Exhibit 10.29

ORIGINALLY EFFECTIVE AS OF 10/31/11

AMENDED AS OF MARCH 26, 2012

Form of Xylem Enhanced Severance Pay Plan

 

1. Purpose

The purpose of this Xylem Enhanced Severance Pay Plan (“Plan”) is to assist in
occupational transition by providing Severance Benefits, as defined herein, for
employees covered by this Plan whose employment is terminated under conditions
set forth in this Plan.

The Plan first became effective as of October 31, 2011 following the spin-off of
Xylem Inc. from ITT Corporation (the “Predecessor Corporation”) on October 31,
2011. The Predecessor Corporation maintained a similar plan prior to the
spin-off (the “Predecessor Plan”), and the Plan was created to continue service
accruals under the Predecessor Plan. The Plan shall remain in effect as provided
in Section 9 hereof, and covered employees shall receive full credit for their
service and participation with the Predecessor Corporation as provided in
Section 5 hereof. The Plan was modified on March 26, 2012 to reflect updated
pension provisions for Section 5 and certain other technical updates.

 

2. Covered Employees

Covered employees under this Plan (“Employees”) are active full-time, regular
salaried United States or Canadian citizen employees of Xylem Inc. (“Xylem”) and
of any subsidiary company (“Xylem Subsidiary”) (including Employees who are
short term disabled, within the meaning of the Company’s short term disability
benefit plans, as of a Potential Acceleration Event) (other than Employees
receiving periodic severance payments as of a Potential Acceleration Event) who
are or were, at any time within the two year period immediately preceding the
Employees’ Qualifying Termination primarily located at Xylem Inc. Corporate
Headquarters (currently in White Plains, New York), and such other employees of
the Company who shall be designated as covered employees thereunder by the Chief
Executive or the Senior Vice President, Chief Human Resources Officer of Xylem
or a designee of such officers (“Authorized Officers or Designees”). No person
who is employed on a temporary, occasional or seasonal basis is eligible under
this Plan. Additionally, executives covered by the Xylem Special Senior
Executive Severance Pay Plan shall not be considered covered Employees under
this Plan.

After the occurrence of an Acceleration Event, the terms “Xylem”, “Xylem
Subsidiary” and “Company” as used herein shall also include, respectively and as
the context requires any successor company to Xylem or any successor company to
any Xylem Subsidiary and any affiliate of any such successor company.

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3. Definitions

An “Acceleration Event” shall occur if:

(i) a report on Schedule 13D shall be filed with the Securities and Exchange
Commission pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the
“Act”) disclosing that any person (within the meaning of Section 13(d) of the
Act), other than Xylem or a subsidiary of Xylem or any employee benefit plan
sponsored by Xylem or a subsidiary of Xylem, is the beneficial owner directly or
indirectly of twenty percent (20%) or more of the outstanding Common Stock $1
par value, of Xylem (the “Stock”);

(ii) any person (within the meaning of Section 13(d) of the Act), other than
Xylem or a subsidiary of Xylem, or any employee benefit plan sponsored by Xylem
or a subsidiary of Xylem, shall purchase shares pursuant to a tender offer or
exchange offer to acquire any Stock of Xylem (or securities convertible into
Stock) for cash, securities or any other consideration, provided that after
consummation of the offer, the person in question is the beneficial owner (as
such term is defined in Rule 13d-3 under the Act), directly or indirectly, of
twenty percent (20%) or more of the outstanding Stock of Xylem (calculated as
provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to
acquire Stock);

(iii) the consummation of (A) any consolidation, business combination or merger
involving Xylem, other than a consolidation, business combination or merger
involving Xylem in which holders of Stock immediately prior to the
consolidation, business combination or merger (x) hold fifty percent (50%) or
more of the combined voting power of Xylem (or the corporation resulting from
the merger or consolidation or the parent of such corporation) after the merger
and (y) have the same proportionate ownership of common stock of Xylem (or the
corporation resulting from the merger or consolidation or the parent of such
corporation), relative to other holders of Stock immediately prior to the
merger, business combination or consolidation, immediately after the merger as
immediately before, or (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all the
assets of Xylem,

(iv) there shall have been a change in a majority of the members of the Board of
Directors of Xylem within a 12-month period unless the election or nomination
for election by Xylem’s stockholders of each new director during such 12-month
period was approved by the vote of two-thirds of the directors then still in
office who (x) were directors at the beginning of such 12-month period or
(y) whose nomination for election or election as directors was recommended or
approved by a majority of the directors who where directors at the beginning of
such 12-month period or

(v) any person (within the meaning of Section 13(d) of the Act) (other than
Xylem or any subsidiary of Xylem or any employee benefit plan (or related trust)
sponsored by Xylem or a subsidiary of Xylem) becomes the beneficial owner (as
such term is defined in Rule 13d-3 under the Act) of twenty percent (20%) or
more of the Stock.

