<PAGE>
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 the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
MUELLER INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE>
[LOGO]
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 6, 1999
------------------------
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 6, 1999, 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 4, 2000) 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, 1999; and
3. 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 10, 1999, will
be entitled to notice of and vote at the Annual Meeting or any adjournment(s)
thereof. A complete list of the 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.
William H. Hensley
CORPORATE SECRETARY
March 17, 1999
<PAGE>
PROXY STATEMENT
MUELLER INDUSTRIES, INC.
8285 TOURNAMENT DRIVE, SUITE 150
MEMPHIS, TENNESSEE 38125
TELEPHONE: (901) 753-3200
------------------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 1999
------------------------
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 6, 1999, 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 26, 1998, is first being mailed on or about March 17,
1999.
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 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 35,851,396 shares of Common Stock outstanding at the close
of business on March 10, 1999, 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
<PAGE>
properly be brought before the Annual Meeting. Only stockholders of record at
the close of business on March 10, 1999, 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 6, 1999, the following parties were known by the Company to be
the "beneficial owner" of more than five percent of the Common Stock:
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS OF BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED CLASS
- -------------------------------------- ----------------- --------------
<S> <C> <C>
Harvey L. Karp 3,634,000(1) 9.21%(1)
c/o Mueller Industries, Inc.
8285 Tournament Drive, Suite 150
Memphis, Tennessee 38125
</TABLE>
- ------------------------
(1) Includes 3,600,000 shares of Common Stock which are subject to currently
exercisable stock options.
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 4, 2000),
or until the election and qualification of their successors: Robert B. Hodes,
Harvey L. Karp, G.E. Manolovici, William D. O'Hagan and Robert J. Pasquarelli.
If any such person should be unwilling or unable to serve as a director of the
Company, which is not anticipated, the persons named in the proxy will vote the
proxy for substitute nominees selected by them unless the number of directors
has been reduced to the number of nominees willing and able to serve.
Directors are elected by a plurality of the votes cast. "Plurality" means
that the individuals who receive the largest 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 6, 1999, information about the
4,981,886 shares of Common Stock (calculated based on 35,851,396 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 their current positions with
2
<PAGE>
the Company, principal occupations and employment over the preceding five years,
age and directorships held in certain other publicly-owned companies.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED AS OF PERCENT
PRINCIPAL OCCUPATION, EMPLOYMENT, ETC. MARCH 6, 1999 OF CLASS
- --------------------------------------------------- ------------- -----------
<S> <C> <C>
Robert B. Hodes.................................... 42,000 *
Director of the Company since February 10,
1995; Director of W.R. Berkley Corporation,
Crystal Oil Company, Globalstar
Telecommunications Limited, Loral Space &
Communications Ltd., R.V.I. Guaranty, Ltd., LCH
Investments N.V. and Restructured Capital
Holdings, Ltd.; age 73 (1)
Harvey L. Karp..................................... 3,634,000 9.21%
Chairman of the Board of Directors since
October 8, 1991; Director since August 1991;
age 71 (2)
G.E. Manolovici.................................... 10,000 *
Director of the Company since November 30,
1998; age 62 (3)
William D. O'Hagan................................. 776,136 2.14%
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 57 (4)
Robert J. Pasquarelli.............................. 21,200 *
Director of the Company since July 1991; age 53
(5)
Earl W. Bunkers.................................... 107,484 *
Executive Vice President and Chief Financial
Officer of the Company since August 28, 1991;
age 65 (6)
William H. Hensley................................. 200,290 *
Vice President and General Counsel of the
Company since December 16, 1991; Secretary of
the Company since January 30, 1992; age 48 (7)
Kent A. McKee...................................... 86,604 *
Vice President of the Company since February
11, 1999; age 38 (8)
Lee R. Nyman....................................... 104,172 *
Senior Vice
President--Manufacturing/Engineering of the
Company since February 11, 1999; age 46 (9)
Executive Officers, Named Officers and Directors as
a Group............................................ 4,981,886 12.48%**
</TABLE>
- ------------------------
* Less than 1%
** Includes 4,075,680 shares of Common Stock which are subject to currently
exercisable stock options held by officers and directors of the Company.
