EXHIBIT 10.18

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 16th day of July, 2008
(the “Effective Date”) by and between Mueller Water Products, Inc. (“Company”)
and Evan L. Hart (“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 including, without limitation, the agreement dated
as of September 6, 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
July 23, 2008 (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 Senior Vice President and Chief Financial Officer
and will report to the 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 Chief Executive Officer. 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 person to whom the Executive reports, 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 Chief Executive Officer of the Company and obtained
by the Executive.

 

3. Compensation and Benefits

 

  a. Executive’s base salary will be $285,000 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 sixty percent (60%) 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

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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. This award is at the discretion of the Compensation Committee of the
Board or the Chief Executive Officer, as applicable.

 

  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.

 

  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 $1,500 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 agrees to comply with policies as adopted from time to time by
the Board of Directors for executives, which includes stock ownership
guidelines.

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 Other Than 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

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other than 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 date of termination of
employment, 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.

 

  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 150% of (A) the sum of Executive’s current monthly
rate of base salary and one-twelfth of the annual target bonus (B) multiplied by
12 months (Clauses (A) and (B) together are referred to as the “Base Amount”).
Payment of the Base Amount shall be made in substantially equal monthly
installments over 18 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.

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  iii. 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. 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.

 

  iv. Executive will continue group life insurance coverage for a period of 18
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.

 

  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:

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  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.

 

  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

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).

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  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 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 a principal financial officer with responsibility for the overall financial
affairs of the Company and its subsidiaries and participating as a member of the
senior leadership team in overall strategic and business planning for the
Company 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 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.

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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

 

  •  

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.

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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.

 

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

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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.

 

  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.

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  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 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

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Employer, to the extent such claims involve, in any way, this Agreement or
Executive’s employment with 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 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  ELH  Employer   GEH  

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IN WITNESS WHEREOF, the parties have executed this Agreement on this 23rd day of
July, 2008.

 

MUELLER WATER PRODUCTS, INC. By:  

/s/ Gregory E. Highland

 

Chairman of the Board, President and

Chief Executive Officer

 

/s/ Evan L. Hart

  Executive