SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MUELLER INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
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(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
[MUELLER INDUSTRIES, INC. GRAPHIC OMITTED]
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 9, 2002
----------------------
To the Stockholders of
Mueller Industries, Inc.
The Annual Meeting of Stockholders of Mueller Industries, Inc. (the
"Company"), will be held at the Company's headquarters at 8285 Tournament
Drive, Suite 150, Memphis, Tennessee 38125 on Thursday, May 9, 2002, at 10:00
A.M. local time, for the following purposes:
1. To elect five directors, each to serve until the next annual meeting
of stockholders (tentatively scheduled for May 10, 2003) or until his
successor is elected and qualified;
2. To consider and act upon a proposal to approve the adoption by the
Board of Directors of the Company's 2002 Stock Option Plan which
allows for the issuance of a maximum of 750,000 shares of Common
Stock;
3. To consider and act upon a proposal to approve the appointment of
Ernst & Young LLP, independent public accountants, as auditors of the
Company for the fiscal year ending December 28, 2002; 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 12, 2002,
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.
John P. Fonzo
Corporate Secretary
March 25, 2002
MUELLER INDUSTRIES, INC.
8285 Tournament Drive, Suite 150
Memphis, Tennessee 38125
Telephone (901) 753-3200
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PROXY STATEMENT
Annual Meeting of Stockholders
May 9, 2002
----------------------
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 9, 2002, 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 29, 2001, is first being mailed on or about March
25, 2002.
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 in favor of the proposals set forth thereon and for the
nominees named herein. The discretion granted in the accompanying proxy card
includes the authority to vote on all additional matters properly coming before
the Annual Meeting as the persons named in the proxy deem appropriate. A
stockholder giving a proxy may revoke it at any time before it is voted at the
Annual Meeting by giving written notice to the secretary of the Annual Meeting,
or by casting a ballot at the Annual Meeting. Votes cast by proxy or in person
at the Annual Meeting will be tabulated by election inspectors appointed for
the Annual Meeting. The election inspectors will also determine whether a
quorum is present. The holders of a majority of the shares of common stock,
$.01 par value per share ("Common Stock"), outstanding and entitled to vote who
are present either in person or represented by proxy will constitute a quorum
for the Annual Meeting. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum, but as unvoted for purposes of determining the approval
of any matter submitted. If a broker indicates on a proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with
respect to that matter.
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 33,610,755 shares of Common Stock outstanding at the close
of business on March 12, 2002, 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 12, 2002, will be entitled to notice of, and to vote at, the
Annual Meeting. The Company's Certificate of Incorporation and Bylaws do not
provide for cumulative voting for the election of Directors.
PRINCIPAL STOCKHOLDERS
As of March 12, 2002, the following parties were known by the Company to
be the "beneficial owner" of more than five percent of the Common Stock:
Shares Beneficially Percent of
Name and Address of Beneficial Owner Owned Class
- -------------------------------------- --------------------- -----------------
Harvey L. Karp ....................... 3,483,400 (1) 9.39% (1)
c/o Mueller Industries, Inc.
8285 Tournament Drive, Suite 150
Memphis, Tennessee 38125
Berkshire Hathaway Inc. .............. 3,216,900 (2) 9.57% (4)
1440 Kiewit Plaza
Omaha, Nebraska 68131
Prudential Financial, Inc. ........... 1,765,254 (3) 5.25% (4)
751 Broad Street
Newark, New Jersey 07102-3777
- -----------
(1) Includes 3,400,000 shares of Common Stock which are subject to currently
exercisable stock options.
(2) Information obtained from a Schedule 13G, dated February 14, 2002, filed
with the Securities and Exchange Commission on behalf of Warren E.
Buffett, Berkshire Hathaway Inc., OBH, Inc. and National Indemnity
Company. The Schedule 13G reported ownership of 3,216,900 shares of
Common Stock then outstanding. The Schedule 13G reported shared voting
power and shared dispositive power over 3,216,900 shares.
(3) Information obtained from a Schedule 13G, dated February 13, 2002, filed
with the Securities and Exchange Commission on behalf of Prudential
Financial, Inc. The Schedule 13G reported ownership of 1,765,254 shares
of Common Stock then outstanding. The Schedule 13G reported that
Prudential Financial, Inc. has sole voting power over 45,100 shares,
shared voting power over 1,699,954 shares, sole dispositive power over
45,100 shares and shared dispositive power over 1,710,154 shares.
(4) The percent of class shown was based on the shares of Common Stock
reported on the respective Schedules 13G and the total number of shares
outstanding as of December 31, 2001. The difference in the total number
of shares outstanding on December 31, 2001 and March 12, 2002 does not
materially affect the percentage of ownership of the class.
2
ELECTION OF DIRECTORS
The Board of Directors proposes to elect the following five persons 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 10, 2003),
or until the election and qualification of their successors: Gennaro J. Fulvio,
Gary S. Gladstein, Robert B. Hodes, Harvey L. Karp and William D. O'Hagan. 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. G.E.
Manolovici is not standing for reelection to the Board of Directors at the
Annual Meeting.
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 result of a direction to withhold or a broker non-vote) will not be
counted in such director's favor.
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE
OFFICERS AND INFORMATION ABOUT DIRECTOR NOMINEES
The following table sets forth, as of March 12, 2002, information about
the 4,422,144 shares of Common Stock (calculated based on 33,610,755 shares
outstanding) beneficially owned by each of the Company's current directors,
nominees for director, executive officers and Named Officers (as defined under
"Executive Compensation"). Unless otherwise indicated, all directors and
nominees for director, executive officers and Named 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 publiclyowned
companies.
Common Stock
Beneficially
Owned as of Percent of
Principal Occupation, Employment, etc. March 12, 2002 Class
- ----------------------------------------------------------- ---------------- -----------
Gennaro J. Fulvio ......................................... 0 *
Director nominee; age 45 (1)
Gary S. Gladstein ......................................... 22,500 *
Director of the Company since July 1, 2000;
Director of Jos. A. Bank Clothiers, Inc. and Cresud S.A.;
age 57 (2)
Robert B. Hodes ........................................... 46,000 *
Director of the Company since February 10, 1995;
Director of W.R. Berkley Corporation, Loral Space &
Communications Ltd., K & F Industries, Inc., R. V. I.
Guaranty, Ltd. and LCH Investments N.V.; age 76 (3)
3
Common Stock
Beneficially
Owned as of Percent of
Principal Occupation, Employment, etc. March 12, 2002 Class
- --------------------------------------------------------------------- ---------------- --------------
Harvey L. Karp ...................................................... 3,483,400 9.39%
Chairman of the Board of Directors since
October 8, 1991; Director since August 1991;
age 74 (4)
G.E. Manolovici ..................................................... 16,000 *
Director of the Company since November 30, 1998;
age 65 (5)
William D. O'Hagan .................................................. 755,214 2.20%
Chief Executive Officer of the Company since
January 1, 1994; Chief Operating Officer of the Company
since June 22,1992; President of the Company since
December 1, 1992; Director of the Company since
January 1993; age 60 (6)
John P. Fonzo ....................................................... 500 *
Vice President, General Counsel and Secretary of the
Company since July 5, 2000; age 46 (7)
Roy C. Harris ....................................................... 59,616 *
Vice President and Chief Information Officer of the
Company since July 5, 2000; age 59 (8)
Kent A. McKee ....................................................... 73,204 *
Chief Financial Officer of the Company since April 1, 1999;
Vice President of the Company since February 11, 1999;
age 41 (9)
Lee R. Nyman ........................................................ 34,210 *
Senior Vice President-Manufacturing/Engineering of the
Company since February 11, 1999; age 49 (10)
Executive Officers, Named Officers and Directors as a Group ......... 4,422,144 11.63%**
- -----------
* Less than 1%
** Includes 4,188,599 shares of Common Stock which are subject to currently
exercisable stock options held by officers and directors of the Company.
