Exhibit 10.20
MUELLER INDUSTRIES, INC.
2002 STOCK OPTION PLAN
(Amended and Restated as of February 16, 2006)
1. Purposes.
The Mueller Industries, Inc. 2002 Stock Option Plan (the "Plan") is
intended to attract and retain the best available personnel for positions of
substantial responsibility with Mueller Industries, Inc., a Delaware
corporation (the "Company"), and its subsidiary corporations, and to provide
additional incentive to such persons to exert their maximum efforts toward
the success of the Company and its subsidiary corporations. The above aims
will be effectuated through the granting of certain options ("Options") to
purchase shares of the Company's common stock, par value $.01 per share (the
"Common Stock"). Under the Plan, the Company may grant "incentive stock
options" ("ISOs") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or Options which are not intended to
be ISOs ("Non-Qualified Options").
2. Administration of the Plan.
The Plan shall be administered by the Board of Directors of the Company
(the "Board of Directors"), or a committee consisting of at least two
persons, appointed by the Board of Directors, each of whom shall be a "non-
employee director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934 (the "Exchange Act") (the entity administering the Plan
hereinafter called the "Committee"). The Committee may exercise the power
and authority vested in the Board of Directors under the Plan. Within the
limits of the express provisions of the Plan, the Committee shall have the
authority, in its discretion, to take the following actions under the Plan:
(a) to determine the individuals to whom, and the time or times at
which, Options shall be granted, the number of shares of Common Stock to be
subject to each Option and whether such Options shall be ISOs or Non-
Qualified Options;
(b) to interpret the Plan;
(c) to prescribe, amend and rescind rules and regulations relating
to the Plan;
(d) to determine the terms and provisions of the respective stock
option agreements granting Options, including the date or dates upon which
Options shall become exercisable, which terms need not be identical;
(e) to accelerate the vesting of any outstanding Options; and
(f) to make all other determinations and take all other actions
necessary or advisable for the administration of the Plan.
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In making such determinations, the Committee may take into account the
nature of the services rendered by such individuals, their present and
potential contributions to the Company's success, and such other factors as
the Committee, in its discretion, shall deem relevant. An individual to whom
an Option has been granted under the Plan is referred to herein as an
"Optionee". The Committee's determinations on the matters referred to in
this Section 2 shall be conclusive.
3. Shares Subject to the Plan.
The total number of shares of Common Stock which shall be subject to
Options granted under the Plan shall not exceed 1,750,000, subject to
adjustment as provided in Section 7 hereof. The Company shall at all times
while the Plan is in force reserve such number of shares of Common Stock as
will be sufficient to satisfy the requirements of outstanding Options. The
shares of Common Stock to be issued upon exercise of Options shall be
authorized and unissued or reacquired shares of Common Stock.
The Committee may adopt reasonable counting procedures to ensure
appropriate counting with respect to the number of shares of Common Stock
available under the Plan at any time or subject to any particular Option. To
the extent that an Option expires or is canceled, forfeited, settled in cash
or otherwise terminated or concluded without a delivery to the Optionee of
the full number of shares to which the Option related, the undelivered
shares will again be available for grant in connection with new Options
under the Plan. Shares withheld in payment of the exercise price or taxes
relating to an Option and shares equal to the number surrendered in payment
of any exercise price or taxes relating to an Option shall be deemed to
constitute shares not delivered to the Optionee and shall be deemed to again
be available for grant in connection with new Options under the Plan;
provided, however, that, where shares are withheld or surrendered after the
termination of the Plan, or any other transaction occurs that would result
in shares becoming available under this Section 3, such shares shall not
become available if and to the extent that it would constitute a material
revision of the Plan subject to shareholder approval under then applicable
rules of the principle stock exchange on which the shares are then listed or
designated for trading.
4. Eligibility.
(a) Options may be granted under the Plan only to (i) employees of
the Company and (ii) employees of any "subsidiary corporation" (a
"Subsidiary") of the Company within the meaning of Section 424(f) of the
Code; provided, however, that no person may be granted Options under the
Plan with respect to more than 100,000 shares of Common Stock in any one
year. The term "Company," when used in the context of an Optionee's
employment, shall be deemed to include Subsidiaries of the Company.
(b) Nothing contained in the Plan shall be construed to limit the
right of the Company to grant stock options otherwise than under the Plan
for proper corporate purposes.
