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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Mueller Water Products, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which the transaction applies:
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Aggregate number of securities to which the transaction applies:
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Per unit price or other underlying value of the 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):
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Proposed maximum aggregate value of the transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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YOUR VOTE IS IMPORTANT TO US.
PLEASE REVIEW THE ATTACHED MATERIALS AND SUBMIT YOUR VOTE PROMPTLY.
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1.
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Election of nine directors nominated by the board of directors for the coming year;
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2.
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To consider, on an advisory basis, the compensation of our named executive officers, as described in this Proxy Statement;
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3.
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To approve amendments of the 2010 Management Incentive Plan and re-approve performance goals under the plan;
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4.
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To approve amendments of the 2006 Employee Stock Purchase Plan;
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5.
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To approve amendments of the 2006 Stock Incentive Plan and re-approve performance goals under the plan; and
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6.
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To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending
September 30,
2016
.
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Page
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PROXY STATEMENT SUMMARY
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Audit Fees and Other Fees
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Director Compensation Summary
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2015 Key Accomplishments
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Performance and Compensation Highlights
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Executive Compensation Program Overview
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Other Compensation Practices and Policies
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Please note attendance at the Annual Meeting will be limited to stockholders of Mueller Water Products, Inc. (or their authorized representatives) as of the record date. You will be required to provide the admission ticket that is detachable from your proxy card or other evidence of ownership, along with photo identification. If your shares are held by a bank or broker, please bring your bank or broker statement evidencing your beneficial ownership of our common stock as of the record date to gain admission to the Annual Meeting.
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Reduced interest expense by 44%
. We lowered our interest expense, net to $27.6 million in fiscal 2015 from $49.6 million in fiscal 2014 by successfully refinancing our long-term debt.
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Reduced total debt outstanding by $52 million
. We reduced our total debt outstanding to $489.0 million at September 30, 2015 from $541.0 million at September 30, 2014.
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Increased dividend by 14%
. We increased our quarterly dividend to $0.02 from $0.0175. We paid
$12.0 million of dividends in fiscal 2015.
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Repurchased stock
. During the third quarter, we announced a stock repurchase program and used $5.0 million to purchase 523,851 shares of Common Stock pursuant to this program.
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2015 PERFORMANCE HIGHLIGHTS
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Net Sales
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Adjusted Operating Income
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Adjusted Net Income
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Adjusted Free Cash Flow
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Average Investment in Working Capital
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Return on Net Assets
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Mueller Co.
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Anvil
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|||||
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($ in millions)
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($ in millions)
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($ in millions)
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($ in millions)
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(%)
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(%)
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(%)
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2015
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1,164.5
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137.8
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66.9
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66.2
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23.7
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27.2
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24.7
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2014
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1,184.7
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127.2
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46.7
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125.0
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23.6
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23.4
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25.3
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2015 COMPENSATION HIGHLIGHTS
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•
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We structure a significant portion of our executives’ overall compensation as incentive compensation
. For fiscal
2015
, incentive compensation represented approximately 76% of our CEO’s total target compensation, and an average of 67% of the total target compensation of the other NEOs. Performance-based incentive compensation represented 52% of our CEO’s total target compensation for fiscal
2015
.
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•
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We structure performance-based compensation to pay for performance.
We set clear and measurable financial goals for Company and segment performance. In evaluating individual performance, we assess progress toward strategic priorities.
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•
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We paid performance-based compensation for fiscal
2015
that reflects Company, segment and individual performance.
Our NEOs’ compensation was negatively affected by Company and segment performance in relation to targets set for
fiscal
2015
.
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◦
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Annual cash bonuses earned by our NEOs ranged from 9% to 63% of target (compared with 54% to 115% of target last year) because Company and segment performance on certain financial measures selected by the Compensation Committee was below targeted levels.
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◦
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There was no long-term compensation paid out or credited for
fiscal
2015
because Company performance on the “return on net assets” financial measure was below threshold levels.
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•
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We continue to maintain best practices for executive compensation.
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◦
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We design our compensation programs to mitigate risk.
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◦
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Our equity incentive plan prohibits the repricing or exchange of equity-based awards without stockholder approval.
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◦
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We prohibit hedging and pledging of our Common Stock by executives or directors.
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◦
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Our executives and directors are subject to stock ownership guidelines.
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◦
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We can “clawback” cash- or equity-based compensation paid to executives under certain circumstances.
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DIRECTOR NOMINEES
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Name
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Age
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Director Since
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Independent
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Experience
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Board Committees
(1)
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Shirley C. Franklin
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70
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2010
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Barbara Jordan visiting professor at the LBJ School of the University of Texas; former Mayor of Atlanta
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Audit; Governance; EHS
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Thomas J. Hansen
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66
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2011
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Former Vice Chairman of Illinois Tool Works Inc.
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Audit; Governance
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Gregory E. Hyland
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64
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2005
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Chairman, President and Chief Executive Officer of Mueller Water Products, Inc.
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Exec*
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Jerry W. Kolb
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80
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2006
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Retired Vice Chairman of Deloitte & Touche LLP
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Audit*; Comp
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Joseph B. Leonard
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72
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2006
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Retired Chairman of AirTran Holdings, Inc.
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Audit; Comp
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Mark J. O’Brien
(2)
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72
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2006
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Former Chairman and Chief Executive Officer of Walter Investment Management Corp.
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Comp; EHS; Governance
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Bernard G. Rethore
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74
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2006
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Chairman Emeritus of Flowserve Corporation
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Audit; Comp; Governance*; EHS; Exec
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Lydia W. Thomas
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71
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2008
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Retired President and Chief Executive Officer of Noblis, Inc.
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EHS*; Governance
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Michael T. Tokarz
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66
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2006
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Chairman of Walter Energy, Inc.
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Comp*; Exec
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(1)
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Audit = Audit Committee; Comp = Compensation and Human Resources Committee; EHS = Environment, Health and Safety Committee; Exec = Executive Committee; Governance = Nominating and Corporate Governance Committee
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(2)
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Mr. O’Brien serves as our Lead Director. See “Corporate Governance — Board Operations — Board Leadership Structure” for more information.
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Shirley C. Franklin
Age: 70
Director since: 2010
Board committees: Audit, Governance, EHS
Other public company boards: Delta Air Lines, Inc.
Ms. Franklin serves as the Barbara Jordan visiting professor at the LBJ School of the University of Texas and as Executive Chair of the board of directors of Purpose Built Communities, Inc., a national non-profit organization that works to transform struggling neighborhoods into sustainable communities. She also serves as Co-Chair of the Atlanta Regional Commission on Homelessness and as Chair of the board of directors of the National Center for Civil and Human Rights. From 2002 to 2010, Ms. Franklin served as mayor of Atlanta, Georgia. She earned a Bachelor of Science degree in sociology from Howard University and a Master’s degree in sociology from the University of Pennsylvania.
The Board considered Ms. Franklin’s record of civic involvement and significant executive management experience, which has spanned three decades. During her service as mayor of Atlanta, Ms. Franklin worked to rebuild the city’s water infrastructure.
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Joseph B. Leonard
Age: 72
Director since: 2006
Board committees: Audit, Compensation
Other public company boards: Air Canada, Walter Energy, Inc.
Mr. Leonard served as Interim Chief Executive Officer of Walter Energy from March 2010 through March 2011 and from August 2011 to September 2011. He served as Chairman of AirTran Holdings, Inc., an airline holding company, from 2007 to 2008, Chairman and Chief Executive Officer of AirTran from 1999 to 2007 and President of AirTran from 1999 to 2001. Mr. Leonard earned a Bachelor of Science degree in aerospace engineering from Auburn University.
The Board considered Mr. Leonard’s significant experience in executive management, operations, marketing and public affairs based on his career with major corporations.
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Mark J. O’Brien
Age: 72
Director since: 2006
Board committees: Compensation, Governance, EHS
Other public company boards: Walter Investment Management Corp.
Mr. O’Brien serves as our Lead Director. He served as Chairman of Walter Investment Management Corp. (formerly Walter Industries’ Homes Business), a mortgage portfolio owner and mortgage originator and servicer, from 2009 through December 2015, and he served as its Chief Executive Officer from 2009 to October 2015. Mr. O'Brien has served as President and Chief Executive Officer of Brier Patch Capital and Management, Inc., a real estate management and investment firm, since 2004. He served in various executive capacities at Pulte Homes, Inc., a home building company, for 21 years, retiring as President and Chief Executive Officer in 2003. Mr. O'Brien earned a Bachelor of Arts degree in history from the University of Miami.
The Board considered Mr. O’Brien’s knowledge of capital markets, municipal finance and the homebuilding and real estate sectors of the economy.
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Bernard G. Rethore
Age: 74
Director since: 2006
Board committees: Audit, Compensation, Governance (Chair), EHS, Executive
Other public company boards: Dover Corp., Walter Energy, Inc.
Other public company boards within the last five years: Belden, Inc.
Mr. Rethore has served as Chairman Emeritus of Flowserve Corporation, a manufacturer of pumps, valves, seals and components, since 2000. From January 2000 to April 2000, he served as Flowserve’s Chairman. Mr. Rethore had previously served as its Chairman, President and Chief Executive Officer. In 2008, Mr. Rethore was honored by the Outstanding Directors Exchange as an Outstanding Director of the Year, and in 2012, he was designated a Board Leadership Fellow by the National Association of Corporate Directors. He earned a Bachelor of Arts degree in Economics (Honors) from Yale University and a Master of Business Administration degree from the Wharton School of the University of Pennsylvania, where he was a Joseph P. Wharton Scholar and Fellow.
The Board considered Mr. Rethore’s more than 30 years of experience at senior executive level positions with public manufacturing companies and his service on the boards of other public companies. His extensive management experience makes him a valuable contributor to the Board on matters involving business strategy, capital allocation and merger and acquisition opportunities.
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•
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The list of performance measures under the Amended MIP has been made co-extensive with the performance measures used in the Mueller Water Products, Inc. 2006 Stock Incentive Plan; and
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•
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The definition of “change of control” under the Amended MIP has been revised to make it consistent with the definition included in the Mueller Water Products, Inc. 2006 Stock Incentive Plan.
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Name and Position
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2015 Amount Earned ($)
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Gregory E. Hyland,
Chairman, President and Chief Executive Officer
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280,485
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Evan L. Hart,
Senior Vice President and Chief Financial Officer
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96,560
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Keith L. Belknap,
Senior Vice President, General Counsel and Chief Compliance Officer; President of Mueller Technologies companies
|
89,218
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Gregory S. Rogowski,
President, Mueller Co.
