UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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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
April 29, 2004
To the Stockholders of
Mueller Industries, Inc.
1. |
To elect six directors, each to serve until the next annual meeting of stockholders (tentatively scheduled for April 28, 2005) or until his successor is elected and qualified; |
2. |
To consider and act upon a proposal to approve the appointment of Ernst & Young LLP, independent public accountants, as auditors of the Company for the fiscal year ending December 25, 2004; and |
3. |
To consider and transact such other business as may properly be brought before the Annual Meeting and any adjournment(s) thereof. |
March 24, 2004
TABLE OF CONTENTS
SOLICITATION
OF PROXIES |
1 | |||||
VOTING
SECURITIES |
2 | |||||
PRINCIPAL
STOCKHOLDERS |
2 | |||||
ELECTION OF
DIRECTORS |
3 | |||||
OWNERSHIP OF
COMMON STOCK BY DIRECTORS AND EXECUTIVE OFFICERS AND INFORMATION ABOUT DIRECTOR NOMINEES |
3 | |||||
Meetings and
Committees of the Board of Directors |
6 | |||||
Director
Compensation |
7 | |||||
Board of
Directors Affiliations |
7 | |||||
CORPORATE
GOVERNANCE |
8 | |||||
Director
Independence |
8 | |||||
Independent
Directors |
9 | |||||
Audit
Committee |
9 | |||||
Compensation
Committee |
9 | |||||
Nominating and
Corporate Governance Committee |
10 | |||||
Corporate
Governance Guidelines |
11 | |||||
Code of
Business Conduct and Ethics |
11 | |||||
Directors Attendance at Annual Meetings of Stockholders |
11 | |||||
Communication
With the Board of Directors |
12 | |||||
EXECUTIVE
COMPENSATION |
12 | |||||
Summary
Compensation Table |
12 | |||||
Option Grants
During 2003 Fiscal Year |
13 | |||||
Option
Exercises During 2003 Fiscal Year and Fiscal Year End Option Values |
14 | |||||
Employment
Contracts and Termination of Employment Arrangements |
14 | |||||
REPORT OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS |
17 | |||||
REPORT OF THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS |
18 | |||||
PERFORMANCE
GRAPH |
19 | |||||
APPOINTMENT OF
AUDITORS |
20 | |||||
STOCKHOLDER
NOMINATIONS FOR BOARD MEMBERSHIP AND OTHER PROPOSALS FOR 2005 ANNUAL MEETING |
20 | |||||
OTHER MATTERS
TO COME BEFORE THE ANNUAL MEETING |
21 | |||||
SECTION 16(a)
BENEFICIAL OWNERSHIP COMPLIANCE REPORTING |
21 | |||||
OTHER
INFORMATION |
22 | |||||
APPENDIX A
Audit Committee Charter |
A-1 | |||||
APPENDIX B
Compensation Committee Charter |
B-1 | |||||
APPENDIX C
Nominating and Corporate Governance Committee Charter |
C-1 | |||||
APPENDIX D
Corporate Governance Guidelines |
D-1 | |||||
APPENDIX E
Code of Business Conduct and Ethics |
E-1 |
MUELLER INDUSTRIES, INC.
8285 Tournament Drive, Suite 150
Memphis,
Tennessee 38125
Telephone (901) 753-3200
_________________
PROXY STATEMENT
Annual Meeting of Stockholders
April 29, 2004
SOLICITATION OF PROXIES
VOTING SECURITIES
PRINCIPAL STOCKHOLDERS
Name and Address of Beneficial Owner |
Shares Beneficially Owned |
Percent of Class |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Berkshire
Hathaway Inc. 1440 Kiewit Plaza Omaha, Nebraska 68131 |
2,446,900 | (1) | 7.1% | (3) | ||||||
Wachovia
Corporation One Wachovia Center Charlotte, North Carolina 28288-0137 |
2,249,562 | (2) | 6.6% | (3) |
2
ELECTION OF DIRECTORS
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE
OFFICERS AND
INFORMATION ABOUT DIRECTOR NOMINEES
Principal Occupation, Employment, etc. |
Common Stock Beneficially Owned as of March 8, 2004 |
Percent of Class |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Gennaro J.
Fulvio |
4,000 | * | ||||||||
Director of
the Company since May 9, 2002; age 47 (1) |
||||||||||
Gary S.
Gladstein |
21,400 | * | ||||||||
Director of
the Company since July 1, 2000; Director of Jos. A. Bank Clothiers, Inc. and Imergent, Inc.; age 59 (2) |
||||||||||
Terry
Hermanson |
3,000 | * | ||||||||
Director of
the Company since February 13, 2003; age 61 (3) |
||||||||||
Robert B.
Hodes |
29,500 | * | ||||||||
Director of
the Company since February 10, 1995; |
||||||||||
Director of
Loral Space & Communications Ltd. and K & F Industries, Inc.; age 78 (4) |
3
Principal Occupation, Employment, etc. |
Common Stock Beneficially Owned as of March 8, 2004 |
Percent of Class |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Harvey L.
Karp |
1,534,000 | 4.39 | % | ||||||||||||||
Chairman of
the Board of Directors since October 8, 1991; Director since August 1991; age 76 (5) |
|||||||||||||||||
William D.
OHagan |
908,136 | 2.60 | % | ||||||||||||||
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 62 (6) |
|||||||||||||||||
Michael O.
Fifer |
| * | |||||||||||||||
Executive
Vice President of the Company since June 30, 2003; age 47 (7) |
|||||||||||||||||
Roy C.
Harris |
68,116 | * | |||||||||||||||
Vice
President and Chief Information Officer of the Company since July 5, 2000; age 61 (8) |
|||||||||||||||||
William H.
Hensley |
3,908 | * | |||||||||||||||
General
Counsel of the Company since September 2, 2003; Vice President and Secretary of the Company since October 30, 2003; age 53 (9) |
|||||||||||||||||
Kent A.
McKee |
96,610 | * | |||||||||||||||
Chief
Financial Officer of the Company since April 1, 1999; Vice President of the Company since February 11, 1999; age 43 (10) |
|||||||||||||||||
Lee R.
Nyman |
68,610 | * | |||||||||||||||
Senior Vice
President-Manufacturing/Engineering of the Company since February 11, 1999; age 51 (11) |
|||||||||||||||||
James H.
