Employment Agreement

Amendment to Employment Agreement

Amendment 2 to Employment Agreement

Amendment 3 to Employment Agreement

Amendment 4 to Employment Agreement

Executive Change-in-Control Severance Agreement

 

 

EX-99.1 2 dex991.htm EMPLOYMENT AGREEMENT, GREGORY E. HYLAND

Exhibit 99.1

 

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 15th day of September, 2008 (the “Effective Date”) by and between Mueller Water Products, Inc. (“Company”) and Gregory E. Hyland (“Executive”). This Agreement sets forth the terms and conditions of Executive’s employment and termination of employment with the Company whenever that occurs.

ARTICLE I: TERMS OF EMPLOYMENT

 

1.

Prior Agreements. Executive acknowledges and represents that any and all prior employment agreements the Employment Agreement between Walter Industries, Inc. and Executive dated as of September 9, 2005, as assigned to and assumed by Mueller Water Products, Inc. as of December 14, 2006 are terminated and that the only obligations and duties between the Company and the Executive with respect to any severance are those expressly set forth in this Agreement and those set forth in the Change in Control Severance Agreement between Executive and the Company dated as of the date hereof (the “Change in Control Agreement”). Executive represents and warrants that the Executive is not a party to any other agreement or obligation for personal services and that there exists no impediment or restraint, contractual or otherwise on the Executive’s power, right or ability to accept the Company’s offer of employment and to perform the employment specified in this Agreement.

 

2.

Employment

 

 

a.

Executive will serve as Chairman, President and Chief Executive Officer and Executive’s designated work location will be Atlanta, Georgia. Executive will have the responsibilities generally consistent for such position in similarly sized public companies and such other and additional responsibilities as may be assigned to Executive from time to time by the Company’s Board of Directors. Executive acknowledges that this Agreement contemplates any possible future promotion and any assignment of responsibilities with respect to any affiliate or subsidiary of the Company, which may be made without amendment of this Agreement.

 

 

b.

Executive shall devote substantially all of Executive’s working time, attention and energies to the business of the Company and its affiliated entities. With permission of the Board of Directors, Executive however, may be involved in charitable and professional activities and serve on boards of not-for-profit entities, in each case in accordance with Company policy and in a manner and in organizations that will not adversely effect the Executive’s performance or reflect unfavorably on the Company. Executive may not serve on any for-profit board without the prior permission of the Board of Directors. In no event will Executive be covered by any insurance policies of the Company for service on other boards unless pursuant to a specific written endorsement approved by the Board of Directors of the Company and obtained by the Executive.


3.

Compensation and Benefits

 

 

a.

Executive’s initial base salary will be $790,000 per year. Executive’s salary and job performance will be reviewed at least once per year consistent with the practices of the Company.

 

 

b.

Executive is entitled to participate in a Company executive incentive bonus plan, as in effect from time to time and as approved by the Compensation Committee of the Board of Directors. Executive’s initial target annual bonus will be one hundred percent (100%) of the Executive’s base salary in effect for such year. Actual annual bonus may range from 0% to 200% of target and will be determined based upon corporate and/or individual performance factors established by the Company. Bonus ranges, target and performance goals may be changed in accordance with the applicable plan and without amendment of this Agreement. Executive must be employed on the date the Board approves the bonus payable with respect to any fiscal year to be eligible to receive an annual bonus for such fiscal year.

 

 

c.

Executive will be eligible for the Company’s long term incentive program consistent with its application to executives generally at the level of responsibility held and with the terms of such program, as in effect from time to time. The target value of Executive’s annual long term incentive program equity opportunity will be $1.6 million This award is at the discretion of the Compensation Committee of the Board of Directors.

 

 

d.

Executive shall be eligible to participate in any pension, profit sharing, health or welfare benefit generally made available by the Company to similarly situated executive employees, as in effect from time to time, including, without limitation:

 

 

i.

life and group health (medical, dental, etc.) benefits generally applicable to executives in the location in which Executive is primarily based, as in effect from time to time and in accordance with their terms.

 

 

ii.

Retirement Savings Plan generally applicable to salaried employees in the location in which Executive is primarily based, as in effect from time to time and in accordance with its terms.

 

 

iii.

Employee Stock Purchase Plan generally applicable to salaried employees in the location in which Executive is primarily based, as in effect from time to time and in accordance with its terms.

 

 

iv.

Four weeks of annual vacation to be used in accordance with the Company’s vacation policies generally applicable to executives in the location in which Executive is primarily based, as in effect from time to time.

 

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v.

Expense reimbursement for properly documented ordinary and necessary business expenses incurred by Executive in the performance of employment hereunder in accordance with the Company’s expense reimbursement policy.

 

 

e.

Executive shall be entitled to a car allowance of $2,000 per month, subject to applicable taxes.

 

 

f.

Executive shall be entitled to reimbursement of financial planning expenses in accordance with the Company’s policy for executive financial planning.

 

 

g.

Executive shall be entitled to reimbursement for expenses of an annual physical in accordance with the Company’s policy for executive physical exams.

 

 

h.

Executive shall be entitled to reimbursement for membership dues in one country club and one luncheon club in the Atlanta, Georgia area, in accordance with the Company’s policy for executive club reimbursement.

 

 

i.

Executive agrees to comply with policies as adopted from time to time by the Board of Directors for executives, which includes stock ownership guidelines.

 

 

j.

Executive shall be entitled to participate in the Mueller Water Products, Inc. Supplemental Defined Contribution Plan.

The reimbursement of expenses during a year will not affect the expenses eligible for reimbursement in any other year. With respect to reimbursement of any expenses, in no event shall such an expense be reimbursed after the last day of the year following the year in which the expense was incurred. This provision has no effect on the policies of the Company with respect to expense reimbursement.

 

4.

Termination of Employment - Death; By Company for Cause or Disability; By Executive’s Resignation for Good Reason. Executive’s employment automatically terminates upon Executive’s death. The Company may terminate Executive’s employment on account of Disability or for Cause. Executive may voluntarily resign or retire from employment for Good Reason upon not less than 15 business days prior written notice to the Company. Upon termination of employment for any of these reasons, Executive shall be entitled to base salary through the end of the fiscal year in which the termination occurs, and other benefits in accordance with the terms of the Company’s retirement, insurance, and other applicable plans and programs then in effect.

 

 

a.

For purposes of this Agreement, “Disability” occurs if Executive has been physically or mentally incapacitated so as to render Executive incapable of performing the essential functions of any substantial gainful activity, or Executive has received income replacement benefits under a Company plan for at least three months, and, in either instance, that incapacity is expected to result in death or to last for a continuous period of at least 12 months. Executive’s receipt of disability benefits under the Company’s long-term disability plan or receipt of Social Security disability benefits, among other possible evidence, shall be deemed conclusive evidence of Disability for purposes of this Agreement.

 

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b.

For purposes of this Agreement, the term “Cause” means any of the following: Executive’s (i) conviction or guilty plea of a felony or conviction or guilty plea of any crime involving fraud or dishonesty, (ii) theft or embezzlement of property from the Company, (iii) willful and continued refusal to perform the duties of Executive’s position in all material respects (other than any such failure resulting from Executive’s incapacity due to physical or mental illness) that continues for more than 15 business days after the Company gives Executive written notice of the failure, specifying what duties Executive failed to perform and an opportunity to cure within 30 days, (iv) fraudulent preparation of financial information of the Company; (v) willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, provided that no act or failure to act on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interests of the Company or (vi) willful violation of material Company policies or procedures, including but not limited to, the Company’s Code of Business Conduct and Ethics and Compliance Program (or any successor policy) then in effect.

 

 

c.

For purposes of this Agreement, the term “Good Reason” shall have the meaning set forth in Article I, Section 6(b).

 

5.

Involuntary Termination of Employment by the Company. If the Company involuntarily terminates the employment of Executive other than as set forth in Section 4, the Executive will be entitled to the benefits set forth below.

Severance Benefits” consist of:

 

 

i.

Lump sum payment of unpaid base salary and other benefits, including accrued but unused vacation pay and unreimbursed business expenses, accrued to the date of termination of employment and paid on the same basis as paid upon any voluntary termination of employment.

 

 

ii.

A total amount equal to 100% of (A) Executive’s current monthly rate of base salary multiplied by 24 months (the “Base Amount”) and (B) one-twelfth of the annual target bonus multiplied by 12 months (the “Bonus Amount”). Payment of the Base Amount shall be made in substantially equal monthly installments over 24 months from the date of Executive’s separation from service (within the meaning of Section 409A of the Code) and payment of the Bonus Amount shall be made in substantially equal monthly installments over 12 months from the date of Executive’s separation from service (within the meaning of Section 409A of the Code). The first of each such installment shall be paid within sixty (60) days following Executive’s separation from service (the “Commencement Date”) and subsequent installments shall be paid on the last business day of each succeeding month; provided, however, that Executive’s

 

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entitlement to each such installment shall be contingent upon execution (and non-revocation) by Executive of the release under article III, Section 2. All payments are subject to applicable taxes.

 

 

iii.

Notwithstanding contrary provisions in an executive incentive bonus plan or in Section 3.b of this Article I, Executive will be paid an annual bonus for the fiscal year in which the termination of employment occurs determined and paid in the same manner as for all other executive participants in the annual bonus program except that the bonus will be pro rated for the portion of the fiscal year during which Executive was actively employed and will be paid within sixty (60) days after the end of such fiscal year.

 

 

iv.

