committee fee was paid whether or not such committee meeting was held in conjunction with a Board of Directors meeting. In addition, the Chairman of the Audit Committee received an annual fee of $5,000 while the Chairman of each of the Compensation and Nominating and Corporate Governance Committees received an annual fee of $3,000.2010,2011, each non-employee director, except for Messrs. Cumming and Steinberg, received a grant of options to purchase 2,000 shares of our Common Stock and were granted 1,000 shares of restricted stock pursuant to our 2009 Stock Incentive Plan, whichPlan. The options were fully vested as of their date of grant and the restricted stock will vest on the first anniversary of the date of grant.
OF THE BOARD OF DIRECTORS(1)byunder Statement on Auditing Standards No. 114, The Auditor’s Communication With Those Charged- 42 -With Governance,61,Communications with Audit Committees, as currentlyamended and as adopted by the Public Company Accounting Oversight Board in effect.Rule 3200T. In addition, the Audit Committee discussed with the independent auditors the auditors’ independence from management and the Company, including the matters in the written disclosures required by Public Company Accounting Oversight Board’s Rule 3526, and considered the compatibility of non-audit services provided by the independent auditors with the auditor’s independence.25, 201031, 2011 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 31, 2011.29, 2012.____________________Gary S. Gladstein, Chairman Gennaro J. Fulvio Terry Hermanson (1) This Section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. - 43 -
OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATIONTerry Hermanson, Chairman Ian M. Cumming Paul J. Flaherty Gennaro J. Fulvio 4446 -25, 201031, 2011 (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 1,659 $27.87 �� 732 (1) Equity compensation plans - not approved by security holders — — — Total 1,659 $27.87 732
____________________(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 1,231 $ 28.07 746 (1) Equity compensation plans - not approved by security holders — — — Total 1,231 $ 28.07 746
(1) Of the 732746 thousand securities remaining available for issuance under the equity compensation plans, 603457 thousand are available under the Company’s 2009 Stock Incentive Plan for issuance of restricted stock, stock appreciation rights, or stock options. The remaining securities are available for issuance of stock options only.
ACCOUNTING FIRM31, 2011,29, 2012, 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 outstanding shares of the Company present in person or by proxy at the Annual Meeting and entitled to vote thereon. If the appointment of E&Y is not ratified by the stockholders at the Annual Meeting, the Audit Committee will reconsider its action and will appoint auditors for the 20112012 fiscal year without further stockholder action. Further, even if- 45 -the appointment is ratified by stockholder action, the Audit Committee may at any25, 201031, 2011 and December 26, 200925, 2010 and fees for other services rendered by E&Y during those periods: 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 2011 2010 Audit Fees $ 2,121,420 $ 2,045,861 Audit-Related Fees 59,440 94,197 Tax Fees 421,296 423,076 All Other Fees 1,995 1,945 $ 2,604,151 $ 2,565,079 20102011 and 2009.2010. date.4648 -20102011 and 2009,2010, respectively, under the categories Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees described above were pre-approved.