Rourke |
120,000 | * | |||||||||||||||
President-Industrial Products Division of the Company since December 27, 2003; General Manager-Rod since January 29, 2002; age 55
(12) |
|||||||||||||||||
Executive
Officers, Named Officers and Directors as a Group |
2,857,280 | 8.17 | %** |
* |
Less than 1 % |
** |
Includes 2,416,100 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. The number of shares of Common Stock beneficially |
4
owned by Mr. Fulvio includes 4,000 shares of Common Stock which are subject to currently exercisable stock options. |
(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 of Common Stock beneficially owned by Mr. Gladstein includes 6,000 shares of Common Stock which are subject to currently exercisable stock options. |
(3) |
Mr. Hermanson has been the principal and President of Mr. Christmas, Inc., a wholesale merchandising company, for more than the last five years. The number of shares of Common Stock beneficially owned by Mr. Hermanson includes 2,000 shares of Common Stock which are subject to currently exercisable stock options. |
(4) |
Mr. Hodes is Of Counsel to the New York law firm of Willkie Farr & Gallagher LLP. 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 (as to which Mr. Hodes disclaims beneficial ownership) and (ii) 10,000 shares of Common Stock which are subject to currently exercisable stock options. |
(5) |
The number of shares of Common Stock beneficially owned by Mr. Karp includes 1,500,000 shares of Common Stock which are subject to currently exercisable stock options. |
(6) |
The number of shares of Common Stock beneficially owned by Mr. OHagan includes (i) 660,000 shares of Common Stock which are subject to currently exercisable stock options, (ii) 28,136 shares of Common Stock owned by Mr. OHagans spouse, (iii) 191,162 shares of Common Stock held in a property trust, with Mr. OHagans daughter as trustee, and (iv) 28,838 shares of Common Stock owned by a family partnership of which Mr. OHagan is a general partner and in which Mr. OHagan or his spouse hold a 99% interest. Mr. OHagan disclaims beneficial ownership of the 28,136 shares of Common Stock owned by his spouse and of the 191,162 shares held in trust. |
(7) |
Mr. Fifer served as President, North American Operations, for Watts Water Technologies, Inc., a plumbing valve manufacturer, for more than five years prior to May 31, 2003. |
(8) |
Mr. Harris served (i) as Division Manager of the Companys 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 56,500 shares of Common Stock which are subject to currently exercisable stock options. |
(9) |
Mr. Hensley served as Vice President, General Counsel and Secretary of the Company for more than five years prior to July 5, 2000. From July 5, 2000 through September, 2000, Mr. Hensley provided ongoing legal services to the Company. From September, 2000 to August, 2003, Mr. Hensley pursued an advanced degree, was self-employed in managing his private investment portfolio and provided advice in connection with private business ventures. The number of shares of Common Stock beneficially owned by Mr. Hensley includes 1,470 shares of Common Stock owned by one of Mr. Hensleys children. |
(10) |
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 51,000 shares of Common Stock which are subject to currently exercisable stock options. |
5
(11) |
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 52,600 shares of Common Stock which are subject to currently exercisable stock options. |
(12) |
Mr. Rourke served (i) as Vice President-Industrial Products Division of the Company from December 14, 1995 to December 27, 2003, (ii) as Vice President and General Manager-Industrial Division of the Company from November 4, 1993 to December 14, 1995, and (iii) prior thereto as Vice President and General Manager, Industrial Products, for Mueller Brass Co. in Port Huron. The number of shares of Common Stock beneficially owned by Mr. Rourke includes 74,000 shares of Common Stock which are subject to currently exercisable stock options. |
Meetings and Committees of the Board of Directors
6
Director Compensation
Board of Directors Affiliations
7
CORPORATE GOVERNANCE
Director Independence
8
Independent Directors
|
A majority of the members of the Companys Board of Directors have been determined to meet the NYSEs standards for independence. See Director Independence above. |
|
The Companys Corporate Governance Guidelines provide that the Companys independent directors shall hold annually at least two formal meetings independent from management. The independent directors choose a director to preside at non-management sessions of the Board of Directors. |
Audit Committee
|
All members of the Audit Committee have been determined to meet
the standards of independence required of audit committee members by the NYSE and applicable SEC rules. See Director Independence
above. In accordance with the rules and regulations of the SEC, the above paragraph regarding the independence of the members of the Audit Committee shall not be deemed to be soliciting material or to be filed with the SEC or subject to Regulations 14A or 14C of the Exchange Act or to the liabilities of Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act, notwithstanding any general incorporation by reference of this Proxy Statement into any other filed document. |
|
The Board of Directors has determined that all members of the Audit Committee are financially literate. Further, the Board of Directors has determined that Gary S. Gladstein and Gennaro J. Fulvio each possess accounting or related financial management expertise, within the meaning of the listing standards of the NYSE, and are each audit committee financial experts within the meaning of applicable SEC rules. |
|
Ernst & Young LLP, the Companys independent auditors, reports directly to the Audit Committee. |
|
The Audit Committee, consistent with the Sarbanes-Oxley Act of 2002 and the rules adopted thereunder, meets with management and the Companys independent auditors prior to the filing of officers certifications with the SEC to receive information concerning, among other things, significant deficiencies in the design or operation of internal control over financial reporting. |
|
The Audit Committee has adopted procedures for the receipt, retention and treatment of complaints by Company employees regarding the Companys accounting, internal accounting controls or auditing matters. |
|
The Audit Committee operates under a formal charter adopted by the Board of Directors that governs its duties and standards of performance. The charter is reproduced as Appendix A to this Proxy Statement. Copies of the charter can be obtained free of charge from the Companys Web site at www.muellerindustries.com. |
Compensation Committee
|
All members of the Compensation Committee have been determined to meet the NYSE standards for independence. See Director Independence above. Further, each member of the Compensation Committee is a Non-Employee Director as defined in Rule 16b-3 under the Exchange Act. |
9
|
The Compensation Committee operates under a formal charter adopted by the Board of Directors that governs its duties and standards of performance. The charter is reproduced as Appendix B to this Proxy Statement. Copies of the charter can be obtained free of charge from the Companys Web site at www.muellerindustries.com. |
Nominating and Corporate Governance Committee
|
All members of the Nominating and Corporate Governance Committee have been determined to meet the NYSE standards for independence. See Director Independence above. |
|
The Nominating and Corporate Governance Committee recommends to
the Board of Directors as director nominees individuals of established personal and professional integrity, ability and judgment, which are chosen with
the primary goal of ensuring that the entire Board of Directors collectively serves the interests of the Companys stockholders. Due consideration
is given to assessing the qualifications of potential nominees and any potential conflicts with the Companys interests. The Nominating and
Corporate Governance Committee also assesses the contributions of the Companys incumbent directors in connection with their potential
re-nomination. In identifying and recommending director nominees, the Committee members take into account such factors as they determine appropriate,
including recommendations made by the Board of Directors. Once the Nominating and Corporate Governance Committee has identified prospective nominees, background information is elicited about the candidates, following which they are investigated, interviewed and evaluated by the Committee which then reports to the Board of Directors. |
|
The Nominating and Corporate Governance Committee operates under a formal charter adopted by the Board of Directors that governs its duties and standards of performance. The charter is reproduced as Appendix C to this Proxy Statement. Copies of the charter can be obtained free of charge from the Companys Web site at www.muellerindustries.com. |
10
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 Exchange Act, including such persons 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 Companys books, and of such beneficial owner, and (ii) the class and number of shares of Common Stock which are owned beneficially and of record by such stockholder and such beneficial owner. The presiding officer of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure. See Stockholder Nominations for Board Membership and Other Proposals for 2005 Annual Meeting.
Corporate Governance Guidelines
|
The Company has adopted a set of Corporate Governance Guidelines, including specifications for director qualification and responsibility, director access to officers and employees, director compensation, director orientation and continuing education, and the annual performance evaluation of the Board of Directors. |
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The guidelines are reproduced as Appendix D to this Proxy Statement. Copies of the guidelines can be obtained free of charge from the Companys Web site at www.muellerindustries.com. |
Code of Business Conduct and Ethics
|
The Company has adopted a Code of Business Conduct and Ethics, which is designed to help officers, directors and employees resolve ethical issues in an increasingly complex business environment. The Code of Business Conduct and Ethics is applicable to all of the Companys officers, directors and employees, including the Companys principal executive officer, principal financial officer, principal accounting officer or controller and other persons performing similar functions. The Code of Business Conduct and Ethics covers topics, including but not limited to, conflicts of interest, confidentiality of information and compliance with laws and regulations. |
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Waivers from the Code of Business Conduct and Ethics are discouraged. Any waivers from the Code of Business Conduct and Ethics that relate to the Companys directors and executive officers must be approved by the Board of Directors, and will be posted on the Companys Web site at www.muellerindustries.com. |
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The Code of Business Conduct and Ethics is reproduced as Appendix E to this Proxy Statement. Copies of the Code can be obtained free of charge from the Companys Web site at www.muellerindustries.com. |
Directors Attendance at Annual Meetings of Stockholders
11
Communication With the Board of Directors
EXECUTIVE COMPENSATION
Summary Compensation Table
Long-Term Compensation |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Awards |
||||||||||||||||||||||
Annual Compensation |
Securities Underlying |
All Other | ||||||||||||||||||||
Name and Principal Position |
Year |
Salary |
Bonus(1) |
Options(#) |
Compensation(2) |
|||||||||||||||||
Harvey L.