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196,283
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Thomas E. Fish,
President, Anvil International
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27,266
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Executive Officer Group
(1)
|
900,589
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Non-Employee Directors Group
|
-
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Non-Executive Officer Employee Group
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4,435,700
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(1)
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Includes Messrs. Hyland, Hart, Belknap, Rogowski and Fish, and other executive officers.
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Total shares authorized to date
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4,000,000
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Total shares issued through January 12, 2016
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2,649,771
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Total shares issued to employees, other than executives, through January 12, 2016
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2,515,711
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Total shares issued to executives, other than employees, through January 12, 2016
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134,060
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Total shares available to date
|
1,350,229
|
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Additional shares requested under this amendment
|
1,800,000
|
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Total shares authorized if this amendment is approved
|
5,800,000
|
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Total shares available if this amendment is approved
|
3,150,229
|
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•
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Extend the term of the ESPP by ten years from May 24, 2016 to May 24, 2026; and
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•
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Increase the number of shares of Common Stock available for purchase under the ESPP by 1,800,000.
|
•
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The term of the Stock Plan has been extended by ten years from May 23, 2016 to May 23, 2026;
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•
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The amount of options, restricted stock units, restricted stock bonus, stock appreciation rights, performance awards and other stock-based awards (collectively, “stock awards”) that any non-employee director is eligible to receive during any fiscal year has been limited; and
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•
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The events that will constitute a “change in control” in instances where an excise tax under Section 409A of the Code would be imposed have been revised.
|
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2015 Stock-Based Awards
|
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Name and Position
|
Dollar Value
(1)
|
Number of Shares / Units
(2)
|
Gregory E. Hyland,
Chairman, President and Chief Executive Officer
|
2,248,099
|
229,867
|
Evan L. Hart,
Senior Vice President and Chief Financial Officer
|
652,443
|
66,712
|
Keith L. Belknap,
Senior Vice President, General Counsel and Chief Compliance Officer; President of Mueller Technologies companies
|
703,181
|
76,272
|
Gregory S. Rogowski,
President, Mueller Co.
|
631,719
|
64,593
|
Thomas E. Fish,
President, Anvil International
|
1,398,128
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142,958
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Executive Officer Group
(3)
|
6,450,386
|
663,921
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Non-Employee Directors Group
|
980,874
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137,736
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Non-Executive Officer Employee Group
|
232,155
|
26,746
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(1)
|
The dollar amounts shown reflect the aggregate grant date fair values for RSU awards, PRSU awards and stock options awarded in fiscal 2013, 2014 and 2015 for the fiscal 2015 performance period, in each case calculated in accordance with ASC 718, Stock Compensation, excluding the effect of forfeitures.
|
(2)
|
Represents RSUs and PRSU awards that could have been earned based on the achievement of performance goals in the 2015 performance period assuming target performance. For non-executive directors, also includes shares issuable pursuant to stock options.
|
(3)
|
Includes Messrs. Hyland, Hart, Belknap, Rogowski and Fish, among other executive officers.
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2015
|
|
2014
|
||||
Audit fees
(1)
|
$
|
2.5
|
|
|
$
|
2.6
|
|
Audit-related fees
(2)
|
0.8
|
|
|
—
|
|
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Tax fees
|
0.1
|
|
|
—
|
|
||
All other fees
|
—
|
|
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—
|
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Total fees
|
$
|
3.4
|
|
|
$
|
2.6
|
|
(1)
|
Reflects fees for professional services performed by Ernst & Young for annual audits (including out-of-pocket expenses) and quarterly limited reviews of our consolidated financial statements.
|
(2)
|
Reflects fees for professional services performed by Ernst & Young for audits of a subsidiary’s financial statements for fiscal 2012 through fiscal 2015.
|
•
|
Management was primarily responsible for preparing our financial statements and establishing and maintaining effective internal control over financial reporting. The Audit Committee was responsible for monitoring and overseeing our financial reporting and audit functions, as well as internal controls over financial reporting and disclosure.
|
•
|
Ernst & Young, our independent registered public accounting firm for fiscal
2015
, was responsible for performing an independent audit of our consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States and was also responsible for performing an independent audit of, and expressing an opinion on, our internal controls over financial reporting.
|
•
|
The Audit Committee reviewed and discussed with management and Ernst & Young the audited consolidated financial statements for the year ended September 30, 2015, our quarterly consolidated financial statements and operating results for each quarter in the fiscal year and the related significant accounting and disclosure issues, and the effectiveness of our internal controls over financial reporting.
|
•
|
The Audit Committee reviewed management’s report contained in our annual report on Form 10-K for the year ended September 30,
2015
(“Annual Report”), as well as Ernst & Young’s Reports of Independent Registered Public Accounting Firm included in the Annual Report related to its audits of the consolidated financial statements and internal control over financial reporting.
|
•
|
The Audit Committee discussed with Ernst & Young matters required to be discussed by Statement on Auditing Standards No. 16, as amended, “Communication with Audit Committees.” In addition, Ernst & Young provided the Audit Committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and the Audit Committee has discussed with Ernst & Young the firm’s independence.
|
Audit Committee
|
Jerry W. Kolb, Chair
|
Shirley C. Franklin
|
Thomas J. Hansen
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Joseph B. Leonard
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Bernard G. Rethore
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Neil A. Springer
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Governance Highlights
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• Annual election of directors
• Each of our directors, other than our Chairman, is independent
• Independent lead director
• All Board standing committees are comprised of independent directors
|
• Regular executive sessions of independent directors chaired by lead director
• Risk oversight conducted by full Board and committees
• Annual Board and committee self-evaluations
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• Executive compensation programs designed to mitigate imprudent risk
• Stock ownership guidelines for executives and directors
• Incentive awards subject to clawback
|
•
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The director must meet bright-line independence standards under the NYSE Listed Company Manual (the “NYSE Manual”); and
|
•
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The Board must affirmatively determine the director otherwise has no material relationship with us directly or as an officer, stockholder or partner of an organization that has a relationship with us. See the Guidelines on our website for more detail.
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•
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No member of those committees receives compensation from us other than directors’ fees and no member is an affiliated person of ours (other than by virtue of his or her directorship).
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•
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All members of the Audit Committee meet the additional standards for audit committee members of publicly traded companies required by the Sarbanes-Oxley Act of 2002.
|
•
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All members of the Compensation Committee qualify as “non-employee directors” as defined in Rule 16b-3 under the Exchange Act and meet the independence requirements of the NYSE Manual and additional standards applicable to “outside directors” under Section 162(m) of the Code.
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Key Characteristics Required of All Directors
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• Personal ethics and integrity
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• Collaborative skills
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• Commitment
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• Independence
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• Interpersonal skills
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• Business acumen
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• Leadership capabilities
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•
General management expertise.
Experience serving in management positions is important since these directors bring perspective in analyzing, shaping and overseeing the execution of important operational and policy issues at a senior level. These insights and guidance, and the ability to assess and respond to situations encountered in serving on the Board, may be enhanced if the leadership experience has been developed at businesses or organizations that operate in the manufacturing sector.
•
Financial expertise
. Knowledge of financial markets, financing and funding operations, accounting and financial reporting processes is important since it assists our directors in understanding, advising and overseeing our capital structure, financing and investing activities, financial reporting and internal control of these activities.
•
Multiple-part manufacturing and operations experience
.
Experience in manufacturing is useful in understanding our research and development efforts, product engineering, design and manufacturing, operations, products and the market segments in which we compete.
•
Mergers and acquisitions experience
. Since we have a strategy of selectively pursuing potential acquisitions, directors who have a background in M&A transactions can provide useful insight into developing and implementing strategies for growing our businesses through combination with other organizations. Useful experience includes consideration of the “fit” of a proposed combination with our strategy, the valuation of transactions and management’s plans for integration with existing operations.
|
|
•
Strategic planning expertise.
We operate in competitive markets and our businesses are subject to a wide variety of risks. Directors who have strategic planning experience can assist the Board in adopting policies and procedures that respond to the risks we face.
•
Corporate governance expertise
. Directors who have corporate governance experience can assist the Board in fulfilling its responsibilities related to the oversight of our legal and regulatory compliance.
•
Offshore sourcing expertise
. Directors with knowledge of trends and developments in offshore sourcing are important to us since we periodically evaluate offshore sourcing of certain of our products where doing so will lower costs while maintaining quality.
•
Marketing expertise
. Since we believe many of our products benefit from strong brand recognition, directors who have marketing experience can provide expertise and guidance as we seek to maintain and expand brand and product awareness and a positive reputation.
•
International business experience
. Since we manufacture and sell certain of our products outside the United States, directors with global expertise can provide a useful business and cultural perspective regarding significant aspects of our businesses.
•
Government and regulatory affairs expertise
. The manufacture and marketing of our products is subject to the rules and regulations of various federal, state and local agencies. Directors who have served in government positions or who have worked extensively with governments or regulatory bodies can provide oversight of compliance with rules and regulations and insight into working constructively with governments or regulatory bodies.
|
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•
|
Each of our directors, other than our Chairman, is independent and each standing committee is comprised entirely of independent directors.
|
•
|
All directors play active roles in overseeing our business, both at the Board and committee levels.
|
•
|
Directors have full and free access to members of management and the authority to retain independent advisors as they deem necessary without consulting management or obtaining management’s approval.
|
Our Lead Director:
|
|
•
Presides at meetings of independent directors and at Board meetings when the Chairman is not present.
•
Acts as a liaison between the independent directors and management.
•
Consults with the Chairman on other matters pertinent to our business and the Board.
|
|
Current Members
Kolb (Chair)
Franklin
Hansen
Leonard
Rethore
Springer
|
|
• Oversees the integrity of our financial statements, financial reporting activities and accounting policies and procedures.
• Selects and oversees the independent registered public accounting firm, approves its services (including both audit and non-audit services) and fees, and evaluates its performance. In its evaluation, the Audit Committee considers the firm’s reputation for independence and integrity, the qualifications and performance of the firm’s personnel and the effectiveness of their communications, the appropriateness of fees and the Public Company Accounting Oversight Board reports on the firm and its peers.
• Reviews the scope and results of the independent registered public accounting firm’s audits.
• Reviews the organization and scope of the internal audit function and evaluates its performance.
• Oversees our internal accounting systems and related internal controls over financial reporting, as well as our financial risk management profile.
