<PAGE>
                                                                   Exhibit 10.13

                                                                  EXECUTION COPY

      RESTRICTED STOCK AGREEMENT (this "Agreement") made as of this 22nd day of
November, 2002 (the "Effective Date"), National Waterworks Holdings, a Delaware
corporation (the "Company"), and Terry Howell (the "Executive"). Certain
capitalized terms used herein are defined in Section 6 hereof and capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Employment Agreement (as defined below).

      In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

      1.    PURCHASE AND SALE OF EXECUTIVE STOCK.

      (a) Upon execution of this Agreement and in connection with the Closing,
the Executive Subscription Agreement and payment of the Original Purchase Price
(as hereinafter defined), the Company will issue to the Executive 47,589.80
shares of Class A Common Stock, par value $0.01 per share, of the Company (the
"Class A Common Stock"), for a purchase price of $0.0179 per share (the
"Original Purchase Price"). All of such shares of Common Stock purchased by the
Executive hereby are referred to herein as "Executive Stock." To secure the
Company's rights under the Repurchase Option in Section 3, the Company will
retain possession of the certificates representing the Executive Stock.

      (b) The parties agree that the Fair Market Value of each share of
Executive Stock as of the date hereof is $0.0179. The Executive, in his sole
discretion, may make an effective election with the Internal Revenue Service
(the "IRS") under Section 83(b) of the Code and the regulations promulgated
thereunder in the form of EXHIBIT A attached hereto. The Executive understands
that under applicable law such election must be filed with the IRS no later than
thirty (30) days after any acquisition of the Executive Stock to be effective.
If the Executive files an effective election, the excess of the Fair Market
Value of the Executive Stock (which the IRS may assert is different from the
Fair Market Value determined by the parties) covered by such election over the
amount paid by the Executive for the stock shall be treated as ordinary income
received by the Executive, and the Company or its subsidiary, National
Waterworks, Inc. shall withhold from Executive's compensation all amounts
required under applicable law. If the Executive does not file an effective
election, future appreciation on the Executive Stock will generally be taxable
as ordinary income when such stock vests pursuant to this Agreement. The
foregoing is merely a brief summary of complex tax laws and regulations, and
therefore, the Executive is strongly advised to consult with his own tax
advisors.

      (c) In connection with the acquisition of the Executive Stock hereunder,
the Executive represents and warrants to the Company that:

            (i) the Executive Stock to be acquired by the Executive pursuant to
      this Agreement will be acquired for the Executive's own account, for
<PAGE>
      investment only and not with a view to, or intention of, distribution
      thereof in violation of the Securities Act, or any applicable state
      securities laws, and the Executive Stock will not be disposed of in
      contravention of the Securities Act or any applicable state securities
      laws or this Agreement or the Stockholders' Agreement;

            (ii) the Executive is a manager of the Company's subsidiary,
      National Waterworks, Inc., and has generally such knowledge and experience
      in business and financial matters and with respect to investments in
      securities of privately held companies so as to enable him to understand
      and evaluate the risks and benefits of his investment in the Executive
      Stock;

            (iii) the Executive has no need for liquidity in his investment in
      the Executive Stock and is able to bear the economic risk of his
      investment in the Executive Stock for an indefinite period of time and
      understands that the Executive Stock has not been registered or qualified
      under the Securities Act or any applicable state securities laws, by
      reason of the issuance of the Executive Stock in a transaction exempt from
      the registration and qualification requirements of the Securities Act or
      such state securities laws and, therefore, cannot be sold unless
      subsequently registered or qualified under the Securities Act or such
      state securities laws or an exemption from such registration or
      qualification is available;

            (iv) the Executive understands that the exemption from registration
      afforded by Rule 144 (the provisions of which are known to the Executive)
      promulgated under the Securities Act, depends on satisfaction of various
      conditions and that, if applicable, Rule 144 may only afford the basis for
      sales under certain circumstances and only in limited amounts; and

            (v) the Executive has had an opportunity to ask questions and
      receive answers concerning the terms and conditions of the offering of the
      Executive Stock and has had full access to or been provided with such
      other information concerning the Company as he has requested.