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5. Terms of Options.
The terms of each Option granted under the Plan shall be determined by
the Committee consistent with the provisions of the Plan, including the
following:
(a) The purchase price of the shares of Common Stock subject to
each Option shall be fixed by the Committee, in its discretion, at the time
such Option is granted; provided, however, that in no event shall such
purchase price be less than the Fair Market Value (as defined in paragraph
(h) of this Section 5) of the shares of Common Stock as of the date such
Option is granted.
(b) The dates on which each Option (or portion thereof) shall be
exercisable shall be fixed by the Committee, in its discretion, at the time
such Option is granted.
(c) The expiration of each Option shall be fixed by the Committee,
in its discretion, at the time such Option is granted. No Option shall be
exercisable after the expiration of ten (10) years from the date of its
grant and each Option shall be subject to earlier termination as determined
by the Committee, in its discretion, at the time such Option is granted.
(d) Unless otherwise determined by the Committee and set forth in
the applicable Option agreement (or other agreement) between the Company and
an Optionee, the following provisions relating to an Optionee's termination
of employment with the Company shall apply to all Options granted hereunder
after February 16, 2006. In the event an Optionee's employment with the
Company is terminated for any reason other than death, disability (within
the meaning of Section 22(e)(3) of the Code) or by the Company without cause
(as defined in the applicable Option agreement), each Option shall
immediately expire as of the date of such termination, whether or not
exercisable in whole or in part on such date. In the event an Optionee's
employment with the Company is terminated by reason of the Optionee's death
or disability (within the meaning of Section 22(e)(3) of the Code), the
unexercisable portion of each Option held by such Optionee as of the date of
such termination shall immediately expire and the portion of each Option
held by such Optionee that is exercisable as of the date of such termination
shall remain exercisable for a period of twelve months following such
termination. In the event an Optionee's employment with the Company is
terminated by the Company without cause (as defined in the applicable Option
agreement), the unexercisable portion of each Option held by such Optionee
as of the date of such termination shall immediately expire and the portion
of each Option held by such Optionee that is exercisable as of the date of
such termination shall remain exercisable for a period of forty-five (45)
days following such termination. However, in no event shall any post-
termination exercise period for any Option extend beyond the original
expiration date set by the Committee for such Option.
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(e) Options shall be exercised by the delivery to the Company at
its principal office or at such other address as may be established by the
Committee (Attention: General Counsel) of written notice of the number of
shares of Common Stock with respect to which the Option is being exercised
accompanied by payment in full of the purchase price for such shares. Unless
otherwise determined by the Committee, payment for such shares may be made
(i) in cash, (ii) by certified check, bank cashier's check or personal check
acceptable to the Company, payable to the order of the Company in the amount
of such purchase price, (iii) by delivery to the Company (by attestation or
otherwise) of shares of Common Stock having a Fair Market Value equal to
such purchase price, (iv) by irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds necessary to pay
such purchase price and to sell the shares of Common Stock to be issued upon
exercise of the Option and deliver the cash proceeds less commissions and
brokerage fees to the Optionee or to deliver the remaining shares of Common
Stock to the Optionee, (v) through a net exercise of the Options whereby the
Optionee instructs the Company to withhold that number of shares of Common
Stock having a Fair Market Value equal to the aggregate exercise price for
the portion of the Options being exercised and deliver to the Optionee the
remainder of the shares subject to exercise, or (vi) by any combination of
the methods of payment described in (i) through (v) above.
(f) An Optionee shall not have any of the rights of a holder of the
Common Stock with respect to the shares of Common Stock subject to an Option
until such shares are issued to such Optionee upon the exercise of such
Option.
(g) Generally, an Option shall not be transferable, except by will
or the laws of descent and distribution, and may be exercised, during the
lifetime of an Optionee, only by the Optionee; provided, however, that the
Committee may, in its sole discretion, at the time of grant or at any time
thereafter, allow for the transfer of Options that are not ISOs to other
persons or entities, subject to such conditions or limitations as it may
establish. No Option granted under the Plan shall be subject to execution,
attachment or other process.