(1) 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) 4,000 shares of Common Stock owned by trusts of which Mr. Hodes
is trustee, (ii) 2,200 shares of Common Stock owned by Mr. Hodes' children,
and (iii) 8,000 shares of Common Stock which are subject to currently
exercisable stock
3
<PAGE>
options. Mr. Hodes disclaims beneficial ownership of the 4,000 shares of
Common Stock owned by trusts of which he is trustee.
(2) The number of shares of Common Stock beneficially owned by Mr. Karp includes
3,600,000 shares of Common Stock which are subject to currently exercisable
stock options.
(3) 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, advisor to Quantum Fund.
(4) The number of shares of Common Stock beneficially owned by Mr. O'Hagan
includes (i) 368,000 shares of Common Stock which are subject to currently
exercisable stock options, (ii) 20,000 shares of Common Stock owned by Mr.
O'Hagan's spouse, and (iii) 200,000 shares of Common Stock owned by trusts
of which Mr. O'Hagan is trustee and in which Mr. O'Hagan or his spouse hold
a 99% interest. Mr. O'Hagan disclaims beneficial ownership of the 20,000
shares of Common Stock owned by his spouse.
(5) Mr. Pasquarelli has served (i) as General Manager of Armco Inc.'s Mansfield,
Ohio, stainless steel manufacturing operations from July 1, 1997, (ii) as a
metals industry consultant from January 16, 1996 to June 30, 1997, and (iii)
for more than five years prior to January 17, 1996, as Director, President
and Chief Executive Officer of New Jersey Steel Corporation, a New Jersey
based steel maker. The number of shares of Common Stock beneficially owned
by Mr. Pasquarelli includes 10,000 shares of Common Stock which are subject
to currently exercisable stock options.
(6) The number of shares of Common Stock beneficially owned by Mr. Bunkers
includes 3,600 shares of Common Stock which are subject to currently
exercisable stock options.
(7) The number of shares of Common Stock beneficially owned by Mr. Hensley
includes (i) 30,400 shares of Common Stock which are subject to currently
exercisable stock options, and (ii) 6,660 shares of Common Stock owned by
Mr. Hensley's children.
(8) Mr. McKee has 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 21,200 shares of Common Stock which are subject to currently
exercisable stock options.
(9) Mr. Nyman has 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 34,480 shares of
Common Stock which are subject to currently exercisable stock options.
During 1998, the Board of Directors held ten meetings and took action three
times by unanimous written consent. 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 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
4
<PAGE>
Plan and the Company's 1994 Non-Employee Director Stock Option Plan and on
February 12, 1998 created a committee to be responsible for administering the
Company's 1998 Stock Option Plan (collectively, the "Option Plan Committees").
During 1998, each of the directors attended 75% or more of the meetings of the
Board and the meetings of the committees on which they served.
The Audit Committee is composed of three directors who are not officers or
employees of the Company: Robert Hodes, G.E. Manolovici and Robert Pasquarelli.
During 1998, the Audit Committee held one meeting. 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 approves the scope of the non-audit services
performed by the Company's independent accountants and considers the possible
effect on 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 Compensation Committee is composed of two directors who are not officers
or employees of the Company: G.E. Manolovici and Robert Pasquarelli. These same
directors also serve as members of the Plan Committees and 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 1998, the Compensation Committee and
the Option Plan Committees held one formal meeting.