      (d) This Agreement constitutes the legal, valid and binding obligation of
the Executive, enforceable in accordance with its terms, and the execution,
delivery and performance of this Agreement by the Executive does not and will
not conflict with, violate or cause a breach of any agreement, contract or
instrument to which the Executive is a party or any judgment, order or decree to
which the Executive is subject.

      (e) As an inducement to the Company to issue the Executive Stock to the
Executive and as a condition thereto, the Executive acknowledges and agrees
that:

            (i) neither the issuance of the Executive Stock to the Executive nor
      any provision contained herein shall entitle the Executive to remain in
      the employment of the Company and its Subsidiaries, if any, or affect the
      right of the Company to terminate the Executive's employment at any time
      for any reason
<PAGE>
      (but nothing herein is intended to limit the Executive's rights under the
      Employment Agreement); and

            (ii) except as provided in any other agreement between the Company
      and/or National Waterworks, Inc. and the Executive, the Company shall have
      no duty or obligation to disclose to the Executive, and the Executive
      shall have no right to be advised of, any material information regarding
      the Company and its Subsidiaries, if any, at any time prior to, upon or in
      connection with the forfeiture of the Executive Stock upon the termination
      of the Executive's employment with National Waterworks, Inc.

      (f) In connection with the issuance and sale by the Company to the
Executive of the Executive Stock, the Company represents and warrants that:

            (i) the Company is a corporation duly organized, validly existing
      and in good standing under the laws of the jurisdiction of its
      incorporation and has all requisite corporate power and authority to own,
      lease and operate the assets used in its business, to carry on its
      business as presently conducted, to enter into this Agreement, to perform
      its obligations hereunder, and to consummate the transactions contemplated
      hereby;

            (ii) the Company has taken all corporate action necessary to
      authorize its execution and delivery of this Agreement, its performance of
      its obligations thereunder, and its consummation of the transactions
      contemplated thereby;

            (iii) this Agreement constitutes a valid and binding obligation of
      the Company, enforceable in accordance with its terms; and

            (iv) the Executive Stock, when issued in accordance with this
      Agreement, will be duly authorized and validly issued, fully paid and
      nonassessable and will be free of all Encumbrances created by or through
      the Company. For purposes of this clause, "Encumbrance" means any security
      interest, mortgage, lien, pledge, charge, easement, reservation,
      restriction, or similar right of any third party.
<PAGE>
      2.    VESTING OF EXECUTIVE STOCK.

      (a) General.

            (i) Time-Based Vesting. Fifty Percent (50%) of the Executive Stock
shall vest on each date set forth below (each, a "Vesting Date") as to that
number of shares of the Executive Stock set forth opposite such Vesting Date:

<TABLE>
<CAPTION>
                     Vesting Date                             No. of shares of Executive Stock
                     ------------                             --------------------------------
<S>                                                     <C>
On the first anniversary of the Effective Date                  12.5% of the Executive Stock

After the first anniversary of the Effective Date         An additional 1.0417% of the Executive Stock
     through the fourth anniversary of the              on the first day of each calendar month after the
             Effective Date                              first anniversary of the Effective Date until 50%
                                                                  of the Executive Stock is vested
</TABLE>

            (ii) Performance-Based Vesting - EBITDA. Six and one-quarter percent
(6.25%) of the Executive Stock shall vest on each December 31st, commencing on
December 31, 2003 and ending on December 31, 2006 (each, a "Performance Vesting
Date") provided that the Company generates EBITDA for such calendar year in an
amount equal to the Minimum EBITDA set forth below. Notwithstanding the
foregoing, in the event that the Company exceeds the Minimum EBITDA in any
successor calendar year ending on or prior to December 31, 2006, the amount of
such excess may be applied to any prior year in which the Company's EBITDA was
less than the Minimum EBITDA for such year and, to the extent that adding such
excess results in the Company's EBITDA for such period to exceed the Minimum
EBITDA for such year, the Executive Stock subject to vesting on the last date of
such year shall be deemed vested. Notwithstanding the foregoing, in the event
that the Company exceeds the Minimum EBITDA in any calendar year ending on or
prior to December 31, 2005, up to $5,000,000 of such excess may be applied to
the Company's EBITDA for the calendar year immediately following such year only
if the Company's EBITDA for such immediately following year is less than the
Minimum EBITDA for such year and, to the extent that adding up to $5,000,000 of
such excess results in the Company's EBITDA for such immediately following year
to exceed the Minimum EBITDA for such year, the Executive Stock subject to
vesting on the last date of such year shall be deemed vested.
<PAGE>
<TABLE>
<CAPTION>
            Calendar Year                           Minimum EBITDA
            -------------                           --------------
<S>                                                 <C>
                  2003                               $98,800,000

