Exhibit 10.1

 

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CONFIDENTIAL

 

April 17, 2006

 

Mr. Jeffery W. Sprick

500 West Eldorado Street

Decatur, IL  62522

 

Dear Jeff:

 

Confirming our recent discussions, we are pleased that you will be continuing as
Senior Vice President and Chief Financial Officer for Mueller Water
Products, Inc. (the “Company”). The following outlines the terms of your
employment. This document supersedes all previous agreements you had with Walter
Industries, Inc., the Company or any affiliate, subsidiary or
predecessor-in-interest of Walter Industries, Inc. or the Company.

 

1.                                       Position. You will serve as Senior Vice
President and Chief Financial Officer reporting to the President and Chief
Executive Officer of Mueller Water Products, Inc. You will be responsible for
all financial matters affecting the company including financial reporting,
balance sheet management, capital structure, and strategic issues affecting the
Company’s financial position.

 

2.                                       Compensation. Your compensation package
will be as follows:

 

(a)                                  Effective as of November 1, 2005, your base
salary will be $240,000 per year. Your salary and performance will be reviewed
once per year.

 

(b)                                 Effective November 1, 2006, you will
participate in the Mueller Water Products Corporate Executive Incentive Plan
with an annual bonus target of 50%, or $120,000 at your current annual base
salary. Your actual annual incentive payment will have a downside of zero and an
upside of 200% of target. The calculation of your actual bonus amount will
consist of four parts:  15% - for the operating income, on a consolidated basis,
of the Company, 35% - for the operating income of the Mueller segment, the Anvil
segment and Company corporate, 30% for the RONA

 

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(Return On Net Assets) of the Mueller segment, the Anvil segment and Company
corporate, and 20% - for the Individual Goals. A bonus will not be paid or
payable in the event you are not employed by the Company on the day of the
payout.

 

(c)                                  You will be eligible for the Mueller Water
Products, Inc. long term incentive program as it applies to other executives.

 

(d)                                 You will receive the following additional
benefits:

 

•                  Reimbursement for all reasonable and customary
business-related travel and entertainment expenses in accordance with the terms
of the policy generally applicable to the executives in the location in which
you are primarily based, as it may change from time to time.

 

•                  Participation in the group life and health insurance benefit
programs, generally applicable to executives employed in the location in which
you are primarily based, in accordance with their terms, as they may change from
time to time.

 

3.                                       Severance. In the event of your
involuntary termination, other than for “cause”, you will be eligible for the
following severance benefits:

 

•                  Twelve months of salary continuance, including base and
target bonus, at the applicable rate in effect at the time of termination.

 

•                  Twelve months of continuing fringe benefits to the extent
plans permit continued participation. In any event, health and life insurance
will continue for the period of your contractual severance and the COBRA
election period will not commence until the expiration of that period.

 

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 or its subsidiaries, which result from or are suggested
by any work you may do for the Company, or which result from use of the premises
of the Company or of its affiliates or the property of the Company, its
affiliates or its customers (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

 

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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 equipment,
supplies, facilities, or confidential information of the Company or of the
Company’s affiliates or confidential information of the Company’s customers and
which do not relate to the business, anticipated research or developments of, or
the work you have performed for, the Company or the Company’s affiliates.

 

5.                                       Non-Compete. It is understood and
agreed that the Company is in the water transmission products business. The
nature of, and methods employed in, the Company’s business are such that the
Employee will have substantial relationships with specific businesses and
personnel, prospective and existing, vendors, contractors, customers, and
employees of the Company that result in the creation of customer goodwill.
Therefore, following the termination of employment under this Agreement for any
reason and continuing for a period of twelve (12) months from the date of such
termination, so long as the Company or any affiliate, successor or assign
thereof carries on the name or like business within the Restricted Area (defined
as the states in which the Company and its subsidiaries operate in as of the
date of your separation), you shall not, directly or indirectly, for yourself or
on behalf of, or in conjunction with, any other person, persons, company,
partnership, corporation, business entity or otherwise:

 

a.               Call upon, solicit, write, direct, divert, influence, or accept
business (either directly or indirectly) with respect to any account or customer
or prospective customer of the Company or any corporation controlling,
controlled by, under common control with, or otherwise related to the Company,
including but not limited to any affiliates of the Company; or

 

b.              Hire away any independent contractors or personnel of the
Company or its affiliates and/or entice any such persons to leave the employ of
the Company or its affiliated entities without the prior written consent of the
Company.

 

6.                                       Non-Disparagement. Following the
termination of employment under this Agreement for any reason and continuing for
so long as the Company or any affiliate, successor or assigns thereof carries on
the name or like business within the Restricted Area, you shall not, directly or
indirectly, for yourself or on behalf of, or in conjunction with, any other
person, persons, company, partnership, corporation, business entity or
otherwise:

 

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a.               Make any statements or announcements or permit anyone to make
any public statements or announcements concerning the termination of your
employment with the Company, or

 

b.              Make any statements that are inflammatory, detrimental,
slanderous, or negative in any way to the interests of the Company or its
affiliated entities.

 

7.                                       No Conflict. As an inducement to the
Company to make this offer to you, you represent and warrant that you are not a
party to any agreement or obligation for personal services and that there exists
no impediment or restraint, contractual or otherwise on your power, right or
ability to accept this offer and to perform the duties and obligations specified
herein.

 

8.                                       Confidential Information. You
acknowledge and agree that you will respect and safeguard the property, trade
secrets and confidential information of the Company and its affiliates. You
acknowledge that the Company’s electronic communication systems (such as email
and voicemail) are maintained to assist in the conduct of the Company’s business
and that such systems and data exchanged or stored thereon are Company property.
In the event that you leave the employ of the Company, you will not disclose any
trade secrets or confidential information you acquired while an employee of the
Company to any other person or entity, including without limitation, a
subsequent employer, or use such information in any manner.

 

9.                                       Cause. Definition of “Cause” shall mean
your (i) conviction or guilty plea of a felony involving fraud or dishonesty,
(ii) theft or embezzlement of property from the Company, (iii) willful and
continued refusal to perform the duties of your position (other than any such
failure resulting from your incapacity due to physical or mental illness) or
(iv) fraudulent preparation of financial information of the Company.

 

10.                                 Entire Agreement. It is agreed and
understood that this offer letter, if and when accepted, shall constitute our
entire agreement with respect to the subject matter herein and shall supersede
all prior agreements, discussions, understandings and proposals (written or
oral) relating to your employment with the Company or any of its affiliates,
including Walter Industries, Inc.; provided, that this does not supersede, but
is to be read in conjunction with the Executive Change in Control Severance
Agreement dated the date hereof between you and Walter Industries, Inc. for so
long as that agreement is effective.

 

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We are delighted that you will be continuing with Mueller Water Products, Inc.
If the terms of the proposal are acceptable, please sign one of the enclosed
copies and return it to me in the envelope provided.

 

 

Very truly yours,

 

 

 

 

 

/s/ Gregory E. Hyland

 

 

Gregory E. Hyland

 

Chairman, President and Chief Executive Officer

 

 

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Agreed and Accepted

 

 

 

 

 

/s/ Jeffery W. Sprick

 

 

Jeffery W. Sprick

 

 

 

April 17, 2006

 

 

Date

 

 

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