The Nominating Committee is composed of two directors who are 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 1998, 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 By-laws, 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 later than (i) with respect to an election to be
held at an annual meeting of stockholders, 90 days prior to the anniversary date
of the immediately preceding annual meeting (unless the annual meeting date is
advanced by more than thirty days or delayed by more than sixty days, in which
case different deadlines apply), and (ii) with respect to an election to be held
at a special meeting of stockholders for the election of directors, not earlier
than 90 days prior to the special meeting and not later than the later of (a) 60
days prior to such special meeting or (b) the tenth day following the day on
which public announcement is first made of the date of the special meeting,
PROVIDED that in the event that the number of directors to be elected to the
Board is increased and there is no public announcement naming all of the
nominees for director or specifying the size of the increased Board made by the
Company at least 70 days prior to the first anniversary of the preceding year's
annual meeting, a stockholder's notice shall also be considered timely, but only
with respect to nominees for any new positions created by such increase, if it
is delivered to the Secretary of 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
5
<PAGE>
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 1998, 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 the
Audit, Compensation and Nominating Committees receive an annual fee of $2,500.
Under the Company's 1994 Non-Employee Director Stock Option Plan, each
member of the Company's Board of Directors who is neither an employee nor an
officer of the Company is automatically granted each year on the date of the
Company's Annual Meeting of Stockholders, without further action by the Board,
an option to purchase 2,000 shares of Common Stock at the fair market value on
the date the option is granted. As of March 6, 1999, options to purchase 18,000
shares of Common Stock were outstanding under the Company's 1994 Non-Employee
Director Stock Option Plan.
BOARD OF DIRECTORS' AFFILIATIONS
Mr. Hodes is Counsel to the law firm of Willkie Farr & Gallagher, which
provided services to the Company during 1998.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the annual and long-term compensation for
services in all capacities for the Company for the fiscal years 1998, 1997 and
1996, of those persons who were, at December 26, 1998, (i) the chief executive
officer, and (ii) the other four most highly compensated executive officers of
the Company (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- -------------
OTHER SECURITIES
NAME AND PRINCIPAL ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION(2) OPTIONS(#) COMPENSATION(3)
- ------------------------------------ --------- ---------- ----------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Harvey L. Karp 1998 $ 630,630 $ 630,630
Chairman of the Board 1997 $ 606,372 $ 576,053
1996 $ 606,373 $ 545,736
William D. O'Hagan 1998 $ 429,962 $ 408,464 200,000 $ 11,081
President and Chief 1997 $ 413,616 $ 372,254 180,000 $ 7,201
Executive Officer 1996 $ 413,430 $ 351,415 $ 120,092 $ 3,503
Earl W. Bunkers 1998 $ 188,000 $ 136,900 $ 6,679
Executive Vice President 1997 $ 180,600 $ 135,450 6,000 $ 5,669
and Chief Financial Officer 1996 $ 180,435 $ 135,326 $ 55,792 6,000 $ 3,221
William H. Hensley 1998 $ 177,000 $ 129,475 7,500 $ 5,807
Vice President, General 1997 $ 170,100 $ 127,575 8,000 $ 5,107
Counsel and Secretary 1996 $ 169,944 $ 127,458 8,000 $ 3,119
Lee R. Nyman 1998 $ 172,000 $ 131,100 23,000 $ 6,857
Vice President--Manufacturing/ 1997 $ 165,375 $ 134,031 8,000 $ 5,458
Management Engineering 1996 $ 161,135 $ 120,851 12,000 $ 3,162
</TABLE>
- ------------------------
(1) Includes all amounts earned for the respective years, even if deferred under
the Company's Executive Deferred Compensation Plan.
(2) Perquisites and other personal benefits received by each Named Officer in
1998 aggregated below the required disclosure threshold.
(3) Consists of the following amounts for 1998: (a) $5,000 contributed on behalf
of Messrs. O'Hagan, Bunkers, Hensley and Nyman, respectively, as matching
contributions under the Company's Executive Deferred Compensation Plan; and
(b) $6,081, $1,679, $807 and $1,857 for Messrs. O'Hagan, Bunkers, Hensley
and Nyman, respectively, representing the portion of interest credits on
deferred compensation accounts under the Company's Executive Deferred
Compensation Plan that are deemed by rules of the Securities and Exchange
Commission to be at above-market rates.