(h) For purposes of the Plan, as of any date when the Common Stock
is or listed on one or more national securities exchanges (including the New
York Stock Exchange) or quoted on the NASDAQ Stock Market, the "Fair Market
Value" of the Common Stock as of any date shall be deemed to be the mean
between the highest and lowest sale prices of the Common Stock reported on
the principal national securities exchange on which the Common Stock is
listed and traded or the NASDAQ Stock Market on the immediately preceding
date, or, if there is no such sale on that date, then on the last preceding
date on which such a sale was reported. If the Common Stock is not listed on
an exchange or quoted on the NASDAQ Stock Market, or representative quotes
are not otherwise available, the "Fair Market Value" of the Common Stock
shall mean the amount determined by the Committee to be the fair market
value based upon a good faith attempt to value the Common Stock accurately.
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6. Special Provisions Applicable to ISOs.
The following special provisions shall be applicable to ISOs granted
under the Plan.
(a) No ISOs shall be granted under the Plan after ten (10) years
from the earlier of (i) the date the Plan is adopted or (ii) the date the
Plan is approved by the holders of the Common Stock.
(b) ISOs may not be granted to a person who owns stock possessing
more than 10% of the total combined voting power of all classes of stock of
the Company, any of its Subsidiaries, or any "parent corporation" (a
"Parent") of the Company, within the meaning of Section 424(e) of the Code,
unless (i) the exercise price is no less than 110% of the Fair Market Value
of the underlying Common Stock on the date of grant and (ii) the ISO is not
exercisable after the expiration of five years from the date of grant.
(c) If the aggregate Fair Market Value of the Common Stock with
respect to which ISOs are exercisable for the first time by any Optionee
during a calendar year (under all plans of the Company and its Parents and
Subsidiaries) exceeds $100,000, such ISOs shall be treated, to the extent of
such excess, as Non-Qualified Options. For purposes of the preceding
sentence, the Fair Market Value of the Common Stock shall be determined at
the time the ISOs covering such shares were granted.
7. Adjustment upon Changes in Capitalization.
(a) In the event that (i) the outstanding shares of Common Stock or
capital structure of the Company are changed by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split,
reverse stock split, combination or exchange of shares and the like, or
dividends payable in shares of Common Stock, or (ii) an extraordinary
dividend is declared by the Company on the Common Stock, whether payable in
the form of cash, stock or any other form of consideration (including
debentures), the Committee shall make such appropriate adjustment to the
aggregate number of shares of Common Stock available under the Plan, the
number of shares of Common Stock subject to Options that may be granted to
any person in any one year, and the number of shares of Common Stock and
price per share of Common Stock subject to outstanding Options, as
determined by the Committee, in its sole discretion, to be appropriate. If
the Company shall be reorganized, consolidated or merged with another
corporation, or if all or substantially all of the assets of the Company
shall be sold or exchanged, an Optionee shall at the time of such corporate
event be entitled to receive upon the exercise of his Option the same number
and kind of shares of stock or the same amount of property, cash or
securities as he would have been entitled to receive upon the occurrence of
any such corporate event as if he had been, immediately prior to such event,
the holder of the number of shares of Common Stock covered by his Option;
provided, however, that if any such event occurs or if the Company enters
into an agreement to undertake any such event, the Committee may, in its
sole discretion, cancel any outstanding Options and pay to such Optionees,
in cash or stock, or any combination thereof, the value of any such vested
Options as determined by the Committee based on the price per share of
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Common Stock received or to be received by the stockholders of the Company
upon such event. The immediately prior sentence is not intended to provide
for any automatic acceleration of vesting of any Option, which shall be left
to the sole discretion of the Committee.
(b) Any adjustment under this Section 7 in the number of shares of
Common Stock subject to Options shall apply proportionately to only the
unexercised portion of any Option granted hereunder. If fractions of a share
would result from any such adjustment, the adjustment shall be revised to
the next lower whole number of shares.