• Oversees our legal compliance and ethics programs and the Ethics Code.
|
|
14 meetings in fiscal 2015
|
|
|
|
|
|
|
Current Members
Tokarz (Chair)
Kolb
Leonard
O’Brien
Rethore
Springer
|
|
• Oversees the overall strategic human resources programs, including executive compensation and equity-based plans.
• Reviews and recommends the compensation of non-employee directors.
• Oversees an annual risk assessment process related to compensation programs.
• Manages succession planning across senior positions.
|
|
6 meetings in fiscal 2015
|
|
|
Current Members
Rethore (Chair)
Franklin
Hansen
O’Brien
Thomas
|
|
• Establishes criteria for and qualifications of persons suitable for nomination as directors and reports recommendations to Board.
• Develops and annually reviews the Guidelines.
• Reports recommendations to Board related to committee structure and membership.
|
|
4 meetings in fiscal 2015
|
|
|
Current Members
Thomas (Chair)
Franklin
O’Brien
Rethore
|
|
• Reviews policies and procedures related to complying with laws, regulations and rules pertaining to the environment, health and safety.
• Encourages activities that demonstrate sound environmental stewardship initiatives.
|
|
4 meetings in fiscal 2015
|
|
|
Current Members
Hyland (Chair)
Rethore
Springer
Tokarz
|
|
• Exercises interim powers delegated to it any time when a matter requires expeditious Board action or when it would not be practical for the full Board to meet.
|
|
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Audit Committee
|
|
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Compensation Committee
|
|
|
•
Oversees risk management related to accounting and financial reporting, the audit process, internal control over financial reporting and disclosure controls and procedures
•
Oversees the internal audit function
•
Monitors legal and compliance issues and active matters
|
|
|
•
Oversees risk management related to the risks and rewards associated with our compensation policies and practices
•
Oversees management development and succession planning across senior positions
|
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EHS Committee
|
|
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Governance Committee
|
|
|
•
Oversees risk management related to risks directly related to the environment, health and safety areas
|
|
|
•
Oversees risk management related to governance structure and processes and risks arising from related person transactions
|
|
Fiscal 2015 Director Compensation Table
|
||||||||||
Name
|
Fees Earned or Paid in Cash ($)
|
Stock
Awards
($)
(2)
|
Option
Awards
($)
(2)
|
All Other
Compensation
($)
|
Total
($)
|
|||||
Annual
Retainer
(1)
|
Meeting
Fees
|
Total
|
||||||||
Shirley C. Franklin
|
55,000
|
|
39,000
|
|
94,000
|
|
44,995
|
63,991
|
—
|
202,986
|
Thomas J. Hansen
|
60,000
|
|
37,500
|
|
97,500
|
|
44,995
|
63,991
|
—
|
206,486
|
Jerry W. Kolb
|
65,000
|
|
40,500
|
|
105,500
|
|
44,995
|
63,991
|
—
|
214,486
|
Joseph B. Leonard
|
55,000
|
|
40,500
|
|
95,500
|
|
44,995
|
63,991
|
—
|
204,486
|
Mark J. O’Brien
|
62,500
|
|
31,500
|
|
94,000
|
|
44,995
|
63,991
|
—
|
202,986
|
Bernard G. Rethore
|
55,000
|
|
46,500
|
|
101,500
|
|
44,995
|
63,991
|
—
|
210,486
|
Neil A. Springer
(3)
|
70,000
|
|
40,500
|
|
110,500
|
|
44,995
|
63,991
|
—
|
219,486
|
Lydia W. Thomas
|
62,500
|
|
19,500
|
|
82,000
|
|
44,995
|
63,991
|
—
|
190,986
|
Michael T. Tokarz
(4)
|
70,000
|
|
19,500
|
|
89,500
|
|
44,995
|
63,991
|
8,628
|
207,114
|
(1)
|
Includes fees earned as chair of a committee or as Lead Director. Messrs. Hanson and Kolb each served as Chair of the Audit Committee for a portion of fiscal
2015
and each received a pro rata portion of the $15,000 annual retainer paid for these services.
|
(2)
|
Reflects the grant date fair value of the RSUs and stock options granted during fiscal
2015
computed in accordance with the stock-based compensation accounting rules described in Note 11 for our fiscal 2015 consolidated financial statements, which are included in the 2015 Annual Report. Expense is recognized over the shorter of the grants’ three-year terms or until a director becomes retirement-eligible pursuant to the terms of the 2006 Stock Plan. All non-employee directors were retirement-eligible at September 30,
2015
.
|
(3)
|
Mr. Springer will retire from the Board at a Board meeting scheduled for January 27, 2016.
|
(4)
|
Mr. Tokarz deferred the receipt of all director compensation fees earned in fiscal
2015
into 9,787 stock equivalent shares of Common Stock. “All Other Compensation” represents amounts accrued on identical terms to dividends paid on Common Stock equal to the accumulated stock equivalent share balance. See “— Deferred Compensation” for more information.
|
(1)
|
Each director is “retirement-eligible” under the 2006 Stock Plan. Commencing in fiscal 2014, all equity-based awards to directors require a grantee who is or becomes “retirement-eligible” prior to an initial vesting date to remain in continuous service from the grant date through at least the first anniversary thereof to receive accelerated vesting upon retirement. Accordingly, for purposes of this table, any stock options and RSUs outstanding on the date a director became retirement-eligible are deemed vested.
|
(2)
|
Because Mr. Springer is scheduled to retire from the Board at a Board meeting scheduled for January 27, 2016, the vesting of outstanding stock awards will accelerate on that date.
|
•
|
Gregory E. Hyland, Chairman, President and Chief Executive Officer
|
•
|
Evan L. Hart, Senior Vice President and Chief Financial Officer
|
•
|
Keith L. Belknap, Senior Vice President, General Counsel and Chief Compliance Officer; President of Mueller Technologies companies
|
•
|
Gregory E. Rogowski, President of Mueller Co.
|
•
|
Thomas E. Fish, President of Anvil.
|
|
|
|
|
|
2015 Key Accomplishments
|
||||
In fiscal 2015, we strengthened our balance sheet and executed initiatives to return value to our stockholders.
|
||||
|
|
|
|
|
|
Reduced interest expense by 44%
. We lowered our interest expense, net to $27.6 million in fiscal 2015 from $49.6 million in fiscal 2014 by successfully refinancing our long-term debt.
|
|
|
Reduced total debt outstanding by $52 million
. We reduced our total debt outstanding to $489.0 million at September 30, 2015 from $541.0 million at September 30, 2014.
|
|
Increased dividend by 14%
. We increased our quarterly dividend to $0.02 from $0.0175. We paid
$12.0 million of dividends in fiscal 2015.
|
|
|
Repurchased stock
. During the third quarter, we announced a stock repurchase program and used $5.0 million to purchase 523,851 shares of Common Stock pursuant to this program.
|
|
|
|
|
|
•
|
Our performance in fiscal
2015
. We were pleased with our operating performance in f
iscal
2015
. Despite a
1.7%
year-over-year decrease in net sales, which was largely driven by lower sales into the oil and gas market at our Anvil business unit, we:
|
◦
|
Increased our adjusted operating margin to 11.8% from 10.7% in fiscal
2014
,
|
◦
|
Increased our adjusted operating EBITDA margin to 16.8% from 15.5% in fiscal
2014
,
|
◦
|
Increased our adjusted operating income
8.3%
year-over-year and
|
◦
|
Increased our adjusted net income
43.3%
year-over-year.
|
|
Net Sales
|
Adjusted Operating Income
(1)
|
Adjusted Net Income
(2)
|
Adjusted Free Cash Flow
(3)
|
Average Investment in Working Capital
(4)
|
Return on Net Assets
(6)
|
|
|
Mueller Co.
|
Anvil
|
|||||
|
($ in millions)
|
($ in millions)
|
($ in millions)
|
($ in millions)
|
(%)
|
(%)
|
(%)
|
2015
|
1,164.5
|
137.8
|
66.9
|
66.2
|
23.7
|
27.2
|
24.7
|
2014
|
1,184.7
|
127.2
|
46.7
|
125.0
|
23.6
|
23.4
|
25.3
|
•
We
structure performance-based compensation to
pay for performance.
We set clear and measurable financial goals for Company and segment performance. In evaluating individual performance, we assess progress toward strategic priorities.
|
||
◦
Performance-based compensation earned by our named executive officers.
For fiscal 2015, 52% of our CEO’s total target compensation, and an average of 47% of the total target compensation of other NEOs, could only be earned by meeting performance goals.
|
|
|
▪
Our NEOs compensation was negatively affected by Company and segment performance in relation to targets set for fiscal 2015.
▪
Annual cash bonuses earned by our NEOs ranged from 9% to 63% of target (compared with 54% to 115% of target last year) because Company and segment performance on certain financial measures selected by the Compensation Committee was below targeted levels.
▪
There was no long-term compensation paid out or credited for fiscal 2015 because Company performance on the return on net assets financial measure was below threshold levels.
|
|
•
|
We continue to maintain best practices for executive compensation
.
|
•
|
We consider stockholder feedback on executive compensation
.
At our
2015
annual meeting of stockholders, approximately 98% of the votes cast supported the advisory vote on executive compensation. We carefully consider feedback from our stockholders regarding executive compensation.
|
◦
|
Based on strong stockholder support expressed for our executive compensation programs, the Compensation Committee applied a consistent pay-for-performance philosophy in structuring executive compensation for fiscal
2015
.
|
◦
|
Stockholders are invited to express their views or concerns on executive compensation directly to the Chair of the Compensation Committee in the manner described under “Corporate Governance — Communicating with the Board.”
|
|
|
|
|
Competitiveness
Compensation programs should be designed to target at or about the 50th percentile, plus or minus 15%, of total compensation for comparable executive positions at a customized peer group.
|
|
Pay for Performance
Where compensation for an executive is tied to the achievement of financial and strategic goals, actual results that exceed target levels should provide above-target payouts, and results that do not exceed threshold levels should not provide payouts.
|
|
|
|
|
|
|
|
|
|
Responsibility
A significant portion of an executive’s overall compensation should be tied to the achievement of financial performance goals. The portion of an executive’s target total compensation that is incentive based should increase as an executive’s responsibilities increase.
|
|
Stockholder Alignment
Executives’ interests are more directly aligned with other stockholders’ interests when compensation programs:
• Emphasize both short- and long-term financial performance
• Are significantly impacted by the value of Common Stock
• Require meaningful Common Stock ownership.