7
<PAGE>
OPTION GRANTS
Shown below is further information on options granted during the fiscal year
ended December 26, 1998, to the Named Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL RATES OF
- ------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL STOCK PRICE APPRECIATION
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR MARKET PRICE FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE ON DATE OF EXPIRATION ------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) GRANT ($/SH) DATE 5% ($) 10% ($)
- ------------------------- ----------- ------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Harvey L. Karp........... -- -- -- -- -- -- --
William D. O'Hagan....... 200,000 49.6 % $15.9375(1) $15.9375 10/09/08 2,004,619 5,079,919
Earl W. Bunkers.......... -- -- -- -- -- -- --
William H. Hensley....... 7,500 1.9 % 21.90 (2) 21.90 10/29/08 103,297 261,765
Lee R. Nyman............. 8,000 2.0 % 37.04 (3) 37.04 7/01/08 186,356 472,245
Lee R. Nyman............. 15,000 3.7 % 21.90 (2) 21.90 10/29/08 206,594 523,530
</TABLE>
- ------------------------
(1) These options vest ratably over a five year term, with the first 20% vesting
on October 9, 1999, except that if there is a "Change in Control", on the
later of (i) the day Mr. O'Hagan notifies the Company he is terminating as a
result of said change, and (ii) ten days prior to the date Mr. O'Hagan's
employment is terminated, all remaining unvested options become immediately
exercisable. The options are exercisable only for shares of Common Stock
held in treasury by the Company. The Company has agreed to maintain a
sufficient number of treasury shares to allow for the exercise of the vested
and exercisable portion of these options. "Change in Control" is defined to
mean (i) a change in control which would be required to be reported to the
Securities and Exchange Commission or any securities exchange on which the
Common Stock is listed, (ii) any non-exempted person or party becoming the
beneficial owner of securities representing 20% or more of the voting power
of the Company, or (iii) when the individuals who, on August 10, 1995,
constituted the Board of Directors of the Company cease to constitute at
least a majority of the Board, provided that new directors are deemed to
have been directors on that date if elected by or on recommendation of at
least sixty percent of the directors who were directors on August 10, 1995.
(2) These options were granted under the Company's 1998 Stock Option Plan at
100% of the fair market value of the Common Stock at 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
preceding trading date. 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 ratably
over a five-year term, with the first 20% vesting on October 29, 1999.
(3) These options were granted under the Company's 1998 Stock Option Plan at
100% of the fair market value of the Common Stock at time of grant, which,
in accordance with the terms of the 1998 Stock
8
<PAGE>
Option Plan, is the mean between the highest and lowest sale price of the
Common Stock on the last preceding trading date. 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 ratably over a five year term, with the first 20%
vesting on July 1, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUES AT DECEMBER 26, 1998
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS VALUE OF UNEXERCISED
AT DEC. 26, IN-THE-MONEY OPTIONS
1998(#) AT DEC. 26, 1998($)(*)
------------------ ----------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------- --------------- ------------ ------------------ ----------------------
<S> <C> <C> <C> <C>
Harvey L. Karp........................ 3,600,000/0 64,800,000/0
William D. O'Hagan.................... 400,000 10,475,000 328,000/472,000 2,918,935/1,792,500
Earl W. Bunkers....................... 6,400 58,299 14,990/19,810 124,423/106,051
William H. Hensley.................... 6,000 46,125 25,900/29,600 244,704/107,043
Lee R. Nyman.......................... 62,320 1,577,399 29,680/49,000 268,712/122,443
</TABLE>
- ------------------------
* Represents the difference between the closing price of the Common Stock on
the last trading day prior to December 26, 1998 and the exercise price of
the options.