Karp |
2003 | $ | 841,250 | $ | 841,250 | | | |||||||||||||||
Chairman of the
Board |
2002 | $ | 801,190 | $ | 801,190 | | | |||||||||||||||
2001 | $ | 801,190 | $ | 600,893 | | | ||||||||||||||||
William D.
OHagan |
2003 | $ | 573,573 | $ | 544,894 | 100,000 | $ | 8,000 | ||||||||||||||
President and
Chief Executive |
2002 | $ | 546,260 | $ | 768,947 | 100,000 | $ | 8,000 | ||||||||||||||
Officer |
2001 | $ | 546,260 | $ | 382,382 | | $ | 6,800 | ||||||||||||||
Kent A.
McKee |
2003 | $ | 247,200 | $ | 113,278 | 20,000 | $ | 8,000 | ||||||||||||||
Vice President
and Chief |
2002 | $ | 208,142 | $ | 99,931 | 12,500 | $ | 8,000 | ||||||||||||||
Financial
Officer |
2001 | $ | 181,125 | $ | 56,082 | 10,000 | $ | 6,800 | ||||||||||||||
Lee R.
Nyman |
2003 | $ | 244,802 | $ | 111,757 | 20,000 | $ | 8,000 | ||||||||||||||
Senior Vice
President- |
2002 | $ | 212,629 | $ | 101,546 | 20,000 | $ | 8,000 | ||||||||||||||
Manufacturing/Engineering |
2001 | $ | 191,475 | $ | 67,572 | 15,000 | $ | 6,800 | ||||||||||||||
James H.
Rourke |
2003 | $ | 206,979 | $ | 75,423 | 20,000 | $ | 8,000 | ||||||||||||||
President-Industrial |
2002 | $ | 197,104 | $ | 150,785 | 20,000 | $ | 8,000 | ||||||||||||||
Products
Division |
2001 | $ | 175,950 | $ | 65,337 | 15,000 | $ | 6,800 |
12
Option Grants During 2003 Fiscal Year
Option Grants in Last Fiscal Year
Individual Grants |
Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term |
||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Number of Securities Underlying Options Granted (#) |
% of total Options Granted to Employees in Fiscal Year |
Exercise or Base Price ($/Sh) |
Market Price on Date of Grant ($/Sh) |
Expiration Date |
5% |
10% |
||||||||||||||||||||||||
Harvey L.
Karp |
|
0.00% | $ | | $ | | |
$ | | $ | | ||||||||||||||||||||
William D.
OHagan |
100,000 | 36.63% | (1) | $ | 25.10 | $ | 25.10 | 2/13/2013 | $ | 1,578,526 | $ | 4,000,294 | |||||||||||||||||||
James H.
Rourke |
20,000 | 7.33% | (2) | $ | 25.86 | $ | 25.86 | 2/10/2013 | $ | 325,201 | $ | 824,124 | |||||||||||||||||||
Kent A.
McKee |
20,000 | 7.33% | (2) | $ | 25.86 | $ | 25.86 | 2/10/2013 | $ | 325,201 | $ | 824,124 | |||||||||||||||||||
Lee R.
Nyman |
20,000 | 7.33% | (2) | $ | 25.86 | $ | 25.86 | 2/10/2013 | $ | 325,201 | $ | 824,124 |
13
Option Exercises During 2003 Fiscal Year and Fiscal Year End Option Values
Aggregated Option Exercises in Last Fiscal Year
and Option Values at
December 27, 2003
Number of Securities Underlying Unexercised Options at Dec. 27, 2003 (#) |
Value of Unexercised In-the-Money Options at Dec. 27, 2003(2) |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Shares Acquired on Exercise (#) |
Value Realized ($)(1) |
Exercisable/ Unexercisable |
Exercisable/ Unexercisable |
||||||||||||||
Harvey L.
Karp |
| | 2,400,000/ | 0 | $ | 78,642,000/ | $ 0 | |||||||||||
William D.
OHagan |
| | 620,000/ | 180,000 | $ | 11,429,038/ | $1,219,400 | |||||||||||
James H.
Rourke |
| | 112,000/ | 49,000 | $ | 1,474,384/ | $ 309,221 | |||||||||||
Kent A.
McKee |
| | 52,500/ | 38,500 | $ | 702,022/ | $ 267,425 | |||||||||||
Lee R.
Nyman |
| | 44,600/ | 49,000 | $ | 209,954/ | $ 309,221 |
Employment Contracts and Termination of Employment Arrangements
14
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 Companys health plans and programs at the Companys expense for the remainder of such three-year term.
15
Employment Agreement) upon appropriate written notice. If Mr. OHagans employment is terminated for Cause or if Mr. OHagan voluntarily resigns for any reason other than Good Reason, his right to receive his base salary, bonus, and any other compensation and benefits to which he would otherwise be entitled under the OHagan Employment Agreement shall be forfeited as of the date of termination. Mr. OHagan may terminate his employment for any reason within six months following a Change in Control (as defined in the OHagan Employment Agreement). In such event, the Company will pay to Mr. OHagan a lump sum amount equal to (i) his then current base salary multiplied by the number of years (including partial years) then remaining in the 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. OHagan shall become immediately exercisable.
16
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. McKee shall become immediately exercisable.
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS (1)
Gary S. Gladstein, Chairman
Gennaro J. Fulvio
Terry
Hermanson
17
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF
DIRECTORS
Gennaro J. Fulvio, Chairman
Gary S. Gladstein
18
PERFORMANCE GRAPH
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
12/26/1998 |
12/25/1999 |
12/30/2000 |
12/29/2001 |
12/28/2002 |
12/27/2003 |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mueller
Industries, Inc. |
100 | 164 | 134 | 167 | 136 | 174 | ||||||||||||||||||||
Dow Jones
Equity Market Index |
100 | 123 | 113 | 100 | 77 | 100 | ||||||||||||||||||||
Dow Jones
Building Material Index |
100 | 79 | 81 | 84 | 71 | 99 |
19
APPOINTMENT OF AUDITORS
2003 |
2002 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Audit
Fees |
$ | 613,133 | $ | 591,975 | ||||||
Audit-Related
Fees |
107,117 | 149,612 | ||||||||
Tax
Fees |
171,470 | 336,477 | ||||||||
All Other
Fees |
2,731 | | ||||||||
$ | 894,451 | $ | 1,078,064 |
STOCKHOLDER NOMINATIONS FOR BOARD MEMBERSHIP
AND OTHER PROPOSALS FOR 2005
ANNUAL MEETING
20
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 2005, no earlier than January 29, 2005 and no later than February 28, 2005. 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.
OTHER MATTERS TO COME BEFORE THE ANNUAL MEETING
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING
21
OTHER INFORMATION
22
Appendix A
MUELLER INDUSTRIES, INC.
AUDIT COMMITTEE CHARTER
Purpose
The Audit Committee (the Audit Committee) of the Board of Directors of Mueller Industries, Inc. (the Company) is appointed by the Board of Directors to assist the Board of Directors in fulfilling its oversight responsibilities relating to (i) corporate accounting, disclosure and reporting practices and legal and regulatory compliance of the Company, (ii) the quality and integrity of the Companys financial statements and (iii) the qualifications, independence and performance of the Companys internal audit function and independent auditors.