The Company will charge Executive the active employee rate for healthcare coverage for 18 months after termination of employment. The COBRA election period will not commence until after the expiration of that period. After Executive has exhausted COBRA coverage, Executive will continue to be provided health coverage substantially the same as COBRA coverage at the active employee rate for 18 additional months of coverage. Executive may decline coverage at any time. If Executive declines coverage or becomes eligible for coverage by another employer, such coverage will cease and Executive may not become covered by Company coverage again.

 

 

v.

Executive will continue group life insurance coverage for a period of 24 months following Executive’s termination of employment date.

 

 

vi.

Notwithstanding anything to the contrary herein, if Executive is a “specified employee” under Section 409A of the Code, then any payment(s) to the Executive described in this Agreement that (A) constitute “deferred compensation” to an Executive under Section 409A; (B) are not exempt from Section 409A; and (C) are otherwise payable within 6 months after Executive’s separation from service (within the meaning of Section 409A of the Code) shall instead be made on the date 6 months and 1 day after such separation from service, and such payment(s) shall be increased by an amount equal to interest on each such payment(s) at a rate of interest equal to the Federal Funds Rate in effect as of the date of termination of employment from the date on which such payment(s) would have been made in the absence of this provision and the payment date described in this sentence. The Federal Funds Rate shall mean the “Federal Funds Rate” as issued in the Money Rates column of The Wall Street Journal on the date prior to the calculation of any interest under this Agreement.

 

6.

Termination by Executive for Good Reason. If Executive terminates employment for Good Reason, Executive will be entitled to the same benefits as if employment had been terminated involuntarily under Article I, Section 5(a). Any benefits provided under this section are conditioned on Executive giving written notice to the Company under subsection (a) below and meeting the requirements for a satisfactory release as set forth in Article III, Section 2.

 

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a.

Termination for Good Reason means delivery of a Notice of Termination for Good Reason by Executive given to the Company’s Senior Vice President of Human Resources within ninety (90) days of the occurrence of the event giving rise to the Notice, unless such circumstances are substantially corrected prior to the date of termination specified in the Notice of Termination for Good Reason. A “Notice of Termination for Good Reason” shall mean a notice that (i) indicates the specific termination provision or provisions relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination for Good Reason and (iii) indicates a date of termination of employment. The failure by Executive to set forth in the Notice of Termination for Good Reason any facts or circumstances which contribute to the showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder. The Notice of Termination for Good Reason shall provide for a date of termination of employment not less than fifteen (15) nor more than thirty (30) days after the date such Notice of Termination for Good Reason is given, provided that in the case of the events set forth in Article I, Sections 6(b)(i) or (ii), the date may be not less than twenty (20) days after the giving of such notice.

 

 

b.

For purposes of this Agreement, “Good Reason” means, without Executive’s express written consent, the occurrence of any one or more of the following to the extent that there is, or would be if not corrected, a material negative change in the Executive’s employment relationship with the Company:

 

 

i.

The assignment of the Executive to duties materially inconsistent with the Executive’s authorities, duties, responsibilities, and status as an executive and/or officer of the Company, or a material reduction or alteration in the nature or status of the Executive’s authorities, duties, or responsibilities from those in effect as of ninety (90) calendar days prior to the reassignment, other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Executive.

 

 

ii.

The Company’s requiring the Executive to be based at a new or different location from the location of the Executive’s current principal job location or office which would result in a material negative change in Executive’s employment; provided that for purposes of this subsection, a material negative change to the employment relationship is presumed if the new location is in excess of fifty (50) miles of the old location; or

 

 

iii.

A material reduction by the Company of the Executive’s base salary in effect on the Effective Date hereof, or as the same shall be increased from time to time.

 

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iv.

A material negative change in responsibility or base salary shall not have occurred under this Section 6(b) if (A) the amount of the Executive’s bonus fluctuates due to performance considerations under the company’s incentive plan in effect from time to time or (B) the Executive is transferred to a position of comparable responsibility and compensation with the Company.

Unless the Executive becomes Totally Disabled, the Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason herein.

 

7.

Clawback

Notwithstanding anything herein to the contrary and only to the extent required by law, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, then the Executive agrees to reimburse the Company for (a) any bonus or other incentive-based or equity-based compensation received by such Executive from the Company during the 12-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurs) of the financial document embodying such financial reporting requirement and (b) any profits realized from the sale of securities of the Company during that 12-month period. The Compensation Committee of the Board of Directors shall have the exclusive authority to interpret and enforce this provision.

 

8.

Taxes and Tax Equalization

 

 

a.

The Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as legally shall be required.

 

9.

Compliance with Code Section 409A

 

 

a.

Each of the payments of severance and continued medical benefits under Article I, Sections 4 and 5 above are designated as separate payments for purposes of the short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F), the exemption for involuntary terminations under separation pay plans under Treasury Regulation Section 1.409A-1(b)(9)(iii), and the exemption for medical expense reimbursements under Treasury Regulation Section 1.409A-1(b)(9)(v)(B).

 

 

b.

It is the intention of the Company and Executive that this Agreement not result in unfavorable tax consequences to Executive under Code Section 409A. Accordingly, Executive consents to any amendment of this Agreement as the Company may reasonably make in furtherance of such intention, and the Company shall promptly provide, or make available to, Executive a copy of such amendment. Any such amendments shall be made in a manner that preserves to

 

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the maximum extent possible the intended benefits to Executive. This Section 8(b) does not create an obligation on the part of the Company to modify this Agreement and does not guarantee that the amounts or benefits owed under this Agreement will not be subject to interest and penalties under Code Section 409A.

ARTICLE II: POST EMPLOYMENT OBLIGATIONS AND RESTRICTIONS

 

1.

Noncompetition.

In the event that Executive’s employment is terminated pursuant to Article I, Sections 4 or 5, then Executive agrees as follows:

 

 

a.

Executive will not perform Competitive Services, directly or indirectly, for any person, entity, business, or enterprise in the United States engaged in the business of the Company as being carried on as of the date of termination (“Competing Business”) for the period of twelve (12) months following the date of termination of the Executive’s employment with the Company). For the purposes of this restriction, “Competitive Services” means performing services as [describe position] and duties substantially similar to those duties Executive will perform for Employer under this Agreement or, in the case of managerial or executive duties, managerial or executive duties for a competitor.

 

 

b.

Executive acknowledges and agrees that:

 

 

i.

Executive is familiar with the business of Employer and the commercial and competitive nature of the industry and recognizes that the value of Employer’s business would be injured if Executive performed Competitive Services for a Competing Business;

 

 

ii.

This Non-Competition Agreement is essential to the continued good will and profitability of Employer;

 

 

iii.

In the course of employment with Employer, Executive will become familiar with the trade secrets and other Confidential Information (as defined below) of Employer and its subsidiaries, affiliates, and related entities, and that Executive’s services will be of special, unique, and extraordinary value to Employer; and

 

 

iv.

Executive’s skills and abilities enable Executive to seek and obtain similar employment in a business other than a Competing Business, and Executive possesses other skills that will serve as the basis for employment opportunities that are not prohibited by this Non-Competition Agreement. When Executive’s employment with Employer terminates, Executive expects to be able to earn a livelihood without violating the terms of this Agreement.

 

2.

Nonsolicitation of Employees. During the term of the Executive’s employment with the Company and for a period of twelve (12) months following the termination of the Executive’s employment with the Company for any reason whatsoever, the Executive

 

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shall not, either on his or her own account or for any person, firm, partnership, corporation, limited liability company, or other entity within the Territory; (a) solicit any employee of the Company to leave his or her employment with the Company; or (b) induce or attempt to induce any such employee to breach his or her employment agreement with the Company.

 

3.

Nonsolicitation of Customers. During the term of the Executive’s employment with the Company and for a period of two (2) years following the termination of the Executive’s employment with the Company for any reason whatsoever, the Executive shall not directly or indirectly solicit or attempt to solicit any current customer of the Company or any of its subsidiaries with which the Executive had material contact during his or her employment with the Company: (a) to cease doing business in whole or in part with or through the Company or any of its subsidiaries; or (b) to do business with any other person, firm, partnership, corporation, limited liability company, or other entity which performs services competitive to those provided by the Company or any of its subsidiaries. This restriction on post-employment conduct shall apply only to solicitation for the purpose of selling or offering products or services that are similar to or which compete with those products or services offered by the Company during the period of the Executive’s employment. For purposes of this Section 4, “material contact” shall be defined as any communication intended or expected to develop or further a business relationship and customers about which the employee learned confidential information as a result of his/her employment.

 

4.

Developments. You agree that all inventions, improvements, trade secrets, reports, manuals, computer programs, systems, tapes and other ideas and materials developed or invented by you during the period of your employment with the Company, either solely or in collaboration with others, which relate to the actual or anticipated business or research of the Company, which result from or are suggested by any work you may do for the Company, or which result from use of the Company’s premises or the Company’s or its customers’ property (collectively, the “Developments”) shall be the sole and exclusive property of the Company. You hereby assign to the Company your entire right and interest in any Developments and will hereafter execute any documents in connection therewith that the company may reasonably request. This section does not apply to any inventions that you made prior to your employment by the Company, or to any inventions that you develop entirely on your own time without using any of the Company’s equipment, supplies, facilities or the Company’s or its customers’ confidential information and which do not relate to the Company’s business, anticipated research and developments or the work you have performed for the Company.

 

5.