“Cause” shall mean action by the Employee involving willful malfeasance or gross
negligence or the Employee’s failure to act involving material nonfeasance that
would tend to have a materially adverse effect on the Company. No act or
omission on the part of the Employee shall be considered “willful” unless it is
done or omitted in bad faith or without reasonable belief that the action or
omission was in the best interests of the Company.

 

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“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Company” shall mean Xylem Inc. (“Xylem”) and of any subsidiary company (“Xylem
Subsidiary”), collectively or individually as the context requires “Company”;
provided, however, that for purposes of service under the Predecessor Plan,
Company shall include the Predecessor Corporation.

“Enhanced Severance Period” shall mean the period, expressed in weeks, equal to
the sum of (x) two times the normal severance pay or termination pay period of
weeks for the Employee (the “Normal Severance Period”), determined as if the
Employee were an employee of the same grade, and having the same years of
service, covered by and eligible for the severance pay or termination pay plans
or policies at Xylem Corporate Headquarters, White Plains, New York, as in
effect immediately preceding an Acceleration Event and (y) four (4) weeks (in
lieu of notice of termination), provided that the Enhanced Severance Period
shall not exceed 108 weeks and shall not be less than the Minimum Severance
Period.

“Enhanced Week’s Pay” shall mean the sum of (x) the current annual base salary
rate paid or in effect at the time of Employee’s termination of employment and
(y) the most recent annual bonus or service recognition award paid to or earned
by the Employee in respect of the Company’s most recent completed fiscal year
prior to the date of the Employee’s termination of employment, divided by 52
weeks.

“Good Reason” shall mean:

(i) without the Employee’s express written consent and excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith
and which is remedied by the Company or its affiliates within 30 days after
receipt of notice thereof given by the Employee, (A) a reduction in the
Employee’s annual base compensation (whether or not deferred), (B) the
assignment to the Employee of any duties inconsistent in any material respect
with the Employee’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities, or (C) any other action by
the Company or its affiliates which results in a material diminution in such
position, authority, duties or responsibilities;

(ii) without the Employee’s express written consent, the Company’s requiring the
Employee’s work location to be other than within twenty-five (25) miles of the
location where such Employee was principally working immediately prior to the
Acceleration Event; or

(iii) any failure by the Company to obtain the express written assumption of
this Plan from any successor to the Company; provided that “Good Reason” shall
cease to exist for an event on the 90th day following the later of its
occurrence or the Employee’s knowledge thereof, unless the Employee has given
the Company notice thereof prior to such date.

“Minimum Severance Period” shall mean:

(i) with respect to Employees with less than twenty (20) years of service with
the Company, twenty-six (26) weeks,

 

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(ii) with respect to Employees with between twenty (20) and twenty-five
(25) years of service with the Company, 52 weeks,

(iii) with respect to Employees with greater than twenty-five (25) years of
service with the Company but less than or equal to thirty (30) years of service
with the Company, seventy-eight (78) weeks and

(iv) with respect to Employees with greater than thirty (30) years of service
with the Company, one hundred and four (104) weeks.

For purposes hereof, “years of service” shall have the same meaning as in the
termination pay plans or policies at Xylem Corporate Headquarters, White Plains,
New York, as in effect immediately preceding an Acceleration Event and shall be
determined as of the date of the Employee’s termination of employment with the
Company.

“Potential Acceleration Event” shall mean any execution of an agreement, the
commencement of a tender offer or any other transaction or event that if
consummated would result in an Acceleration Event.

 

4. Severance Benefits Upon Termination of Employment

If an Employee’s employment with the Company is terminated due to a Qualifying
Termination, he or she shall receive the severance benefits set forth in
Section 5 hereof (“Severance Benefits”). For purposes hereof, a “Qualifying
Termination” shall mean a termination of an Employee’s employment with the
Company either:

(x) by the Company without Cause (A) within the two (2) year period commencing
on the date of the occurrence of an Acceleration Event or (B) prior to the
occurrence of an Acceleration Event and either (1) following the public
announcement of the transaction or event which ultimately results in such
Acceleration Event or (2) at the request of a party to, or participant in, the
transaction or event which ultimately results in an Acceleration Event; or

(y) by an Employee for Good Reason within the two (2) year period commencing
with the date of the occurrence of an Acceleration Event.