(1) Mr. Fulvio has been a member of Fulvio & Associates, LLP, Certified Public
Accountants (formerly Speer & Fulvio, LLP), since 1987.
(2) Mr. Gladstein previously served as a director of the Company from 1990 to
1994. Mr. Gladstein is currently a Senior Consultant at Soros Fund
Management. He was Chief Operating Officer at Soros Fund Management from
1985 until his retirement at the end of 1999. The number of shares owned by
Mr. Gladstein includes 2,000 shares of Common Stock owned by Mr.
Gladstein's son. Mr. Gladstein disclaims beneficial ownership of the 2,000
shares of Common Stock owned by his son.
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(3) Mr. Hodes is Counsel to the New York law firm of Willkie Farr & Gallagher.
The number of shares of Common Stock beneficially owned by Mr. Hodes
includes (i) 2,200 shares of Common Stock owned by Mr. Hodes' children and
(ii) 10,000 shares of Common Stock which are subject to currently
exercisable stock options.
(4) The number of shares of Common Stock beneficially owned by Mr. Karp
includes 3,400,000 shares of Common Stock which are subject to currently
exercisable stock options.
(5) Mr. Manolovici is currently self-employed in managing his private
investment portfolio. Prior to June 1994, Mr. Manolovici served as a
Managing Director of Soros Fund Management. The number of shares of Common
Stock beneficially owned by Mr. Manolovici includes 6,000 shares of Common
Stock which are subject to currently exercisable stock options. Mr.
Manolovici is not standing for re-election to the Board of Directors at the
Annual Meeting.
(6) The number of shares of Common Stock beneficially owned by Mr. O'Hagan
includes (i) 484,000 shares of Common Stock which are subject to currently
exercisable stock options, (ii) 4,068 shares of Common Stock owned by Mr.
O'Hagan's spouse and (iii) 28,136 shares of Common Stock owned by a family
partnership of which Mr. O'Hagan is a general partner and in which Mr.
O'Hagan or his spouse hold a 99% interest. Mr. O'Hagan disclaims beneficial
ownership of the 4,068 shares of Common Stock owned by his spouse.
(7) Mr. Fonzo has served as Vice President, General Counsel and Secretary of
the Company since July 5, 2000. Prior thereto, Mr. Fonzo had been General
Counsel, Consumer Packaging, for International Paper Company, since 1998,
and Senior Counsel, International Paper Company, since 1995. The number of
shares of Common Stock beneficially owned by Mr. Fonzo includes 500 shares
of Common Stock which are subject to currently exercisable stock options.
(8) Mr. Harris served (i) as Division Manager of the Company's Standard
Products Division from May 1, 1997 through July 11, 2000 and (ii) as
Controller, Standard Products Division from December 1995 to May 1, 1997.
The number of shares of common stock beneficially owned by Mr. Harris
includes 41,340 shares of Common Stock which are subject to currently
exercisable stock options.
(9) Mr. McKee served (i) as Vice President -- Business Development/Investor
Relations of the Company from December 14, 1995 to February 11, 1999, (ii)
as Treasurer of the Company from November 8, 1991 to December 14, 1995 and
(iii) 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 35,800 shares of Common Stock which are subject to
currently exercisable stock options.
(10) Mr. Nyman served as Vice President -- Manufacturing/Management Engineering
of the Company from July 7, 1993 to February 11, 1999. The number of shares
of Common Stock beneficially owned by Mr. Nyman includes 19,800 shares of
Common Stock which are subject to currently exercisable stock options.
During 2001, the Board of Directors held four 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
5
and the Company's 1994 Non-Employee Director Stock Option Plan, on February 12,
1998 created a committee to be responsible for administering the Company's 1998
Stock Option Plan and on February 12, 2002 created a committee to be
responsible for administering the Company's 2002 Stock Option Plan
(collectively, the "Option Plan Committees"). During 2001, no director attended
fewer than 75% of the total number of meetings of the Board and all committees
on which he served.
During 2001, the Audit Committee was composed of three directors who were
not officers or employees of the Company: Gary S. Gladstein, G.E. Manolovici
and Robert Hodes. During 2001, the Audit Committee met four times. The Board of
Directors determined that the members of the Audit Committee were independent,
as independence is defined in Sections 303.01(B)(2)(a) and (3) of the New York
Stock Exchange listing standards. The Audit Committee (i) makes recommendations
to the Board of Directors regarding the appointment of the Company's
independent accountants, (ii) reviews and approves any major change in the
Company's accounting policy, (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 procedures
for compliance with disclosure requirements concerning conflicts of interest
and the prevention of unethical, questionable or illegal payments, and (vii)
makes such reports and recommendations to the Board of Directors as it may deem
appropriate. The Board of Directors has adopted a written Audit Committee
Charter.
During 2001, the Compensation Committee was composed of two directors who
were not officers or employees of the Company: Gary S. Gladstein and G.E.
Manolovici. These same directors also served as members of the Plan Committees
and the Option Plan Committees. The Compensation Committee (i) reviews
management compensation standards and practices and (ii) makes such
recommendations to the Board of Directors as it deems appropriate. During 2001,
the Compensation Committee and the Option Plan Committees held one meeting.
During 2001, the Nominating Committee was composed of two directors who
were not officers or employees of the Company: Robert Hodes and G.E.
Manolovici. The Nominating Committee makes recommendations to the Board of
Directors regarding director candidates and criteria for Board membership.
During 2001, the Nominating Committee held one meeting. The Nominating
Committee does not consider individuals nominated by stockholders for election
to the Board. However, under the Company's Bylaws, nominations for the election
of directors may be made by a qualifying stockholder, but only if written
notice of such stockholder's intent to make such nomination has been 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 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
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timely, but only with respect to nominees for any new positions created by such
increase, if it is delivered to the Secretary of the Company not later than the
tenth day following the day on which such public announcement is first made by
the Company. To be a qualifying stockholder, the stockholder must be a
stockholder of record at the time the notice was delivered to the Secretary of
the Company. Each such notice shall set forth: (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director, all
information relating to such person that is required to be disclosed in
solicitation of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A (or successor provisions) under the
Securities Exchange Act of 1934, including such person's written consent to be
named in the proxy statement as a nominee and serving as a director if elected;
(b) as to any other business that the stockholder desired to be brought before
the meeting, a brief description of the business desired to be brought before
the meeting, the reasons for conducting such business at the meeting, and any
material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
stockholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the Company's books, and of such beneficial
owner, and (ii) the class and number of shares of Common Stock which are owned
beneficially and of record by such stockholder and such beneficial owner. The
presiding officer of the meeting may refuse to acknowledge the nomination of
any person not made in compliance with the foregoing procedure.