Non-Disparagement. Following the termination of employment under this Agreement for any reason and continuing for so long as the Employer or any affiliate, successor or assigns thereof carries on the name or like business within the Restricted Area, neither Employer nor Employee shall, directly or indirectly, for himself or herself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

 

 

 

Make any statements or announcements or permit anyone to make any public statements or announcements concerning Employee’s reasons for termination with Employer without Employee’s consent, or

 

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Make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of the Employer or its affiliated entities on the one hand, or Employee, on the other hand.

ARTICLE III: GENERAL PROVISIONS

 

1.

Confidentiality and Non-Disclosure

 

 

a.

Executive acknowledges that, in the course of Executive’s employment, Executive will have access to confidential information, trade secrets, knowledge or data relating to Employer and its businesses, including but not limited to information disclosed to Executive, or known by Executive as a consequence of or through employment with Employer, where such information is not generally known in the trade or industry, and where such information refers or relates in any manner whatsoever to the business activities, processes, services, or products of Employer, or any affiliates (“Confidential Information”).

 

 

b.

Confidential Information includes, but is not limited to, business and development plans (whether contemplated, initiated, or completed), mergers and acquisitions, pricing information, business contacts, sources of supply, customer information (including customer lists, customer preferences, and sales history), methods of operation, results of analysis, customer lists (including advertising contacts), business forecasts, financial data, costs, revenues, and similar information.

 

 

c.

Confidential Information is to be protected regardless of its format (tangible or intangible); thus, it includes information maintained in electronic form (such as e-mails, computer files, or information on a cell phone, Blackberry, or other personal data device). Information that is in the public domain, other than as a result of a breach of this Agreement, shall not constitute Confidential Information.

 

 

d.

Executive agrees that during employment and during the two (2) year period thereafter, Executive will not use or disclose, on Executive’s own behalf or on behalf of any other person or entity, any Confidential Information to employees of Employer who do not have a need-to-know or to third parties; provided, however, that Executive may disclose Confidential Information during employment in the normal course of business.

 

 

e.

Executive agrees that this non-disclosure obligation shall extend longer than two (2) years after termination of employment as to any materials or information that constitutes a trade secret of Employer under applicable law, for the full period of time in which such materials or information remain a trade secret, if longer than two (2) years.

 

 

f.

Executive agrees to take all reasonable precautions to safeguard and prevent disclosure of Confidential Information to unauthorized persons or entities.

 

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2.

Release. As a condition of receiving any severance payments under this Agreement, Executive must sign and not revoke, within the deadlines provided by the Company and in compliance with applicable federal and/or state laws, a written release of all employment claims against the Company and its related entities, including, without limitation, employment discrimination of any kind, wage payment, breach of contract, claims for workers compensation, unemployment, disability and severance claims that Executive has or may have at the termination of employment. In addition, Executive will agree not to sue the Company or any other entities or persons released.

 

3.

Intellectual Property. Executive agrees that Executive has no right to use, for the benefit of Executive or anyone other than Employer, any of the copyrights, trademarks, service marks, patents, and inventions of Employer.

 

4.

Return of Property. Executive agrees that upon termination of employment or, prior to such termination at the request of Employer, Executive shall return to Employer all documents, copies, recordings of any kind, papers, computer records, and other material in Executive’s possession or under Executive’s control which may contain or be derived from Confidential Information, together with all other documents, notes, other work product, and other material and property belonging or relating to Employer, and any tangible Employer property, including any computer equipment, cell phone, pager, blackberry or other electronic messaging device, and keys.

 

5.

Injunctive Relief. Executive and Employer recognize that the services to be rendered by Executive are of a special, unique, unusual, and extraordinary character having a peculiar value, the loss of which will cause Employer immediate and irreparable harm which cannot be adequately compensated in damages. Executive and Employer further recognize that disclosure of any Confidential Information or breach of the provisions of this Agreement will give rise to immediate and irreparable injury to Employer that is inadequately compensable in damages. In the event of a breach or threatened breach of this Agreement, Executive agrees and consents that Employer shall be entitled to injunctive relief, both preliminary and permanent, without bond, and Executive will not raise the defense that Employer has an adequate remedy at law. In addition, Employer shall be entitled to any other legal or equitable remedies as may be available under law. The remedies provided in this Agreement shall be deemed cumulative and the exercise of one shall not preclude the exercise of any other remedy at law or in equity for the same event or any other event.

 

6.

Successors

 

 

a.

The Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) of all or a significant portion of the assets of the Company by agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Regardless of whether such agreement is executed, this Agreement shall be binding upon any successor in accordance with the operation of law and such successor shall be deemed the “Company” for purposes of this Agreement.

 

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b.

This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amount would still be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

 

7.

Miscellaneous

 

 

a.

Employment Status. This Agreement is not, and nothing herein shall be deemed to create, an employment contract between the Executive and the Company or any of its subsidiaries. Executive understands and agrees that the Executive’s employment with the Company is at-will, which means that neither Executive nor Company may, subject to the terms of this Agreement terminate this Agreement at any time with or without cause and with or without notice. The Executive acknowledges that the rights of the Company remain wholly intact to change or reduce at any time and from time to time his compensation, title, responsibilities, location, and all other aspects of the employment relationship, or to discharge him (subject to such discharge possibly qualifying Executive for severance under Article I, Section 4 or 5).

 

 

b.

Agreement. This Agreement and the Change in Control Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, representations and statements, whether oral, written, implied or expressed, relating to such subject matter.

 

 

c.

Notices. All notices, requests, demands, and other communications hereunder shall be sufficient if in writing and shall be deemed to have been duly given if delivered by hand or if sent by registered or certified mail to the Executive at the last address he filed in writing with the Company or, in the case of the Company, at its principal office.

 

 

d.

Execution in Counterparts. This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed to be original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.

 

 

e.

Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. Further, the captions of this Agreement are not part of the provisions hereof and shall have no force and

 

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effect. Notwithstanding any other provisions of this Agreement to the contrary, the Company shall have no obligation to make any payment to the Executive hereunder to the extent, but only to the extent, that such payment is prohibited by the terms of any final order of a federal or state court or regulatory agency of competent jurisdiction; provided, however, that such an order shall not affect, impair, or invalidate any provision of this Agreement not expressly subject to such order.

 

 

f.

Modification. No provision of this Agreement may be modified, waived, or discharged unless such modification, waiver, or discharge is agreed to in writing and signed by the Executive and by a member of the Board, as applicable, or by the respective parties’ legal representatives or successor, except as provided in Article I, Section 8(b).

 

 

g.

Applicable Law. To the extent not preempted by the laws of the United States, the laws of the state of Delaware shall be the controlling law in all matters relating to this Agreement without giving effect to principles of conflicts of laws.

 

 

h.

Consent to Forum. Executive expressly consents and submits that the exclusive jurisdiction for any controversy, dispute, or claim between the parties arising out of or relating to this Agreement or Executive’s employment with Executive that are not required to be submitted to arbitration pursuant to Article IV of this Agreement (such as claims for injunctive or equitable relief described in Article III, Section 5 of this Agreement) shall be the courts in the state of Delaware. Executive expressly consents to the exercise of personal jurisdiction over Executive by the courts in the state of Delaware. Executive hereby waives, to the fullest extent permitted by applicable law, any objection or defense that a Delaware court does not have personal jurisdiction over Executive, is an improper venue, or constitutes an inconvenient forum.

ARTICLE IV. DISPUTE RESOLUTION; MUTUAL AGREEMENT TO ARBITRATE

 

1.

Executive and Employer agree that, except as otherwise provided in this Agreement, final and binding arbitration shall be the exclusive remedy for any controversy, dispute, or claim arising out of or relating to this Agreement or Executive’s employment with Employer, including Executive’s hire, treatment in the workplace, or termination of employment. For example, if Executive’s employment with Employer is terminated and he contends that the termination violates any statute, contract or public policy, then Executive will submit the matter to arbitration for resolution, in lieu of any court or jury trial to which Executive would otherwise might be entitled.

 

2.

This Article covers all common-law and statutory claims, including, but not limited to, any claim for breach of contract (including this Agreement) and for violation of laws forbidding discrimination on the basis of race, sex, color, religion, age, national origin, disability, or any other basis covered by applicable federal, state, or local law, and includes claims against Employer and/or any parents, affiliates, owners, officers, directors, employees, agents, general partners or limited partners of Employer, to the extent such claims involve, in any way, this Agreement or Executive’s employment with

 

13


 

Employer. This Article covers all judicial claims that could be brought by either party to this Agreement, but does not cover administrative claims for workers’ compensation or unemployment compensation benefits or the filing of charges with government agencies that prohibit waiver of the right to file a charge, and does not preclude either party to the Agreement from seeking emergency injunctive relief in the courts as provided for in Article III, Sections 5 and 7(h).

 

3.

The arbitration shall be governed by JAMS Employment Arbitration Rules and Procedure except as modified herein. If the party chooses to have the arbitration proceeding administered by a third party, then the arbitration shall be administered by JAMS. If the party chooses to have the arbitration administered by JAMS, then the arbitration will “commence” in accordance with the JAMS Employment Arbitration Rules and Procedure. If the party chooses to have this matter arbitrated privately, then the arbitration will be deemed to “commence” on the date that the party, pursuant to Article III, Section 7(c), provides a demand for arbitration and notice of claims and remedies sought outlining the facts relied upon, legal theories, and statement of claimed relief (“Demand”). The responding party shall serve a response to the claims and any counterclaims within fifteen (15) business days from the date of receipt of the Demand.

 

4.

Any arbitration shall be held in Washington, D.C. (unless the parties mutually agree in writing to another location within the United States) within 120 days of the commencement of the arbitration.

