EXHIBIT 10.15
EXECUTION VERSION
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT effective as of November 9, 2006, by and between
MUELLER INDUSTRIES, INC., a Delaware corporation, having its principal
address at 8285 Tournament Drive, Suite 150, Memphis, Tennessee 38125 (the
"Employer") and Gregory L. Christopher, an individual residing at 3615
Classic Drive South, Memphis, Tennessee 38125 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive has been employed by the Employer in several
capacities since September 21, 1992, and currently as President, Standard
Products Division of the Employer; and
WHEREAS, the parties desire to provide for the ongoing employment of the
Executive by the Employer as set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the Executive and the Employer hereby agree as follows:
1. Term of Employment. The Employer agrees to employ the Executive and
the Executive hereby accepts such employment, as President, Standard
Products Division of the Employer, for a rolling three year term. This
Agreement shall commence as of the date hereof, and be automatically
extended so that the unexpired term on any date is always three years (the
"Employment Period"), until such time as either party gives written notice
to the other party of its election not to extend such term. The Employment
Period shall end three years from the date on which such notice is given
unless it is terminated earlier as provided in Section 4 hereof.
2. Duties and Authority. During the Employment Period the Executive
shall serve as President, Standard Products Division of the Employer. The
Executive shall devote his best efforts and full working time and attention
to services for the Employer. The Executive agrees to hold any additional
office or position with the Employer or any of the Employer's subsidiaries
without additional compensation if elected or appointed to such office or
position.
3. Compensation.
a. As compensation for the Executive's services in all capacities
during the Employment Period, the Employer shall pay the Executive the
following:
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i. a base salary at a rate of $257,500 per annum to be paid in
equal installments in accordance with normal payroll practices of the
Employer but not less frequently than monthly, provided that in each
subsequent calendar year or part thereof during which the Executive is
employed commencing in 2007, the Executive's base salary shall be adjusted
upward annually from the Executive's current base salary at a rate
commensurate with increases granted to other key executives (the "Base
Salary").
ii. a discretionary annual cash incentive bonus (the "Bonus")
for each calendar year or part thereof during which the Executive is
employed, the amount of such bonus to be consistent with the executive bonus
program which the Employer establishes for other key executives.
b. The Executive shall be entitled to reimbursement for reasonable
business and travel expenses incurred in the performance of his duties in
accordance with the Employer's normal reimbursement practices.
c. Subject to the terms of the applicable plan and/or program, the
Executive shall participate in all bonus, incentive, stock option, pension,
disability and health plans and programs and all fringe benefits maintained
by or on behalf of the Employer and in which senior executives of the
Employer are entitled to participate.
d. Subject to Section 4(c) herein, the Executive's existing stock
options with respect to the Employer's common stock shall continue to be
governed by and subject to the terms and conditions set forth in the
respective option agreements.
4. Termination of Employment.
a. The Executive's employment hereunder shall terminate upon the
Executive's death, and the Employer shall have the right to terminate the
Executive's employment upon his permanent disability. A permanent
disability is a physical or mental disability which results in the
Executive's inability to substantially perform his duties hereunder for a
period of 180 consecutive days or for a period of 200 days within any period
of 12 consecutive months, except that a permanent disability shall not
include a physical or mental disability which occurs in connection with the
Executive's employment hereunder. In the event of termination by reason of
death or permanent disability, the Employer's obligation to pay further
compensation hereunder shall cease on the date of termination, except that
the Executive (or, in the case of death, his beneficiaries, or his estate if
no beneficiary has been named) shall be entitled to receive his Base Salary
and Bonus prorated on a calendar day basis through the date of such
termination.
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b. The Employer may terminate the Executive's employment hereunder
for Cause (as defined below) upon not less than 30 days prior written notice
specifying such Cause. For purposes of this Agreement, the term "Cause"
shall mean (i) Executive's willful and continued failure to substantially
perform his duties hereunder, (ii) the engaging by the Executive in willful
misconduct which is demonstrably and materially injurious to the Employer,
or (iii) the Executive's conviction of a felony for a crime of moral
turpitude. For purposes of this Section 4(b), no act, or failure to act on
the Executive's part shall be considered "willful" unless done, or omitted
to be done, by him not in good faith and without reasonable belief that his
action or omission was in the best interest of the Employer. The Executive
shall not be terminated for Cause in the case of actions or omissions
described in clauses (i) or (ii) of this Section 4(b) unless the Employer
shall have given the Executive an opportunity to cure any such actions or
omissions during the 30-day period after the Executive's receipt of written
notice required under this Section 4(b).