|
|
Pay Element
|
Salary
|
Bonus
|
RSUs
|
PRSUs
|
|
|
|
|
|
Who Receives
|
All NEOs ---------------------------------------------------------------------------------------------------------------------------------------->
|
|||
|
|
|
|
|
When Granted
|
Generally reviewed every 12 months
|
Annually
|
Annually
|
Annually
|
|
|
|
|
|
Form of Delivery
|
Cash ---------------------------------------------------------->
|
Equity --------------------------------------------------------->
|
||
|
|
|
||
Type of Performance
|
Short-term emphasis ------------------------------------->
|
Long-term emphasis -------------------------------------->
|
||
|
|
|
|
|
Performance Period
|
Ongoing
|
1 year
|
Generally vest annually over 3 years
|
Vests at the end of 3-year award cycles
|
|
|
|
|
|
How Payout Determined
|
Predominantly tied to Peer Group data, with an element of Compensation Committee discretion
|
Predominantly formulaic(based on performance against goals), with an element of Compensation Committee discretion
|
Depends on stock price on vest date
|
Formulaic (based on performance against goals); Compensation Committee verifies results
|
|
|
|
|
|
Most Recent Performance Measures
|
__
|
Mix of 90% financial results / 10% operational and/or individual goals
|
Change in stock price
|
Absolute improvement in return on net assets
|
Name
|
Annual Salary Rate at September 30, 2015 ($)
|
Annual Salary Rate at September 30, 2014 ($)
|
||||
Gregory E. Hyland
|
900,000
|
900,000
|
||||
Evan L. Hart
|
393,500
|
382,019
|
||||
Keith L. Belknap
|
420,000
|
361,530
|
||||
Gregory E. Rogowski
|
422,500
|
410,146
|
||||
Thomas E. Fish
|
401,494
|
401,494
|
Financial Performance
|
||||||||||||||||
|
|
|
|
Results Required to Achieve
Bonus ($ in millions, except for percentages)
|
2015
Actual
Results
($ in millions)
|
Actual 2015
Payout
Factor
(% of
Target
Bonus)
|
||||||||||
|
|
|
Weight
(% of Target Bonus)
|
|||||||||||||
Name
|
|
Metric
|
Threshold
(0%)
|
Target
(100%)
|
Maximum
(200%)
|
|||||||||||
Gregory E. Hyland
|
|
Consolidated Adjusted Net Income
|
60
|
57.5
|
|
|
82.1
|
|
|
106.7
|
|
|
66.9
|
|
|
38.4
|
|
Consolidated Adjusted Free Cash Flow
|
30
|
87.4
|
|
|
109.2
|
|
|
131.0
|
|
|
66.2
|
|
|
0
|
|
Evan L. Hart
|
|
Consolidated Adjusted Net Income
|
60
|
57.5
|
|
|
82.1
|
|
|
106.7
|
|
|
66.9
|
|
|
38.4
|
|
Consolidated Adjusted Free Cash Flow
|
30
|
87.4
|
|
|
109.2
|
|
|
131.0
|
|
|
66.2
|
|
|
0
|
|
Keith L. Belknap
|
|
Consolidated Adjusted Net Income
|
60
|
57.5
|
|
|
82.1
|
|
|
106.7
|
|
|
66.9
|
|
|
38.4
|
|
Consolidated Adjusted Free Cash Flow
|
30
|
87.4
|
|
|
109.2
|
|
|
131.0
|
|
|
66.2
|
|
|
0
|
|
Gregory S. Rogowski
|
|
Mueller Co. Adjusted Operating Income
|
60
|
107.5
|
|
|
153.6
|
|
|
199.7
|
|
|
149.8
|
|
|
91.8
|
|
Mueller Co. Average Working Capital as a Percent of Net Sales
|
30
|
23.4
|
%
|
|
22.4
|
%
|
|
21.4
|
%
|
|
23.7
|
%
|
|
0
|
|
Thomas E. Fish
|
|
Anvil Adjusted Operating Income
|
60
|
32.1
|
|
|
45.9
|
|
|
59.7
|
|
|
30.8
|
|
|
0
|
|
Anvil Average Working Capital as a Percent of Net Sales
|
30
|
23.4
|
%
|
|
23.0
|
%
|
|
22.0
|
%
|
|
27.2
|
%
|
|
0
|
•
|
Each PRSU award reflects a target number of shares (based on the fair market value of Common Stock on the award date) that may be issued to the award recipient at the end of a three-year award cycle if performance targets are achieved.
|
•
|
PRSUs are divided into three equal tranches and each tranche is earned based on the achievement level of the applicable annual performance target.
|
•
|
Performance period targets are established by the Compensation Committee on an annual basis coinciding with our fiscal year.
|
•
|
At the end of each fiscal year, the Compensation Committee confirms performance against the applicable performance target, and PRSUs representing the level of achievement during that performance period are “banked” for potential payout following the end of the three-year award cycle.
|
•
|
The actual number of shares a participant may receive ranges from zero to two times the target number of shares, depending solely on the level of achievement during each performance period within the award cycle.
|
•
|
PRSUs do not convey voting rights or earn dividends.
|
Timeline for PRSU Grants
|
|||||
Grant
|
Fiscal 2013
|
Fiscal 2014
|
Fiscal 2015
|
Fiscal 2016
|
Fiscal 2017
|
Fiscal 2013
|
Performance Period
|
Performance Period
|
Performance Period
|
|
|
Fiscal 2014
|
|
Performance Period
|
Performance Period
|
Performance Period
|
|
Fiscal 2015
|
|
|
Performance Period
|
Performance Period
|
Performance Period
|
•
|
Using multiple performance measures in annual incentive awards and capping payout levels;
|
•
|
Maintaining the ability to reduce annual incentive awards, based on its independent judgment;
|
•
|
Using multiple long-term incentive vehicles;
|
•
|
Using overlapping multi-year award cycles in connection with performance shares and capping payout levels; and
|
•
|
Maintaining stock ownership guidelines, an anti-hedging policy and a clawback policy.
|
•
|
Providing recommendations regarding the composition of our peer group;
|
•
|
Preparing and analyzing peer group compensation and plan design data;
|
•
|
Reviewing and advising on the performance measures to be used in incentive awards;
|
•
|
Valuing equity-based awards; and
|
•
|
Reviewing and advising on principal aspects of executive and non-employee director compensation, including base salaries, bonuses and equity-based awards for executives, and cash compensation and equity-based awards for non-employee directors.
|
•
|
Other services provided to us by the consultant;
|
•
|
Fees paid by us as a percentage of the consultant’s total revenue;
|
•
|
Policies or procedures maintained by the consultant that are designed to prevent a conflict of interest;
|
•
|
Any business or personal relationships between the individual consultants involved in the engagement and a member of the Compensation Committee;
|
•
|
Any Common Stock owned by the individual consultants involved in the engagement; and
|
•
|
Any business or personal relationships between our executives and the consultant or the individual consultants involved in the engagement.
|
Position/Title
|
|
Target Ownership
|
Chief Executive Officer and President
|
|
6 x base salary
|
Group Presidents and Executive Vice Presidents
|
|
3 x base salary
|
Senior Vice Presidents
|
|
2 x base salary
|
Non-Employee Directors
|
|
4 x annual retainer
|
Compensation and Human Resources Committee
|
Michael T. Tokarz, Chairman
|
Jerry W. Kolb
|
Joseph B. Leonard
|
Mark J. O’Brien
|
Bernard G. Rethore
|
Neil A. Springer
|
Name and Principal Position
|
Fiscal Year
|
Salary
($)
|
Bonus
(1)
($)
|
Stock Awards
(2)
($)
|
Non-Equity Incentive Plan Compensation
(3)
($)
|
Change in Pension Value
and Nonqualified Deferred
Compensation Earnings
(4)
($)
|
All Other Compensation
(5)
($)
|
Total
($)
|
|||||||||||||
Gregory E. Hyland
Chairman, President and Chief Executive Officer
|
2015
|
|
900,000
|
|
27,000
|
|
|
2,248,099
|
|
|
280,485
|
|
|
19,044
|
|
|
51,122
|
|
|
3,525,750
|
|
2014
|
|
891,667
|
|
—
|
|
|
2,214,126
|
|
|
941,867
|
|
|
23,115
|
|
|
50,813
|
|
|
4,121,588
|
|
|
2013
|
|
875,000
|
|
—
|
|
|
1,391,729
|
|
|
1,097,338
|
|
|
17,982
|
|
|
50,235
|
|
|
3,432,284
|
|
|
Evan L. Hart
Senior Vice President and Chief Financial Officer
|
2015
|
|
389,673
|
|
—
|
|
|
652,443
|
|
|
96,560
|
|
|
—
|
|
|
31,769
|
|
|
1,170,445
|
|
2014
|
|
377,713
|
|
—
|
|
|
655,716
|
|
|
319,685
|
|
|
—
|
|
|
31,460
|
|
|
1,384,574
|
|
|
2013
|
|
369,100
|
|
—
|
|
|
443,043
|
|
|
336,398
|
|
|
—
|
|
|
30,924
|
|
|
1,179,465
|
|
|
Keith L. Belknap
Senior Vice President, General Counsel and Chief Compliance Officer; President of Mueller Technologies companies
|
2015
|
|
385,760
|
|
—
|
|
|
703,181
|
|
|
89,218
|
|
|
—
|
|
|
38,787
|
|
|
1,216,946
|
|
2014
|
|
352,603
|
|
—
|
|
|
471,888
|
|
|
242,979
|
|
|
—
|
|
|
40,676
|
|
|
1,108,146
|
|
|
2013
|
|
331,500
|
|
50,000
|
|
|
324,266
|
|
|
250,853
|
|
|
—
|
|
|
40,564
|
|
|
997,183
|
|
|
Gregory S. Rogowski
President, Mueller Co.
|
2015
|
|
418,382
|
|
—
|
|
|
631,719
|
|
|
196,283
|
|
|
—
|
|
|
34,005
|
|
|
1,280,389
|
|
2014
|
|
406,164
|
|
—
|
|
|
638,753
|
|
|
313,731
|
|
|
—
|
|
|
36,601
|
|
|
1,395,249
|
|
|
2013
|
|
398,200
|
|
—
|
|
|
440,458
|
|
|
350,705
|
|
|
—
|
|
|
32,663
|
|
|
1,222,026
|
|
|
Thomas E. Fish
President, Anvil International
|
2015
|
|
401,494
|
|
12,000
|
|
|
1,398,128
|
|
|
27,266
|
|
|
—
|
|
|
47,267
|
|
|
1,886,155
|
|
2014
|
|
397,596
|
|
—
|
|
|
541,480
|
|
|
160,758
|
|
|
—
|
|
|
46,181
|
|
|
1,146,015
|
|
|
2013
|
|
389,800
|
|
—
|
|
|
371,027
|
|
|
333,133
|
|
|
—
|
|
|
44,507
|
|
|
1,138,467
|
|
(1)
|
Amounts for Messrs. Hyland and Fish include lump sum payments of
$27,000
and
$12,000
, respectively, made in February 2015. See “Compensation Discussion and Analysis — Compensation Elements — Salary”.