EXECUTIVE OFFICERS4749 -20102011 Summary Compensation Table included in the proxy statement for the 20112012 Annual Meeting, as such compensation is disclosed pursuant to Item 402 of Regulation S-K in this proxy statement under the section titled “Compensation Discussion and Analysis,” as well as the compensation tables and other narrative executive compensation disclosures thereafter.”STOCKHOLDER VOTE ON THE FREQUENCY OF THE STOCKHOLDERVOTE ON NAMED EXECUTIVE OFFICER COMPENSATION Stockholders are being asked to vote on an advisory, non-binding basis, on whether the stockholder vote on the compensation of the Company’s named executive officers should occur every one, two, or three years. The Company is providing its stockholders with an advisory vote on the frequency of the stockholder vote on the compensation of the Company’s named executive officers as required pursuant to Section 14A of the Securities Exchange Act of 1934. This advisory vote is another mechanism for stockholders to provide input on the Company’s compensation programs. The Board of Directors believes that stockholders should have the opportunity to vote on the compensation of named 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.- 48 - The following resolutions will be submitted for a stockholder vote at the Annual Meeting. Although the stockholder vote on the frequency of the stockholder vote on the compensation of the Company’s named executive officers is not binding on the Board of Directors or the Company, the Company values the views of its stockholders. The Board of Directors and Compensation Committee will review the results of the vote and take them into consideration in determining how often to conduct the stockholder vote on the compensation of the Company’s named executive officers. “RESOLVED, that the stockholders of the Company approve, on an advisory basis, whether the stockholder vote on the compensation of the Company’s named executive officers listed in the annual proxy statement should occur EVERY YEAR.” OR “RESOLVED, that the stockholders of the Company approve, on an advisory basis, whether the stockholder vote on the compensation of the Company’s named executive officers listed in the annual proxy statement should occur EVERY TWO YEARS.” OR “RESOLVED, that the stockholders of the Company approve, on an advisory basis, whether the stockholder vote on the compensation of the Company’s named executive officers listed in the annual proxy statement should occur EVERY THREE YEARS.”THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARES FOR A STOCKHOLDER VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION TO OCCUR EVERY THREE YEARS.PROPOSAL TO ADOPT THE MUELLER INDUSTRIES, INC.2011 ANNUAL BONUS PLAN Effective as of March 15, 2011, the Board of Directors adopted the Mueller Industries, Inc. 2011 Annual Bonus Plan (the “Plan”) subject to the approval of the Company’s stockholders. The primary purpose of the Plan is to provide incentives to senior executives of the Company and its subsidiaries to meet or exceed certain corporate performance targets and thereby enhance return to the Company’s stockholders and to encourage such executives to remain in the employ- 49 -of the Company and its subsidiaries. In adopting the Plan, it is the objective of the Board of Directors to enable the Company to maximize any federal tax deductions in connection with bonus payments to the Company’s most highly compensated executive officers. The following description of the Plan is qualified in its entirety by the text of the Plan as filed with the SEC. The Plan is a management incentive plan designed to provide certain employees of the Company with incentive compensation based upon achievement of pre-established performance goals. The Plan is designed to comply with the performance-based compensation exemption from Section 162(m) of the Code, which denies federal tax deductions for annual compensation in excess of $1,000,000 paid by the Company to the Chief Executive Officer and any of the four other most highly compensated executive officers, unless such compensation is performance-based and paid pursuant to a plan approved by the Company’s stockholders. Historically, the Company awarded performance-based compensation under its standalone Annual Bonus Plan. In 2010, the Company awarded performance-based compensation under its newly adopted 2009 Stock Incentive Plan, and it was the Company’s intent to continue this practice in future years. However, after making awards of performance-based compensation under the 2009 Stock Incentive Plan for one year, the Company determined that from an administrative perspective, a standalone annual bonus plan was warranted. Accordingly, the Board adopted the Plan, subject to stockholder approval. The Plan will be administered by the Compensation Committee of the Board of Directors (the “Committee”). The Committee will select Plan participants who will be eligible to earn bonus awards under the Plan (the “Bonus”). The Chairman of the Board of Directors (the “Chairman”) and the Chief Executive Officer (“CEO”) of the Company and such other employees of the Company and any subsidiary of the Company chosen by the Committee to participate in the Plan for a Plan Year shall participate in the Plan. Within 90 days following