 

5.

The arbitration shall take place before a single arbitrator to be appointed by mutual agreement of counsel for each party or, if counsel cannot agree, then pursuant to the procedures set forth by JAMS. The parties may not have any ex parte communications with the arbitrator.

 

6.

The arbitrator may award any relief otherwise available to the parties by law or equity.

 

7.

The parties are limited to two (2) depositions per side, and limited written discovery as may be required by the arbitrator, not to exceed that allowed under the Federal Rules of Civil Procedure.

 

8.

Any hearing in this matter shall be completed within 120 days of the date of commencement of the arbitration, as the term “commencement” is defined by JAMS. The arbitrator shall issue its award within thirty (30) days of the last hearing day.

 

9.

Unless Executive objects, Employer will pay the arbitrator’s fees. Each party shall pay its own costs and attorneys’ fees, if any, unless the arbitrator rules otherwise. A court may enter judgment upon the arbitrator’s award, either by confirming the award, or vacating, modifying or correcting the award, on any ground referred to in the Federal Arbitration Act, or where the findings of fact are not supported by substantial evidence, or where the conclusions of law are erroneous.

 

10.

The provisions of this Article are severable, meaning that if any provision in this Article IV (“Dispute Resolution; Mutual Agreement to Arbitrate”) is determined to be unenforceable and cannot be reformed under applicable law, the remaining provisions shall remain in full effect, provided however, that any amendment of an unenforceable

 

14


 

provision shall only be to the extent necessary and shall preserve the intent of the parties hereto. It is agreed and understood that the scope of this Article, including questions of arbitrability of any dispute, shall be determined by the arbitrator.

 

11.

Executive acknowledges that prior to accepting the provisions of this Article IV and signing this Agreement, Executive has been given an opportunity to consult with an attorney and to review the JAMS Employment Arbitration Rules and Procedure that would govern the dispute resolution process under this Article. In signing this Agreement, the parties acknowledge that the right to a court trial and trial by jury is of value, and knowingly and voluntarily waive such right for any dispute subject to the terms of this Article.

Initials: Executive_GH         Employer _DB        

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

MUELLER WATER PRODUCTS, INC.

By:

 

/s/ Donald N. Boyce

 

Donald N. Boyce, for the Board of Directors

 

/s/ Gregory E. Hyland

 

Gregory E. Hyland

 

Executive

 

15

 

 

EX-10.1 2 a06-6274_1ex10d1.htm MATERIAL CONTRACTS

Exhibit 10.1

 

March 2, 2006

 

Mr. Gregory E. Hyland

8315 Bar Harbor Lane

Charlotte, NC 28210

 

Dear Greg,

 

We are amending your offer letter dated September 9, 2005 as follows:

 

In place of paragraph 2,

 

You and your spouse do not need to relocate to Tampa, Florida.  Once the location of the new Mueller Water Products, Inc. headquarters is established, you and your spouse will relocate to the new location within 120 days of the corporate office becoming operational.”

 

In place of the first sentence of the final bullet point in paragraph 4(g):

 

The Company will reimburse you for all out of pocket costs of your relocation to the area where the new Mueller Water Products, Inc. headquarters is established (the “New Headquarters Area”), including moving of household effects, temporary living expenses in Tampa and the New Headquarters Area for up to 120 days after the new corporate office becomes operational, reasonable house hunting expenses for you and your spouse, transportation of your family to the New Headquarters Area, closing costs on the sale of your home in North Carolina, and costs associated with the purchase of another home in the New Headquarters Area, and if you choose, within 60 days of receiving an offer from the Company based upon appraisals, use of the Company’s third party relocation service to sell your home in North Carolina.”

 

In place of paragraph 7,

 

The Company desires to have you, as chief executive of the Company, make a meaningful investment in the Company.  In this regard, as soon as practicable, but within the next 12 months (until September 9, 2006) you shall invest at least $150,000 in Walter Industries, Inc. or Mueller Water Products, Inc. common stock.  This investment should be made in consultation with the Company’s General Counsel in order to avoid any concerns regarding insider information concerning the Company and its businesses.”

 


 

A new paragraph 15 is added as follows:

 

15.  You agree that Walter Industries, Inc. may assign this agreement to Mueller Water Products, Inc. or its successor, effective upon the spin off of Mueller Water Products, Inc. from Walter Industries.”

 

If you are in agreement, please sign and return one copy of this letter and retain one for your records.

 

Very truly yours,

 

 

/s/ Donald N. Boyce

 

Donald N. Boyce

For the Board of Directors

 

Agreed and Accepted:

 

 

/s/ Gregory E. Hyland

 

Gregory E. Hyland

Chairman, President & Chief Executive Officer

 

 

 

 

 

EX-99.1 2 dex991.htm AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT, GREGORY E. HYLAND

Exhibit 99.1

 

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT is made and entered into as of the 1st day of December, 2009, by and between Mueller Water Products, Inc., a Delaware corporation (“Company”), and Gregory E. Hyland (“Employee”).

W I T N E S S E T H:

WHEREAS, Company and Employee entered into an Executive Employment Agreement effective as of September 9, 2005 (the “Agreement”);

WHEREAS, the Agreement provides for a severance payment in certain circumstances that is based on the Employee’s salary and annual target bonus;

WHEREAS, for clarity, the Company desires to recast the severance payment as a percentage of the Employee’s salary only without impacting the economics of the Agreement;

WHEREAS, the Company desires to define certain terms that are used throughout the Agreement;

NOW, THEREFORE, Employee and Company, in consideration of the agreements, covenants and conditions herein, hereby agree as follows:

1. Capitalized terms used in this Amendment shall have the meanings assigned to such terms in the Agreement.

2. Sections 3(a) and 3(b) of the Agreement shall be deleted in their entirety and replaced with the following:

 

 

a.

Executive’s base salary (“Salary”) will be $790,000.00 per year. Executive’s Salary and job performance will be reviewed at least once per year consistent with the practices of the Company.

 

 

b.

Executive is entitled to participate in a Company executive incentive bonus plan, as in effect from time to time and as approved by the Compensation and Human Resources Committee of the Board of Directors. Executive’s initial target annual bonus (“Bonus”) will be one hundred percent (100%) of the Executive’s base salary in effect for such year. Actual annual Bonus may range from 0% to 200% of target and will be determined based upon corporate and/or individual performance factors established by the Company. Bonus ranges, target and performance goals may be changed in accordance with the applicable plan and without amendment of this Agreement. Executive must be employed on the date the Board approves the Bonus payable with respect to any fiscal year to be eligible to receive an annual Bonus for such fiscal year.


3. The introductory paragraph to Section 5 and Sections 5(i) and 5(ii) of the Agreement shall be deleted in their entirety and replaced with the following:

5. Involuntary Termination of Employment by the Company. If the Company involuntarily terminates the employment of Executive other than as set forth in Section 4 [Death, Disability, Cause or other than for Good Reason], the Executive will be entitled to the benefits set forth below.

“Severance Benefits” consist of:

 

 

i.

Lump sum payment of unpaid Salary and other benefits, including accrued but unused vacation pay and unreimbursed business expenses, accrued to the date of termination of employment and paid on the same basis as paid upon any voluntary termination of employment.

 

 

ii.

A total amount equal to 300% of Executive’s current rate of Salary (the “Base Amount”). Payment of the Base Amount shall be made in substantially equal monthly installments over 24 months from the date of Executive’s separation from service (within the meaning of Section 409A of the Code). The first such installment shall be paid within sixty (60) days following Executive’s separation from service (the “Commencement Date”) and subsequent installments shall be paid on the last business day of each succeeding month; provided, however, that Executive’s entitlement to each such installment shall be contingent upon execution (and non-revocation) by Executive of the release under article III, Section 2. All payments are subject to applicable taxes.

4. All references to the terms “salary” and “base salary” in Sections 4 through 6 shall be replaced with the term “Salary”.

5. The term “bonus” in Section 6 shall be replaced with the term “Bonus”.

6. The Agreement, as expressly amended by this Amendment, shall remain in full force and effect in accordance with its terms and continue to bind the parties. This Amendment supersedes and amends any other agreements between the Company and/or any subsidiary or division and Employee, and any policy applicable to the Employee. Any disputes under this Amendment shall be resolved as provided in the Agreement.

7. This Amendment shall be effective as of the date first set forth above.

 

2


IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first above written.

 

MUELLER WATER PRODUCTS, INC.

By:

 

/s/ Donald N. Boyce

 

Donald N. Boyce

Chairman

Compensation Committee

/s/ Gregory E. Hyland

Gregory E. Hyland

 

3

 

 

 

 

EX-99.1 2 dex991.htm AMENDMENT TO EMPLOYMENT AGREEMENT

Exhibit 99.1

 

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT is made and entered into as of the 1st day of December, 2010, by and between Mueller Water Products, Inc., a Delaware corporation (“Company”), and Gregory Hyland (“Employee”).