                  2004                               $105,100,000

                  2005                               $112,000,000

                  2006                               $115,400,000
</TABLE>

The Minimum EBITDA targets set forth above shall be appropriately adjusted by
the Company's Board of Directors for acquisitions made by the Company (whether
by purchase of assets, merger or otherwise) and such adjustments shall take into
account the pro forma annual EBITDA of any acquired business. For purposes of
clarity, EBITDA calculations shall not be reduced by the amounts paid by the
Company under that certain Management Agreement by and among the Company, J.P.
Morgan Partners, LLC and THL Managers V, LLC dated November 22, 2002.

            (iii) Performance-Based Vesting - Net Working Capital Percentage.
Six and one-quarter percent (6.25%) of the Executive Stock shall vest on each
December 31st, commencing on December 31, 2003 and ending on December 31, 2006
(each, a "Performance Vesting Date") provided that the Company achieves a Net
Working Capital Ratio (as defined below) for such calendar year not to exceed
the Maximum Net Working Capital Ratio set forth below.

<TABLE>
<CAPTION>
             Calendar Year          Maximum Net Working Capital Percentage
             -------------          --------------------------------------
<S>                                 <C>
                  2003                               13.5%

                  2004                               13.4%

                  2005                               13.3%

                  2006                               13.2%
</TABLE>

The Maximum Net Working Capital Ratio shall be subject to appropriate adjustment
by the Company's Board of Directors in the event that the Company acquires any
business(es) with an aggregate purchase price in excess of $10,000,000
(including any earnout components, etc.).

      "Net Working Capital Ratio" shall equal the simple average of the Monthly
Net Working Capital Ratios (as defined below) during such calendar year. The
"Monthly Net Working Capital Ratios" shall equal a fraction, the numerator of
which is the Net Working Capital (as defined below) calculated on the last day
of such calendar month, and the denominator of which is the product of twelve
(12) and the Net Sales (calculated in accordance with past practice ) generated
by the Company during such calendar month. "Net Working Capital" shall mean the
excess of (i) the sum of the Company's accounts receivables and inventory over
(ii) the Company's accounts payable, each as calculated in accordance with past
practice.
<PAGE>
      (b) In the event the Executive ceases to be employed by the Company or any
of its Subsidiaries for any reason, then (i) all shares of Executive Stock
subject to clause (a)(i) above shall cease vesting effective as of the
Termination Date and, (ii) in the event that the Company achieves Minimum EBITDA
and/or achieves a Net Working Capital Ratio not to exceed the Maximum Net
Working Capital Ratio, as the case may be, with respect to the year in which
such termination occurs, the shares of Executive Stock subject to vesting with
respect to such year under clauses (a)(ii) or (a)(iii) multiplied by a fraction,
the numerator of which shall equal the number of whole months during such year
that the Executive remained employed with the Company and the denominator of
which is 12, shall be deemed vested as of the end of such year.

      (c) Notwithstanding the vesting terms set forth in clause (a) above, upon
a Termination Without Cause within twelve (12) months after the consummation of
a Sale, all Executive Stock subject to vesting pursuant to clause (a)(i) above
shall automatically and immediately vest.

      (d) Notwithstanding the vesting terms set forth in clause (a) above, upon
a Sale or Public Sale in which each of J.P Morgan Partners, LLC and Thomas H.
Lee Partners, L.P. and their affiliates receive aggregate consideration or
proceeds representing an amount which equals or exceeds the sum of the amounts
originally paid by J.P. Morgan Partners, LLC and Thomas H. Lee Partners, L.P.
and/or their affiliates with respect to the purchase of the Company's equity
securities on or about the Closing plus a rate of return on such amounts equal
to at least 25%, compounded annually, all Executive Stock subject to vesting
pursuant to clauses (a)(ii) and (a)(iii) shall automatically and immediately
vest.