c. The Executive's employment hereunder may be terminated by the
Employer without Cause upon not less than 90 days prior written notice or by
the Executive for "Good Reason" (as defined below) upon not less than
10 days prior written notice. In such event, (i) the Executive shall
continue to receive his then current Base Salary otherwise payable pursuant
to Section 3 hereof 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 3 calendar years
immediately preceding the written notice, such bonus to be paid in the
normal course at the time other executive bonuses are normally paid, and
(ii) all of the outstanding unvested Employer stock options then held by
Executive shall immediately vest and become exercisable upon such notice.
In addition, at the Employer's expense, the Executive shall continue to
participate in all of the Employer's health plans and programs until he
reaches age 65 as if he remained employed until such time, to the same
extent and upon the same terms and conditions as the Executive participated
immediately prior to the termination, provided that the Executive's
continued participation is permissible or otherwise practicable under the
general terms and provisions of such benefit plan. For purposes of this
Agreement, "Good Reason" shall mean (A) a failure by the Employer to comply
with any material provision of this Agreement which has not been cured
within 10 days after notice of such noncompliance has been given by
Executive to the Employer, (B) other than as provided in Section 2 herein,
the assignment to the Executive by the Employer of duties inconsistent with
the Executive's position, authority, duties, responsibilities or status with
the Employer as in effect immediately after the date of execution of this
Agreement, including, but not limited to, any reduction whatsoever in such
position, authority, duties, responsibilities or status, or a change in the
Executive's titles or offices, as then in effect, or any removal of the
Executive from, or any failure to re-elect the Executive to, any of such
positions, except in connection with the termination of his employment on
account of his death, disability, or for Cause, (C) the requirement of
excessive travel on the part of the Executive, (D) a relocation by the
Employer of the Executive's principal place of employment to any location
outside a thirty mile radius from the Executive's current principal place of
employment, (E) the failure of the Employer to have any successor to the
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Employer assume the Agreement, (F) the delivery to the Executive of notice
of the Employer's decision to terminate the Executive's employment without
Cause, or (G) any other material change in the conditions of employment if
the Executive determines in good faith that his customary duties can no
longer be performed because of the change.
d. The Executive shall also have the right to resign voluntarily
without Good Reason from employment during the Employment Period by written
notice to the Employer at least 60 days prior to the effective date of the
resignation. Upon such resignation without Good Reason, the Executive shall
be entitled to receive any accrued but unpaid Base Salary. The Employer
shall have discretion whether or not to award the Executive a Bonus for any
calendar year in which he resigns without Good Reason.
e. If the Executive's employment shall terminate by expiration of
the Employment Period or is terminated by the Employer for Cause pursuant to
Section 4(b), or if the Executive shall voluntarily resign for any reason
other than Good Reason, the Executive's right to receive the Base Salary
(except any accrued and unpaid salary and except as set forth in
Section 4(f) below), the Bonus, and any other compensation and benefits to
which he would otherwise be entitled under this Agreement shall be forfeited
as of the date of termination of employment.
f. Except as provided in Section 4(b) hereof, or any relevant
option agreement, the Executive's death or termination of employment shall
not affect his rights under any Employer stock options.
g. Notwithstanding anything to the contrary herein, the Executive
may also terminate his employment upon a "Change in Control" (as hereinafter
defined). If the Executive terminates his employment upon a "Change in
Control" then:
i. the Employer shall pay the Executive as severance pay in a
lump sum within thirty days following such termination, the following
amounts, which shall not be discounted to take into account present value:
(1) the Executive's Base Salary through the date of
termination at the rate in effect immediately prior to the termination date;
(2) an amount equal to the product of (x) the Executive's
annual Base Salary at the rate in effect immediately prior to the date of
termination, multiplied by (z) the number of years (including partial years)
then remaining in the Employment Period; and
(3) an amount equal to the product of (x) the average
annual Bonus for the three calendar years immediately preceding the date of
termination, multiplied by (z) the number of years (including partial years
as full years) then remaining in the Employment Period;
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ii. the Employer shall, at the Employer's expense, allow the
Executive to continue to participate, until he reaches age 65, in all the
Employer's benefits, to the same extent and upon the same terms and
conditions as the Executive participated immediately prior to the
termination, provided that the Executive's continued participation is
permissible or otherwise practicable under the general terms and provisions
of such benefit plan; and
iii. on the later of (x) the day the Executive notifies the
Employer he is terminating upon a Change in Control, and (y) ten days prior
to the date the Executive actually terminates his employment, all remaining
unvested options previously granted the Executive shall become immediately
exercisable on that date.