Director Compensation
During 2001, Directors of the Company who were not employed by the Company
received an annual fee for serving on the Company's Board of Directors of
$25,000, plus a fee of $1,000 per Board and $750 per Audit, Compensation or
Nominating Committee meeting attended by such Director, plus reimbursement for
such Director's expenses incurred in connection with any such Board or
Committee meeting, except no Committee meeting fees were paid for meetings held
in conjunction with a Board of Directors meeting. In addition, the Chairman of
each of the Audit, Compensation and Nominating Committees receives an annual
fee of $2,500.
Under the Company's 1994 Non-Employee Director Stock Option Plan, each
member of the Company's Board of Directors who is neither an employee nor an
officer of the Company is automatically granted each year on the date of the
Company's Annual Meeting of Stockholders, without further action by the Board,
an option to purchase 2,000 shares of Common Stock at the fair market value of
the Common Stock on the date the option is granted. As of March 12, 2002,
options to purchase 18,000 shares of Common Stock were outstanding under the
Company's 1994 Non-Employee Director Stock Option Plan.
Board of Directors' Affiliations
Mr. Hodes is Counsel to the law firm of Willkie Farr & Gallagher, which
provided legal services to the Company during 2001.
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EXECUTIVE COMPENSATION
The following table summarizes the annual and long-term compensation for
services in all capacities for the Company for the fiscal years 2001, 2000 and
1999, of those persons who were, at December 29, 2001, (i) the chief executive
officer, and (ii) the other four most highly compensated executive officers of
the Company (collectively, the "Named Officers").
Long-Term
Compensation
-------------
Awards
-------------
Annual Compensation Securities
--------------------------- Underlying All Other
Name and Principal Position Year Salary Bonus(1) Options(#) Compensation(2)
- ------------------------------ ------ ----------- ------------- ------------- ----------------
Harvey L. Karp ............... 2001 $801,190 $ 600,893
Chairman of the Board 2000 $763,048 $ 763,048
1999 $693,680 $1,144,572
William D. O'Hagan ........... 2001 $546,260 $ 382,382 $ 6,800
President and Chief Executive 2000 $520,260 $ 494,247 $24,583
Officer 1999 $472,966 $ 756,746 $16,611
John P. Fonzo ................ 2001 $194,580 $ 43,350 5,000 $ 6,800
Vice President, 2000 $ 85,323 $ 105,400 2,500
General Counsel 1999 -- --
& Secretary (3)
Kent A. McKee ................ 2001 $181,125 $ 56,082 10,000 $ 6,800
Vice President and Chief 2000 $175,000 $ 91,250 7,500 $ 7,700
Financial Officer 1999 $149,949 $ 149,954 7,500 $ 7,146
Lee R. Nyman ................. 2001 $191,475 $ 67,572 15,000 $ 6,800
Senior Vice President -- 2000 $185,000 $ 114,900 10,000 $ 8,204
Manufacturing Engineering 1999 $178,020 $ 207,262 15,000 $ 9,589
- -----------
(1) Includes all amounts earned for the respective years, even if deferred
under the Company's Executive Deferred Compensation Plan.
(2) Consists of $6,800 contributed on behalf of each of Messrs. O'Hagan,
Fonzo, McKee and Nyman, respectively, as matching contributions under the
Company's 401(k) Plan for 2001.
(3) Mr. Fonzo joined the Company on July 5, 2000.
8
OPTION GRANTS
Shown below is further information on options granted during the fiscal
year ended December 29, 2001, to the Named Officers.
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants for Option Term
------------------------------------------------------------------------ ----------------------
Number of % of
Securities Total Options Exercise Market Price
Underlying Granted or Base on Date
Options to Employees Price of Grant Expiration
Name Granted (#) in Fiscal Year ($/Sh) ($/Sh) Date 5% 10%
- ------------------------ ------------- ---------------- --------------- ------------- ----------- ---------- -----------
Harvey L. Karp ......... -- -- -- -- -- -- --
William D. O'Hagan ..... -- -- -- -- -- -- --
John P. Fonzo .......... 5,000 7.14% $ 29.10(1) $ 29.10 11/7/2011 $ 91,505 $231,883
Kent A McKee ........... 10,000 14.29% $ 29.10(1) $ 29.10 11/7/2011 $183,010 $463,767
Lee R. Nyman ........... 15,000 21.43% $ 29.10(1) $ 29.10 11/7/2011 $274,515 $695,650
- -----------
(1) These options were granted under the Company's 1998 Stock Option Plan
with an exercise price equal to 100% of the fair market value of the
Common Stock at the time of grant, which, in accordance with the terms of
the 1998 Stock Option Plan, is the mean between the highest and lowest
sale price of the Common Stock on the last trading date immediately
preceding the date of grant. For purposes of determining the potential
realizable value of these options, the mean between the highest and
lowest sale price of the Common Stock on the trading date immediately
preceding the date of grant was used as the date of grant market price.
These options vest over a four-year term, with the first 40% vesting on
November 7, 2002, and 20% vesting on November 7 of each of the following
three years
Aggregated Option Exercises in Last Fiscal Year and
Option Values at December 29, 2001
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Dec. 29, 2001 (#) Dec. 29, 2001(2)
Shares ------------------- -------------------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($)(1) Unexercisable Unexercisable
- ----------------------- -------------- ---------------- ------------------- -------------------------
Harvey L. Karp ........ 3,600,000/ 0 $113,412,600/ 0
William D. O'Hagan..... 484,000/116,000 $ 8,688,455/1,898,980
John P. Fonzo ......... 500/ 7,000 $ 4,937/ 41,898
Kent A. McKee ......... 35,800/ 24,700 $ 583,642/ 150,620
Lee R. Nyman .......... 48,400 971,696 19,800/ 42,800 $ 106,658/ 231,470
- -----------
(1) Represents the difference between the closing price of the Common Stock
on the date of exercise and the exercise price of the options.
(2) Represents the difference between the closing price of the Common Stock
on the last trading day prior to December 29, 2001 and the exercise price
of the options.
9
The Company did not award stock appreciation rights to any executive
officer during 2001, nor was any award made under any long-term incentive plan.
The Company does not have a defined benefit or actuarial plan covering any of
the Named Officers.
Employment Contracts and Termination of Employment Arrangements
Effective as of September 17, 1997, the Company amended and restated
Harvey L. Karp's then existing employment agreement (as amended and restated,
the "Karp Employment Agreement"). The Karp Employment Agreement has a
three-year rolling 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 Karp Employment
Agreement provides for Mr. Karp to serve as Chairman of the Board of Directors
of the Company. Under the terms of the Karp Employment Agreement, Mr. Karp is
to receive (i) an annual base salary of $606,373 (to be adjusted upward
annually at a rate commensurate with increases granted to other key
executives), and (ii) a discretionary cash incentive bonus consistent with the
executive bonus program which the Company establishes for other key executives.
In addition, Mr. Karp is to receive reimbursement for reasonable business and
travel expenses incurred in the performance of his duties and will participate
in all bonus, incentive, stock option, pension, disability and health plans and
programs and all fringe benefit plans maintained by the Company in which senior
executives participate.