|
(2)
|
The dollar amounts shown for RSU and PRSU awards represent the aggregate grant date fair values calculated in accordance with ASC 718, Stock Compensation, excluding the effect of forfeitures. These amounts include awards made to Messrs. Belknap and Fish in July 2015 and December 2014, respectively. See “Compensation Discussion and Analysis — Compensation Elements — Long-Term Equity-Based Compensation — Other Equity Awards”. The dollar amounts shown for fiscal
2015
include the aggregate grant date fair values of PRSUs awarded in fiscal
2013
,
2014
and
2015
for the fiscal
2015
performance period assuming target performance. Actual target performance for the fiscal 2015 performance period resulted in no awards of PRSUs for such period. Assuming maximum performance, the aggregate values of PRSUs awarded for the fiscal
2015
performance period would have been:
$2,496,208
for Mr. Hyland; $741,891 for Mr. Hart; $534,321 for Mr. Belknap; $723,446 for Mr. Rogowski; and
$613,050
for Mr. Fish. The dollar amounts shown for fiscal
2014
and
2013
include grant-date fair values, assuming target performance of the transition period PRSU awards that were paid in fiscal
2015
. Estimated amounts that may be earned over the entire three-year award cycle of outstanding PRSUs are reflected in “Outstanding Equity Awards at
2015
Fiscal Year-End” below.
|
(3)
|
Amounts reflect annual non-equity incentive plan compensation awards earned by our NEOs based on Company and segment financial performance and operational / individual performance. The amounts earned for fiscal
2015
were paid in December
2015
. See “Compensation Discussion and Analysis — Compensation Elements — Annual Cash Incentive Awards”.
|
(4)
|
Amounts reflect accruals for deferred compensation for Mr. Hyland under a plan we established for his benefit. See “— Nonqualified Deferred Compensation During Fiscal Year
2015
” below.
|
(5)
|
Amounts reflect the combined value of each NEO’s perquisites and compensation that is not otherwise reflected in the Summary Compensation Table. Amounts for fiscal
2015
are described in “—Summary Compensation Table — All Other Compensation” below.
|
Name
|
Vehicle Allowance or Use of Leased Vehicle
($)
|
Financial Planning
(1)
($)
|
Contributions
to 401(k)
Plans
($)
|
Life and
Long-Term Disability Insurance
($)
|
Other
($)
|
Total
($)
|
|||||||
Gregory E. Hyland
|
24,000
|
|
—
|
|
10,600
|
|
13,522
|
|
3,000
|
|
(2)
|
51,122
|
|
Evan L. Hart
|
18,000
|
|
—
|
|
10,600
|
|
3,169
|
|
—
|
|
|
31,769
|
|
Keith L. Belknap
|
18,000
|
|
2,100
|
|
10,243
|
|
5,444
|
|
3,000
|
|
(2)
|
38,787
|
|
Gregory S. Rogowski
|
18,000
|
|
—
|
|
10,600
|
|
5,405
|
|
—
|
|
|
34,005
|
|
Thomas E. Fish
|
18,000
|
|
7,000
|
|
10,600
|
|
7,424
|
|
4,243
|
|
(3)
|
47,267
|
|
(1)
|
NEOs are entitled to reimbursement of up to $7,500 of annual financial planning ($10,000 for the CEO).
|
(2)
|
Represents annual executive physical exam expenses.
|
(3)
|
Represents the incremental cost to us of Mr. Fish’s spouse accompanying him on a sales incentive award trip.
|
Fiscal 2015 Grants of Plan-Based Awards Table
|
|||||||||||||||||
|
|
|
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards
(1)
|
Estimated Future Issuance of Shares Under Equity Incentive Plans
(2)
|
All Other Stock-Based Awards
(#)
(3)
|
Grant Date Fair Value of Stock-Based Awards
($)
(4)
|
|||||||||||
Name
|
Grant
Date
|
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
|||||||||
Gregory E. Hyland
|
|
|
—
|
900,000
|
|
1,800,000
|
|
|
|
|
|
|
|||||
|
12/2/2014
|
(5)
|
|
|
|
17,041
|
|
34,083
|
|
68,166
|
|
|
333,332
|
|
|||
|
12/2/2014
|
|
|
|
|
|
|
|
102,249
|
|
999,995
|
|
|||||
|
12/3/2013
|
(5)
|
|
|
|
19,561
|
|
39,123
|
|
78,246
|
|
|
382,623
|
|
|||
|
11/27/2012
|
(5)
|
|
|
|
27,206
|
|
54,412
|
|
108,824
|
|
|
532,149
|
|
|||
Evan L. Hart
|
|
|
—
|
292,255
|
|
584,510
|
|
|
|
|
|
|
|||||
|
12/2/2014
|
(5)
|
|
|
|
4,797
|
|
9,594
|
|
19,188
|
|
|
93,829
|
|
|||
|
12/2/2014
|
|
|
|
|
|
|
|
28,783
|
|
281,498
|
|
|||||
|
12/3/2013
|
(5)
|
|
|
|
5,506
|
|
11,013
|
|
22,026
|
|
|
107,707
|
|
|||
|
11/27/2012
|
(5)
|
|
|
|
8,661
|
|
17,322
|
|
34,644
|
|
|
169,409
|
|
|||
Keith L. Belknap
|
|
|
—
|
270,032
|
|
540,064
|
|
|
|
|
|
|
|||||
|
7/27/2015
|
(5)
|
|
|
|
|
|
|
28,506
|
|
236,030
|
|
|||||
|
12/2/2014
|
(5)
|
|
|
|
3,408
|
|
6,816
|
|
13,632
|
|
|
66,660
|
|
|||
|
12/2/2014
|
|
|
|
|
|
|
|
20,449
|
|
199,991
|
|
|||||
|
12/3/2013
|
(5)
|
|
|
|
3,912
|
|
7,824
|
|
15,648
|
|
|
76,519
|
|
|||
|
11/27/2012
|
(5)
|
|
|
|
6,338
|
|
12,677
|
|
25,354
|
|
|
123,981
|
|
|||
Gregory S. Rogowski
|
|
|
—
|
313,787
|
|
627,573
|
|
|
|
|
|
|
|||||
|
12/2/2014
|
(5)
|
|
|
|
4,601
|
|
9,202
|
|
18,404
|
|
|
89,996
|
|
|||
|
12/2/2014
|
|
|
|
|
|
|
|
27,607
|
|
269,996
|
|
|||||
|
12/3/2013
|
(5)
|
|
|
|
5,281
|
|
10,563
|
|
21,126
|
|
|
103,306
|
|
|||
|
11/27/2012
|
(5)
|
|
|
|
8,610
|
|
17,221
|
|
34,442
|
|
|
168,421
|
|
|||
Thomas E. Fish
|
|
|
—
|
301,121
|
|
602,241
|
|
|
|
|
|
|
|||||
|
12/2/2014
|
(5)
|
|
|
|
3,919
|
|
7,839
|
|
15,678
|
|
|
76,665
|
|
|||
|
12/2/2014
|
|
|
|
|
|
|
|
111,616
|
|
1,091,604
|
|
|||||
|
12/3/2013
|
(5)
|
|
|
|
4,499
|
|
8,998
|
|
17,996
|
|
|
88,000
|
|
|||
|
11/27/2012
|
(5)
|
|
|
|
7,252
|
|
14,505
|
|
29,010
|
|
|
141,859
|
|
(1)
|
Amounts represent the range of possible cash payouts for fiscal
2015
awards under the annual cash incentive plan as described in “Compensation Discussion and Analysis - Compensation Elements - Annual Cash Incentive Awards”. The awards that were earned based on actual performance for fiscal
2015
were paid in December
2015
and are shown in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
|
(2)
|
Represents PRSU awards that may be earned based on the achievement of performance goals in the
2015
performance period. See “Compensation Discussion and Analysis — Compensation Elements — Long-Term Equity-Based Compensation — Performance-Based Restricted Stock Units”. Estimated amounts that may be earned over the three-year award cycle of PRSUs granted in fiscal 2013,
2014
and
2015
are reflected in “Outstanding Equity Awards at
2015
Fiscal Year-End” below.
|
(3)
|
Represents time-vesting RSUs. Each RSU entitles the grantee to receive one share of Common Stock upon vesting. The RSUs generally vest in equal installments on the first, second and third anniversaries of the grant date. See “Compensation Discussion and Analysis — Compensation Elements — Long-Term Equity-Based Compensation — Time-Based Restricted Stock Units”.
|
(4)
|
See footnote 2 to the Summary Compensation Table for a description of the methods used to determine grant date fair value of equity-based awards.
|
(5)
|
Represents the range of shares of Common Stock that may vest after the end of the three-year award cycle applicable to a PRSU award solely with respect to the fiscal
2015
performance period, assuming achievement of threshold, target and maximum performance.