 

5. Severance Benefits

Severance Benefits for Employees:

 

  •  

Accrued Rights — The Employee’s base salary through the date of termination of
employment, any annual bonus earned but unpaid as of the date of termination for
any previously completed fiscal year, reimbursement for any unreimbursed
business expenses properly incurred by the Employee in accordance with Company
policy prior to the date of the Employee’s termination of employment and such
employee benefits, if any, as to which the Employee may be entitled under the
employee benefit plans of the Company, including without limitation, the payment
of any accrued or unused vacation under the Company’s vacation policy.

 

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  •  

Severance Pay — The number of weeks of the Employee’s Enhanced Severance Period
times the Employee’s Enhanced Week’s Pay, paid in the form described in
Section 6 below.

 

  •  

Benefits

> Continued health and life insurance benefits for a period equal to the
Employee’s Enhanced Severance Period following the Employee’s termination of
employment at the same cost to the Employee, and at the same coverage levels, as
provided to the Employee (and the Employee’s eligible dependents) immediately
prior to his or her termination of employment. In the event the Company changes
health and/or life insurance programs, coverage levels, benefit providers and/or
modifies benefit contributions, the Employee would be treated consistent with
other employees at his or her salary grade. In the event continuation of health
and/or life insurance is not permissible, the Company may provide alternative
benefits or payments as described under the subheading “General” below.

> Payment of a lump sum amount (“Savings Plan Lump Sum Amount”) for the Enhanced
Severance Period equal to the product of (x) the number of years corresponding
to the duration of the Enhanced Severance Period (expressed as a fraction, for
any fractional years), (y) the current annual base salary rate and annual bonus
as determined above as “Severance Pay” and (z) the current aggregate percentage
used to determine “Company Contributions” which the Employee would have been
eligible for under the Xylem Retirement Savings Plan for Salaried Employees (the
“RSP”) and Xylem Supplemental Retirement Savings Plan (the “Supplemental Plan”)
(or corresponding savings plan arrangements outside of the United States or any
successor plans thereto) in respect of the plan year during which the Employee’s
termination of employment occurs.

“Company Contributions” means the sum of:

(i) Company core contributions (e.g., either 3% or 4% based on age and years of
eligible service, based on the terms of the RSP and Supplemental Plan as in
effect in March 2012);

(ii) Company matching contributions (e.g., equal to 50% of the first 6% of
eligible pay contributed to the RSP and Supplemental Plan, based on the terms of
the RSP and Supplemental Plan as in effect in March 2012; for calculation of
Savings Plan Lump Sum Amount 3% will be applied); and

(iii) Company transition credit contributions (e.g., another 3% or 5% based on
age and service as defined in the RSP and Supplemental Plan, based on the terms
of the RSP and Supplemental Plan as in effect in March 2012).

In aggregate, the maximum percentage of Company Contributions for calculating
the Savings Plan Lump Sum Amount may not exceed 12%.

 

  •  

Outplacement - Outplacement services for one (1) year.

 

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General

With respect to the provision of benefits described above during the above
period equal to the Employee’s Enhanced Severance Period, if, for any reason at
any time the Company is unable to treat the Employee as being eligible for
ongoing participation in any Company employee benefit plans in existence
immediately prior to the termination of employment of the Employee, and if, as a
result thereof, the Employee does not receive a benefit or receives a reduced
benefit the Company shall provide such benefits by making available equivalent
benefits from other sources or making cash payments providing equivalent value
(as reasonably determined in good faith by the Company) in a manner consistent
with Section 15 below.

Notwithstanding any other provision of the Plan to the contrary, all prior
service and participation by an Employee with the Predecessor Corporation shall
be credited in full towards an Employee’s service and participation with the
Company.

 

6. Form of Payment of Severance Pay and Lump Sum Payments

Severance Pay shall be paid in cash, in non-discounted equal periodic
installment payments corresponding to the frequency and duration of the
severance payments that the Employee would have been entitled to receive under
the Normal Severance Period in the absence of the occurrence of an Acceleration
Event. The Savings Plan Lump Sum Amount shall be paid in cash within thirty
(30) calendar days after the date the employment of the Employee terminates. The
timing of payments shall in all respects be subject to Section 15 below.