Under the terms of the Karp Employment Agreement, Mr. Karp's employment
may be terminated by the Company without Cause (as defined in the Karp
Employment Agreement) or by Mr. Karp for Good Reason (as defined in the Karp
Employment Agreement) upon appropriate written notice. In either such event,
Mr. Karp will continue to receive his then-current base salary as if his
employment had continued for the remainder of the then current three-year term
and an annual bonus for the remainder of the then current three-year term equal
to the average bonus for the three calendar years immediately preceding the
written notice of termination. In addition, all outstanding unvested Company
stock options then held by Mr. Karp will immediately vest and become
exercisable and Mr. Karp will continue to participate in the Company's health
plans and programs at the Company's expense for the remainder of such
three-year term.
Mr. Karp may resign voluntarily without Good Reason upon appropriate
written notice to the Company. In such event, Mr. Karp will be entitled to
receive any accrued but unpaid base salary and, at the Company's discretion, a
bonus for the calendar year in which his resignation without Good Reason
occurs. The Company may terminate Mr. Karp's employment for Cause (as defined
in the Karp Employment Agreement) upon appropriate written notice. In such
event, Mr. Karp will forfeit all existing Company stock options, but such
options shall remain exercisable for the 30-day period following Mr. Karp's
receipt of the written notice. Mr. Karp may terminate his employment for any
reason within six months following a Change in Control (as defined in the Karp
Employment Agreement). In such event, the Company will pay to Mr. Karp a lump
sum amount equal to (i) three times his then current base salary, and (ii)
three times his average annual bonus for the three calendar years immediately
preceding the date of termination. In addition, all outstanding unvested
options then held by Mr. Karp shall become immediately exercisable. In the
event that any Payment (as defined in the Karp Employment Agreement) would be
subject to the excise tax imposed by the "Golden Parachute" regulations, Mr.
Karp would be entitled to a gross-up payment from the Company to cover such
taxes.
Effective as of May 12, 2000, the Company amended and restated William D.
O'Hagan's then existing employment agreement (as amended and restated, the
"O'Hagan Employment Agree-
10
ment"). The O'Hagan Employment Agreement provides for Mr. O'Hagan to serve as
President and Chief Executive Officer of the Company for a rolling three-year
term, which is automatically extended so that the unexpired term on any date is
always three years, unless either party gives written notice of his or its
intention not to extend the term (the "Employment Period"). Under the terms of
the O'Hagan Employment Agreement, Mr. O'Hagan is to receive (i) an annual base
salary of $413,430 (to be adjusted upward annually at a rate commensurate with
increases granted to other key executives), and (ii) a discretionary cash
incentive bonus consistent with the executive bonus program which the Company
establishes for other key executives. In addition, Mr. O'Hagan is to receive
reimbursement for reasonable business and travel expenses incurred in the
performance of his duties and will participate in all bonus, incentive, stock
option, pension, disability and health plans and programs and all fringe
benefit plans maintained by the Company in which senior executives participate.
Under the terms of the O'Hagan Employment Agreement, Mr. O'Hagan's
employment may be terminated by the Company without Cause (as defined in the
O'Hagan Employment Agreement) or by Mr. O'Hagan for Good Reason (as defined in
the O'Hagan Employment Agreement) upon appropriate written notice. In either
such event, Mr. O'Hagan will continue to receive his then-current base salary
as if his employment had continued for the remainder of the Employment Period
and an annual bonus for the remainder of the Employment Period equal to the
average bonus for the three calendar years immediately preceding the written
notice of termination. In addition, all outstanding unvested Company stock
options then held by Mr. O'Hagan will immediately vest and become exercisable
and Mr. O'Hagan will continue to participate in the Company's health plans and
programs at the Company's expense until he reaches age 65.
Mr. O'Hagan may resign voluntarily without Good Reason upon appropriate
written notice to the Company. In such event, Mr. O'Hagan will be entitled to
receive any accrued but unpaid base salary and, at the Company's discretion, a
bonus for the calendar year in which his resignation without Good Reason
occurs. The Company may terminate Mr. O'Hagan's employment for Cause (as
defined in the O'Hagan Employment Agreement) upon appropriate written notice.
If Mr. O'Hagan's employment is terminated for Cause or if Mr. O'Hagan
voluntarily resigns for any reason other than Good Reason, his right to receive
his base salary, bonus, and any other compensation and benefits to which he
would otherwise be entitled under the O'Hagan Employment Agreement shall be
forfeited as of the date of termination. Mr. O'Hagan may terminate his
employment for any reason within six months following a Change in Control (as
defined in the O'Hagan Employment Agreement). In such event, the Company will
pay to Mr. O'Hagan a lump sum amount equal to (i) his then current base salary
multiplied by the number of years (including partial years) then remaining in
the Employment Period, and (ii) his average annual bonus for the three calendar
years immediately preceding the date of termination multiplied by the number of
years (including partial years) then remaining in the Employment Period. In
addition, all remaining unvested options previously granted to Mr. O'Hagan
shall become immediately exercisable.
The Company does not have any other employment agreements with Named
Officers. Except as set forth above, the Company has no compensatory plan or
arrangement with respect to any Named Officer which would result in severance
or change-in-control payments in excess of $100,000.
11
REPORT OF THE AUDIT COMMITTEE (1)
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
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 under generally accepted auditing standards. In
addition, the Audit Committee discussed with the independent auditors the
auditors' independence from management and the Company, including the matters
in the written disclosures required by the Independence Standards Board and
considered the compatibility of nonaudit services provided by the independent
auditors with the auditor's independence.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The Audit Committee meets with the
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 10K for the year ended December 29, 2001, for filing with
the Securities and Exchange Commission. The Audit Committee and the Board of
Directors have also recommended, subject to shareholder approval, the selection
as the Company's independent auditors, Ernst & Young LLP, for the fiscal year
ending December 28, 2002.
Gary S. Gladstein, Chairman
Robert B. Hodes
G.E. Manolovici
- -----------
(1) This Section is not "soliciting material," is not deemed "filed" with the
Securities and Exchange Commission and is not to be incorporated by
reference in any filing of the Company under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether made before or after the date hereof and
irrespective of any general incorporation language in any such filing.
12
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Base compensation payable to Mr. Karp, the Company's Chairman, and to Mr.
O'Hagan, its Chief Executive Officer, is principally governed by the terms of
their employment agreements. These agreements provide for minimum base
compensation of $606,373 for Mr. Karp and $413,430 for Mr. O'Hagan effective as
of September 17, 1997. Effective at the beginning of the 2001 fiscal year, the
base compensation payable to each of Messrs. Karp and O'Hagan was increased by
five percent, which reflected the Company's growth over the last three years in
sales and pre-tax profits.
The employment agreements for Messrs. Karp and O'Hagan also provide for
payment of an annual discretionary cash bonus consistent with the executive
bonus program which the Company establishes for other key executives. For 2001,
Messrs. Karp and O'Hagan were awarded discretionary bonuses in the amount of
75% and 70%, respectively, of their gross wages (excluding bonuses for 2000
which were paid in 2001, and certain other miscellaneous items). The bonuses
paid to Messrs. Karp and O'Hagan were recommended by the Compensation Committee
and approved by the Board of Directors, based on the favorable assessment of
their contributions to the Company's profitability in 2001.