8. Further Conditions of Exercise.
(a) The obligation of the Company to issue shares of Common Stock
pursuant to the exercise of Options shall be subject to all applicable laws,
rules and regulations, and to such approvals by governmental agencies as may
be required. Notwithstanding any of the provisions hereof, the Optionee may
not exercise the Options, and the Company will be under no obligation to
offer to sell or to sell and shall be prohibited from offering to sell or
selling any shares of Common Stock pursuant to the exercise of any Option,
unless such exercise, offer or sale shall be properly registered pursuant to
the Securities Act of 1933 (as now in effect or as hereafter amended) (the
"Securities Act") with the Securities and Exchange Commission or unless the
Company has received an opinion of counsel, satisfactory to the Company,
that such shares may be offered or sold without such registration pursuant
to an available exemption therefrom and the terms and conditions of such
exemption have been fully complied with. Any determination in this
connection by the Committee shall be final, binding and conclusive. The
Company shall use reasonable efforts, when it deems appropriate, to register
the offer or sale of shares of Common Stock underlying any Option pursuant
to the Securities Act and to take any other affirmative action in order to
cause the exercise of the Options or the issuance or transfer of shares
pursuant thereto to comply with any law or regulation of any governmental
authority. If the shares of Common Stock offered for sale or sold under any
Option are offered or sold pursuant to an exemption from registration under
the Securities Act, the Company may restrict the transfer of such shares and
may legend the Common Stock certificates representing such shares in such
manner as it deems advisable to ensure the availability of any such
exemption.
(b) The Company is relieved from any liability for the non-issuance
or non-transfer or any delay in issuance or transfer of any shares of Common
Stock subject to Options which results from the inability of the Company to
obtain or in any delay in obtaining from any regulatory body having
jurisdiction all requisite authority to issue or transfer shares of Common
Stock either upon exercise of the Options or shares of Common Stock issued
as a result of such exercise if counsel for the Company deems such authority
necessary for lawful issuance or transfer of any such shares.
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9. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan)
shall terminate ten (10) years from the date of its adoption by the Board of
Directors, and no Option shall be granted after termination of the Plan.
(b) The Plan may at any time be terminated or, from time to time,
be modified or amended by the Board of Directors; provided, however, that
the Board of Directors shall not, without approval by the affirmative vote
of the holders of a majority of the shares of the capital stock of the
Company present in person or by proxy and entitled to vote at the meeting,
amend the Plan to (i) increase (except as provided by Section 7) the maximum
number of shares of Common Stock as to which Options may be granted under
the Plan, (ii) increase the maximum number of shares of Common Stock as to
which Options may be granted to any person in any single year, (iii)
decrease the purchase price for Options below Fair Market Value of the
Common Stock at the time of grant, or (iv) change the class of persons
eligible to receive Options under the Plan.
(c) No termination, modification or amendment of the Plan may
adversely affect the rights conferred by any Options without the consent of
the affected Optionee.
10. Effectiveness of the Plan.
The Plan shall become effective upon adoption by the Board of Directors,
subject to the approval by the shareholders of the Company. Options may be
granted under the Plan prior to receipt of such approval, provided that, in
the event such approval is not obtained, the Plan and all Options granted
under the Plan shall be null and void and of no force and effect.
11. Not a Contract of Employment.
Nothing contained in the Plan or in any stock option agreement executed
pursuant hereto shall be deemed to confer upon any Optionee any right to
remain in the employ of the Company or of any Subsidiary.
12. Governing Law.
The Plan shall be governed by the laws of the State of Delaware without
reference to principles of conflict of laws thereof.
13. Withholding.
As a condition to the exercise of any Option, the Committee may require
that an Optionee satisfy, through withholding from other compensation or
otherwise, the full amount of all federal, state and local income and other
taxes required to be withheld in connection with such exercise. The
Committee may, in its sole discretion, allow for the retention by the
Company of shares of Common Stock otherwise to be delivered to the Optionee
upon the exercise of any Option in order to satisfy this withholding
requirement.
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14. Section 409A. The Plan and all Options granted hereunder are intended
to be exempt from the provisions of Section 409A of the Code. To the extent
that any Options, payments or benefits provided hereunder are considered
deferred compensation subject to Section 409A, the Company intends for this
Plan and all Options to comply with the standards for nonqualified deferred
compensation established by 409A (the "409A Standards"). Notwithstanding
anything herein to the contrary, to the extent that any terms of the Plan or
any Option would subject Optionees to gross income inclusion, interest or an
additional tax pursuant to Section 409A, those terms are to that extent
superseded by the 409A Standards. The Company reserves the right to amend
Options granted hereunder to cause such Options to comply with or be exempt
from Section 409A.
As adopted by the Board of Directors of Mueller
Industries, Inc. as of February 12, 2002 and
as amended and restated as of February 16, 2006.
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