the commencement of each “Plan Year” (fiscal year of the Company), the Committee may select such employees as it deems appropriate for participation in the Plan and set performance goals for the Chairman and CEO, and such other employees for the Plan Year. Such Plan participants will be entitled to earn a Bonus of incentive compensation based on the attainment of these pre-established performance goals during the Plan Year (collectively “Performance Goals”). Performance Goals will consist of one or more of the following: (a) pre-tax earnings; (b) earnings per share; (c) operating- 50 -income; (d) net sales; (e) total stockholder return; (f) net income; (g) funds from operations; (h) funds from operations multiple; (i) earnings before interest expense, taxes, depreciation and amortization (“EBITDA”); (j) pretax operating earnings after interest expense and before bonuses, service fees and extraordinary or special items; (k) operating margin; (l) return on equity; (m) return on capital; (n) return on investment; (o) operating earnings; (p) working capital; (q) ratio of debt to stockholders’ equity; (r) market capitalization; (s) market capitalization defined by the Company’s line of credit; (t) growth in funds from operations; (u) growth in net operating income; (v) return on invested capital; (w) inventory levels or inventory turnover; (x) total net sales; (y) total gross profit or total gross profit percentage; (z) operating cash flow or free cash flow; (aa) economic value added; (bb) pre-interest and pre-tax expense return on average invested capital, which may be expressed on a current value basis; (cc) accounts receivable (measured in terms of days sales outstanding); (dd) operating expenses; (ee) sales growth; (ff) profit before taxes or profit after taxes less the Company’s cost of capital; and/or (gg) net revenue. Any such targets may relate to one or any combination of two or more of corporate groups, units, divisions, affiliates or to individual performance. No participant may receive a Bonus of more than $2,500,000 for any Plan Year. The Committee is authorized at any time during or after a Plan Year, in its sole and absolute discretion, to reduce or eliminate a Bonus payable to any participant for any reason, including changes in the position or duties of the participant, whether due to termination of employment (including death, disability or termination with or without cause) or otherwise. No reduction in a Bonus made to any participant shall increase the amount of a Bonus to any other participant. Following the completion of each Plan Year, the Committee will certify in writing the degree to which Performance Goals were attained and such Bonuses earned and are payable to participants. Each participant will receive payment of his or her earned Bonus as soon as practicable following the determination of such award by the Committee, but not later than two and one-half months following the end of the Plan Year. If the employment of a participant terminates by reason of death or disability, then the Committee may, in its sole discretion, determine to pay all or a prorated portion of any Bonus relating to the Plan Year in which the participant’s employment terminates. Unless such a determination is made, upon a participant’s termination of employment on account of death or disability, the participant shall immediately- 51 -cease participation in the Bonus and shall not be entitled to earn a Bonus for such Plan Year. If a participant’s employment with the Company terminates for any reason other than death or disability during a Plan Year, then the participant will immediately cease participation in the Plan and will not have the opportunity to earn a Bonus for such Plan Year, unless the Committee determines otherwise and provided that the payment of any Bonus remains subject to the achievement of the Performance Goals applicable to the Plan Year of termination. The Board of Directors may at any time terminate, suspend or modify the Plan. Amendments are subject to approval of the stockholders of the Company only if such approval is necessary to maintain the Plan in compliance with the requirements of Section 162(m) of the Code, its successor provisions or any other applicable law or regulation. No Bonus may be earned during any suspension of the Plan or after its termination. The Plan became effective as of March 15, 2011, for bonuses payable in respect of the 2011 Plan Year, subject to approval of the Company’s stockholders. If approval of the Company’s stockholders is not obtained, then the Plan shall cease to be effective. Although any employee that the Committee chooses is eligible to participate in the Plan, it is currently anticipated that payments under the Plan will be made only to Harvey L. Karp, Gregory L. Christopher and Kent A. McKee.New Plan Benefits Because the payment of annual Bonuses is contingent upon the achievement of certain Performance Goals as of the end of the Company’s fiscal year, the Company cannot determine the amounts that will become payable for the fiscal year 2011 or in the future. The table below sets forth the amounts that would have been earned under the Plan for the Company’s 2010 fiscal year, based on the performance targets and award levels set for the Company’s 2011 fiscal year and on the Company’s actual performance for the 2010 fiscal year, as if the Plan had been in effect for the Company’s 2010 fiscal year.