The Compensation Committee increased base compensation payable to other
executive officers at the beginning of 2001 by an average of approximately
3.5%, based on recommendations from Messrs. Karp and O'Hagan, as well as the
Company's positive operating results. Bonuses paid to officers other than
Messrs. Karp and O'Hagan for 2001 did not exceed 36% of gross wages (excluding
bonuses for 2000 which were paid in 2001, and certain other miscellaneous
items). These bonuses were paid pursuant to (i) the Company's 2001 bonus
program, which provided for bonuses to be paid based on the Company's
attainment of income targets for fiscal 2001, and (ii) discretionary bonuses in
the amount of $40,000 or less paid to certain Company officers.
The Compensation Committee periodically grants stock options to executive
officers and other key employees as part of the Company's overall executive
compensation program. During the 2001 fiscal year, the Compensation Committee
granted options to acquire an aggregate of 40,000 shares of Common Stock to
executive officers other than Messrs. Karp and O'Hagan, based in part on
recommendations from Messrs. Karp and O'Hagan. When granting options to
executive officers, the Compensation Committee considers the total number of
shares available under the Company's option plans, the number of options
previously granted to such officers, Company and individual performance, and
each officer's level of responsibility within the Company. However, no specific
corporate or individual performance factors are used. The Compensation
Committee believes that stock options are an integral part of the Company's
executive compensation program, which motivate executives to practice long-term
strategic management, and align their financial interests with those of the
Company's stockholders.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits the deductibility of compensation paid to each of the Named
Officers to $1 million per year, subject to certain exceptions. The
Compensation Committee is comprised of "outside" directors and the Company's
1998 Stock Option Plan has been structured so that compensation attributable to
options will qualify as "performance based" compensation, which is excluded
from the determination of the annual maximum deductible amount. If, because of
competitive factors, individual performance or changes in tax provisions, the
Compensation Committee determines that it is appropriate to pay one or more
executive officers compensation in excess of the annual maximum deductible
amount, the Compensation Committee would expect to authorize such compensation.
During 2001, Mr. Karp's annual cash compensation exceeded the maximum
deductible amount.
G. E. Manolovici, Chairman
Gary S. Gladstein
13
CORPORATE PERFORMANCE GRAPH
The following table compares total stockholder return since December 28,
1996 to the Dow Jones Equity Market Index ("Equity Market Index") and the Dow
Jones Building Material Index ("Building Material Index"). Total return values
for the Equity Market Index, the Building Material Index and the Company were
calculated based on cumulative total return values assuming reinvestment of
dividends. The Common Stock is traded on the New York Stock Exchange under the
symbol MLI.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Among Mueller Industries, Inc., Dow Jones Equity Market
Index and Dow Jones Building Material Index
Fiscal Year Ending Last Saturday in December
[GRAPHIC OMITTED]
12/28/96 12/27/97 12/26/98 12/25/99 12/30/00 12/29/01
---------- ---------- ---------- ---------- ---------- ---------
Mueller Industries, Inc. .............. 100 147 111 182 148 186
Dow Jones Equity Market Index ......... 100 125 161 198 181 161
Dow Jones Building Material Index ..... 100 120 138 115 119 121
PROPOSAL TO APPROVE THE 2002 STOCK OPTION PLAN
DESCRIPTION OF THE 2002 STOCK OPTION PLAN. The 2002 Stock Option Plan (the
"2002 Plan") was adopted by the Board of Directors on February 12, 2002,
subject to the approval of stockholders at the Annual Meeting. Management of
the Company believes that the 2002 Plan is important to provide an inducement
to obtain and retain the services of qualified employees. The 2002 Plan allows
for the grant of "incentive stock options" ("Incentive Options") as defined in
Section 422 of the Code and stock options not so qualified as Incentive Options
("Non-Qualified Options"). Only employees of the Company and its subsidiaries
are eligible to participate in the 2002 Plan. Participation in the 2002 Plan is
solely at the discretion of the entity administering the 2002 Plan (the
"Committee"), which has the power and authority to select employees to receive
option awards under the 2002 Plan. The current members of the Committee are
Messrs. Gary S. Gladstein and G.E. Manolovici, who serve at the pleasure of the
Board until removed. Unless earlier terminated by the Board of Directors, the
2002 Plan (but not outstanding options) will
14
terminate on February 12, 2012, after which no further awards may be granted
under the 2002 Plan. The 2002 Plan may be administered by the full Board of
Directors or, at the Board's discretion, by a committee of the Board consisting
of at least two persons.
The Company has reserved 750,000 shares of Common Stock for issuance upon
the exercise of options under the 2002 Plan. The complete text of the 2002 Plan
has been filed with the Securities and Exchange Commission as Exhibit A to this
Proxy Statement.
Recipients of options under the 2002 Plan ("Optionees") are selected by
the Committee. The Committee determines the terms of each option grant
including (1) the purchase price of shares subject to options, (2) the dates on
which options become exercisable and (3) the expiration date of each option
(which may not exceed ten years from the date of grant). The maximum number of
shares for which options may be granted under the 2002 Plan to any single
individual in any one year is 100,000 (subject to adjustments for capital
changes). The minimum per share purchase price of options granted under the
2002 Plan is the Fair Market Value (as defined in the 2002 Plan) of one share
of the Common Stock on the date the option is granted.
On March 12, 2002, the market value of a share of Common Stock was $34.63.
Optionees will have no voting, dividend or other rights as stockholders
with respect to shares of Common Stock covered by options prior to becoming the
holders of record of such shares. The purchase price upon the exercise of
options may be paid in cash, by certified bank or cashier's check, by tendering
stock held by the Optionee for at least six months, or by cashless exercise
through a broker. The total number of shares of Common Stock available under
the 2002 Plan, the number of shares available for options that may be granted
to any one individual in any one year and the number of shares and per share
exercise price under outstanding options will be appropriately adjusted in the
event of any reorganization, merger or recapitalization of the Company or
similar corporate event.
The Board of Directors may at any time terminate the 2002 Plan or from
time to time make such modifications or amendments to the 2002 Plan as it may
deem advisable; provided that the Board may not, without the approval of
stockholders, amend the 2002 Plan to increase the maximum number of shares of
Common Stock for which options may be granted under the 2002 Plan, increase the
number of shares as to which options may be granted to any person in any single
year, decrease the minimum per share exercise price for options below the Fair
Market Value (as defined in the 2002 Plan) of one share of Common Stock on the
date of grant or change the class of persons eligible to receive options under
the 2002 Plan.
Options granted under the 2002 Plan will be evidenced by a written option
agreement between the Optionee and the Company. Subject to limitations set
forth in the 2002 Plan, the terms of option agreements will be determined by
the Committee, and need not be uniform among Optionees.
FEDERAL INCOME TAX CONSEQUENCES. The following is a brief discussion of
the Federal income tax consequences of transactions under the 2002 Plan. The
Plan is not qualified under Section 401(a) of the Code. This discussion is not
intended to be exhaustive and does not describe state or local taxes
consequences.
INCENTIVE OPTIONS
No taxable income is realized by the Optionee upon the grant or exercise
of an Incentive Option. If Common Stock is issued to an Optionee pursuant to
the exercise of an Incentive Option,
15
and if no disqualifying disposition of such shares is made by such Optionee
within two years after the date of grant or within one year after the transfer
of such shares to such Optionee, then (1) upon sale of such shares, any amount
realized in excess of the option price will be taxed to such Optionee as a
long-term capital gain and any loss sustained will be a long-term capital loss,
and (2) no deduction will be allowed to the Optionee's employer for Federal
income tax purposes.