"Change in Control," as used in Section 4(g) of this Agreement, is
defined to mean the occurrence of any of the following events:
(i). a change in control of a nature that would be required to
be reported in response to any form or report to the Securities and Exchange
Commission or any stock exchange on which the Employer's shares are listed
which requires the reporting of a change in control of the Employer;
(ii). When any "person," as such term is used in
Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), is or becomes the "beneficial owner," as defined in
Rule 13d-3 under the Exchange Act, directly or indirectly, of 20% of the
voting power of the Employer's then outstanding securities, other than
(x) beneficial owners of more than 5% of the Employer's Common Stock on
August 10, 1995, (y) "Exempted Persons" as defined in Section 1(a) of the
Employer's Rights Agreement, dated as of November 10, 1994, (z) mutual
funds, banks, investment advisors registered under the Investment Advisers
Act of 1940, as amended, and other institutional investors, which either
(i) became 20% beneficial owners as a result of an acquisition of Common
Stock by the Employer which by reducing the number of such shares then
outstanding, increases the proportionate number of shares beneficially owned
by such person to 20% or more of the outstanding Common Stock except that if
such person, after such shares purchased by the Employer, becomes the
beneficial owner of any additional shares of Common Stock, then this
exception would not apply, or (ii) were exempted from the operation of this
provision with the prior approval of 80% of the Board of Directors of the
Employer; or
(iii). When the individuals who, on the effective date of this
Agreement, constitute the Board of Directors of the Employer cease for any
reason to constitute at least a majority thereof, provided, however, that a
director who was not a director on the effective date of this Agreement
shall be deemed to have been a director at that date if such director was
elected by, or on the recommendation of or with the approval of, at least
sixty percent of the directors who were directors on the effective date of
this Agreement (either directly or by prior operation of this provision);
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provided, however, that an occurrence shall cease to be a "Change in
Control" for purposes of this Section 4(g) six months after the occurrence
of an event that would otherwise constitute a "Change in Control," except
that, for purposes of computing this six-month period, the six-month time
period shall not commence until, as to clause (i), the date on which a
change in control form or report is actually filed, and as to clause (ii),
the date on which a beneficial owner discloses in a public filing that it
has crossed the 20% threshold.
5. Notices. Any notice or other communication hereunder shall be made
in writing by hand delivery and shall be deemed to have been delivered and
received when delivered by hand, if personally delivered, as follows:
(a) if to the Executive at the address shown at the beginning of this
Agreement or to such other person(s) or address(es) as the Executive shall
have furnished to the Employer in writing, and (b) if to the Employer at the
address shown at the beginning of this Agreement, attention of the Board of
Directors, with copies to the Employer at the same address, Attention:
General Counsel, and to Willkie Farr & Gallagher, LLP, 787 Seventh Avenue,
New York, New York 10019, Attention: Serge Benchetrit, Esq., or to such
other person(s) or address(es) as such persons or the Employer shall have
furnished to the Executive in writing.
6. Certain Additional Payments by the Employer.
a. Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment, distribution, waiver of
Employer rights, acceleration of vesting of any stock options or restricted
stock, or any other payment or benefit in the nature of compensation to or
for the benefit of the Executive, alone or in combination (whether such
payment, distribution, waiver, acceleration or other benefit is made
pursuant to the terms of this Agreement or any other agreement, plan or
arrangement providing payments or benefits in the nature of compensation to
or for the benefit of the Executive, but determined without regard to any
additional payments required under this Section 6 (a "Payment")) would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") (or any successor provision) or any
interest or penalties are incurred by the Executive with respect to such
excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
with respect to the Gross-Up Payment (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any
income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
b. Subject to the provisions of Section 6(c) , all determinations
required to be made under this Section 6, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made
by the nationally recognized accounting firm then auditing the accounts of
the Employer (the "Accounting Firm") which shall provide detailed supporting
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calculations both to the Employer and the Executive within 15 business days
of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Employer. In the event that the
Accounting Firm is unwilling or unable to perform its obligations pursuant
to this Section 6, the Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to hereunder as the Accounting Firm).