|
Name
|
|
|
Option Awards
|
Stock Awards
|
||||||||||||||
Grant
Date
|
Number of Securities Underlying Unexercised Options
(#)
|
Option Exercise Price
($)
(2)
|
Option Expiration Date
|
Number of Units of Stock That Have Not Vested
(#)
(3)
|
Market Value of Units of Stock That Have Not Vested
($)
(4)
|
Number of Performance Units That Have Not Vested
(#)
|
Market Value of Performance Units That Have Not Vested
($)
(4)
|
|||||||||||
Exercisable
|
|
Unexercisable
|
||||||||||||||||
Gregory E. Hyland
(8)
|
12/15/06
|
(1)
|
69,611
|
|
|
—
|
|
20.56
|
|
02/22/16
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/29/06
|
|
88,300
|
|
|
—
|
|
15.09
|
|
11/29/16
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/29/07
|
|
226,757
|
|
|
—
|
|
10.66
|
|
11/29/17
|
—
|
|
—
|
|
—
|
|
—
|
|
|
12/02/08
|
|
343,155
|
|
|
—
|
|
5.49
|
|
12/02/18
|
—
|
|
—
|
|
—
|
|
—
|
|
|
12/01/09
|
|
281,748
|
|
|
—
|
|
5.05
|
|
12/01/19
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/30/10
|
|
281,748
|
|
|
—
|
|
3.52
|
|
11/30/20
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/29/11
|
|
90,931
|
|
|
—
|
|
2.03
|
|
11/29/21
|
—
|
|
—
|
|
—
|
|
—
|
|
|
12/03/13
|
(6)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
39,124
|
|
299,690
|
|
|
12/02/14
|
(7)
|
—
|
|
|
—
|
|
—
|
|
|
102,249
|
|
783,227
|
|
68,166
|
|
522,152
|
|
Evan L. Hart
|
11/29/06
|
|
2,384
|
|
|
—
|
|
15.09
|
|
11/29/16
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/29/07
|
|
10,459
|
|
|
—
|
|
10.66
|
|
11/29/17
|
—
|
|
—
|
|
—
|
|
—
|
|
|
07/31/08
|
|
24,752
|
|
|
—
|
|
9.10
|
|
07/31/18
|
—
|
|
—
|
|
—
|
|
—
|
|
|
12/02/08
|
|
66,539
|
|
|
—
|
|
5.49
|
|
12/02/18
|
—
|
|
—
|
|
—
|
|
—
|
|
|
12/01/09
|
|
84,615
|
|
|
—
|
|
5.05
|
|
12/01/19
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/30/10
|
|
84,615
|
|
|
—
|
|
3.52
|
|
11/30/20
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/29/11
|
|
71,942
|
|
|
—
|
|
2.03
|
|
11/29/21
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/27/12
|
(5)
|
—
|
|
|
—
|
|
—
|
|
|
17,321
|
|
132,679
|
|
—
|
|
—
|
|
|
12/03/13
|
(6)
|
—
|
|
|
—
|
|
—
|
|
|
22,026
|
|
168,719
|
|
11,013
|
|
84,360
|
|
|
12/02/14
|
(7)
|
—
|
|
|
—
|
|
—
|
|
|
28,783
|
|
220,478
|
|
19,189
|
|
146,988
|
|
Keith L. Belknap
|
04/02/12
|
|
22,335
|
|
|
—
|
|
3.54
|
|
04/02/22
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/27/12
|
(5)
|
—
|
|
|
—
|
|
—
|
|
|
12,678
|
|
97,113
|
|
—
|
|
—
|
|
|
12/03/13
|
(6)
|
—
|
|
|
—
|
|
—
|
|
|
15,649
|
|
119,871
|
|
7,826
|
|
59,947
|
|
|
12/02/14
|
(7)
|
—
|
|
|
—
|
|
—
|
|
|
20,449
|
|
156,639
|
|
13,633
|
|
104,429
|
|
|
07/27/15
|
|
—
|
|
|
—
|
|
—
|
|
|
28,506
|
|
218,356
|
|
—
|
|
—
|
|
Gregory S. Rogowski
|
12/01/09
|
|
85,839
|
|
|
—
|
|
5.05
|
|
12/01/19
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/30/10
|
|
85,839
|
|
|
—
|
|
3.52
|
|
11/30/20
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/29/11
|
|
70,684
|
|
|
—
|
|
2.03
|
|
11/29/21
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/27/12
|
(5)
|
—
|
|
|
—
|
|
—
|
|
|
17,220
|
|
131,905
|
|
—
|
|
—
|
|
|
12/03/13
|
(6)
|
—
|
|
|
—
|
|
—
|
|
|
21,126
|
|
161,825
|
|
10,564
|
|
80,920
|
|
|
12/02/14
|
(7)
|
—
|
|
|
—
|
|
—
|
|
|
27,607
|
|
211,470
|
|
18,405
|
|
140,982
|
|
Thomas E. Fish
(8)
|
08/22/06
|
|
10,502
|
|
|
—
|
|
16.95
|
|
08/22/16
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/29/06
|
|
14,928
|
|
|
—
|
|
15.09
|
|
11/29/16
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/29/07
|
|
53,433
|
|
|
—
|
|
10.66
|
|
11/29/17
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/27/12
|
(5)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
12/03/13
|
(6)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
8,999
|
|
68,932
|
|
|
12/02/14
|
(7)
|
—
|
|
|
—
|
|
—
|
|
|
111,616
|
|
854,979
|
|
15,678
|
|
120,093
|
|
(1)
|
Represents options granted in connection with our separation from Walter Industries (now Walter Energy) in December 2006. These awards were intended to replace equity awards made prior to August 2006 by Walter Industries. The exercise price of these options reflected a conversion ratio of 3.239:1 and the vesting dates and expiration dates were identical to the replaced awards.
|
(2)
|
Option exercise prices are equal to the closing price of Common Stock on the NYSE on the respective grant dates.
|
(3)
|
RSUs granted on 11/27/12, 12/03/13 and 12/02/14 each vest in equal installments on the first, second and third anniversaries of the respective grant dates.
|
(4)
|
“Market value” is calculated by multiplying the number of RSUs or PRSUs that have not vested by the closing price of Common Stock on the NYSE on September 30,
2015
of
$7.66
per share.
|
(5)
|
Represents PRSUs granted in fiscal
2013
for a three-year award cycle (fiscal
2013
through fiscal
2015
). The performance units shown are based on actual performance for fiscal
2013
and
2014
and assume target performance for fiscal
2015
. Actual performance for each of fiscal
2013
and
2014
was
200%
of target. See “Compensation Discussion and Analysis — Compensation Elements — Long-Term Equity-Based Compensation — Performance-Based Restricted Stock Units”.
|
(6)
|
Represents PRSUs granted in fiscal
2014
for a three-year award cycle (fiscal
2014
through fiscal
2016
). The PRSUs shown are based on actual performance for fiscal
2014
and assume target performance for fiscal
2015
and
2016
. Actual performance for fiscal
2015
was
200%
of target. See “Compensation Discussion and Analysis — Compensation Elements — Long-Term Equity-Based Compensation — Performance-Based Restricted Stock Units”.
|
(7)
|
Represents PRSUs granted in fiscal
2015
for a three-year award cycle (fiscal
2015
through fiscal
2017
). The PRSUs shown are based on actual performance for fiscal
2015
and assume target performance for fiscal
2016
and
2017
. Actual performance for fiscal
2015
was
0%
of target. See “Compensation Discussion and Analysis — Compensation Elements — Long-Term Equity-Based Compensation — Performance-Based Restricted Stock Units”.
|
(8)
|
Messrs. Hyland and Fish are “retirement-eligible” under the terms and for purposes of the 2006 Stock Plan. Accordingly, for purposes of this table, all of their outstanding equity-based awards (other than unearned and outstanding PRSUs) are deemed vested, other than awards granted after December 2013. Beginning in December 2013, all equity-based awards (other than PRSUs) require a grantee who is or becomes retirement-eligible prior to an initial vesting date to remain in continuous service from the grant date through at least the first anniversary thereof to receive accelerated vesting upon retirement.
|
|
Option Awards
|
Stock Awards
|
||||||
Name
|
Number of Shares Acquired on Exercise
|
Value Realized on Exercise
(1)
($)
|
Number of Shares Acquired on Vesting
|
Value Realized on Vesting
(2)
($)
|
||||
Gregory E. Hyland
|
181,862
|
|
1,442,948
|
|
290,540
|
|
2,795,592
|
|
Evan L. Hart
|
—
|
|
—
|
|
81,996
|
|
789,664
|
|
Keith L. Belknap
|
—
|
|
—
|
|
72,727
|
|
723,567
|
|
Gregory S. Rogowski
|
69,735
|
|
384,637
|
|
73,387
|
|
707,713
|
|
Thomas E. Fish
|
21,156
|
|
157,532
|
|
64,451
|
|
621,181
|
|
(1)
|
Calculated by subtracting the exercise price of the option from the closing price of Common Stock on the NYSE on the exercise date, multiplied by the number of options exercised.
|
(2)
|
Calculated as the closing price of Common Stock on the NYSE on the vesting date multiplied by the number of RSUs that vested.
|
Name
(1)
|
Base Salary
(2)
($)
|
2015 Annual Target Bonus as Percent of Base Salary
(3)
(%)
|
Monthly Car Allowance
($)
|
Annual Vacation
|
Severance Benefits as Percent of Salary
(4)
(%)
|
||
Gregory E. Hyland
(5)
|
900,000
|
|
100
|
2,000
|
|
4 weeks
|
300.0
|
Evan L. Hart
|
393,500
|
|
75
|
1,500
|
|
4 weeks
|
262.5
|
Keith L. Belknap
|
420,000
|
|
70
|
1,500
|
|
4 weeks
|
240.0
|
Gregory S. Rogowski
|
422,500
|
|
75
|
1,500
|
|
4 weeks
|
262.5
|
Thomas E. Fish
|
401,494
|
|
75
|
1,500
|
|
5 weeks
|
262.5
|
(1)
|
Each agreement provides for an annual equity opportunity, which is subject to the discretion of the Compensation Committee in the case of Mr. Hyland and commensurate with their executive-level position in the case of each other NEO. Each agreement also entitles the employee to receive reimbursement for financial planning services and the cost of an annual physical exam.
|
(2)
|
Salaries are reviewed annually. Amounts shown represent annual salaries as of September 30,
2015
.
|
(3)
|
Payout can range from zero to up to twice the amount of the target based on the satisfaction of predetermined financial, operational and individual performance objectives.
|
(4)
|
Paid in monthly installments over 24 months in the case of Mr. Hyland and over 18 months in the case of each other NEO. Also includes a lump sum payment of unpaid salary and other benefits.
|
(5)
|
Mr. Hyland participates in an unfunded deferred compensation plan. See “— Nonqualified Deferred Compensation During Fiscal
2015
“.