The Company did not award stock appreciation rights to any executive officer
during 1998, nor was any award made under any long-term incentive plan. The
Company does not have a defined benefit or actuarial plan covering the Chief
Executive Officer or 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 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
9
<PAGE>
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 September 17, 1997, the Company amended and restated William
D. O'Hagan's then existing employment agreement (as amended and restated, the
"O'Hagan Employment Agreement"). The O'Hagan Employment Agreement provides for
Mr. O'Hagan to serve as President and Chief Executive Officer of the Company for
a term beginning on the effective date of the O'Hagan Employment Agreement and
ending on December 31, 2002 (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. 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
10
<PAGE>
occurs. The Company may terminate Mr. O'Hagan's employment for Cause (as defined
in the O'Hagan Employment Agreement) upon appropriate written notice. In such
event, Mr. O'Hagan will forfeit the Company stock options granted on November 4,
1993, effective as of the date of his termination, but such options shall remain
exercisable for the 30-day period following Mr. O'Hagan's receipt of the written
notice. 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.
If Mr. O'Hagan's employment is terminated by reason of the expiration of the
Employment Period, and the Company and Mr. O'Hagan have not entered into a new
employment agreement, Mr. O'Hagan shall be entitled to receive his usual
discretionary annual bonus for calendar year 2002. In addition, beginning on
January 1, 2003, Mr. O'Hagan shall be placed on a temporary leave of absence for
six months. During that time period, Mr. O'Hagan shall (i) have the status of an
employee of the Company, and (ii) continue to receive base salary payments, but
the Company shall have the right to replace Mr. O'Hagan as Chief Executive
Officer and President. At the end of such six-month temporary leave of absence,
if the Company and Mr. O'Hagan have not entered into a new employment
arrangement, Mr. O'Hagan's employment will be automatically terminated. In such
event, Mr. O'Hagan will not be entitled to any severance payments. In the event
that any Payment (as defined in the O'Hagan Employment Agreement) would be
subject to the excise tax imposed by the "Golden Parachute" regulations, Mr.
O'Hagan would be entitled to a gross-up payment from the Company to cover such
taxes.
Under the terms of the O'Hagan Employment Agreement, the Company has agreed,
at Mr. O'Hagan's option, to loan Mr. O'Hagan up to $5,000,000 on a full recourse
basis, which loan would be evidenced by a promissory note in favor of the
Company. Any such loan shall be secured by either (a) Common Stock of the
Company having, at the time the promissory note is executed, a fair market value
of at least 125% of the face amount of the promissory note, or (b) other
marketable property acceptable to the Company having, at the time the promissory
note is executed, a fair market value of at least 150% of the face amount of the
promissory note.
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.
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 as December 22, 1997, the base compensation
payable to each of Messrs. Karp and O'Hagan was increased by four percent, which
was in line with base compensation increases granted on that date to other key
executives.
11
<PAGE>
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 1998,
Messrs. Karp and O'Hagan were awarded discretionary bonuses in the amount of
100% and 95%, respectively, of their gross wages (excluding bonuses for 1997
which were paid in 1998, 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 growth and profitability in 1998.
The Compensation Committee increased base compensation payable to other
executive officers at the end of 1998 by an average of approximately 3.5%, based
in part 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 1998 did not exceed 77% of gross wages (excluding
bonuses for 1997 which were paid in 1998, and certain other miscellaneous
items). These bonuses were paid pursuant to (i) the Company's 1998 bonus
program, which provided for bonuses to be paid based on the Company's attainment
of income targets for fiscal 1998, and (ii) discretionary bonuses in the amount
of $10,000 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. The Compensation Committee granted options to acquire an
aggregate of 38,000 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. No specific corporate or individual performance factors are used,
however. 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. On October 9, 1998, the Board of
Directors approved a special option grant of 200,000 shares of Common Stock to
Mr. O'Hagan. The options were granted at fair market value at time of grant,
have a ten year term, and vest ratably over five years, except under certain
circumstances if there is a "Change in Control." Such options were granted in
recognition of Mr. O'Hagan's contributions to the Company's success and to
provide additional motivation and alignment of financial interests.
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the
deductibility of compensation paid to each of the Chief Executive Officer and
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 1998, Mr. Karp's annual cash compensation exceeded the maximum deductible
amount.
