Company: MWA
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001350593-25-000043
Chunk: 26

Company: Mueller Water Products, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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 beyond twelve months.Stock options generally vest ratably on each anniversary date of the original grant over three years.  Compensation expense attributed to stock options is based on the fair value of the awards on their respective grant dates, as determined using a Black-Scholes model.  The assumptions used to determine the grant date fair value are indicated below for awards granted to date during the current fiscal year:December 3,2024March 3,2025Variables used in determining grant date fair value:Dividend yield1.64%1.41%Risk-free rate4.14%4.02%Expected term (in years)6.006.00The expected dividend yield is based on our estimated annual dividend and our stock price history at the grant date. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield in effect at the grant date with a term equal to the expected term.  The expected term represents the average period of time the options are expected to be outstanding.A PRSU award consists of a target number of units that may be paid out at the end of a three-year award cycle.  Settlements in our common shares will range from zero to two times the number of PRSUs granted, depending on our financial performance against predetermined targets. Restricted stock units generally vest ratably over the life of the award, usually three years, on each anniversary date of the original grant.  Compensation expense for restricted stock units is recognized between the grant date and the vesting date (or the date on which a participant becomes retirement-eligible as defined and pursuant to the terms of the 2006 Stock Plan, if sooner) on a straight-line basis for each tranche of each award.  Fair values of restricted stock units are determined using the closing price of our common stock on the respective grant date.Employee stock purchase plan instruments are shares of our common stock purchased by employees under the Mueller Water Products Inc. 2006 Employee Stock Purchase Plan (“ESPP”).  Generally, all full-time, active employees are eligible to participate in the ESPP, subject to certain restrictions.  Employee purchases are funded through payroll deductions, and any excess payroll withholdings are returned to the employee.  The price for the shares purchased under the ESPP is 85% of the lower of the closing price on the first day or the last day of the offering period.We issued 260,727 shares of common stock to settle PRSUs vested during the nine months ended June 30, 2025; no