Exhibit 10.3
MUELLER INDUSTRIES, INC.
2002 STOCK OPTION PLAN
1. Purposes.
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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.
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The Plan shall be administered by the Board of Directors of the Company
(the "Board of Directors"), or a committee consisting of at least two persons,
appointed by the Board of Directors, each of whom shall be a "non-employee
director" within the meaning of Rule 16b 3 under the Securities Exchange Act of
1934 (the "Exchange Act") (the entity administering the Plan hereinafter called
the "Committee"). The Committee may exercise the power and authority vested in
the Board of Directors under the Plan. Within the limits of the express
provisions of the Plan, the Committee shall have the authority, in its
discretion, to take the following actions under the Plan:
(a) to determine the individuals to whom, and the time or times at which,
Options shall be granted, the number of shares of Common Stock to be subject to
each Option and whether such Options shall be ISOs or Non-Qualified Options;
(b) to interpret the Plan;
(c) to prescribe, amend and rescind rules and regulations relating to the
Plan;
(d) to determine the terms and provisions of the respective stock option
agreements granting Options, including the date or dates upon which Options
shall become exercisable, which terms need not be identical;
(e) to accelerate the vesting of any outstanding Options; and
(f) to make all other determinations and take all other actions necessary
or advisable for the administration of the Plan.
In making such determinations, the Committee may take into account the
nature of the services rendered by such individuals, their present and potential
contributions to the
Company's success, and such other factors as the Committee, in its discretion,
shall deem relevant. An individual to whom an Option has been granted under the
Plan is referred to herein as an "Optionee". The Committee's determinations on
the matters referred to in this Section 2 shall be conclusive.
3. Shares Subject to the Plan.
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The total number of shares of Common Stock which shall be subject to
Options granted under the Plan shall not exceed 750,000, subject to adjustment
as provided in Section 7 hereof. The Company shall at all times while the Plan
is in force reserve such number of shares of Common Stock as will be sufficient
to satisfy the requirements of outstanding Options. The shares of Common Stock
to be issued upon exercise of Options shall be authorized and unissued or
reacquired shares of Common Stock. The shares of Common Stock relating to the
unexercised portion of any expired, terminated or cancelled Option shall
thereafter be available for the grant of Options under the Plan.
4. Eligibility.
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(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.
1. Terms of Options.
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The terms of each Option granted under the Plan shall be determined by the
Committee consistent with the provisions of the Plan, including the following:
(a) The purchase price of the shares of Common Stock subject to each Option
shall be fixed by the Committee, in its discretion, at the time such Option is
granted; provided, however, that in no event shall such purchase price be less
than the Fair Market Value (as defined in paragraph (g) of this Section 5) of
the shares of Common Stock as of the date such Option is granted.
(b) The dates on which each Option (or portion thereof) shall be
exercisable shall be fixed by the Committee, in its discretion, at the time such
Option is granted.
(c) The expiration of each Option shall be fixed by the Committee, in its
discretion, at the time such Option is granted. No Option shall be exercisable
after the expiration of ten (10) years from the date of its grant and each
Option shall be subject to earlier termination as determined by the Committee,
in its discretion, at the time such Option is granted.
(d) Options shall be exercised by the delivery to the Company at its
principal office or at such other address as may be established by the Committee
(Attention: Corporate Treasurer) of written notice of the number of shares of
Common Stock with respect to which the Option is being exercised accompanied by
payment in full of the purchase price of such shares. Unless otherwise
determined by the Committee, payment for such shares may be made (i) in cash,
(ii) by certified check or bank cashier's check payable to the order of the
Company in the amount of such purchase price, (iii) by delivery to the Company
of shares of Common Stock (by attestation or otherwise) (held by the Optionee
for at least six months prior to such delivery) having a Fair Market Value equal
to such purchase price, (iv) by irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds necessary to pay
such purchase price and to sell the shares of Common Stock to be issued upon
exercise of the Option and deliver the cash proceeds less commissions and
brokerage fees to the Optionee or to deliver the remaining shares of Common
Stock to the Optionee, or (v) by any combination of the methods of payment
described in (i) through (iv) above.