- 52 -New Plan Benefits 2011 Annual Bonus Plan Name and Position Dollar Value Harvey L. Karp Chairman of the Board $ 2,500,000 Gregory L. Christopher Chief Executive Officer and Director $ 919,211 Kent A. McKee Executive Vice President and Chief Financial Officer $ 532,004 James H. Rourke President, Industrial Business n/a Gary C. Wilkerson Vice President, General Counsel and Secretary n/a Executive Group $ 3,951,215 Non-Executive Director Group n/a Non-Executive Officer Employee Group n/a Required Vote The affirmative vote of a majority of the shares of Common Stock voting, in person or by proxy, at the Annual Meeting will be required to approve the Plan.THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARES FOR THE PROPOSAL TO APPROVE THE MUELLER INDUSTRIES, INC. 2011 ANNUAL BONUS PLAN.STOCKHOLDER NOMINATIONS FOR BOARD MEMBERSHIP
AND OTHER PROPOSALS FOR 20122013 ANNUAL MEETING5, 20113, 2012 will be held on or about May 3, 2012.2, 2013. 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 2012,2013, no earlier than February 5, 20122, 2013 and no later than March 6, 2012.4, 2013. 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 -2012,2013, such proposal must be received by the Secretary of the Company by November 24, 201121, 2012 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 20122013 is changed to a date more than 30 days earlier or later than May 3, 2012,2, 2013, the Company will inform the stockholders in a20102011 all filing requirements applicable to its officers, directors and ten percent stockholders were complied with.25, 201031, 2011 that accompanies this Proxy Statement. These financial statements are also on file with the SEC, 100 F Street,N.E., Washington, D.C. 20549 and with the NYSE. The Company’s SEC filings are also available at the Company’s website at www.muellerindustries.com or the SEC’s website at www.sec.gov.- 54 -25, 201031, 2011 (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 TO20112012 Annual General Meeting to be held on May 5, 2011.3, 2012.
HTTP://WWW.PROXYVOTE.COMFirm,”Firm” and “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 Adopt the Mueller Industries, Inc. 2011 Annual Bonus Plan.Officers.”- 55 -
By order of the Board of Directors 
5653 -
ATTN: GARY WILKERSON
8285 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 PROXY MATERIALS If you would like to reduce the costs incurred by 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 proxy 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 Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 
For Withhold For All All All Except The Board of Directors recommends you vote
FOR the following: o o o 1. Election of Directors Nominees ForAllWithholdAllFor AllExceptTo 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. ooo 01 Alexander P. Federbush 02 Paul J. Flaherty03 Gennaro J. Fulvio04 Gary S. Gladstein 05 Scott J. Goldman 06 Terry Hermanson07 Harvey L. Karp 08 Gregory L. Christopher The Board of Directors recommends you vote FOR proposals 2 and 3.ForAgainstAbstain2 Approve the appointment of Ernst & Young LLP as independent auditors of the Company.ooo 3 01 Ian M. Cumming 02 Alexander P. Federbush 03 Paul J. Flaherty 04 Gennaro J. Fulvio 05 Gary S. Gladstein 06 Scott J. Goldman 07 Terry Hermanson 08 Joseph S. Steinberg 09 Gregory L. Christopher The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain 2. Approve the appointment of Ernst & Young LLP as independent auditors of the Company. o o o 3. To approve, on an advisory basis by non-binding vote, executive compensation. o o o To approve, on an advisory basis by non-binding vote, executive compensation. ooo The Board of Directors recommends you vote 3 YEARS on the following proposal: 1 year 2 years3 yearsAbstain4 To approve, on an advisory basis by non-binding vote, the frequency of holding future advisory votes on executive compensation.ooooThe Board of Directors recommends you vote FOR the following proposal:ForAgainstAbstain5 To approve the adoption of the Company's 2011 Annual Bonus Plan.oooNOTE: Such other business as may properly come before the meeting or any adjournment thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE SIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" ALL NOMINEES LISTED, "FOR" PROPOSAL 2, "FOR" PROPOSAL 3, FOR "3 YEARS" FOR PROPOSAL 4 AND "FOR" PROPOSAL 5. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/are available at www.proxyvote.comwww.proxyvote.com.. 
MUELLER INDUSTRIES, INC. PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - MAY 5, 20113, 2012
This Proxy is Solicited on Behalf of the Board of Directors. The undersigned hereby appoints Gary C. Wilkerson and Kent A. McKee, and each of them, Proxies, with full power of substitution in each, to represent and to vote, as designated, all shares of Common Stock of Mueller Industries, Inc. that the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held on May 5, 2011,3, 2012, and at all adjournments thereof, upon and in respect of the matters set forth on the reverse side hereof, and in their discretion, upon any other matter that may properly come before said meeting. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.