All fees and expenses of the Accounting Firm shall be borne solely by the
Employer. Any Gross-Up Payment, determined pursuant to this Section 6,
shall be paid by the Employer to the Executive within 5 days of the receipt
of the Accounting Firm's determination. Any determination by the Accounting
Firm shall be binding upon the Employer and Executive. The parties hereto
acknowledge that, as a result of the potential uncertainty in the
application of Section 4999 of the Code (or any successor provision) at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that the Employer will not have made Gross-Up Payments which should
have been made consistent with the calculations required to be made
hereunder (an "Underpayment"). In the event that the Employer exhausts its
remedies pursuant to Section 6(c) and the Executive thereafter is required
to make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment shall
be promptly paid by the Employer to or for the benefit of the Executive.
c. The Executive shall notify the Employer in writing of any claim
by the Internal Revenue Service that, if successful, would require the
payment by the Employer of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than 20 business days after the
Executive is informed in writing of such claim and shall apprise the
Employer of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which he gives such
notice to the Employer (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Employer
notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
i. give the Employer any information reasonably requested by
the Employer relating to such claim,
ii. take such action in connection with contesting such claim
as the Employer shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Employer,
iii. cooperate with the Employer in good faith in order
effectively to contest such claim, and
iv. permit the Employer to participate in any proceedings
relating to such claim;
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provided, however, that the Employer shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limiting the
foregoing provisions of this Section 6(c), the Employer shall control all
proceedings taken in connection with such contest and, at its sole option,
may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim
and may, at its sole option, either direct the Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one
or more appellate courts, as the Employer shall determine; provided,
however, that if the Employer directs the Executive to pay such claim and
sue for a refund, the Employer shall advance the amount of such payment to
the Executive, on an interest-free basis, and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Further, the Employer's control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
d. If, after the receipt by the Executive of an amount advanced by
the Employer pursuant to Section 6(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject
to the Employer's complying with the requirements of Section 6(c)) promptly
pay to the Employer the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Employer pursuant to
Section 6(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Employer does not
notify the Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination, then
such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
7. Non-Competition and Non-Solicitation. During the Employment Period
of the Executive's employment under this Agreement and during the eighteen
month period following the termination of his employment with Employer for
any reason, the Executive shall not, directly or indirectly (i) compete with
the Employer or engage or participate, directly or indirectly in the
business or businesses which are engaged in by the Employer in any
geographical area where such business or businesses are engaged in or
proposed to be engaged in by the Employer following the Executive's
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termination of employment, or (ii) make, offer, solicit or induce to enter
into, any written or oral arrangement, agreement or understanding regarding
employment or retention as a consultant with any person who was, at any time
during the 24 months preceding the termination of the Executive's employment
under this Agreement, a full-time employee of Employer. Nothing herein,
however, shall prohibit the Executive from acquiring or holding any issue of
stock or securities of any company that has securities listed on a national
securities exchange or quoted in the daily listing of over-the-counter
market securities; provided that at any one time he and members of his
immediate family do not own more than 5% of any voting securities of any
such company; and provided, further, that such investments do not require
him to participate in the operations of such company. In the event that it
shall be determined that any provision of this paragraph is invalid as
constituting an unreasonable restraint, the restraint in such provision
shall be reduced to the extent necessary to cure such invalidity, and the
remaining provisions shall retain full force and effect.