Except as noted below for corporate "insiders," if the Common Stock
acquired upon the exercise of an Incentive Option is disposed of prior to the
expiration of either holding period described above, generally (1) the Optionee
will realize ordinary income in the year of disposition in an amount equal to
the excess (if any) of the fair market value of such shares at exercise (or, if
less, the amount realized on the disposition of such shares) over the option
price paid for such shares and (2) the Optionee's employer will be entitled to
deduct such amount for Federal income tax purposes if the amount represents an
ordinary and necessary business expense. Any further gain (or loss) realized by
the Optionee will be taxed as short-term or long-term capital gain (or loss),
as the case may be, and will not result in any deduction by the employer.
Subject to certain exceptions for disability or death, if an Incentive
Option is exercised more than three months following termination of employment,
the exercise of the option will generally be taxed as the exercise of a
Non-Qualified Option.
For purposes of determining whether an Optionee is subject to any
alternative minimum tax liability, an Optionee who exercises an Incentive
Option generally would be required to increase his or her alternative minimum
taxable income, and compute the tax basis in the stock so acquired, in the same
manner as if the Optionee had exercised a Non-Qualified Option. Each Optionee
is potentially subject to the alternative minimum tax. In substance, a taxpayer
is required to pay the higher of his/her alternative minimum tax liability or
his/her "regular" income tax liability. As a result, a taxpayer has to
determine his potential liability under the alternative minimum tax.
NON-QUALIFIED OPTIONS
Except as noted below for corporate "insiders," with respect to
Non-Qualified Options: (1) no income is realized by the Optionee at the time
the option is granted; (2) generally, at exercise, ordinary income is realized
by the Optionee in an amount equal to the difference between the option price
paid for the shares and the fair market value of the shares, if unrestricted,
on the date of exercise, and the Optionee's employer is generally entitled to a
tax deduction in the same amount subject to applicable tax withholding
requirements; and (3) at sale, appreciation (or depreciation) after the date of
exercise is treated as either short-term or long-term capital gain (or loss)
depending on how long the shares have been held.
SPECIAL RULES APPLICABLE TO CORPORATE INSIDERS
As a result of the rules under Section 16(b) of the Exchange Act,
"insiders" (as defined in the Exchange Act), depending upon the particular
exemption from the provisions of Section 16(b) utilized, may not receive the
same tax treatment as set forth above with respect to the grant and/or exercise
of options. Generally, insiders will not be subject to taxation until the
expiration of any period during which they are subject to the liability
provisions of Section 16(b) with respect to any particular option. Insiders
should check with their own tax advisers to ascertain the appropriate tax
treatment for any particular option.
NEW PLAN BENEFITS. Inasmuch as awards to all participants under the 2002
Plan will be granted at the sole discretion of the Committee, such benefits
under the 2002 Plan are not
16
determinable. Compensation paid and other benefits granted in respect of the
2001 fiscal year to the Named Officers are set forth in the Summary
Compensation Table.
PROPOSED ACTION. Approval of the adoption of the 2002 Plan will require
the affirmative vote of the holders of a majority of the shares of the Common
Stock of the Company present, in person or by proxy, at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARES FOR
THE PROPOSAL TO APPROVE THE 2002 STOCK OPTION PLAN.
APPOINTMENT OF AUDITORS
Ernst & Young LLP ("E & Y") has, upon the recommendation of the Company's
Audit Committee, been selected and appointed by the Board of Directors to audit
and certify the Company's financial statements for the fiscal year ending
December 28, 2002, subject to ratification by the Company's stockholders. If
the appointment of E & Y is not ratified by the stockholders at the Annual
Meeting, the Board of Directors will reconsider its action and will appoint
auditors for the 2002 fiscal year without further stockholder action. Further,
even if the appointment is ratified by stockholder action, the Board of
Directors may at any time in the future in its discretion reconsider the
appointment without submitting the matter to a vote of stockholders. It is
expected that representatives of E & Y will be in attendance at the Annual
Meeting and will be available to answer questions and to make a statement if
they desire to do so.
During the Company's fiscal year ending December 29, 2001, fees were
incurred as follows: For the annual audit--$598,000; all other fees--$663,000,
which included audit related services --$412,000; and non-audit
services--$251,000. The Company did not engage E & Y to provide advice to the
Company regarding financial information systems design and implementation
during the fiscal year ended December 29, 2001.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARES FOR
THE PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS AUDITORS OF THE
COMPANY.
STOCKHOLDER NOMINATIONS FOR BOARD MEMBERSHIP
AND OTHER PROPOSALS FOR 2003 ANNUAL MEETING
It is anticipated that the next Annual Meeting after the one scheduled for
May 9, 2002 will be held on or about May 10, 2003. 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 of Stockholders to be held in 2003 no earlier
than February 9, 2003 and no later than March 11, 2003. 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.
Since the Company did not receive timely notice of any stockholder
proposal for the 2002 Annual Meeting, it will have discretionary authority to
vote on any stockholder proposals presented at such meeting.
In addition to the foregoing, and in accordance with the rules of the
Securities and Exchange Commission, in order for a stockholder proposal,
relating to a proper subject, to be considered for
17
inclusion in the Company's proxy statement and form of proxy relating to the
Annual Meeting to be held in 2003, such proposal must be received by the
Secretary of the Company by November 18, 2002 in the form required under and
subject to the other requirements of the applicable rules of the Securities and
Exchange Commission. If the date of the Annual Meeting to be held in 2003 is
changed to a date more than 30 days earlier or later than May 10, 2003, the
Company will inform the stockholders in a timely fashion of such change and the
date by which proposals of stockholders must be received for inclusion in the
proxy materials. Any such proposal should be submitted by certified mail,
return receipt requested, or other means, including electronic means, that
allow the stockholder to prove the date of delivery.
OTHER MATTERS TO COME BEFORE THE 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 2001 all filing
requirements applicable to its officers, directors and ten percent shareholders
were complied with.
OTHER INFORMATION
Consolidated financial statements for the Company are included in the
Annual Report to Stockholders for the year ended December 29, 2001 that
accompanies this Proxy Statement. These financial statements are also on file
with the Securities and Exchange Commission, 450 Fifth Avenue, N.W.,
Washington, D.C. 20549 and with the New York Stock Exchange.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AS FILED FOR THE YEAR
ENDED DECEMBER 29, 2001 (EXCLUDING EXHIBITS) WILL BE FURNISHED, WITHOUT CHARGE,
BY WRITING TO JOHN P. FONZO, SECRETARY, MUELLER INDUSTRIES, INC., AT THE
COMPANY'S PRINCIPAL PLACE OF BUSINESS (8285 TOURNAMENT DRIVE, SUITE 150,
MEMPHIS, TENNESSEE 38125).
By order of the Board of Directors
John P. Fonzo
Corporate Secretary
18
EXHIBIT A
MUELLER INDUSTRIES, INC.
2002 STOCK OPTION PLAN
1. Purposes.
The Mueller Industries, Inc. 2002 Stock Option Plan (the "Plan") is
intended to attract and retain the best available personnel for positions of
substantial responsibility with Mueller Industries, Inc., a Delaware
corporation (the "Company"), and its subsidiary corporations, and to provide
additional incentive to such persons to exert their maximum efforts toward the
success of the Company and its subsidiary corporations. The above aims will be
effectuated through the granting of certain options ("Options") to purchase
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"). Under the Plan, the Company may grant "incentive stock options"
("ISOs") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or Options which are not intended to be ISOs
("Non-Qualified Options").