|
Potential Payments Upon Termination or Change-in-Control Table
|
||||||||||||||||||
Name
|
|
Cash Severance
($)
|
|
Bonus Earned as of Event Date
(1)
($)
|
Vesting of Unvested Long-Term Awards
(2)
($)
|
Health, Welfare and Other Benefits Continuation
($)
|
|
Outplacement
(3)
($)
|
|
Sec 280G Excise Tax and Related Gross-Up
(4)
($)
|
Total
($)
|
|||||||
Gregory E. Hyland
|
A
|
3,395,622
|
|
(5)
|
280,485
|
|
—
|
|
50,281
|
|
(9)
|
25,000
|
|
|
—
|
|
3,751,388
|
|
|
B
|
3,663,914
|
|
(6)
|
280,845
|
|
3,598,760
|
|
50,281
|
|
(9)
|
315,000
|
|
|
—
|
|
7,908,800
|
|
|
C
|
626,391
|
|
(7)
|
—
|
|
2,776,926
|
|
—
|
|
|
—
|
|
|
—
|
|
3,403,317
|
|
Evan L. Hart
|
A
|
1,063,207
|
|
(5)
|
96,560
|
|
—
|
|
14,088
|
|
(9)
|
25,000
|
|
|
—
|
|
1,198,855
|
|
|
B
|
1,128,676
|
|
(6)
|
96,560
|
|
1,043,752
|
|
18,785
|
|
(9)
|
137,725
|
|
|
—
|
|
2,425,498
|
|
|
C
|
—
|
|
|
—
|
|
812,412
|
|
—
|
|
|
—
|
|
|
—
|
|
812,412
|
|
Keith L. Belknap
|
A
|
1,040,308
|
|
(5)
|
89,218
|
|
—
|
|
25,334
|
|
(9)
|
25,000
|
|
|
—
|
|
1,179,860
|
|
|
B
|
1,046,456
|
|
(6)
|
89,218
|
|
965,620
|
|
33,778
|
|
(9)
|
147,000
|
|
|
—
|
|
2,282,072
|
|
|
C
|
—
|
|
|
—
|
|
801,259
|
|
—
|
|
|
—
|
|
|
—
|
|
801,259
|
|
Gregory S. Rogowski
|
A
|
1,141,563
|
|
(5)
|
196,283
|
|
—
|
|
10,329
|
|
(9)
|
25,000
|
|
|
—
|
|
1,373,175
|
|
|
B
|
1,185,489
|
|
(6)
|
196,283
|
|
1,010,400
|
|
13,771
|
|
(9)
|
147,875
|
|
|
—
|
|
2,553,818
|
|
|
C
|
—
|
|
|
—
|
|
788,513
|
|
—
|
|
|
—
|
|
|
—
|
|
788,513
|
|
Thomas E. Fish
|
A
|
1,092,527
|
|
(5)
|
27,266
|
|
—
|
|
28,923
|
|
(9)
|
25,000
|
|
|
—
|
|
1,173,716
|
|
|
B
|
1,036,333
|
|
(8)
|
27,266
|
|
1,533,049
|
|
38,564
|
|
(9)
|
140,523
|
|
|
—
|
|
2,775,735
|
|
|
C
|
—
|
|
|
—
|
|
1,344,031
|
|
—
|
|
|
—
|
|
|
—
|
|
1,344,031
|
|
(1)
|
Each is entitled to a pro rata share of the current fiscal year bonus in the event of termination without Cause or after a change-in-control. Amounts in this table assume a termination date of September 30,
2015
and represent the actual bonus paid for fiscal
2015
since this amount would not have otherwise been paid at that date.
|
(2)
|
The value of stock options is calculated as the difference between the closing price of Common Stock on September 30,
2015
and the option exercise prices per share multiplied by the number of in-the-money options. The value of RSUs is the closing price of Common Stock on September 30,
2015
multiplied by the number of RSUs. The value of PRSUs reflects the pro rata portion of shares earned during the performance period and payout at target for future performance periods within the award cycle. The closing price of our common stock on September 30,
2015
on the NYSE was
$7.66
. Upon termination due to death, disability or retirement, only the equity awards granted beginning November 2007 vest automatically in accordance with their terms.
|
(3)
|
Services in Case A will be reasonable in our sole discretion. Services in Case B will be provided for up to two years, but will not exceed 35% of the NEO’s base salary at the time of termination.
|
(4)
|
The estimated gross-up for purposes of Section 280G is calculated by determining if the total amount payable to the executive contingent upon a change-in-control exceeds 2.99 times the average of the annual eligible compensation payable to the executive during the preceding five years. If the total amount payable exceeds the average annual compensation amount, a “gross-up” amount is added to the amounts paid to the executive (other than Messrs. Belknap and Fish) in order to put the executive in the same after-tax position as if he had not been subject to the excise tax.
|
(5)
|
Cash severance is equal to a percentage of current annual base salary plus accrued but untaken vacation. The percentage applicable to Mr. Hyland is 300%. The percentage applicable to Messrs. Hart, Rogowski and Fish is 262.5%. The percentage applicable to Mr. Belknap is 240%. Cash severance to Mr. Hyland also includes payout under the Retirement Plan. Accrued vacation assumes no vacation has been taken.
|
(6)
|
Cash severance for Messrs. Hyland, Hart and Rogowski is equal to two times annual base salary plus two times the average bonus over the last three years, plus accrued but untaken vacation. Cash severance to Mr. Hyland also includes payout under the Retirement Plan. Cash severance for Mr. Belknap is equal to two times annual base salary plus one and a half times the average bonus over the last three years (unless reduced as described in footnote 11), plus accrued but untaken vacation. Accrued vacation assumes no vacation has been taken.
|
(7)
|
Cash severance to Mr. Hyland includes payout under the Retirement Plan. See “— Nonqualified Deferred Compensation During Fiscal
2015
“.
|
(8)
|
Cash severance is equal to the lesser of two times annual base salary plus two times the average bonus over the last three years or 2.99 times annual base salary, plus accrued but untaken vacation.
|
(9)
|
Welfare benefits are continued for up to 24 months for Mr. Hyland and 18 months for other NEOs from the separation date based on the current elections and plan premiums.
|
Name and Address of Beneficial Owner
(1)
|
Aggregate Number of Shares of Common Stock Beneficially Owned
(2)
|
Percent of Outstanding Common Stock
|
|||
Shirley C. Franklin, Director
|
112,165
|
|
(3)
|
*
|
|
Thomas J. Hansen, Director
|
90,016
|
|
(3)
|
*
|
|
Gregory E. Hyland, Chairman, President and Chief Executive Officer
|
2,971,162
|
|
(4)
|
1.8
|
|
Jerry W. Kolb, Director
|
200,462
|
|
(3)
|
*
|
|
Joseph B. Leonard, Director
|
211,910
|
|
(3)
|
*
|
|
Mark J. O’Brien, Director
|
182,910
|
|
(3)
|
*
|
|
Bernard G. Rethore, Director
|
209,214
|
|
(3)
|
*
|
|
Neil A. Springer, Director
|
181,736
|
|
(3) (5)
|
*
|
|
Lydia W. Thomas, Director
|
144,271
|
|
(3)
|
*
|
|
Michael T. Tokarz, Director
|
507,958
|
|
(3)
|
*
|
|
Evan L. Hart, Senior Vice President and Chief Financial Officer
|
721,119
|
|
|
*
|
|
Keith L. Belknap, Senior Vice President, General Counsel and Chief Compliance Officer; President of Mueller Technologies companies
|
135,895
|
|
|
*
|
|
Gregory S. Rogowski, President, Mueller Co.
|
566,842
|
|
|
*
|
|
Thomas E. Fish, President, Anvil
|
411,291
|
|
(6)
|
*
|
|
All directors and executive officers as a group (17 individuals)
|
7,474,460
|
|
|
4.6
|
|
Dimensional Fund Advisors LP
6300 Bee Cave Road, Building One, Austin, TX 78746
|
11,000,452
|
|
(7)
|
6.8
|
|
Vanguard Group Inc.
PO Box 2600, V26, Valley Forge, PA 19482-2600
|
10,175,150
|
|
(8)
|
6.3
|
|
BlackRock, Inc.
55 East 52nd Street, New York, NY 10055
|
9,005,323
|
|
(9)
|
5.6
|
|
*
|
Less than 1% of outstanding common stock.
|
(1)
|
The address of each of our directors and executive officers is c/o Mueller Water Products, Inc., 1200 Abernathy Road, N.E., Suite 1200, Atlanta, Georgia 30328.
|
(2)
|
Beneficial ownership as reported in the table has been determined in accordance with the rules of the SEC. Under those rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of, or to direct the disposition of, such security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under such rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may disclaim any beneficial interest. Except as indicated in other notes to this table, directors and executive officers possessed sole voting and investment power with respect to all shares of Common Stock referred to in the table. See “Executive Compensation — Outstanding Equity Awards at Fiscal Year-End Table” for more information concerning outstanding equity awards to our NEOs and “Director Compensation — Director Compensation Summary” for more information concerning outstanding equity awards to our directors.
|
(3)
|
Each director is “retirement-eligible” under and for purposes of the 2006 Stock Plan. Accordingly, for purposes of this table, all of their outstanding equity-based awards are deemed vested. Beginning with the equity-based awards granted to directors in January 2014, all such awards to directors require a grantee who is or becomes retirement-eligible prior to an initial vesting date to remain in continuous service from the grant date through at least the first anniversary thereof to receive accelerated vesting upon retirement. The beneficial ownership reported in the table assumes each grantee of an award on
January 28, 2015
will remain in continuous service through January 28, 2016. Because Mr. Springer is scheduled to retire from the Board at a Board meeting scheduled for January 27, 2016, the vesting of outstanding stock awards will accelerate on that date.
|
(4)
|
Includes 213,898 RSUs and no options that are subject to accelerated vesting upon retirement. Also includes 78,246 PRSUs earned with respect to the 2014 and 2015 performance periods under the December 3, 2013 grant and 0 PRSUs earned with respect to the 2015 performance period under the December 2, 2014 grant.
|
(5)
|
Reflects the vesting of outstanding stock awards that will accelerate on January 27, 2016, the date on which Mr. Springer is expected to retire from the Board.
|
(6)
|
Includes 112,775 RSUs and no options that are subject to accelerated vesting upon retirement. Also includes 17,996 PRSUs earned with respect to the 2014 and 2015 performance periods under the December 3, 2013 grant and no PRSUs earned with respect to the 2015 performance period under the December 2, 2014 grant.
|
(7)
|
As reported on Schedule 13G/A filed with the SEC on February 2, 2015, Dimensional Fund Advisors LP has sole investment discretion with respect to 11,000,452 shares and sole voting power with respect to 10,621,967 shares.
|
(8)
|
As reported on Schedule 13G/A filed with the SEC on February 11, 2015, Vanguard Group, Inc. has sole investment discretion with respect to 10,175,150 shares and sole voting power with respect to 199,346 shares.
|
(9)
|
As reported on Schedule 13G/A filed with the SEC on February 2, 2015, Blackrock, Inc. has sole investment discretion of 9,005,323 shares and sole voting power with respect to 8,645,452 shares.
|
Voting Item
|
Voting Standard
|
Treatment of Abstentions & Broker Non-Votes
|
Board Recommendation
|
|
|
|
|
Elect Directors
|
Plurality of votes cast
|
Not counted as votes cast and, therefore, no effect
|
FOR
|
Say on Pay
|
Majority of votes cast
|
Not counted as votes cast and, therefore, no effect
|
FOR
|
Amend 2010 Management Incentive Plan and Re-Approval of Performance Goals
|
Majority of votes cast
|
Not counted as votes cast and, therefore, no effect
|
FOR
|
Amend 2006 Employee Stock Purchase Plan
|
Majority of votes cast
|
Not counted as votes cast and, therefore, no effect
|
FOR
|
Amend 2006 Stock Incentive Plan and Re-Approval of Performance Goals
|
Majority of votes cast
|
Not counted as votes cast and, therefore, no effect
|
FOR
|
Ratify Auditor
|
Majority of votes cast
|
N/A
|
FOR
|
•
|
Internet at the web address noted in the Notice, proxy materials email or proxy card that you received (
we
encourage you to vote in this manner
);
|
•
|
Telephone through the number noted in the proxy card that you received (if you received a proxy card);
|
•
|
Signing and dating your proxy card (if you received a proxy card) and mailing it to the indicated address; or
|
•
|
Attending the Annual Meeting and voting in person.
|
•
|
Voting again using the Internet or by telephone prior to the Annual Meeting;
|
•
|
Delivering a later-dated proxy card; or
|
•
|
Voting in person at the meeting (if you are a beneficial stockholder).
|
•
|
When to submit?