Organization
The Audit Committee shall be comprised of not less than three members of the Board of Directors who shall meet the compensation, independence, experience, financial expertise and other requirements of the New York Stock Exchange (NYSE) and applicable federal and state securities laws and regulations. The members of the Audit Committee shall be appointed by the Board of Directors from time to time after considering the recommendation of the Companys Nominating and Corporate Governance Committee and upon a determination by the Board of Directors that the nominees meet all required qualifications for Audit Committee membership. The members of the Audit Committee may be removed by the Board of Directors. The Nominating and Corporate Governance Committee will recommend to the Board of Directors, and the Board of Directors will designate, the Chairman of the Committee.
Committee Authority and Responsibilities
The Audit Committee will maintain flexible policies and procedures and meeting schedules, consistent with the requirements of this Charter and the Companys by-laws, to enable the Audit Committee to react to changing circumstances and provide that the Companys accounting, disclosure and reporting practices are in accordance with applicable legal and regulatory requirements. The Chairman of the Audit Committee may call meetings during the year as necessary, but shall call a meeting at least once each fiscal quarter.
The Committee will provide for free and open communication between the Committee and the Companys directors, independent auditors, internal auditors and management.
Both the Companys internal auditors and independent auditors are ultimately accountable to the Board of Directors and the Audit Committee as representatives of the Companys shareholders.
The Audit Committee, in its capacity as a committee of the Board of Directors, shall be directly responsible for the appointment, compensation, evaluation and oversight of the work (including resolution of disagreements between management and the auditor regarding financial reporting) of the Companys independent auditors for the purpose of preparing or issuing an audit report or related work. The Audit Committee shall have sole responsibility for engaging or terminating the relationship with the Companys independent auditors and the independent auditors shall report directly to the Audit Committee. The Company shall provide appropriate funding, as determined by the Audit Committee, for payment of fees and expenses to the independent auditors for the purpose of rendering an audit report.
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The Audit Committee has authority to retain special legal, accounting or other consultants to advise the Audit Committee as the Audit Committee may determine appropriate. The Audit Committee may require any officer or employee of the Company or the Companys legal counsel or independent auditors to attend Audit Committee meetings or to meet with any members of, or consultants to, the Audit Committee. The Company shall provide for appropriate funding, as determined by the Audit Committee, in its capacity as a committee of the Board of Directors, for payment of all fees and expenses to any advisors employed by the Audit Committee pursuant to its authority under this Charter or applicable law or regulations.
The Audit Committee shall establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, as well as the confidential, anonymous submissions by Company employees of concerns regarding questionable accounting or auditing matters.
To the extent not inconsistent with its obligations and responsibilities, the Audit Committee may form subcommittees and delegate authority hereunder as it deems appropriate.
The Audit Committee shall make regular reports to the Board of Directors.
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Review and assess the adequacy of this Charter annually and submit any recommended changes to the Board of Directors for approval, including changes necessary to satisfy any applicable requirements of the NYSE and any other legal or regulatory requirements. |
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Appoint and engage independent auditors that meet NYSE and applicable securities law and regulatory requirements to audit the audited financial statements of the Company and its subsidiaries and the Companys employees benefit plans. |
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Review written statements from the independent auditors delineating all non-audit relationships between the independent auditors and the Company, review with the independent auditors the effect of any disclosed relationships or services on objectivity and independence of the independent auditors, take appropriate action to ensure the independence of the appointed independent auditors and approve the compensation arrangements and proxy statement disclosures of compensation, fees and expenses paid to the independent auditors. |
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Receive and review, at least annually, a report by the independent auditors describing (i) the auditors internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review , or peer review, of the independent auditors, or by any inquiry or investigation by a governmental or professional authority involving one or more independent audits carried out by the auditors in the preceding five years and any steps or procedures taken to deal with any such issues. |
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Approve in advance, as a Committee of the whole or by delegation of authority to one or more members of the Committee, any permitted non-audit services performed by the Companys independent auditors, including tax services, and cause such approval to be disclosed in the Companys periodic filings as required by applicable regulations. |
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Discuss with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 and other applicable laws and regulatory requirements relating to the conduct of the audit. |
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Meet with the independent auditors and financial management of the Company to review the scope of the proposed audit for the upcoming year and the audit procedures to be used and at the conclusion of the year review such audit, including any comments or recommendations of the independent auditors. |
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Review with the Companys independent auditors, internal auditors, and financial and accounting personnel the adequacy and effectiveness of the internal controls and disclosure controls and procedures of the Company, and elicit any recommendations for the improvement of such internal controls and disclosure controls and procedures or particular areas where new or more detailed controls and procedures are desirable. |
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Review the internal audit function of the Company, including its organizational structure, authority and independence of reporting obligations, department budget, qualification of personnel and the proposed audit plans for the coming year, and the coordination of such plans with the outside auditors. Review and concur with the appointment, reassignment or dismissal of the director of the Companys internal audit function. |
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Receive, review and discuss with the Companys independent auditors, and internal auditor as appropriate: (i) a summary of significant findings from completed internal audits, together with managements response, and periodic progress reports, with explanation for any deviations from the original plan; (ii) all critical accounting policies and practices to be used; (iii) all alternative treatments of financial information within GAAP (generally accepted accounting principles) that have been discussed with management; (iv) ramifications of alternative disclosures and treatments, and the treatment preferred by the auditors; and (v) other material written communications between the independent auditors and management. |
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Review and discuss: (i) significant financial risks; (ii) the financial statements; (iii) the Companys Managements Discussion and Analysis of Financial Condition and Results of Operations for the relevant period and draft earnings press releases with management and the independent auditors, prior to the issuance thereof or the filing or distribution thereof to shareholders; and (iii) financial information and earnings guidance, if any, provided to analyst and rating agencies. Among the items to be discussed are: (i) accounting principles, practices and judgments; (ii) whether the independent auditors are satisfied with the disclosure and content of the financial statements to be presented to the shareholders; and (iii) any changes in accounting principles. |
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Provide sufficient opportunity for the Committee to meet separately in executive session with: (i) management; (ii) the independent auditors; and (iii) the internal auditor (or other personnel responsible for the internal audit function). Among the items to be discussed in these meetings are the auditors evaluation of the Companys financial, accounting and auditing personnel, the auditors judgments about the Companys accounting principles as applied to its financial reporting, the level of management cooperation that the outside auditors received during the course of the audit and managements assessment of the auditors performance. |
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Set clear hiring policies for employees or former employees of the independent auditors. |
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Receive reports concerning any non-compliance with the Companys Code of Business Conduct and Ethics by any director or executive officer of the Company and approve any waivers therefrom. |
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Report on significant matters discussed at each Committee meeting to the Board of Directors. |
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Investigate, as appropriate, any matter brought to its attention within the scope of its duties, with the power to retain outside counsel or a second independent accountant, at the expense of the Company, for this purpose if, in its judgment, that is appropriate. |
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Prepare an appropriate Audit Committee report to shareholders to be included in the Companys annual proxy statement that is consistent with applicable law and Securities and Exchange Commission requirements. |
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Perform any other activities consistent with this Charter, the Companys By-Laws, and governing law and regulations, as the Committee or the Board of Directors deems necessary or appropriate. |
While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to prepare financial statements, plan or conduct audits or to determine that the Companys financial statements are complete and accurate and are in accordance with GAAP and applicable rules and regulations.
A copy of this Charter will be made available on the Companys website at www.muellerindustries.com.