W I T N E S S E T H:

WHEREAS, Company and Employee entered into an Executive Employment Agreement effective as of September 15, 2008 (the “Agreement”) and an amendment to the Agreement effective as of February 6, 2009 (“Amendment No. 1”);

WHEREAS, the Agreement provides that Employee shall be entitled to reimbursement for membership dues in one country club and one luncheon club located in the Atlanta, Georgia area, in accordance with Company’s policy for executive club reimbursement;

WHEREAS, the Compensation and Human Resources Committee (the “Committee”) of Company has determined to change Company’s policy for executive club reimbursement such that Company will no longer reimburse executives for club membership fees after January 1, 2011;

NOW, THEREFORE, in consideration of the agreements, covenants and conditions herein, and for other good and valuable consideration, receipt of which is hereby acknowledged, Employee and Company hereby agree as follows:

1. Capitalized terms used in this Amendment shall have the meanings assigned to such terms in the Agreement.

2. Section 3(h) of the Agreement is deleted in its entirety.

3. The parties acknowledge and agree that this Amendment has been negotiated at arm’s-length between persons knowledgeable in the matters dealt with herein. Accordingly, any rules of law that would require interpretation of any ambiguities against the party who drafted this Amendment do not apply and are expressly waived.

4. The parties agree to cooperate fully and execute any and all documents and to take all additional actions which may be necessary or appropriate to give full force and effect to the terms and intent of this Amendment.


5. The Agreement, as expressly amended by this Amendment, shall remain in full force and effect in accordance with its terms and continue to bind the parties. This Amendment supersedes and amends any other agreements between Company and/or any subsidiary or division and Employee, and any policy applicable to Employee. Any disputes under this Amendment shall be resolved as provided in the Agreement.

6. This Amendment shall be effective as of the date first set forth above.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first above written.

 

MUELLER WATER PRODUCTS, INC.

By:

 

  /s/ Donald N. Boyce

 

On behalf of the Compensation and Human Resources Committee of the Board of Directors

    /s/ Gregory E. Hyland

Gregory Hyland

 

2

 

 

 

EX-10.115 2 exhibit10115.htm EXHIBIT 10.11.5

 

 

FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS FOURTH AMENDMENT is made and entered into as of the 31st day of March 2012, by and between Mueller Water Products, Inc., a Delaware corporation (”Company”), and Gregory E. Hyland (“Employee”).

 

W I T N E S S E T H:

 

WHEREAS, Company and Employee entered into an employment agreement effective as of September 15, 2008 and subsequent amendments effective as of February 6, 2009December 1, 2009 and December 1, 2010 (together, the “Agreement”);

 

WHEREAS, Company and Employee wish to amend certain terms of the Agreement;

 

NOW, THEREFORE, Company and Employee, in consideration of the agreements, covenants and conditions herein, hereby agree as follows:

 

1.

Capitalized terms used in this Fourth Amendment shall have the meanings assigned to such terms in the Agreement.

 

2.

The reference in Section 5(iii) to “sixty (60)” shall be replaced by “seventy-five (75)”.

 

3.

Section 5(iv) shall be deleted in its entirety and replaced with the following:

 

iv.

The Company will allow Executive to continue medical and dental coverage for Executive and Executive's eligible dependents (as provided to its active employees) for up to 18 months following the date of termination of employment, but only if the Executive pays the COBRA rate for such coverage (“Extended Coverage”). If Executive declines Extended Coverage or becomes eligible for medical and/or dental coverage through another employer (including an employer of the Executive's spouse), such Extended Coverage will cease. The COBRA election period and COBRA maximum period of coverage will begin on the date the Extended Coverage ceases, subject to the rules and limitations that apply to COBRA coverage.

 

In addition to the amounts described elsewhere in this Agreement, Executive shall be paid an amount each month equal to 150% of the applicable monthly COBRA rate for the coverage that is extended, reduced by applicable withholdings. For this purpose, the applicable COBRA rate is the cost of COBRA coverage, determined as of the date of termination of employment, for the level of medical and/or dental coverage Executive has in effect on the date of termination of employment. Such amount shall be paid to the Executive each month beginning in the month following the Executive's date of termination of employment and continuing for 18 months; provided, however, this monthly payment shall cease and shall not be payable after the month in which Executive ceases to be eligible for Extended Coverage.

 

4.

A new Section 5(vii) shall be added and shall state in its entirety:

 

vii.

The Company will cover reasonable expenses related to outplacement services, the cost and duration of which shall be determined by the Company in its sole discretion; provided, however, the outplacement assistance is intended to be exempt from Code Section 409A under the exemption in Treas. Reg. § 1.409A-1(b)(9)(v)(A) and, thus, (i) the services will be limited as necessary to be “reasonable” under Code Section 409A, (ii) the services shall be provided by no later than the last day of the second calendar year following the year in which the Executive's date of termination of employment occurs, and (iii) no related payments will be paid beyond the third calendar year after the year in which the Executive's date of termination of employment occurs.

 

5.

The Agreement, as expressly amended by this Fourth Amendment, shall remain in full force and effect in accordance with its terms and continue to bind the parties. This Fourth Amendment supersedes and amends any other agreements between the Company and/or any subsidiary or division and Employee, and any policy applicable to the Employee. Any disputes under this Fourth Amendment shall be resolved as provided in the Agreement.

 

6.

This Fourth Amendment shall be effective as of the date first set forth above.

 

 

 

 

 

 


 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Fourth Amendment as of the date first above written.

 

 

MUELLER WATER PRODUCTS, INC.

 

 

By:    /s/ Joseph B. Leonard            

On behalf of the Compensation and Human

Resources Committee of the Board of Directors

 

 

/s/ Gregory E. Hyland            

Gregory Hyland

 

 

 


EX-99.3 4 dex993.htm FORM OF EXECUTIVE CHANGE-IN-CONTROL SEVERANCE AGREEMENT

Exhibit 99.3

As of September 30, 2008, the following named executive officers of Mueller Water Products, Inc. (the “Company”) have executed Executive Change-in-Control Severance Agreements with the company in the form attached hereto:

 

Gregory E. Hyland

Evan L. Hart

Robert Leggett

Raymond P. Torok

 

1

  

EXECUTIVE CHANGE-IN-CONTROL SEVERANCE AGREEMENT

THIS EXECUTIVE CHANGE-IN-CONTROL SEVERANCE AGREEMENT is made, entered into, and is effective as of the          day of                 , 2008 (hereinafter referred to as the “Effective Date”), by and between Mueller Water Products, Inc. (the “Company”), a Delaware corporation, and                                      (the “Executive”). Executive acknowledges and represents that any and all prior agreements for change in control severance including, without limitation the agreement dated              between Executive and the Company, are terminated and replaced entirely by this Agreement.

WHEREAS, the Executive is currently employed by the Company and possesses considerable experience and knowledge of the business and affairs of the Company concerning its policies, methods, personnel, and operations; and

WHEREAS, the Company is desirous of assuring insofar as possible, that it will continue to have the benefit of the Executive’s services; and the Executive is desirous of having such assurances; and

WHEREAS, the Company recognizes that circumstances may arise in which a Change in Control of the Company occurs, through acquisition or otherwise, thereby causing uncertainty of employment without regard to the Executive’s competence or past contributions. Such uncertainty may result in the loss of the valuable services of the Executive to the detriment of the Company and its shareholders; and

WHEREAS, both the Company and the Executive are desirous that any proposal for a Change in Control or acquisition will be considered by the Executive objectively and with reference only to the business interests of the Company and its shareholders; and

WHEREAS, the Executive will be in a better position to consider the Company’s best interests if the Executive is afforded reasonable security, as provided in this Agreement, against altered conditions of employment which could result from any such Change in Control or acquisition.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

1


Article 1. Definitions

Wherever used in this Agreement, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:

 

 

(a)

Agreement” means this Executive Change-in-Control Severance Agreement.

 

 

(b)

Base Salary” means, at any time, the then regular annual rate of pay which the Executive is receiving as annual salary, excluding amounts: (i) received under short-term or long-term incentive or other bonus plans, regardless of whether or not the amounts are deferred, or (ii) designated by the Company as payment toward reimbursement of expenses.

 

 

(c)

Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

 

 

(d)

Board” means the Board of Directors of the Company.

 

 

(e)

Cause” shall be determined solely by the Committee in the exercise of good faith and reasonable judgment, and shall mean the occurrence of any one or more of the following:

 

 

(i)

The Executive’s conviction or guilty plea of a felony or conviction or guilty plea of any crime involving fraud or dishonesty;

 

 

(ii)

The Executive’s willful and continued refusal to perform the duties of his or her position in all material respects (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness), that continues for more than 15 business days after the Company gives the Executive written notice of the failure, specifying what duties the Executive failed to perform and an opportunity to cure;

 

 

(iii)

fraudulent preparation of financial information of the Company; or

 

 

(iv)

The Executive’s willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, provided that no act or failure to act on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interests of the Company.

 

 

(f)

Change in Control” of the Company shall mean the occurrence of any one (1) or more of the following events:

 

 

(i)

Any Person (other than the Company or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, and any trustee or other fiduciary holding securities under an employee benefit plan of the Company or such proportionately owned corporation) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than thirty percent (30%) of the combined voting power of the Company’s then outstanding securities;

 

2


 

(ii)

During any period of not more than thirty-six (36) consecutive months, individuals who at the beginning of such period constitute the Board, and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority (rounded up to the nearest whole number) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

 

 

(iii)

The consummation of a merger or consolidation of the Company with any other corporation, other than: (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty-six and two-thirds percent (66- 2/3%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than thirty percent (30%) of the combined voting power of the Company’s then outstanding securities; or

 

 

(iv)

The Company’s stockholders approve a plan or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction or series of transactions having a similar effect).

 

 

(g)

Code” means the Internal Revenue Code of 1986, as amended.

 

 

(h)

Committee” means the Compensation Committee of the Board, or, if no Compensation Committee exists, then the full Board, or a committee of Board members, as appointed by the full Board to administer this Agreement.