ROBERT J. PASQUARELLI G.E. MANOLOVICI
12
<PAGE>
CORPORATE PERFORMANCE GRAPH
The following table compares total stockholder return since December 25,
1993 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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOW JONES EQUITY DOW JONES BUILDING
<S> <C> <C> <C>
Mueller Industries,
Inc. Market Index Material Index
12/25/93 100 100 100
12/31/94 89 101 81
12/31/95 173 139 111
12/28/96 214 174 131
12/27/97 315 221 157
12/26/98 238 292 183
</TABLE>
<TABLE>
<CAPTION>
12/25/93 12/31/94 12/31/95 12/28/96 12/27/97 12/26/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mueller Industries, Inc. ............................. 100 89 173 214 315 238
Dow Jones Equity Market Index......................... 100 101 139 174 221 292
Dow Jones Building Material Index..................... 100 81 111 131 157 183
</TABLE>
CERTAIN RELATIONSHIPS AND
TRANSACTIONS WITH MANAGEMENT
On June 15, 1998, pursuant to the O'Hagan Employment Agreement, Mr. O'Hagan,
the Company's President and Chief Executive Officer, borrowed $4,484,887.50 from
the Company. The loan is payable on the earlier of (i) the date the Company pays
Mr. O'Hagan any severance pursuant to a specified provision of the O'Hagan
Employment Agreement, and (ii) December 31, 2002. Interest accrues at the rate
of 6.65%. Interest is payable on March 15 of each year, but, at Mr. O'Hagan's
option, can be deferred until the maturity date of the loan to the extent such
interest payment exceeds the after-tax portion of
13
<PAGE>
Mr. O'Hagan's bonus for the preceding fiscal year. The loan, which is on a full
recourse basis, is secured by Common Stock of the Company.
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 25, 1999, 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 1999 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.
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.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 2000 ANNUAL MEETING
It is presently anticipated that the 2000 Annual Meeting will be held on or
about May 4, 2000. In order for a stockholder proposal to be included in the
Company's proxy materials for the 2000 Annual Meeting, it must be received by
the Secretary of the Company no later than November 18, 1999. It is urged that
any such proposal be sent by certified mail, return receipt requested. If the
date of the 2000 Annual Meeting is changed to a date more than 30 days earlier
or later than May 4, 2000, 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.
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 1998 all filing requirements
applicable to its officers, directors and ten percent shareholders were complied
with, except that (i) Mr. O'Hagan made a late filing with respect to the grant
of options, and (ii) Mr. Nyman made a late filing with respect to the exercise
of 7,000 shares of Common Stock.
14
<PAGE>
OTHER INFORMATION
Consolidated financial statements for the Company are included in the Annual
Report to Stockholders for the year 1998 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
1998 (EXCLUDING EXHIBITS) WILL BE FURNISHED, WITHOUT CHARGE, BY WRITING TO
WILLIAM H. HENSLEY, 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
William H. Hensley
Corporate Secretary
March 17, 1999
15
<PAGE>
MUELLER INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - MAY 6, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
/ / I plan to attend the meeting.
<TABLE>
<S> <C> <C>
1. Election of Directors. / / FOR all nominees / / WITHHOLD AUTHORITY
(except as indicated to the contrary) to vote for all nominees.
Nominees: Robert B. Hodes, Harvey L. Karp, G.E. Manolovici, William D. O'Hagan and Robert J.
Pasquarelli.
(Instruction: To withhold authority to vote for any individual nominee, write that nominee's name
in the space provided below.)
--------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
2. Approve the appointment of Ernst & Young LLP as auditors of the Company. / / FOR / / AGAINST / / ABSTAIN
</TABLE>
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" IN ITEM 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(CONTINUED ON REVERSE SIDE)
<PAGE>
MUELLER INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - MAY 6, 1999
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 May 6, 1999, 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.
Dated: _____________________, 1999
----------------------------------
Signature
----------------------------------
Signature if held jointly
Please sign exactly as your name
appears to the left. 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
authorized person.