2. Administration of the Plan.
The Plan shall be administered by the Board of Directors of the Company
(the "Board of Directors"), or a committee consisting of at least two persons,
appointed by the Board of Directors, each of whom shall be a "non-employee
director" within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934 (the "Exchange Act") (the entity administering the Plan hereinafter called
the "Committee"). The Committee may exercise the power and authority vested in
the Board of Directors under the Plan. Within the limits of the express
provisions of the Plan, the Committee shall have the authority, in its
discretion, to take the following actions under the Plan:
(a) to determine the individuals to whom, and the time or times at which,
Options shall be granted, the number of shares of Common Stock to be subject to
each Option and whether such Options shall be ISOs or Non-Qualified Options;
(b) to interpret the Plan;
(c) to prescribe, amend and rescind rules and regulations relating to the
Plan;
(d) to determine the terms and provisions of the respective stock option
agreements granting Options, including the date or dates upon which Options
shall become exercisable, which terms need not be identical;
(e) to accelerate the vesting of any outstanding Options; and
(f) to make all other determinations and take all other actions necessary
or advisable for the administration of the Plan.
In making such determinations, the Committee may take into account the
nature of the services rendered by such individuals, their present and
potential contributions to the Company's success, and such other factors as the
Committee, in its discretion, shall deem relevant. An individual to whom an
Option has been granted under the Plan is referred to herein as an "Optionee".
The Committee's determinations on the matters referred to in this Section 2
shall be conclusive.
19
3. Shares Subject to the Plan.
The total number of shares of Common Stock which shall be subject to
Options granted under the Plan shall not exceed 750,000, subject to adjustment
as provided in Section 7 hereof. The Company shall at all times while the Plan
is in force reserve such number of shares of Common Stock as will be sufficient
to satisfy the requirements of outstanding Options. The shares of Common Stock
to be issued upon exercise of Options shall be authorized and unissued or
reacquired shares of Common Stock. The shares of Common Stock relating to the
unexercised portion of any expired, terminated or cancelled Option shall
thereafter be available for the grant of Options under the Plan.
4. Eligibility.
(a) Options may be granted under the Plan only to (i) employees of the
Company and (ii) employees of any "subsidiary corporation" (a "Subsidiary") of
the Company within the meaning of Section 424(f) of the Code; provided,
however, that no person may be granted Options under the Plan with respect to
more than 100,000 shares of Common Stock in any one year. The term "Company,"
when used in the context of an Optionee's employment, shall be deemed to
include Subsidiaries of the Company.
(b) Nothing contained in the Plan shall be construed to limit the right of
the Company to grant stock options otherwise than under the Plan for proper
corporate purposes.
5. Terms of Options.
The terms of each Option granted under the Plan shall be determined by the
Committee consistent with the provisions of the Plan, including the following:
(a) The purchase price of the shares of Common Stock subject to each
Option shall be fixed by the Committee, in its discretion, at the time such
Option is granted; provided, however, that in no event shall such purchase
price be less than the Fair Market Value (as defined in paragraph (g) of this
Section 5) of the shares of Common Stock as of the date such Option is granted.
(b) The dates on which each Option (or portion thereof) shall be
exercisable shall be fixed by the Committee, in its discretion, at the time
such Option is granted.
(c) The expiration of each Option shall be fixed by the Committee, in its
discretion, at the time such Option is granted. No Option shall be exercisable
after the expiration of ten (10) years from the date of its grant and each
Option shall be subject to earlier termination as determined by the Committee,
in its discretion, at the time such Option is granted.
(d) Options shall be exercised by the delivery to the Company at its
principal office or at such other address as may be established by the
Committee (Attention: Corporate Treasurer) of written notice of the number of
shares of Common Stock with respect to which the Option is being exercised
accompanied by payment in full of the purchase price of such shares. Unless
otherwise determined by the Committee, payment for such shares may be made (i)
in cash, (ii) by certified check or bank cashier's check payable to the order
of the Company in the amount of such purchase price, (iii) by delivery to the
Company of shares of Common Stock (by attestation or otherwise) (held by the
Optionee for at least six months prior to such delivery) having a Fair Market
Value equal to such purchase price, (iv) by irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds
necessary to pay such purchase price and to sell the shares of Common Stock to
be issued upon exercise of the Option and deliver the cash proceeds less
commissions and brokerage fees to the Optionee or to deliver the remaining
shares of Common Stock to the Optionee, or (v) by any combination of the
methods of payment described in (i) through (iv) above.
20
(e) An Optionee shall not have any of the rights of a holder of the Common
Stock with respect to the shares of Common Stock subject to an Option until
such shares are issued to such Optionee upon the exercise of such Option.
(f) Generally, an Option shall not be transferable, except by will or the
laws of descent and distribution, and may be exercised, during the lifetime of
an Optionee, only by the Optionee; provided, however, that the Committee may,
in its sole discretion, at the time of grant or at any time thereafter, allow
for the transfer of Options that are not ISOs to other persons or entities,
subject to such conditions or limitations as it may establish. No Option
granted under the Plan shall be subject to execution, attachment or other
process.
(g) For purposes of the Plan, as of any date when the Common Stock is
listed on one or more national securities exchanges (including the New York
Stock Exchange) or quoted on the NASDAQ Stock Market, the "Fair Market Value"
of the Common Stock as of any date shall be deemed to be the mean between the
highest and lowest sale prices of the Common Stock reported on the principal
national securities exchange on which the Common Stock is listed and traded or
the NASDAQ Stock Market, on the immediately preceding date, or, if there is no
such sale on that date, then on the last preceding date on which such a sale
was reported. If the Common Stock is not listed on an exchange or quoted on the
NASDAQ Stock Market, or representative quotes are not otherwise available, the
"Fair Market Value" of the Common Stock shall mean the amount determined by the
Committee to be the fair market value based upon a good faith attempt to value
the Common Stock accurately.
6. Special Provisions Applicable to ISOs.
The following special provisions shall be applicable to ISOs granted under
the Plan.
(a) No ISOs shall be granted under the Plan after ten (10) years from the
earlier of (i) the date the Plan is adopted or (ii) the date the Plan is
approved by the holders of the Common Stock.
(b) ISOs may not be granted to a person who owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company, any of its Subsidiaries, or any "parent corporation" (a "Parent") of
the Company, within the meaning of Section 424(e) of the Code, unless (i) the
exercise price is no less than 110% of the Fair Market Value of the underlying
Common Stock on the date of grant and (ii) the ISO is not exercisable after the
expiration of five years from the date of grant.
(c) If the aggregate Fair Market Value of the Common Stock with respect to
which ISOs are exercisable for the first time by any Optionee during a calendar
year (under all plans of the Company and its Parents and Subsidiaries) exceeds
$100,000, such ISOs shall be treated, to the extent of such excess, as
Non-Qualified Options. For purposes of the preceding sentence, the Fair Market
Value of the Common Stock shall be determined at the time the ISOs covering
such shares were granted.