Any stockholder proposals submitted in accordance with Rule 14a-8 must be received at our principal executive offices no later than the close of business on September 17, 2016.
|
•
|
Where to submit?
Proposals should be addressed to Corporate Secretary, Mueller Water Products, Inc., 1200 Abernathy Road, N.E., Atlanta, Georgia 30328.
|
•
|
What to submit?
Proposals must conform to and include the information required by Rule 14a-8.
|
•
|
When to submit?
Stockholder proposals submitted under these Bylaw provisions must be received no earlier than September 17, 2016 and no later than the close of business on October 17, 2016.
|
•
|
Where to submit?
Proposals should be addressed to Corporate Secretary, Mueller Water Products, Inc., 1200 Abernathy Road, N.E., Atlanta, Georgia 30328.
|
•
|
What to submit?
Proposals must include the information required by our Bylaws, which are available on our website. If the notice delivered to our Corporate Secretary does not contain all of the information specified in our Bylaws, the proposed business will not be transacted at the annual meeting.
|
Reconciliation of Non-GAAP Measures to GAAP Results
|
||||
|
|
|
|
|
Net income
|
$
|
30.9
|
|
|
Adjustments to net income:
|
|
|||
Loss on early extinguishment of debt, net of tax
|
|
19.0
|
|
|
Loss on Walter receivable, net of tax
|
|
7.0
|
|
|
Restructuring, net of tax
|
|
5.6
|
|
|
Foreign currency
|
|
4.2
|
|
|
Other
|
|
0.2
|
|
|
Adjusted net income
|
$
|
66.9
|
|
|
|
|
|||
Net cash provided by operating activities
|
$
|
87.8
|
|
|
Capital expenditures
|
(37.5
|
)
|
|
|
Free cash flow
|
50.3
|
|
|
|
Adjustments to free cash flow:
|
|
|||
Foreign currency
|
|
6.9
|
|
|
Restructuring
|
|
5.7
|
|
|
Accrued interest adjustment
|
|
7.4
|
|
|
Pension related
|
|
1.4
|
|
|
Income taxes
|
|
(6.7
|
)
|
|
Other
|
|
1.2
|
|
|
Consolidated adjusted free cash flow
|
$
|
66.2
|
|
|
|
|
|||
Mueller Co. operating income
|
|
145.3
|
|
|
Adjustments to operating income:
|
|
|
|
|
Foreign currency
|
|
7.0
|
|
|
Maintenance supply and tooling cost adjustment
|
|
(1.0
|
)
|
|
Other
|
|
0.6
|
|
|
Mueller Co. adjusted operating income
|
$
|
151.9
|
|
|
|
|
|||
Anvil operating income
|
$
|
30.6
|
|
|
Adjustments to operating income:
|
|
|||
Foreign currency
|
0.7
|
|
|
|
Maintenance supply and tooling cost adjustment
|
|
(0.5
|
)
|
|
Anvil adjusted operating income
|
$
|
30.8
|
|
|
|
|
I.
|
Purpose and Background
|
II.
|
Definitions
|
A.
|
“
Administrator
” shall mean the Committee, with respect to the Covered Participants and with respect to all other employees, the Chief Executive Officer or his designee.
|
B.
|
“
Base Pay
” shall mean base salary as of the beginning day of the Fiscal Year, before taxes, Social Security and other deductions.
|
C.
|
“
Board of Directors
” or “
Board
” shall mean the Board of Directors of the Company.
|
D.
|
“
Change of Control
” means the occurrence of any of the following events:
|
(i)
|
The sale, exchange, lease or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to a person or group of related persons, as such terms are defined or described in Sections 3(a)(9) and 13(d)(3) of the Exchange Act;
|
(ii)
|
A merger or consolidation or similar transaction involving the Company if the stockholders of the common stock of the Company immediately prior to such transaction do not own a majority of the outstanding common stock of the surviving company or its parent immediately after the transaction in substantially the same proportions relative to each other as immediately prior to such transaction;
|
(iii)
|
Any person or group becomes the beneficial owner, directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company, including by way of merger, consolidation or otherwise (for the purposes of this clause (iii), a member of a group will not be considered to be the beneficial owner of the securities owned by other members of the group other than in response to a contested proxy or other control battle); or
|
(iv)
|
During any period of two (2) consecutive years, individuals who at the beginning of such period constituted the Board (together with any new directors whose election by such Board or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors of the Company then still in office, who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board then in office.
|
E.
|
“
Code
” shall mean the Internal Revenue Code of 1986, as amended.
|
F.
|
“
Committee
” shall mean a committee of two or more members consisting solely of members of the Compensation and Human Resources Committee of the Board, or in the absence of such a Committee, the Board, who qualify as "outside directors" under Section 162(m) of the Code.
|
G.
|
“
Company
” shall mean Mueller Water Products, Inc., including its subsidiaries and affiliates.
|
H.
|
“
Covered Participant
” means a Participant who is a “covered employee,” as defined in Section 162(m) of the Code and the regulations or other guidance promulgated by the Internal Revenue Service under Section 162(m) of the Code, or any successor statute, and such other key executives as the Committee shall determine.
|
I.
|
“
Disability
” shall mean a permanent disability that would entitle the employee to benefits under the Company's long-term disability plan.
|
J.
|
“
Fiscal Year
” shall mean the Company's then current fiscal year, which currently commences on October 1 and ends on September 30.
|
K.
|
“
Participant
” shall mean any employee who has been selected to participate in the Plan for the Performance Period.
|
L.
|
“
Performance-Based Compensation
” shall mean compensation that qualifies for the “qualified performance-based compensation exception” under Section 162(m) of the Code, or any successor provisions.
|
M.
|
“
Performance Goal
” shall mean such goals as are identified as such in Section V.
|
N.
|
“
Performance Period
” shall mean the Company’s Fiscal Year, or such shorter period as determined by the Committee.
|
III.
|
Administration
|
IV.
|
Participation
|
V.
|
Operation of the Plan
|
A.
|
Establishment of Performance Goals
|
B.
|
Financial and Operational Performance Goals
|
(a)
|
Net sales or growth in net sales,
|
(b)
|
Earnings, as determined by GAAP or before or after discontinued operations, interest, taxes, or depreciation and/or amortization (“EBITDA”),
|
(c)
|
Earnings per share (including diluted earnings per share) or book value per share,
|
(d)
|
Income (including gross, net or pre-tax income),
|
(e)
|
Operating income before or after discontinued operations and/or taxes,
|
(f)
|
Cash flow (including free cash flow) or cash position,
|
(g)
|
Gross or operating margin,
|
(h)
|
Stock price appreciation,
|
(i)
|
Market share,
|
(j)
|
Return (before or after taking into account taxation or tax rates) on sales, assets, equity, investment or invested capital,
|
(k)
|
Cost reductions or expense management,
|
(l)
|
Improvement of financial ratings or capital structure,
|
(m)
|
Working capital or working capital relative to some other measure (e.g., as a percent of net sales or return on net assets),
|
(n)
|
Days of working capital,
|
(o)
|
Profitability of an identifiable business unit or product,
|
(p)
|
Total stockholder return,
|
(q)
|
Funds from operations and
|
(r)
|
Consummation of acquisitions or sales of certain Company assets, subsidiaries or other businesses.
|
C.
|
Individual Performance Goals
|
D.
|
General Matters
|
i.
|
Events of an “unusual nature” and/or that indicate “infrequency of occurrence”, each as defined in FASB Accounting Standards Update 2015-01, and appearing in the Company’s financial statements or notes thereto in the Company’s annual report on Form 10-K, and/or in management’s discussion and analysis of financial performance appearing in such annual report,,
|
ii.
|
Gains or losses on dispositions or the effect of discontinued operations, or mergers or acquisitions,
|
iii.
|
The cumulative effects of changes in accounting principles or changes in laws or regulations affecting GAAP results (including tax laws and regulations),
|
iv.
|
The writedown of assets,
|
v.
|
Charges for reorganization and restructuring,
|
vi.
|
Material litigation, claims, judgments or settlements, and
|
vii.
|
Cash pension funding in excess of predetermined levels.
|
E.
|
Assignment of Bonus Award
|
F.
|
Means of Earning Bonus
|
G.
|
Maximum Bonus Award
|
VI.
|
Determination and Payment of Bonus Award
|
VII.
|
Miscellaneous
|
A.
|
Time of Payment; Retirement, Death, Disability, Change in Control or Other Termination
|
B.
|
Tax Withholding; Tax Effect
|
C.
|
Claim to Awards and Employee Rights
|
D.
|
Nontransferability
|
E.
|
Applicable Law
|
F.
|
Stockholder Approval
|
G.
|
Amendment, Modification and Termination
|
H.
|
Section 409A
|
I.
|
C
lawback Policy
|
J.
|
Severability
|
1.
|
Purpose and Background
.
|
2.
|
Definitions
.
|
3.
|
Eligibility
.
|
5.
|
Participation
.
|
6.
|
Method of Payment of Contributions
.
|
8.
|
Exercise of Option
.
|
9.
|
Delivery
.
|
10.
|
Voluntary Withdrawal; Termination of Employment
.
|
11.
|
Interest
. No interest shall accrue on the Contributions of a Participant in the Plan.
|
12.
|
Stock
.
|
13.
|
Administration
.
|