 

 

(i)

Company” means Mueller Water Products, Inc., a Delaware corporation (including any and all subsidiaries), or any successor thereto as provided in Article 9 herein.

 

 

(j)

Disability” or “Disabled” means that Executive has been physically or mentally incapacitated so as to render Executive incapable of performing the essential functions of any substantial gainful activity, or Executive has received income replacement benefits under a Company plan for at least three months, and, in either instance, that incapacity is expected to result in death or to last for a continuous period of at least 12 months. Executive’s receipt of disability benefits under the Company’s long-term disability plan or receipt of Social Security disability benefits shall be deemed conclusive evidence of Disability for purposes of this Agreement.

 

3


 

(k)

Effective Date” means the date this Agreement is approved by the Board, or such other date as the Board shall designate in its resolution approving this Agreement, and as specified in the opening sentence of this Agreement.

 

 

(l)

Effective Date of Termination” means the date on which a Qualifying Termination occurs, as provided in Section 2.2 herein, which triggers the payment of Severance Benefits hereunder.

 

 

(m)

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

 

(n)

Federal Funds Rate” shall mean the “Federal Funds Rate” as issued in the Money Rates column of The Wall Street Journal.

 

 

(o)

Good Reason” means, without the Executive’s express written consent, the occurrence after a Change in Control of the Company of any one (1) or more of the following to the extent that there is, or would be if not corrected, a material negative change in the Executive’s employment relationship with the Company:

 

 

(i)

The assignment of the Executive to duties materially inconsistent with the Executive’s authorities, duties, responsibilities, and status as an executive and/or officer of the Company, or a material reduction or alteration in the nature or status of the Executive’s authorities, duties, or responsibilities from those in effect as of ninety (90) calendar days prior to the Change in Control, other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Executive;

 

 

(ii)

The Company’s requiring the Executive to be based at a location in excess of fifty (50) miles from the location of the Executive’s principal job location or office immediately prior to the Change in Control; except for required travel on the Company’s business to an extent substantially consistent with the Executive’s then present business travel obligations;

 

 

(iii)

A reduction by the Company of the Executive’s Base Salary in effect on the Effective Date hereof, or as the same shall be increased from time to time;

 

 

(iv)

The failure of the Company to continue in effect any of the Company’s short- and long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices, or other compensation arrangements in which the Executive participates unless such failure to continue the plan, policy, practice, or arrangement pertains to all plan participants generally; or the failure by the Company to continue the Executive’s participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, as existed immediately prior to the Change in Control of the Company;

 

 

(v)

The failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform the Company’s obligations under this Agreement, as contemplated in Article 9 herein; and

 

4


 

(vi)

A material breach of this Agreement by the Company which is not remedied by the Company within ten (10) business days of receipt of written notice of such breach delivered by the Executive to the Company.

Unless the Executive becomes Disabled, the Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason herein.

 

 

(p)

Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

 

 

(q)

Notice of Termination for Good Reason” shall mean a notice that (i) indicates the specific termination provision or provisions relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination for Good Reason and (iii) indicates a date of termination of employment. The failure by Executive to set forth in the Notice of Termination for Good Reason any facts or circumstances which contribute to the showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder. The Notice of Termination for Good Reason shall provide for a date of termination of employment not less than thirty (30) nor more than sixty (60) days after the date such Notice of Termination for Good Reason is given, provided that in the case of the events set forth in Article I, Section (o) (i) or (ii), the date may be not less than twenty (20) days after the giving of such notice.

 

 

(r)

Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

 

 

(s)

Qualifying Termination” means the Executive’s “separation from service” (as such term is used in Code Section 409A) upon any of the events described in Section 2.2 herein, the occurrence of which triggers the payment of Severance Benefits hereunder.

 

 

(t)

Severance Benefits” shall mean the payment of severance compensation as provided in Section 2.3 herein.

Article 2. Severance Benefits

2.1 Right to Severance Benefits. The Executive shall be entitled to receive from the Company Severance Benefits as described in Section 2.3 herein, if there has been a Change in Control of the Company and if, within twenty-four (24) calendar months thereafter, the Executive’s employment with the Company shall end for any reason specified in Section 2.2 herein as being a Qualifying Termination.

The Executive shall not be entitled to receive Severance Benefits if he is terminated for Cause, or if his employment with the Company ends due to death, Disability, voluntary normal retirement (as defined under the then established rules of the Company’s tax-qualified retirement plan), or due to a voluntary termination of employment for reasons other than as specified in Section 2.2\ herein.

 

5


If benefits are triggered hereunder, and under another Company-related severance plan or program, the benefits under this Agreement shall be paid under the terms hereof, and any duplicative benefits under such other plan or program shall be forfeited.

2.2 Qualifying Termination. The occurrence of any one of the following events within twenty-four (24) calendar months after a Change in Control of the Company shall trigger the payment of Severance Benefits to the Executive under this Agreement:

 

 

(a)

The Company’s involuntary termination of the Executive’s employment without Cause; and

 

 

(b)

The Executive’s voluntary employment termination for Good Reason.

For purposes of this Agreement, a Qualifying Termination shall not include a termination of employment by reason of death, Disability, or voluntary normal retirement (as such term is defined under the then established rules of the Company’s tax-qualified retirement plan), the Executive’s voluntary termination for reasons other than as specified in this Section 2.2 herein, or the Company’s involuntary termination for Cause.

2.3 Description of Severance Benefits. In the event the Executive becomes entitled to receive Severance Benefits, as provided in Sections 2.1 and 2.2 herein, the Company shall pay to the Executive and provide him with the following Severance Benefits:

 

 

(a)

A lump-sum amount equal to the Executive’s unpaid Base Salary, accrued vacation pay, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the Effective Date of Termination.

 

 

(b)

A lump-sum amount equal to the Executive’s annual bonus award earned as of the Effective Date of Termination, based on actual year-to-date performance, as determined at the Committee’s discretion (excluding any special bonus payments). This payment will be in lieu of any other payment to be made to the Executive under the annual bonus plan in which the Executive is then participating for the plan year.

 

 

(c)

An aggregate amount equal to one and one-half (1.5) multiplied by the sum of the following: (i) the higher of: (A) the Executive’s annual rate of Base Salary in effect upon the Effective Date of Termination, or (B) the Executive’s annual rate of Base Salary in effect on the date of the Change in Control; and (ii) the average of the actual annual bonus earned (whether or not deferred) by the Executive under the annual bonus plan (excluding any special bonus payments) in which the Executive participated in the three (3) years preceding the year in which the Executive’s Effective Date of Termination occurs. If the Executive has less than three (3) years of annual bonus participation preceding the year in which the Executive’s Effective Date of Termination occurs, then the Executive’s annual target bonus established under the annual bonus plan in which the Executive is

 

6


 

then participating for the bonus plan year in which the Executive’s Effective Date of Termination occurs shall be used for each year that the Executive did not participate in the annual bonus plan, up to a maximum of three (3) years, to calculate the three (3) year average bonus payment. Payments shall be made in eighteen (18) monthly installments. The first installment shall be equal to 1/18th of the aggregate amount, and shall be paid within sixty (60) days following the Effective Date of Termination, and subsequent installments shall be paid on the last business day of each succeeding month; provided that Executive’s entitlement to each such installment shall be contingent upon execution (and non-revocation) by Executive of a release as described in Section 10.1 before the payment date under this Agreement for each such installment. Each monthly installment thereafter shall increase by a percentage equal to 1/12th of the Federal Funds rate in effect on the last day of the month preceding payment. All payments are subject to applicable taxes.

 

 

(d)

A lump-sum amount equal to one-half (.5) multiplied by the sum of the following: (i) the higher of: (A) the Executive’s annual rate of Base Salary in effect upon the Effective Date of Termination, or (B) the Executive’s annual rate of Base Salary in effect on the date of the Change in Control; and (ii) the average of the actual annual bonus earned (whether or not deferred) by the Executive under the annual bonus plan (excluding any special bonus payments) in which the Executive participated in the three (3) years preceding the year in which the Executive’s Effective Date of Termination occurs. If the Executive has less than three (3) years of annual bonus participation preceding the year in which the Executive’s Effective Date of Termination occurs, then the Executive’s annual target bonus established under the annual bonus plan in which the Executive is then participating for the bonus plan year in which the Executive’s Effective Date of Termination occurs shall be used for each year that the Executive did not participate in the annual bonus plan, up to a maximum of three (3) years, to calculate the three (3) year average bonus payment. Such amount shall be in consideration for the Executive entering into a noncompete agreement as described in Article 4 herein.

 

 

(e)

[Intentionally Omitted]

 

 

(f)

Upon the occurrence of a Change in Control, an immediate full vesting and lapse of all restrictions on any and all outstanding equity-based long-term incentives, including but not limited to stock options and restricted stock awards held by the Executive. This provision shall override any conflicting language contained in the Executive’s respective Award Agreements.

 

 

(g)

To the extent that Executive’s employer contribution account, other than for matching contributions, in the Mueller Water Products, Inc. Retirement Savings Plan (“RSP”) is forfeited upon termination of employment, a lump sum amount equal to the amounts forfeited under the RSP will be paid, subject to applicable taxes, during the sixty (60) day period following the Effective Date of Termination.

 

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(h)

Continuation for twenty-four (24) months of the Executive’s medical insurance and life insurance coverage. These benefits shall be provided by the Company to the Executive beginning immediately upon the Effective Date of Termination. Such benefits shall be provided to the Executive at the same coverage level and cost to the Executive as in effect immediately prior to the Executive’s Effective Date of Termination.