7. Adjustment upon Changes in Capitalization.
(a) In the event that the outstanding shares of Common Stock or the
capital structure of the Company are changed by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split, reverse
stock split, combination or exchange of shares and the like, or dividends
payable in shares of Common Stock, the Committee shall make such appropriate
adjustment to the aggregate number of shares of Common Stock available under
the Plan, the number of shares of Common Stock subject to Options that may be
granted to any person in any
21
one year, and in the number of shares of Common Stock and the price per share
of Common Stock subject to outstanding Options as determined by the Committee,
in its sole discretion to be appropriate. If the Company shall be reorganized,
consolidated or merged with another corporation, or if all or substantially all
of the assets of the Company shall be sold or exchanged, an Optionee shall at
the time of such corporate event be entitled to receive upon the exercise of
his Option the same number and kind of shares of stock or the same amount of
property, cash or securities as he would have been entitled to receive upon the
occurrence of any such corporate event as if he had been, immediately prior to
such event, the holder of the number of shares of Common Stock covered by his
Option; provided, however, that if any such event occurs or if the Company
enters into an agreement to undertake any such event, the Committee may, in its
sole discretion, cancel any outstanding Options and pay to such Optionees, in
cash or stock, or any combination thereof, the value of such Options as
determined by the Committee based on the price per share of Common Stock
received or to be received by the stockholders of the Company upon such event.
The immediately prior sentence is not intended to provide for any automatic
acceleration of vesting of any Option, which shall be left to the sole
discretion of the Committee.
(b) Any adjustment under this Section 7 in the number of shares of Common
Stock subject to Options shall apply proportionately to only the unexercised
portion of any Option granted hereunder. If fractions of a share would result
from any such adjustment, the adjustment shall be revised to the next lower
whole number of shares.
8. Further Conditions of Exercise.
(a) The obligation of the Company to issue shares of Common Stock pursuant
to the exercise of Options shall be subject to all applicable laws, rules and
regulations, and to such approvals by governmental agencies as may be required.
Notwithstanding any of the provisions hereof, the Optionee may not exercise the
Options, and the Company will be under no obligation to offer to sell or to
sell and shall be prohibited from offering to sell or selling any shares of
Common Stock pursuant to the exercise of any Option, unless such exercise,
offer or sale shall be properly registered pursuant to the Securities Act of
1933 (as now in effect or as hereafter amended) (the "Securities Act") with the
Securities and Exchange Commission or unless the Company has received an
opinion of counsel, satisfactory to the Company, that such shares may be
offered or sold without such registration pursuant to an available exemption
therefrom and the terms and conditions of such exemption have been fully
complied with. Any determination in this connection by the Committee shall be
final, binding and conclusive. The Company shall use reasonable efforts, when
it deems appropriate, to register the offer or sale of shares of Common Stock
underlying any Option pursuant to the Securities Act and to take any other
affirmative action in order to cause the exercise of the Options or the
issuance or transfer of shares pursuant thereto to comply with any law or
regulation of any governmental authority. If the shares of Common Stock offered
for sale or sold under any Option are offered or sold pursuant to an exemption
from registration under the Securities Act, the Company may restrict the
transfer of such shares and may legend the Common Stock certificates
representing such shares in such manner as it deems advisable to ensure the
availability of any such exemption.
(b) The Company is relieved from any liability for the non-issuance or
non-transfer or any delay in issuance or transfer of any shares of Common Stock
subject to Options which results from the inability of the Company to obtain or
in any delay in obtaining from any regulatory body having jurisdiction all
requisite authority to issue or transfer shares of Common Stock either upon
exercise of the Options or shares of Common Stock issued as a result of such
exercise if counsel for the Company deems such authority necessary for lawful
issuance or transfer of any such shares.
22
9. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the date of its adoption by the Board of
Directors, and no Option shall be granted after termination of the Plan.
(b) The Plan may at any time be terminated or, from time to time, be
modified or amended by the Board of Directors; provided, however, that the
Board of Directors shall not, without approval by the affirmative vote of the
holders of a majority of the shares of the capital stock of the Company present
in person or by proxy and entitled to vote at the meeting, amend the Plan to
(i) increase (except as provided by Section 7) the maximum number of shares of
Common Stock as to which Options may be granted under the Plan, (ii) increase
the maximum number of shares of Common Stock as to which Options may be granted
to any person in any single year, (iii) decrease the purchase price for Options
below Fair Market Value of the Common Stock at the time of grant, or (iv)
change the class of persons eligible to receive Options under the Plan.
(c) No termination, modification or amendment of the Plan may adversely
affect the rights conferred by any Options without the consent of the affected
Optionee.
10. Effectiveness of the Plan.
The Plan shall become effective upon adoption by the Board of Directors,
subject to the approval by the shareholders of the Company. Options may be
granted under the Plan prior to receipt of such approval, provided that, in the
event such approval is not obtained, the Plan and all Options granted under the
Plan shall be null and void and of no force and effect.
11. Not a Contract of Employment.
Nothing contained in the Plan or in any stock option agreement executed
pursuant hereto shall be deemed to confer upon any Optionee any right to remain
in the employ of the Company or of any Subsidiary.
12. Governing Law.
The Plan shall be governed by the laws of the State of Delaware without
reference to principles of conflict of laws thereof.
13. Withholding.
As a condition to the exercise of any Option, the Committee may require
that an Optionee satisfy, through withholding from other compensation or
otherwise, the full amount of all federal, state and local income and other
taxes required to be withheld in connection with such exercise. The Committee
may, in its sole discretion, allow for the retention by the Company of shares
of Common Stock otherwise to be delivered to the Optionee upon the exercise of
any Option in order to satisfy this withholding requirement.
As adopted by the Board of Directors of Mueller Industries, Inc. as of
February 12, 2002.
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MUELLER INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - MAY 9, 2002
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints John P. Fonzo 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 9, 2002, 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.
CONTINENTAL STOCK TRANSFER
ATTN: HANK DREWS
17 BATTERY PLACE
NEW YORK, NY 10004
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. You will be prompted to enter your 12-digit
Control Number which is located below and then follow the simple instructions
the Vote Voice provides you.
SEE RULE 14a-9(a): ELECTRONIC FILERS FILE FORM OR PROXY BY FILING AS AN APPENDIX
AT END OF PROXY STATEMENT (NOT AS AN EXHIBIT OR A SEPARATE DOCUMENT WITHIN AN
ELECTRONIC SUBMISSION).
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
MUELL1 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MUELLER INDUSTRIES, INC.
1. Election of Directors
Nominees: 01) Gennaro J. Fulvio
02) Gary S. Gladstein
03) Robert B. Hodes
04) Harvey L. Karp
05) William D. O'Hagan
For Withhold For All
All All Except
[ ] [ ] [ ]
To withhold authority to vote, mark "For All Except" and write the
nominee's number on the line below.
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Vote On Proposals
For Against Abstain
2. Approve the appointment of Ernst & Young LLP as auditors of the Company. [ ] [ ] [ ]
3. Approve the Company's 2002 Stock Option Plan. [ ] [ ] [ ]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE SIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR ALL NOMINEES" IN ITEM 1 AND ITEMS 2 AND 3.
Please sign exactly as your name appears to the right. When shares are held
jointly, each shareholder named should sign. When signing as attorney, executor,
administrator, trustee or guardian, you should so indicate when signing. If a
corporation, please sign in full corporate name by duly authorized officer. If a
partnership, please sign in partnership name by duly authorized person.
I plan to attend the meeting [ ]
- ------------------------------------------- --------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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