Exhibit 10.17
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
Jeffery W. Sprick
Raymond P. Torok
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Mueller Water
Products, Inc.
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 March, 2007 (hereinafter referred to as the
“Effective Date”), by and between Mueller Water
Products, Inc. (the “Company”), a Delaware
corporation, and
(the “Executive”).
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:
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 willful and
continued failure to substantially perform his duties with the
Company (other than any such failure resulting from the
Executive’s Disability), after a written demand for
substantial performance is delivered to the Executive that
specifically identifies the manner in which the Committee believes
that the Executive has not
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substantially performed his duties,
and the Executive has failed to remedy the situation within fifteen
(15) business days of such written notice from the Company;
or
(ii)
The Executive’s conviction of
a felony; or
(iii) The Executive’s willful engaging in
conduct that is demonstrably and materially injurious to the
Company, monetarily or otherwise. However, 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;
(ii)
During any period of not more than
thirty-six (36) consecutive months, individuals who at the
beginning of such period constitute the Board of Directors of the
Company, 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 of Directors of the
Company, or, if no Compensation Committee exists, then the full
Board of Directors of the Company, 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.
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(j)
“ Disability ” or
“ Disabled ” shall have the meaning ascribed to
such term in the Executive’s governing long-term disability
plan, or if no such plan exists, at the discretion of the
Board.
(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)
“ 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:
(i)
The assignment of the Executive to
duties materially inconsistent with the Executive’s
authorities, duties, responsibilities, and status (including
offices, titles, and reporting requirements) 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
(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.
(o)
“ 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
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circumstances claimed to provide a
basis for termination of the Executive’s employment under the
provision so indicated.
(p)
“ 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).
(q)
“ Qualifying
Termination ” means any of the events described in
Section 2.2 herein, the occurrence of which triggers the
payment of Severance Benefits hereunder.
(r)
“ Severance Benefits
” 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(b) herein.
No Executive shall be entitled to
receive duplicative severance benefits under any other
Company-related plans or programs if benefits are triggered
hereunder.
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 Section 2.2(b) 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)
A lump-sum 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
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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
Effecti