Effective: February 12, 2004
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Appendix B
MUELLER INDUSTRIES, INC.
COMPENSATION COMMITTEE CHARTER
Statement Of Policy
The Compensation Committee (the Compensation Committee) of the Board of Directors of Mueller Industries, Inc. (the Company) shall provide assistance to the Board of Directors in discharging the Board of Directors responsibilities relating to management organization, performance, compensation and succession.
Organization
The members of the Compensation Committee shall be appointed by the Board of Directors from time to time after considering the recommendation of the Companys Nominating and Corporate Government Committee and upon a determination by the Board of Directors that the nominees meet all required qualifications for Compensation Committee membership. Members of the Compensation Committee may be removed by the Board of Directors. The Compensation Committee shall meet on the call of its chairman. The Compensation Committee has the authority to retain and terminate advisors to assist in discharging its duties, including the authority to approve such advisors fees and retention terms. Half of the members of the Compensation Committee shall be a quorum to transact business. The Nominating and Corporate Governance Committee will recommend to the Board of Directors, and the Board of Directors will designate, the Chairman of the Compensation Committee.
Committee Authority And Responsibilities
In discharging its responsibilities for management organization, performance, compensation and succession, the Compensation Committee shall have direct responsibility to:
|
Consider and authorize the compensation philosophy for the Companys personnel. |
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Review and approve corporate goals and objectives relevant to chairman and chief executive officer compensation, evaluate chairman and chief executive officer performance in light of those goals and objectives and, either as a committee or together with other independent directors (as directed by the Board of Directors), determine and approve chairman and chief executive officer compensation based on this evaluation. |
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Nothing in this Charter shall be construed as precluding discussions of chairman and chief executive officer compensation with the Board of Directors generally, as it is not the intent of this Charter to impair communication among members of the Board of Directors. |
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Annually review and approve perquisites for the chief executive officer and senior management. |
|
Consider and make recommendations to the Board of Directors on matters relating to organization and succession of senior management. |
|
Consider and approve the report of the Compensation Committee for inclusion in the Companys proxy statement. |
|
Make recommendations to the Board of Directors with respect to the Companys employee benefit plans. |
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Administer incentive, deferred compensation and equity based plans. |
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Annually review and update this Charter for consideration by the Board of Directors. |
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Annually evaluate performance and function of the Compensation Committee. |
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Report the matters considered and actions taken by the Compensation Committee to the Board of Directors. |
A copy of this Charter will be made available on the Companys website at www.muellerindustries.com.
Effective: February 12, 2004
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Appendix C
MUELLER INDUSTRIES, INC.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
CHARTER
Purpose and Responsibilities
The Nominating and Corporate Governance Committee (the Committee) of the Board of Directors of Mueller Industries, Inc. (the Company) will assist the Board of Directors in identifying qualified individuals to serve as members of the Board of Directors (consistent with criteria approved by the Board of Directors), 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.
Organization
The members of the Nominating and Corporate Governance Committee shall be appointed by the Board of Directors from time to time upon a determination by the Board of Directors that the nominees meet all required qualifications for Nominating and Corporate Governance Committee membership. Members of the Nominating and Corporate Governance Committee may be removed by the Board of Directors. The Nominating and Corporate Governance Committee shall meet on the call of its chairman. The Nominating and Corporate Governance Committee has the authority to retain and terminate advisors to assist in discharging its duties, including the authority to approve such advisors fees and retention terms. Half of the members of the Nominating and Corporate Governance Committee shall be a quorum to transact business. The Board of Directors will designate the Chairman of the Nominating and Corporate Governance Committee.
Committee Authority and Responsibilities
In furtherance of the Committees purpose, and in addition to any other responsibilities which may be properly assigned by the Board of Directors, the Committee will have the following authorities and responsibilities:
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The Committee will meet as often as it determines is appropriate to carry out its responsibilities. The Chairman of the Committee, in consultation with the other Committee members, will determine the frequency and length of the meetings and will set agendas consistent with this charter. |
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The Committee will recommend to the Board of Directors as director nominees individuals of established personal and professional integrity, ability and judgment, and will be chosen with the primary goal of ensuring that the entire Board of Directors collectively serves the interests of the shareholders. Due consideration will be given to assessing the qualifications of potential nominees and any potential conflicts with the Companys interests. The Committee will also assess the contributions of the Companys incumbent directors in connection with their potential re-nomination. In identifying and recommending director nominees, the Committee members may take into account such factors as they determine appropriate, including recommendations made by the Board of Directors. |
C-1
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The Committee will advise the Board of Directors on the appropriate structure and operations of all committees of the Board of Directors, including committee member qualifications. The Committee may review and recommend to the Board of Directors committee assignments, including additional committee members to fill vacancies as needed. |
|
The Committee may obtain advice and assistance from such internal and external advisors as it deems appropriate in connection with the discharge of its duties, and will have the authority to retain any search firm to be used to identify director candidates on behalf of the Company. The Committee will have sole authority to determine and approve related fees and retention terms for any such advisors, who will be compensated by the Company. |
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The Committee will develop and recommend to the Board of Directors corporate governance guidelines that comply with all applicable legal and regulatory requirements. Such guidelines will be periodically updated as the Committee deems appropriate. |
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The Committee will make recommendations to the Board of Directors regarding orientation for new directors, as well as continuing education for all directors. |
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The Committee will monitor developments, trends and best practices in corporate governance, and take such actions in accordance therewith as it deems appropriate. |
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To the extent not otherwise inconsistent with its obligations and responsibilities, the Committee may form subcommittees and delegate authority hereunder as it deems appropriate. |
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The Committee will report to the Board of Directors as it deems appropriate, and as the Board of Directors may request. |
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The Committee will oversee a self-evaluation process for the Board of Directors and each of its committees (including the Committee) as it deems appropriate, including to satisfy any applicable requirements of the NYSE and any other legal or regulatory requirements. |
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The Committee will perform such other activities consistent with this Charter, the Companys By-Laws, governing law, the rules and regulations of the NYSE and such other requirements applicable to the Companys as the Committee or the Board of Directors deem necessary or appropriate. |
Committee Charter
The Committee will periodically review this Charter and will recommend any changes to the Board of Directors as the Committee deems appropriate, including to satisfy any applicable requirements of the NYSE and any other legal or regulatory requirements.
A copy of this charter will be made available on the Companys website at www.muellerindustries.com
Effective: February 12, 2004
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Appendix D
MUELLER INDUSTRIES, INC.
CORPORATE GOVERNANCE GUIDELINES
General Philosophy
The Board of Directors of Mueller Industries, Inc. (the Company) sets high standards for the Companys employees, officers and directors. Implicit in this philosophy is the importance of sound corporate governance. It is the duty of the Board of Directors to serve as a prudent fiduciary for shareholders and to oversee the management of the Companys businesses. To fulfill its responsibilities and to discharge its duty, the Board of Directors follows the procedures and standards that are set forth in these guidelines.
Director Qualifications
The Board of Directors is responsible for reviewing, on an annual basis, the requisite skills and characteristics of members of the Board of Directors. This assessment will include independence, business, strategic and financial skills, as well as overall experience in the context of the needs of the Board of Directors as a whole.
There is no specified term limit that a director may serve on the Board of Directors. Each director will serve through his respective term and until his successor has duly elected and qualified. The Board of Directors will review each directors performance annually to assess independence, attendance and overall performance.
Executive Sessions of the Board of Directors
Annually, the Board of Directors shall hold at least two (2) executive sessions without management. The non-management members of the Board of Directors shall choose a director to preside at non-management sessions of the Board of Directors.