The Executive shall qualify for full COBRA health benefit continuation coverage beginning upon the expiration of the aforementioned twenty-four (24) month period.

Notwithstanding the above, these medical and life insurance benefits shall be discontinued prior to the end of the stated continuation period in the event the Executive receives substantially similar benefits from a subsequent employer, as determined solely by the Committee in good faith. For purposes of enforcing this offset provision, the Executive shall be deemed to have a duty to keep the Company informed as to the terms and conditions of any subsequent employment and the corresponding benefits earned from such employment, and shall provide, or cause to provide, to the Company in writing correct, complete, and timely information concerning the same.

 

 

(i)

From Executive’s date of termination of employment until the earlier of (i) 24 months following such date of termination or (ii) the date immediately prior to the date of Executive’s employment with a subsequent employer, the Company will provide Executive with outplacement services from a nationally recognized outplacement firm selected by Executive, subject to the limits described in this subsection. The aggregate amount paid by the Company for outplacement services will not exceed an amount equal to 35% of Executive’s annual rate of base salary as of the date of termination of employment (the “Total Outplacement Value”). Further, the cost for such services paid by the Company during any calendar year will not exceed the number of months in that calendar year during which the Executive is entitled to this benefit multiplied by 1/24 of the Total Outplacement Value.

2.4 Termination for Total and Permanent Disability. Following a Change in Control, if the Executive’s employment is terminated with the Company due to Disability, the Executive’s benefits shall be determined in accordance with the Company’s retirement, insurance, and other applicable plans and programs then in effect.

2.5 Termination for Retirement or Death. Following a Change in Control, if the Executive’s employment with the Company is terminated by reason of his voluntary normal retirement (as defined under the then established rules of the Company’s tax-qualified retirement plan), or death, the Executive’s benefits shall be determined in accordance with the Company’s retirement, survivor’s benefits, insurance, and other applicable programs then in effect.

2.6 Termination for Cause or by the Executive Other Than for Good Reason. Following a Change in Control, if the Executive’s employment is terminated either: (i) by the Company for Cause; or (ii) voluntarily by the Executive for reasons other than as specified in Section 2.2(b)

 

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herein, the Company shall pay the Executive his full Base Salary at the rate then in effect, accrued vacation, and other items earned by and owed to the Executive through the Effective Date of Termination, plus all other amounts to which the Executive is entitled under any compensation plans of the Company at the time such payments are due, and the Company shall have no further obligations to the Executive under this Agreement.

2.7 Notice of Termination. Any termination of the Executive’s employment by the Company for Cause shall be communicated by Notice of Termination to the other party. Termination by the Executive for Good Reason requires delivery of a Notice of Termination by Executive for Good Reason given to the Company’s Senior Vice President of Human Resources within ninety (90) days of the occurrence of the event giving rise to the Notice, unless such circumstances are substantially corrected prior to the date of termination specified in the Notice of Termination for Good Reason.

Article 3. Form and Timing of Severance Benefits

3.1 Form and Timing of Severance Benefits. The Severance Benefits described in Sections 2.3(a), 2.3(b), and 2.3(d) herein shall be paid in cash to the Executive in a single lump sum as soon as practicable following the Effective Date of Termination, but in no event beyond ten (10) calendar days from such date. Notwithstanding anything to the contrary herein, if Executive is a “specified employee” under Section 409A of the Code, then any payment(s) to the Executive described under Section 2.3 herein upon his or her termination of employment that (A) constitute “deferred compensation to an Executive under Section 409A; (B) are not exempt from Section 409A on account of separation of service (within the meaning of Section 409A) and (C) are otherwise payable within 6 months after Executive’s termination of employment shall instead be made on the date 6 months and 1 day after such termination of employment, and such payment(s) shall be increased by an amount equal to interest on such payment(s) at a rate of interest equal to the Federal Funds Rate in effect as of the date of termination of employment from the date on which such payment(s) would have been made in the absence of this provision and the payment date described in this sentence.

3.2 Withholding of Taxes. The Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as legally shall be required.

Article 4. Noncompetition and Confidentiality

In the event the Executive becomes entitled to receive Severance Benefits as provided in Section 2.3 herein, the following shall apply:

 

 

(a)

Noncompetition. During the term of employment and for a period of twelve (12) months after the Effective Date of Termination, the Executive shall not: (i) directly or indirectly act in concert or conspire with any person employed by the Company in order to engage in or prepare to engage in or to have a financial or other interest in any business or any activity which he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on; or (ii) serve as an employee, agent, partner, shareholder, director or consultant for, or in any other capacity participate, engage, or have a financial or other interest in any business or any activity which he knows (or reasonably should have known) to be directly competitive with the

 

9


 

business of the Company as then being carried on (provided, however, that notwithstanding anything to the contrary contained in this Agreement, the Executive may own up to two percent (2%) of the outstanding shares of the capital stock of a company whose securities are registered under Section 12 of the Securities Exchange Act of 1934).

 

 

(b)

Confidentiality. The Company has advised the Executive and the Executive acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information (as defined below), and that Protected Information has been and will be developed at substantial cost and effort to the Company. All Protected Information shall remain confidential permanently and no Executive shall at any time, directly or indirectly, divulge, furnish, or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Executive’s employment with the Company), nor use in any manner, either during the term of employment or after termination, at any time, for any reason, any Protected Information, or cause any such information of the Company to enter the public domain.

For purposes of this Agreement, “Protected Information” means trade secrets, confidential and proprietary business information of the Company, and any other information of the Company, including, but not limited to, customer lists (including potential customers), sources of supply, processes, plans, materials, pricing information, internal memoranda, marketing plans, internal policies, and products and services which may be developed from time to time by the Company and its agents or employees, including the Executive; provided, however, that information that is in the public domain (other than as a result of a breach of this Agreement), approved for release by the Company or lawfully obtained from third parties who are not bound by a confidentiality agreement with the Company, is not Protected Information.

 

 

(c)

Nonsolicitation. During the term of employment and for a period of twelve (12) months after the Effective Date of Termination, the Executive shall not employ or retain or solicit for employment or arrange to have any other person, firm, or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee or consultant of the Company.

 

 

(d)

Cooperation. Executive agrees to cooperate with the Company and its attorneys in connection with any and all lawsuits, claims, investigations, or similar proceedings that have been or could be asserted at any time arising out of or related in any way to Executive’s employment by the Company or any of its subsidiaries.

 

 

(e)

Nondisparagement. At all times, the Executive agrees not to disparage the Company or otherwise make comments harmful to the Company’s reputation.

Article 5. Excise Tax Equalization Payment

5.1 Excise Tax Equalization Payment. If any portion of the Severance Benefits or any other payment under this Agreement, or under any other agreement with, or plan of the Company (in the aggregate, “Total Payments”) would constitute an “excess parachute payment,” such that a golden parachute excise tax is due under Internal Revenue code Sections 280G and 4999, the

 

10


Company shall provide to the Executive, in cash, an additional payment in an amount sufficient to cover the full cost of any excise tax and all of the Executive’s additional federal, state, and local income, excise, and employment taxes that arise on this additional payment (cumulatively, the “Full Gross-Up Payment”), such that the Executive is in the same after-tax position as if he had not been subject to the excise tax. For this purpose, the Executive shall be deemed to be in the highest marginal rate of federal, state, and local income taxes in the state and locality of the Executive’s residence on the Effective Date of Termination. This payment shall be made as soon as possible following the date of the Executive’s Qualifying Termination, but in no event later than ten (10) calendar days from such date. Notwithstanding the foregoing, this payment must be paid to Executive by the end of the calendar year next following the calendar year in which the Executive remits the related taxes.

For purposes of this Agreement, the term “excess parachute payment” shall have the meaning assigned to such term in Section 280G of the Internal Revenue Code, as amended (the “Code”), and the term “excise tax” shall mean the tax imposed on such excess parachute payment pursuant to Sections 280G and 4999 of the Code.

5.2 Subsequent Recalculation. In the event the Internal Revenue Service subsequently adjusts the excise tax computation herein described, the Company shall reimburse the Executive for the full amount necessary to make the Executive whole on an after-tax basis (less any amounts received by the Executive that the Executive would not have received had the computations initially been computed as subsequently adjusted), including the value of any underpaid excise tax, and any related interest and/or penalties due to the Internal Revenue Service. This payment shall be made as soon as possible after such amount is determined. Notwithstanding the foregoing, this payment must be paid to Executive by the end of the calendar year next following the calendar year in which the Executive remits the related taxes.

Article 6. The Company’s Payment Obligation

6.1 Payment Obligations Absolute. The Company’s obligation to make the payments and the arrangements provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the Company may have against the Executive or anyone else. All amounts payable by the Company hereunder shall be paid without notice or demand. Each and every payment made hereunder by the Company shall be final, and the Company shall not seek to recover all or any part of such payment from the Executive or from whomsoever may be entitled thereto, for any reasons whatsoever.

The Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Agreement, and the obtaining of any such other employment shall in no event effect any reduction of the Company’s obligations to make the payments and arrangements required to be made under this Agreement, except to the extent provided in Sections 2.3(g) and 2.3(h) herein.

6.2 Contractual Rights to Benefits. This Agreement establishes and vests in the Executive a contractual right to the benefits to which he is entitled hereunder. However, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder.