 

7. Termination of Employment — Other

The Severance Benefits shall only be payable upon an Employee’s termination of
employment due to a Qualifying Termination; provided, that if, following the
occurrence of an Acceleration Event, an Employee is terminated due to the
Employee’s death or disability (as defined in the long-term disability plan in
which the Employee is entitled to participate (whether or not the Employee
voluntarily participates in such plan)) and, at the time of such termination,
the Employee had grounds to resign with Good Reason, such termination of
employment shall be deemed to be a Qualifying Termination.

 

8. Administration of Plan

This Plan shall be administered by Xylem, who shall have the exclusive right to
interpret this Plan, adopt any rules and regulations for carrying out this Plan
as may be appropriate and decide any and all matters arising under this Plan,
including but not limited to the right to determine appeals. Subject to
applicable Federal and state law, all interpretations and decisions by Xylem
shall be final, conclusive and binding on all parties affected thereby.

Notwithstanding the preceding paragraph, following an Acceleration Event, any
controversy or claim arising out of or relating to this Plan, or the breach
thereof, shall be settled by arbitration administered by the American
Arbitration Association under its Commercial Arbitration Rules and the entire
cost thereof shall be borne by the Company. The location of the arbitration
proceedings shall be reasonably acceptable to the Employee. Judgment on the
award

 

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rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. The Company shall pay all legal fees, costs of litigation, prejudgment
interest, and other expenses which are incurred in good faith by the Employee as
a result of the Company’s refusal to provide any of the Severance Benefits to
which the Employee becomes entitled under this Plan, or as a result of the
Company’s (or any third party’s) contesting the validity, enforceability, or
interpretation of this Plan, or as a result of any conflict between the Employee
and the Company pertaining to this Plan. The Company shall pay such fees and
expenses from the general assets of the Company.

 

9. Termination or Amendment

Xylem may terminate or amend this Plan (“Plan Change”) at any time except, that
following the occurrence of (i) an Acceleration Event or (ii) a Potential
Acceleration Event, no Plan Change that would adversely affect any Employee may
be made without the prior written consent of such Employee affected thereby;
provided, however, that (ii) above shall cease to apply if such Potential
Acceleration Event does not result in the occurrence of an Acceleration Event.

 

10. Offset

Any Severance Benefits provided to an Employee under this Plan shall be offset
in a manner consistent with Section 15 by reducing (x) any Severance Pay
hereunder by any severance pay, salary continuation pay, termination pay or
similar pay or allowance and (y) any other Severance Benefits hereunder by
corresponding employee benefits, or outplacement services, which the Employee
receives or is entitled to receive, (i) pursuant to any other Company policy,
practice program or arrangement, (ii) pursuant to any Company employment
agreement or other agreement with the Company, or (iii) by virtue of any law,
custom or practice excluding, however, any unemployment compensation in the
United States, unless the Employee voluntarily expressly waives (which the
Employee shall have the exclusive right to do) in writing any such respective
entitlement.

 

11. Excise Tax

In the event that it shall be determined that any Payment would constitute an
“excess parachute payment” within the meaning of Section 280G of the Code, then
the aggregate of all Payments shall be reduced so that the Present Value of the
aggregate of all Payments does not exceed the Safe Harbor Amount; provided,
however, that no such reduction shall be effected, if the Net After-tax Benefit
to the Employee of receiving all of the Payments exceeds the Net After-tax
Benefit to the Employee resulting from having such Payments so reduced. In the
event a reduction is required pursuant hereto, the order of reduction shall be
first all cash payments on a pro rata basis, then any equity compensation on a
pro rata basis, and lastly medical and dental coverage.

For purposes of this Section 11, the following terms have the following
meanings:

(i) “Net After-tax Benefit” shall mean the Present Value of a Payment net of all
federal state and local income, employment and excise taxes imposed on Employee
with respect thereto, determined by applying the highest marginal rate(s)
applicable to an individual for the Employee’s taxable year in which the
Qualifying Termination occurs.

 

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(ii) “Payment” means any payment or distribution or provision of benefits by the
Company to or for the benefit of the Employee, whether paid or payable or
distributed or distributable pursuant to the terms of this Plan or otherwise,
but determined without regard to any reductions required by this Section 11.

(iii) “Present Value” shall mean such value determined in accordance with
Section 280G(d)(4) of the Code.