Communications with Non-Management Members of the Board Of Directors
An employee, officer or other interested party who has an interest in communicating with non-management members of the Board of Directors may do so by directing the communication to the Chairman of the Nominating and Corporate Governance Committee. Persons who desire to communicate with the non-management directors should send their correspondence addressed to the Chairman of the Nominating and Corporate Governance Committee c/o Mueller Industries, Inc., 8285 Tournament Drive, Suite 150, Memphis, Tennessee 38125 Attn: Chief Financial Officer.
Director Responsibility
Directors must exercise sound business judgment and act in what they reasonably believe to be the best interests of the Company and its shareholders. In discharging this obligation, directors may reasonably rely on the honesty and integrity of the Companys management as well as that of its independent auditors.
D-1
The Company will purchase directors and officers liability insurance for the benefit of its Board of Directors and management. In addition, directors and management shall be entitled to indemnification to the fullest extent permitted by the Delaware General Corporation Law.
In order to oversee effectively the management of the Company, all directors are expected to attend meetings of the Board of Directors and meetings of committees of the Board of Directors of which they are members. Directors are expected to be prepared for these meetings and to be able to devote the time required. Information and data that are important to the understanding of the business to be conducted at a Board of Directors or committee meeting will generally be distributed in advance of the meeting. Directors are encouraged to attend the Companys annual meeting of stockholders.
Board of Directors Committees
The Board of Directors will maintain an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and such other committees as it determines appropriate.
Independent Directors
The Board of Directors believes that a Director is independent if the Director satisfies the independence requirements of the listing standards of the New York Stock Exchange.
Each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee shall have written charters. These charters will address each committees purpose, duties, goals and responsibilities as well as qualifications for committee membership, procedures for committee member appointment and removal, committee structure and operations, and committee reporting to the Board of Directors. Each charter shall be posted on the Mueller Industries, Inc. web site.
The Board of Directors and each committee shall have the power to engage independent legal, financial or other advisors as it may deem necessary, without consulting or obtaining the approval of the Board of Directors, any committee of the Board of Directors or Company management in advance.
The Audit Committee shall have exclusive authority to engage and terminate the Companys independent auditors. The Audit Committee shall also pre-approve all engagements of the independent auditors for all non-audit services. Fees paid to the independent auditors for non-audit services should not exceed the sum of the fees paid for audit and audit-related services.
The Compensation Committee shall assist the Board of Directors in discharging the Board of Directors responsibilities relating to management organization, performance, compensation and successor.
The Nominating and Corporate Governance Committee shall assist the Board of Directors in identifying qualified individuals to serve as members of the Board of Directors, recommending committee assignments and responsibilities to the Board of Directors, evaluating Board of Director and management effectiveness, developing and recommending corporate governance guidelines, and generally advising the Board of Directors on corporate governance and related matters.
Director Access to Officers and Employees
Directors have full and free access to the Companys officers and employees. Directors should use their judgment to ensure that any such contact is not disruptive to the Companys business operations.
D-2
Director Compensation
The form and amount of director compensation shall be determined by the Board of Directors. The Board of Directors will conduct an annual review of director compensation.
In order to maintain independence for members of the Audit Committee, members of the Audit Committee may not directly or indirectly receive fees or other compensation for services as a consultant, legal advisor or financial advisor, regardless of the amount.
Director Orientation and Continuing Education
All new directors must participate in a comprehensive orientation to acquaint them with the Companys strategy, long-range plans, financial statements, properties and operations, corporate governance guidelines, and the code of ethics. The orientation program will introduce new directors to the Companys principal executives, its internal auditor and its independent auditors. All other directors will be invited to attend the orientation program.
From time to time, directors will receive information and updates on legal and regulatory changes that affect the Company, the directors and Company employees.
Annual Performance Evaluation
The Board of Directors will conduct an annual self-evaluation of itself and its committees to determine whether they are functioning effectively. The Board of Directors will survey and receive comments from each director and report annually to the Board of Directors with an assessment of the Board of Directors performance.
A copy of those Corporate Government Guidelines will be made available on the Companys website at www.muellerindustries.com.
Effective: February 12, 2004
D-3
Appendix E
CODE OF BUSINESS CONDUCT AND ETHICS
OF
MUELLER INDUSTRIES, INC.
AND ITS DOMESTIC SUBSIDIARIES
EFFECTIVE DATE: February 12, 2004
INTRODUCTION
Mueller Industries, Inc. expects that directors, officers and employees will conduct themselves ethically and properly as a matter or course and comply with the guidelines set forth below.
This Code of Business Conduct and Ethics (this Code) is prepared, in large part, due to the requirements of the Sarbanes-Oxley Act of 2002 and rules of the New York Stock Exchange. and is applicable to Mueller Industries, Inc. and all direct and indirect U.S. subsidiaries (hereinafter referred to collectively as the Company). Directors, officers and employees of foreign subsidiaries are also expected to act properly and consistent with country-specific guidelines developed for such subsidiaries.
This Code exists to provide the Companys directors, officers, employees, shareholders, suppliers and members of the general public with an official statement as to how the Company conducts itself internally and in the marketplace and certain standards that the Company shall require of its directors, officers and employees.
The Companys Compliance Officer on the Effective Date of this Code is William H. Hensley and the term Compliance Officer, as used in this Code, refers to the Companys current Compliance Officer and any subsequent person appointed to that office.
PURPOSE
This Code is intended to provide a codification of standards that is reasonably designed to deter wrongdoing and to promote the following:
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Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
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Full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the SEC) and in other public communications made by the Company; |
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Compliance with applicable governmental laws, rules and regulations; |
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The prompt internal reporting to an appropriate person or persons identified in this Code for violations of this Code; and |
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Accountability for adherence to this Code. |
E-1
SCOPE
This Code applies to the Companys Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Controller and persons performing similar functions as well as to all directors, officers and employees of the Company. As used herein, the term employees shall be deemed to include each of the foregoing persons unless specifically stated otherwise or unless the context clearly indicates otherwise.
POLICY PROVISIONS
Under this Code, all directors, officers (including the Companys Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Controller and persons performing similar functions) and employees are expected to conduct business for the Company in the full spirit of honest and lawful behavior and shall not cause another director, officer, employee or non-employee to act otherwise, either through inducement or coercion.
I. Conflicts of Interest and Other Matters
Conflicts of interest may arise when an employees position or responsibilities with the Company present an opportunity for personal gain apart from the normal compensation provided through employment. The following guidelines are provided: |
The assets of the Company are much more than its properties, facilities, equipment, corporate funds and computer systems; they include technologies and concepts, business strategies and plans, as well as information about its business. These assets may not be improperly used and/or used to provide personal benefits for employees. In addition, employees may not provide outside persons with assets of the Company for the employees personal gain or in such a manner as to be detrimental to the Company. Employees should protect the Companys assets and ensure their efficient and proper use. Theft, carelessness and waste have a direct impact on the Companys profitability. All Company assets should be used for legitimate business purposes. |
As part of an employees job, he/she may have access to confidential information about the Company, its employees, agents, contractors, customers, suppliers and competitors. Unless released to the public by management, this information should not be disclosed to fellow employees who did not have a business need to know or to non-employees for any reason, except in accordance with established corporate procedures. Confidential information of this sort includes, but is not limited to, information or data on operations, business strategies and growth, business relationships, processes, systems, procedures and financial information. |
Employees should avoid any outside financial interest that might influence their decisions or actions on matters involving the Company or its businesses or property. Such interests include, among other things: (i) a significant personal or immediate family interest in an enterprise that has significant business relations with the Company; or (ii) an enterprise or contract with a supplier, service-provider or any other company or entity where the employee or a member of the immediate family of the employee is a principal or financial beneficiary other than as an employee. All such interests should be disclosed by the employee to the Companys Compliance Officer. |
E-2
Employees should avoid outside employment or activities that would have a negative impact on their job performance with the Company, or which are likely to conflict with their job or their obligations to the Company. |
No employee may enter into any contract or arrangement, own any interest or be a director, officer or consultant in or for an entity which enters into any contract or arrangement (except for the ownership of non-controlling interests in publicly-traded entities) with the Company for the providing of services to the Company unless and until the material facts as to the relationship or interest and the contract or transaction are fully disclosed to the Companys Compliance Officer and, if approved by the Company, the Companys Compliance Officer shall provide written confirmation of the approval of said contract or transaction. |
Employees owe a duty to the Company to advance its legitimate interests when the opportunity arises to do so. Employees should refrain from and shall be prohibited from: (i) taking for themselves or for their personal benefit opportunities that could advance the interests of the Company or benefit the Company when such opportunities are discovered through the use of Company property, information or position; (ii) using Company property, information or position for personal gain; or (iii) competing with the Company. |
II. Dealing With Suppliers, Customers And Other Employees
The Company obtains and keeps its business because of the quality of its operations. Conducting business, however, with other employees, suppliers and customers can pose ethical or even legal problems. The following guidelines are intended to help all employees make the appropriate decision in potentially difficult situations.