 

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Article 7. Term of Agreement

This Agreement will commence on the Effective Date and shall continue in effect for two (2) full years. However, at the end of such two (2) year period and, if extended, at the end of each additional year thereafter, the term of this Agreement shall be extended automatically for one (1) additional year, unless either party delivers written notice six (6) months prior to the end of such term, or extended term, stating that the Agreement will not be extended. In such case, the Agreement will terminate at the end of the term, or extended term, then in progress.

However, in the event of a Change in Control of the Company, the term of this Agreement shall automatically be extended for two (2) years from the date of the Change in Control.

Article 8. Legal Remedies

8.1 Payment of Legal Fees. If Executive incurs reasonable legal fees or other expenses (including expert witness and accounting fees) on or after the date of the Company’s announcement of a Change in Control and within a reasonable time after the Change in Control occurs, in an effort to interpret this Agreement or to secure, preserve, establish entitlement to, or obtain benefits under this Agreement (including the fees and other expenses of Executive’s legal counsel), the Company shall, regardless of the outcome of such effort, reimburse Executive on a current basis for such fees and expenses. Reimbursement of legal fees and expenses shall be made monthly within ten (10) days after Executive’s written submission of a request for reimbursement together with evidence that such fees and expenses were incurred. If Executive does not prevail (after exhaustion of all available judicial remedies) in respect of a claim by Executive or by the Company hereunder, and the Company establishes before a court of competent jurisdiction, by clear and convincing evidence, that Executive had no reasonable basis for his claim hereunder, or for his response to the Company’s claim hereunder, or acted in bad faith, no further reimbursement for legal fees and expenses shall be due to Executive in respect of such claim and Executive shall refund any amounts previously reimbursed hereunder with respect to such claim. Notwithstanding the foregoing, any reimbursement payment must be paid to Executive by the end of the calendar year next following the calendar year in which the Executive incurs the related fees or expenses.

8.2 Dispute Resolution; Mutual Agreement to Arbitrate.

(a) Executive and the Company agree that, except as otherwise provided in this Agreement, final and binding arbitration shall be the exclusive remedy for any controversy, dispute, or claim arising out of or relating to this Agreement or Executive’s employment with the Company, including Executive’s hire, treatment in the workplace, or termination of employment. For example, if Executive’s employment with the Company is terminated and he contends that the termination violates any statute, contract or public policy, then Executive will submit the matter to arbitration for resolution, in lieu of any court or jury trial to which Executive would otherwise might be entitled.

 

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(b) This Section covers all common law and statutory claims, including, but not limited to, any claim for breach of contract (including this Agreement) and for violation of laws forbidding discrimination on the basis of race, sex, color, religion, age, national origin, disability, or any other basis covered by applicable federal, state, or local law, and includes claims against the Company and/or any parents, affiliates, owners, officers, directors, employees, agents, general partners or limited partners of the Company, to the extent such claims involve, in any way, this Agreement or Executive’s employment with the Company. This Section covers all judicial claims that could be brought by either party to this Agreement, but does not cover administrative claims for workers’ compensation or unemployment compensation benefits or the filing of charges with government agencies that prohibit waiver of the right to file a charge.

(c) The arbitration shall be governed by JAMS Employment Arbitration Rules and Procedure except as modified herein. If the party chooses to have the arbitration proceeding administered by a third party, then the arbitration shall be administered by JAMS. If the party chooses to have the arbitration administered by JAMS, then the arbitration will “commence” in accordance with the JAMS Employment Arbitration Rules and Procedure. If the party chooses to have this matter arbitrated privately, then the arbitration will be deemed to “commence” on the date that the party provides a demand for arbitration and notice of claims and remedies sought outlining the facts relied upon, legal theories, and statement of claimed relief (“Demand”). The responding party shall serve a response to the claims and any counterclaims within fifteen (15) business days from the date of receipt of the Demand.

(d) Any arbitration shall be held in Washington, D.C. (unless the parties mutually agree in writing to another location within the United States) within 120 days of the commencement of the arbitration.

(e) The arbitration shall take place before a single arbitrator to be appointed by mutual agreement of counsel for each party or, if counsel cannot agree, then pursuant to the procedures set forth by JAMS. The parties may not have any ex parte communications with the arbitrator.

(f) The arbitrator may award any relief otherwise available to the parties by law or equity.

(g) The parties are limited to two (2) depositions per side, and limited written discovery as may be required by the arbitrator, not to exceed that allowed under the Federal Rules of Civil Procedure.

(h) Any hearing in this matter shall be completed within 120 days of the date of commencement of the arbitration, as the term “commencement” is defined by JAMS. The arbitrator shall issue its award within thirty (30) days of the last hearing day.

(i) Unless Executive objects, the Company will pay the arbitrator’s fees. Each party shall pay its own costs and attorneys’ fees, if any, unless the arbitrator rules otherwise. A court may enter judgment upon the arbitrator’s award, either by confirming the award, or vacating, modifying or correcting the award, on any ground referred to in the Federal Arbitration Act, or where the findings of fact are not supported by substantial evidence, or where the conclusions of law are erroneous.

 

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(j) The provisions of this Section are severable, meaning that if any provision in this Section 8.2 (“Dispute Resolution: Mutual Agreement to Arbitrate”) is determined to be unenforceable and cannot be reformed under applicable law, the remaining provisions shall remain in full effect, provided however, that any amendment of an unenforceable provision shall only be to the extent necessary and shall preserve the intent of the parties hereto. It is agreed and understood that the scope of this Section, including questions of arbitrability of any dispute, shall be determined by the arbitrator.

(k) Executive acknowledges that prior to accepting the provisions of this Section 8.2 and signing this Agreement, Executive has been given an opportunity to consult with an attorney and to review the JAMS Employment Arbitration Rules and Procedure that would govern the dispute resolution process under this Section. In signing this Agreement, the parties acknowledge that the right to a court trial and trial by jury is of value, and knowingly and voluntarily waive such right for any dispute subject to the terms of this Section.

Initials: Executive              the Company             

Article 9. Successors

9.1 Successors to the Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) of all or a significant portion of the assets of the Company by agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Regardless of whether such agreement is executed, this Agreement shall be binding upon any successor in accordance with the operation of law and such successor shall be deemed the “Company” for purposes of this Agreement.

9.2 Assignment by the Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amount would still be payable to him hereunder had he continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

 

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Article 10. Miscellaneous

10.1 Release. As a condition of receiving any severance payments under this Agreement, Executive must sign and not revoke, within the deadlines provided by the Company and in compliance with applicable federal and/or state laws, a written release of all employment claims against the Company and its related entities, including, without limitation, employment discrimination of any kind, wage payment, breach of contract, claims for workers compensation, unemployment, disability and severance claims that Executive has or may have at the termination of employment. In addition, Executive will agree not to sue the Company or any other entities or persons released.

10.2 Employment Status. This Agreement is not, and nothing herein shall be deemed to create, an employment contract between the Executive and the Company or any of its subsidiaries. The Executive acknowledges that the rights of the Company remain wholly intact to change or reduce at any time and from time to time his compensation, title, responsibilities, location, and all other aspects of the employment relationship, or to discharge him prior to a Change in Control (subject to such discharge possibly being considered a Qualifying Termination pursuant to Section 2.2).

10.3 Entire Agreement. This Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, representations and statements, whether oral, written, implied or expressed, relating to such subject matter. In addition, the payments provided for under this Agreement in the event of the Executive’s termination of employment shall be in lieu of any severance benefits payable under any severance plan, program, or policy of the Company to which he might otherwise be entitled.

10.4 Notices. All notices, requests, demands, and other communications hereunder shall be sufficient if in writing and shall be deemed to have been duly given if delivered by hand or if sent by registered or certified mail to the Executive at the last address he has filed in writing with the Company or, in the case of the Company, at its principal offices.

10.5 Execution in Counterparts. This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed to be original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.

10.6 Conflicting Agreements. The Executive hereby represents and warrants to the Company that his entering into this Agreement, and the obligations and duties undertaken by him hereunder, will not conflict with, constitute a breach of, or otherwise violate the terms of, any other employment or other agreement to which he is a party, except to the extent any such conflict, breach, or violation under any such agreement has been disclosed to the Board in writing in advance of the signing of this Agreement.

Notwithstanding any other provisions of this Agreement to the contrary, if there is any inconsistency between the terms and provisions of this Agreement and the terms and provisions of Company-sponsored compensation and welfare plans and programs, the Agreement’s terms and provisions shall completely supersede and replace the conflicting terms of the Company-sponsored compensation and welfare plans and programs, where applicable.

 

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10.7 Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. Further, the captions of this Agreement are not part of the provisions hereof and shall have no force and effect.

Notwithstanding any other provisions of this Agreement to the contrary, the Company shall have no obligation to make any payment to the Executive hereunder to the extent, but only to the extent, that such payment is prohibited by the terms of any final order of a federal or state court or regulatory agency of competent jurisdiction; provided, however, that such an order shall not affect, impair, or invalidate any provision of this Agreement not expressly subject to such order.

10.8 Modification. No provision of this Agreement may be modified, waived, or discharged unless such modification, waiver, or discharge is agreed to in writing and signed by the Executive and by a member of the Board, as applicable, or by the respective parties’ legal representatives or successors.

10.9 Applicable Law. To the extent not preempted by the laws of the United States, the laws of Delaware shall be the controlling law in all matters relating to this Agreement without giving effect to principles of conflicts of laws.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on this                      day of         , 2008.

 

ATTEST

  

Mueller Water Products, Inc.

By:

 

 

  

By:

 

 

 

  

 

Chairman of the Board, President and Chief Executive Officer

 

  

By:

 

 

 

  

 

Executive

 

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