8. Confidentiality; Property of Employer.
a. The Executive shall keep secret and retain in strictest
confidence and shall not directly or indirectly divulge or communicate to
any person (other than as required and authorized in the course of
performing his duties hereunder or with the prior written consent of the
Employer or as required by law) nor shall he make use of (other than in the
ordinary course of his employment for the benefit of the Employer), any
trade secrets, designs, design improvements, business information,
consultant contacts, pricing policies, marketing plans or strategies,
product development techniques or plans, business acquisition plans, new
personnel acquisitions plans, methods of manufacture, inventions and
research projects and other business affairs of the Employer and its
subsidiaries, or any other confidential information of the Employer or any
of its subsidiaries or any of their respective clients or customers, to the
extent any of the foregoing is confidential, except as may be required by
court order. This restriction shall continue to apply after the termination
of the Executive's employment. The Executive shall also use his best
efforts at the expense of the Employer to prevent the publication or
disclosure of any of the trade secrets or confidential information of the
Employer or any of its subsidiaries whether relating to its trade dealings,
financial affairs or otherwise which he may have received or obtained or may
hereafter receive or obtain while in the service of the Employer or any of
its subsidiaries.
b. All memoranda, notes, lists, records and other documents (and
all copies thereof), including computer-related materials, made or compiled
by the Executive or made available to the Executive concerning the
businesses of the Employer or any of its subsidiaries shall be the
Employer's property and shall be delivered to the Employer promptly upon the
termination of the Executive's employment with the Employer or any of its
subsidiaries or at any other time on request.
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9. Assignability. This Agreement shall not be assignable by the
Employer except to a majority-owned subsidiary or parent entity of the
Employer or any successor to the Employer and shall be binding upon and
inure to the benefit of the Employer and its successors and assigns. This
Agreement shall not be assignable by the Executive, but it shall be binding
upon, and to the extent provided in Section 4(a) shall inure to the benefit
of, the Executive's heirs, executors, administrators and legal
representatives.
10. Entire Agreement. This Agreement supersedes any and all prior
understandings between the Executive and the Employer as to the subject
matter hereof.
11. Waivers, Amendments and Further Agreements. Neither this Agreement
nor any term or condition hereof, including without limitation the terms and
conditions of this Section 11, may be waived, modified or amended in whole
or in part as against the Employer or the Executive except by written
instrument executed by each of the parties expressly stating that it is
intended to operate as a waiver, modification or amendment of this Agreement
or the applicable term or condition hereof. Each of the parties hereto
agrees to execute all such further instruments and documents and to take all
such further actions as the other party may reasonably require in order to
effectuate the terms and purposes of this Agreement.
12. Severability. In case one or more of the provisions contained in
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.
13. No Conflicting Obligations. The Executive represents and warrants
to the Employer that the Executive is not now under any obligation to anyone
other than the Employer and other entities of which he is a non-executive
director and has no interest which is inconsistent or in conflict with this
Agreement, or would prevent, limit or impair, in any way, the Executive's
performance of any of the covenants or duties hereinabove set forth.
However, subject to Section 2 hereof, nothing herein shall be deemed to
limit the Executive's participation in, or pursuit of, non-conflicting
business interests.
14. Survival. Except as otherwise provided herein, the covenants,
agreements, representations and warranties contained in or made pursuant to
this Agreement shall survive the Executive's termination of employment,
irrespective of any investigation made by or on behalf of any party.
15. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Tennessee, without
regard to the principles of conflicts of law thereof.
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16. Arbitration; Legal Fees. Any dispute, controversy or claim arising
out of or relating to this Agreement or the breach thereof shall be finally
settled by arbitration by a single arbitrator in accordance with the rules
then in effect of the American Arbitration Association in an arbitration in
Memphis, Tennessee. Judgment upon an award rendered by the arbitrator may
be entered in any court of competent jurisdiction. To the extent that the
Executive prosecutes or defends, whether by arbitration or through a
judicial proceeding, a dispute, controversy or claim relating to this
Agreement which results in a judgment, award or settlement in Executive's
favor in any material respect, the Employer shall reimburse the Executive
for all reasonable fees and costs (including legal fees) incurred by the
Executive in such successful prosecution or defense.
17. Headings. The headings in this Agreement are solely for convenience
of reference and shall be given no effect in the construction or
interpretation of this Agreement.
18. Counterparts. This Agreement may be executed in counterparts each
of which shall be deemed an original but which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Agreement effective as of the date first above written.
MUELLER INDUSTRIES, INC.
By:/s/ Harvey L. Karp
Harvey L. Karp, Chairman
By:/s/ William D. O'Hagan
William D. O'Hagan
Chief Executive Officer
/s/ Gregory L. Christopher
Gregory L. Christopher
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