No employee of the Company may ever accept or pay bribes, kickbacks or other types of unusual payments from or to any organization or individual seeking to do business with, doing business with or competing with the Company. |
Employees may accept gifts or entertainment of nominal value as part of the normal business process if public knowledge of the employees acceptance could cause the Company no conceivable embarrassment. Even a nominal gift and/or entertainment should not be accepted if it might appear to an observer that the gift and/or entertainment would influence the employees business decisions. The term nominal value applies to the amount of the gift and/or its frequency; i.e., frequent gifts, even if of nominal value, are unacceptable. The term entertainment includes, but is not limited to, meals, charitable and sporting events, parties, plays and concerts. If you have any questions about the acceptance of entertainment or gifts, ask the Companys Compliance Officer for advice. |
Employees must comply with the Companys policy on travel and entertainment expenses as set forth in the Companys Policies and Procedures, as the same may be amended or supplemented from time to time. |
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The Company will not offer, give or reimburse expenses for entertainment or gratuities (including transportation, meals at business meetings or tickets to sporting or other events) to government officials or employees who are prohibited from receiving such by applicable government regulations. |
Agreements with agents, sales representatives, distributors, contractors and consultants should be in writing and should clearly and accurately set forth the services to be performed, the basis for earning the commission or fee involved and the applicable rate or fee. Payments should be reasonable in amount and not excessive in light of the practice in the trade and commensurate with the value of services rendered. |
Each employee should endeavor to deal fairly with the Companys customers, suppliers, competitors and other employees. |
III. Books and Records
False or misleading entries shall not be made in any reports, ledgers, books or records of the Company nor shall any misrepresentation be made regarding the content thereof. No employee may engage in an arrangement that in any way may be interpreted or construed as misstating or otherwise concealing the nature or purpose of any entries in the books and records of the Company. No payment or receipt on behalf of the Company may be approved or made with the intention or understanding that any part of the payment or receipt is to be used for a purpose other than that described in the documents supporting the transaction.
IV. Competitive Practices
In business, it is inevitable that the Company and its competitors will meet and talk from time to time; this is neither against the law nor to be avoided. What will not be tolerated is collaboration with competitors in violation of the law on such things as pricing, production, marketing, inventories, product development, sales territories and goals, market studies and proprietary or confidential information.
As a vigorous competitor in the marketplace, the Company seeks economic knowledge about its competitors; however, it will not engage in illegal acts to acquire a competitors trade secrets, financial data, information about company facilities, technical developments or operations.
V. Political Activities & Contributions
The Company encourages each of its employees to be good citizens and to participate in the political process. Employees should, however, be aware that: (1) federal law and the statutes of some states in the U.S. prohibit the Company from contributing, directly or indirectly, to political candidates, political parties or party officials; and (2) employees who participate in partisan political activities should ensure that they do not leave the impression that they speak or act for the Company.
VI. Compliance with Laws, Rules and Regulations
The Company proactively promotes compliance by all employees with applicable laws, rules and regulations of any governmental unit, agency or divisions thereof and the rules and regulations of the New York Stock Exchange and/or any exchange upon which the Companys stock may be traded. The
E-4
Company requires its employees to abide by the provisions of applicable law on trading on inside information and all employees of the Company are directed to refrain from trading in the Companys stock based on inside information. The Company requires its employees to abide by applicable law and the Companys procedures with respect to periods of time within which all or some cross-section of the Companys employees will be prevented from trading in the Company stock. The Company requires its employees to abide by applicable law and the Companys policies with respect to disclosures of material non-public information (Regulation FD).
VII. Protection of Employees from Reprisal for Whistleblowing (Whistleblowing Policy)
To encourage employees to report Alleged Wrongful Conduct. |
To prohibit supervisory personnel from taking Adverse Personnel Action against a Company employee as a result of the employees good faith disclosure of Alleged Wrongful Conduct to a Designated Company Officer or Director or to the Companys Audit Committee. An employee who discloses and subsequently suffers an adverse Personnel Action as a result is subject to the protection of this Whistleblowing Policy. |
All employees of the Company who disclose Alleged Wrongful Conduct, as defined in this Whistleblowing Policy, and, who, as a result of the disclosure, are subject to an Adverse Personnel Action. |
All employees of the Company are encouraged promptly to report Alleged Wrongful Conduct. No Adverse Personnel Action may be taken against a Company employee in Knowing Retaliation for any lawful disclosure of information to a Designated Company Officer or Director or to the Companys Audit Committee, which information the employee in good faith believes evidences: (i) a violation of any law; (ii) fraudulent or criminal conduct or activities; (iii) questionable accounting or auditing matters or matters; (iv) misappropriation of Company funds; or (v) violations of provisions of this Code (such matters being collectively referred to herein as Alleged Wrongful Conduct). |
No supervisor, officer, director, department head or any other employee with authority to make or materially influence significant personnel decisions shall take or recommend an Adverse Personnel Action against an employee in Knowing Retaliation for disclosing Alleged Wrongful Conduct to a Designated Company Officer or Director or to the Companys Audit Committee. |
In addition to other terms as defined above, the terms set forth on Exhibit A attached hereto shall have the meanings set forth thereon for purposes of this Whistleblowing Policy. |
An employee who becomes aware of Alleged Wrongful Conduct is encouraged to make a Disclosure to a Designated Company Officer or Director or to the Companys Audit Committee as soon as possible. |
E-5
This Whistleblowing Policy may not be used as a defense by an employee against whom an Adverse Personnel Action has been taken for legitimate reasons or cause. It shall not be a violation of this Whistleblowing Policy to take Adverse Personnel Action against an employee whose conduct or performance warrants that action separate and apart from the employee making a disclosure. |
An employees protection under this Whistleblowing Policy is in addition to any protections such employee may have pursuant to any applicable state or federal law and this Whistleblowing Policy shall not be construed as limiting any of such protections. |
VIII. Audit Committee Procedures Receipt, Retention and Treatment of Complaints Regarding Accounting, Internal Accounting Controls or Auditing Matters
Pursuant to the requirements of the Sarbanes-Oxley Act of 2002, the Companys Audit Committee has established the following procedures for the receipt, retention and treatment of complaints by Company employees regarding the Companys accounting, internal accounting controls or auditing matters.