(iv) “Safe Harbor Amount” shall be an amount expressed in Present Value which
maximizes the aggregate Present Value of Payments without causing any Payment to
be subject to excise tax under Section 4999 of the Code or the deduction
limitation of Section 280G of the Code.

All determinations required to be made under this Section 11, including whether
and when a reduction is required and the amount of such reduction and the
assumptions to be utilized in arriving at such determination, shall be made by a
nationally recognized accounting firm mutually agreed to by the Employee and the
Company (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Employee within ten (10) business days
of the receipt of notice from the Employee that there has been a Payment, or
such earlier time as is requested by the Company; provided that for purposes of
determining the amount of any reduction, the Employee shall be deemed to pay
federal income tax at the highest marginal rates applicable to individuals in
the calendar year in which any such Qualifying Termination occurs.

All fees and expenses of the Accounting Firm shall be borne solely by the
Company. If the Accounting Firm determines that no excise tax is payable by the
Employee, it shall so indicate to the Employee in writing. Any determination by
the Accounting Firm shall be binding upon the Company and the Employee.

 

12. Miscellaneous

The Employee shall not be entitled to any notice of termination or pay in lieu
thereof except as included as part of Severance Pay as provided herein.

Severance Benefits under this Plan are paid entirely by the Company from its
general assets.

This Plan is not a contract of employment, does not guarantee the Employee
employment for any specified period and does not limit the right of the Company
to terminate the employment of the Employee at any time.

If an Employee should die while any amount is still payable to the Employee
hereunder had the Employee continued to live, all such amounts shall be paid in
accordance with this Plan to the Employee’s designated heirs or, in the absence
of such designation, to the Employee’s estate.

 

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The numbered section headings contained in this Plan are included solely for
convenience of reference and shall not in any way affect the meaning of any
provision of this Plan.

If, for any reason, any one or more of the provisions or part of a provision
contained in this Plan shall be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Plan not held so invalid,
illegal or unenforceable, and each other provision or part of a provision shall
to the full extent consistent with law remain in full force and effect.

The Plan shall be governed by and construed in accordance with the laws of the
State of New York without regard to the conflicts of laws provisions thereof.

The Plan shall be binding on all successors and assigns of the Xylem and an
Employee.

 

13. Notices

Any notice and all other communication provided for in this Plan shall be in
writing and shall be deemed to have been duly given when delivered by hand or
overnight courier or three days after it has been mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.

If to the Company:

Xylem Inc.

1133 Westchester Avenue, Suite N200

White Plains, New York 10604

Attention: General Counsel

If to Employee:

To the most recent address of Employee set forth in the personnel records of
Xylem.

 

14. Adoption and Amendments

This Plan was initially adopted by Xylem on October 31, 2011 (the “Adoption
Date”) and subsequently amended on March 26, 2012; and does not apply to any
termination of employment which occurred or which was communicated to the
Employee prior to the Adoption Date.

 

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  15. Section 409A

This Plan is intended to comply with Section 409A of the Code and will be
interpreted in a manner intended to comply with Section 409A of the Code.
Notwithstanding anything herein to the contrary, (i) if at the time of the
Employee’s termination of employment with the Company the Employee is a
“specified employee” as defined in Section 409A of the Code (and any related
regulations or other pronouncements thereunder) and the deferral of the
commencement of any payments or benefits otherwise payable hereunder as a result
of such termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then the Company
will defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or
provided to the Employee) until the date that is six months following the
Employee’s termination of employment with the Company (or the earliest date as
is permitted under

Section 409A of the Code), at which point all payments deferred pursuant to this
Section 15 shall be paid to the Employee in a lump sum and (ii) if any other
payments of money or other benefits due hereunder could cause the application of
an accelerated or additional tax under Section 409A of the Code, such payments
or other benefits shall be deferred if deferral will make such payment or other
benefits compliant under Section 409A of the Code, or otherwise such payment or
other benefits shall be restructured, to the extent possible, in a manner,
determined by the Company, that does not cause such an accelerated or additional
tax. To the extent any reimbursements or in-kind benefits due under this Plan
constitute “deferred compensation” under Section 409A of the Code, any such
reimbursements or in-kind benefits shall be paid in a manner consistent with
Treas. Reg. Section 1.409A-3(i)(1)(iv). Each payment made under this Plan shall
be designated as a “separate payment” within the meaning of Section 409A of the
Code. The Company shall consult with Employees in good faith regarding the
implementation of the provisions of this section; provided that neither the
Company nor any of its employees or representatives shall have any liability to
Employees with respect thereto.

 

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