(e) An Optionee shall not have any of the rights of a holder of the Common
Stock with respect to the shares of Common Stock subject to an Option until such
shares are issued to such Optionee upon the exercise of such Option.
(f) Generally, an Option shall not be transferable, except by will or the
laws of descent and distribution, and may be exercised, during the lifetime of
an Optionee, only by the Optionee; provided, however, that the Committee may, in
its sole discretion, at the time of grant or at any time thereafter, allow for
the transfer of Options that are not ISOs to other persons or entities, subject
to such conditions or limitations as it may establish. No Option granted under
the Plan shall be subject to execution, attachment or other process.
(g) For purposes of the Plan, as of any date when the Common Stock is
listed on one or more national securities exchanges (including the New York
Stock Exchange) or quoted on the NASDAQ Stock Market, the "Fair Market Value" of
the Common Stock as of any date shall be deemed to be the mean between the
highest and lowest sale prices of the Common Stock reported on the principal
national securities exchange on which the Common Stock is listed and traded or
the NASDAQ Stock Market, on the immediately preceding date, or, if there is no
such sale on that date, then on the last preceding date on which such a sale was
reported. If the Common Stock is not listed on an exchange or quoted on the
NASDAQ Stock Market, or representative quotes are not otherwise available, the
"Fair Market Value" of the Common Stock shall mean the amount determined by the
Committee to be the fair market value based upon a good faith attempt to value
the Common Stock accurately.
6. Special Provisions Applicable to ISOs.
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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.
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(a) In the event that the outstanding shares of Common Stock or the capital
structure of the Company are changed by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split, reverse stock
split, combination or exchange of shares and the like, or dividends payable in
shares of Common Stock, the Committee shall make such appropriate adjustment to
the aggregate number of shares of Common Stock available under the Plan, the
number of shares of Common Stock subject to Options that may be granted to any
person in any one year, and in the number of shares of Common Stock and the
price per share of Common Stock subject to outstanding Options as determined by
the Committee, in its sole discretion to be appropriate. If the Company shall be
reorganized, consolidated or merged with another corporation, or if all or
substantially all of the assets of the Company shall be sold or exchanged, an
Optionee shall at the time of such corporate event be entitled to receive upon
the exercise of his Option the same number and kind of shares of stock or the
same amount of property, cash or securities as he would have been entitled to
receive upon the occurrence of any such corporate event as if he had been,
immediately prior to such event, the holder of the number of shares of Common
Stock covered by his Option; provided, however, that if any such event occurs or
if the Company enters into an agreement to undertake any such event, the
Committee may, in its sole discretion, cancel any outstanding Options and pay to
such Optionees, in cash or stock, or any combination thereof, the value of such
Options as determined by the Committee based on the price per share of Common
Stock received or to be received by the stockholders of the Company upon such
event. The immediately prior sentence is not intended to provide for any
automatic acceleration of vesting of any Option, which shall be left to the sole
discretion of the Committee.
(b) Any adjustment under this Section 7 in the number of shares of Common
Stock subject to Options shall apply proportionately to only the unexercised
portion of any Option granted hereunder. If fractions of a share would result
from any such adjustment, the adjustment shall be revised to the next lower
whole number of shares.
8. Further Conditions of Exercise.
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(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.
9. Termination, Modification and Amendment.
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(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.
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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.
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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.
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The Plan shall be governed by the laws of the State of Delaware without
reference to principles of conflict of laws thereof.
13. Withholding.
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As a condition to the exercise of any Option, the Committee may require
that an Optionee satisfy, through withholding from other compensation or
otherwise, the full amount of all federal, state and local income and other
taxes required to be withheld in connection with such exercise. The Committee
may, in its sole discretion, allow for the retention by the Company of shares of
Common Stock otherwise to be delivered to the Optionee upon the exercise of any
Option in order to satisfy this withholding requirement.
As adopted by the Board of Directors
of Mueller Industries, Inc. as of
February 12, 2002.