To promote and encourage Company employees to report complaints, problems or questionable practices relative to accounting, internal accounting controls or auditing matters (collectively referred to herein as Accounting Concerns). |
All employees of the Company. |
Any Company employee who has, knows of or has reason to know or suspect the existence of any Accounting Concern is encouraged to report such Accounting Concern, promptly and in writing, to the Companys Compliance Officer and the Audit Committee at the following address: |
Submissions by Company employees of Accounting Concerns may be signed by the employee or may be anonymous. Submissions by Company employees of Accounting Concerns should be sufficiently detailed so as to provide the necessary information to the Companys Audit Committee |
E-6
as to the nature of the Accounting Concerns, the violation or potential violation of any federal or state law or regulation or the nature of any questionable accounting or auditing practice or matter. Company employees are encouraged to include as much factual data as possible in any submissions of Accounting Concerns and Company employees shall not utilize the submission of an Accounting Concern for the sole purpose of harassing another Company employee or officer. Submissions by Company employees of Accounting Concerns shall be copied by the Compliance Officers Administrative Assistant and retained in a file entitled Accounting Concerns Report File to be kept separate from the files of the Companys Accounting Department.
The Chairman of the Audit Committee shall review and investigate or cause to be investigated each submission by Company employees of Accounting Concerns that suggests any violation of Company policies, violation of any federal or state laws or regulations or any questionable accounting or auditing practice or matter. The Chairman of the Audit Committee may utilize the services of the Companys outside legal counsel in any such investigations. In the event the Chairman of the Audit Committee shall determine that any Accounting Concern is of sufficient veracity and significance so as to mandate any action by the Company, the Chairman of the Audit Committee shall report the Accounting Concern to the Audit Committee and, if necessary, to the Companys Board of Directors with a recommendation as to specific action to be taken. In extreme cases where an Accounting Concern has been reported that involves a violation or potential violation of federal or state laws or regulations and the Chairman of the Audit Committee has determined that such report is accurate or that sufficient evidence exists to create a significant concern as to whether such violation has occurred or will occur, the Chairman of the Audit Committee may report such Accounting Concern to the appropriate government authority. |
Company employees who submit reports of Accounting Concerns shall be entitled to the protection of the Whistleblowing Policy set forth above. |
IX. Public Company Reporting
As a public company, it is important that the Companys filings with the SEC and other public disclosures of information be complete, fair, accurate and timely. An employee, officer or director of the Company may be called upon to provide necessary information to ensure that the Companys public reports are complete, fair and accurate. The Company expects each Company employee, officer and director to take this responsibility seriously and to provide prompt, complete, fair and accurate responses to inquiries with respect to the Companys public disclosure requirements. With respect to the Companys employees, officers and directors who may be participating in the preparation of reports, information, press releases, forms or other information to be publicly disclosed through filings with the SEC or as mandated by the SEC, such employees, officers and directors are expected to use their diligent efforts to ensure that such reports, press releases, forms or other information are complete, fair, accurate and timely.
X. Compliance and Discipline
All Company employees are required to comply with this Code. Employees are expected to report violations of this Code and assist the Company, when necessary, in investigating violations. All department heads, managers and supervisors are charged with the responsibility of supervising their employees in accordance with this Code.
E-7
Failure to comply with this Code will result in disciplinary action that may include suspension, termination, referral for criminal prosecution and/or reimbursement to the Company for any losses or damages resulting from the violation. The Company reserves the right to terminate any employee immediately for a single violation of this Code.
All employees of the Company may be asked from to time to reaffirm their understanding of and willingness to comply with this Code by signing an appropriate certificate (see Appendix A).
XI. Adoption, Amendment and Waiver
This Code has been adopted by the Companys Board of Directors and may be changed , altered or amended at any time. The interpretation of any matter with respect to this Code by the Board of Directors shall be final and binding. |
Waivers of the provisions of this Code may be granted or withheld from time to time by the Company in its sole discretion. Waivers are only effective if set forth in writing after full disclosure of the facts and circumstances surrounding the waiver. Waivers for the benefit of directors and executive officers must be approved by the Board of Directors and will be publicly disclosed by the Company. All other waivers may be approved by the Compliance Officer and may be publicly disclosed by the Company. |
E-8
NO EMPLOYMENT CONTRACT
Nothing contained herein shall be construed as limiting the Companys right to terminate an employee immediately for any reason. This Code does not provide any guarantees of continued employment, nor does it constitute an employment contract between the Company and any employee.
E-9
APPENDIX A
EMPLOYEE STATEMENT
I acknowledge having received a copy of the Companys Code of Business Conduct and Ethics. I have read it completely and I understand that the Code applies to me. I understand the Code does not constitute an employment contract and I agree to comply fully with each of the provisions of the Code, including such changes to the Code as the Company may announce from time to time. I have reviewed with my department head or the Compliance Officer any matters concerning ownership or other activities which are required to be disclosed to the Company by the Code.
Employee Name _________________________________________________
Employee Signature ______________________________________________
Date __________________________________________________________
E-10
EXHIBIT A
DEFINED TERMS WHISTLEBLOWING POLICY
1. | Adverse Personnel Action: an employment-related act or decision or a failure to take appropriate action by a supervisor or higher level authority which affects an employee negatively as follows: |
(a) |
Termination of employment; |
(b) |
Demotion; |
(c) |
Suspension; |
(d) |
Written reprimand; |
(e) |
Retaliatory investigation; |
(f) |
Decision not to promote; |
(g) |
Receipt of an unwarranted performance rating; |
(h) |
Withholding of appropriate salary adjustments; |
(i) |
Elimination of the employees position, absent an overall reduction in work force, reorganization, or a decrease in or lack of sufficient funding, monies, or work load; or |
(j) |
Denial of awards, grants, leaves or benefits for which the employee is then eligible. |
2. | Disclosure: oral or written report by an employee to a Designated Company Officer or Director or to the Companys Audit Committee of Alleged Wrongful Conduct. |
3. | Knowing Retaliation: An Adverse Personnel Action taken by a supervisor or other authority against an employee where such employees prior disclosure of Alleged Wrongful Conduct is a direct or indirect reason or basis for the Adverse Personnel Action. |
4. | Designated Company Officer or Director: The Companys Compliance Officer, any executive officer of the Company of the level of Senior Vice President or above and any member of the Companys Board of Directors. |
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C/O CONTINENTAL STOCK TRANSFER |
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VOTE BY PHONE - 1-800-690-6903 |
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VOTE BY MAIL |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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MUIND1 |
KEEP THIS PORTION FOR YOUR RECORDS |
DETACH AND RETURN THIS PORTION ONLY |
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
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MUELLER INDUSTRIES, INC. |
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Election of Directors |
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02) Gary S. Gladstein |
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For All |
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03) Terry Hermanson |
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05) Harvey L. Karp |
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06) William D. OHagan |
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Approve the appointment of Ernst & Young LLP as independent auditors of the Company. |
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*Note* Such other business as may properly come before the meeting or any adjournment thereof |
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE SIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ALL NOMINEES IN ITEM 1 AND FOR ITEM 2. |
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Please sign exactly as your name appears to the right. When shares
are held jointly, each stockholder named should sign. When signing as
attorney, executor, administrator, trustee or guardian, you should so
indicate when signing. If a corporation, please sign in full corporate name
by duly authorized officer. If a partnership, please sign in partnership name
by duly authorized person. |
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Signature [PLEASE SIGN WITHIN BOX] |
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Signature (Joint Owners) |
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MUELLER INDUSTRIES, INC. |
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The undersigned hereby appoints William H. Hensley 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 April 29, 2004, 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. |
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