      (e) Notwithstanding the vesting terms set forth in clause (a) above, upon
a Termination Without Cause within the first twelve (12) months after the date
hereof, 1.0417% of the Executive Stock for each whole month that the Executive
remained employed with the Company or its Subsidiary shall automatically and
immediately vest.

      (f) Notwithstanding the vesting terms set forth in clause (a) above, if
the Executive remains employed with the Company or any of its Subsidiaries from
the Effective Date through the eighth anniversary of the Effective Date, all
Executive Stock subject to vesting pursuant to clauses (a)(ii) and (a)(iii)
shall automatically and immediately vest on the eighth anniversary of the
Effective Date.

      3.    REPURCHASE OF SHARES.

      (a) In the event that the Executive ceases to be employed by the Company
or any of its Subsidiaries for any reason, then all shares of Executive Stock
(whether held by the Executive or by one or more of the Executive's transferees)
which as of the date of termination:

            (i) have not vested pursuant to Section 2 hereof, will be subject to
      repurchase by the Company, at its option (the "Non-Vested Repurchase
<PAGE>
      Option"), for the lower of the Original Purchase Price of the Executive
      Stock and Fair Market Value

            (ii) have vested pursuant to Section 2 hereof, will be subject to
      repurchase, solely in the event that the Executive ceases to be employed
      by the Company or any of its Subsidiaries as a result of a Termination for
      Cause, by the Company, at its option (the "Vested Repurchase Option"), for
      the lower of Original Purchase Price of the Executive Stock and Fair
      Market Value.

      (b) In the event of Sale, then all shares of Executive Stock (whether held
by the Executive or by one or more of the Executive's transferees) which, as of
the date of such Sale, have not vested pursuant to Sections 2(a)(ii) and
(a)(iii) hereof, will be subject to repurchase by the Company, at its option
(the "Non-Vested Sale Repurchase Option"; and together with the Non-Vested
Repurchase Option and the Vested Repurchase Option, the "Repurchase Option"),
for the lower of the Original Purchase Price of the Executive Stock and Fair
Market Value.

      (c) The Repurchase Option shall be exercised by the Company, or its
designee, by delivering to the Executive a written notice of exercise and a
check in the amount of the Original Purchase Price or Fair Market Value, as
determined in accordance with Sections 3(a) and (b) above. Upon delivery of such
notice and payment of the purchase price as described above, the Company, or its
designee, shall become the legal and beneficial owner of the shares of Executive
Stock being repurchased and all rights and interest therein or related thereto,
and the Company, or its designee, shall have the right to transfer to its own
name the number of shares of Executive Stock being repurchased without further
action by the Executive or any of his transferees. If the Company or its
designee elect to exercise the repurchase rights pursuant to this Section 3 and
the Executive or his transferee fails to deliver the shares of Executive Stock
in accordance with the terms hereof, the Company, or its designee, may, at its
option, in addition to all other remedies it may have, deposit the purchase
price in an escrow account administered by an independent third party (to be
held for the benefit of and payment over to the Executive or his transferee in
accordance herewith), whereupon the Company shall by written notice to the
Executive cancel on its books the certificates(s) representing such shares of
Executive Stock registered in the name of the Executive and all of the
Executive's or his transferee's right, title, and interest in and to such shares
of Executive Stock shall terminate in all respects.

      (d) Each holder of the Executive Stock shall promptly return to the
Company share certificates representing shares of the Executive Stock
repurchased pursuant to Sections 3(a) and (b) hereof. In the event such
certificates represent more shares of the Executive Stock than are required to
be forfeited, the Company shall, without charge, deliver to such holder of the
Executive Stock a new certificate representing such excess.

      (e) In the event that Executive Stock is repurchased pursuant to this
Section 3, the Executive and his successors, assigns or Representatives shall
take (at the Company's expense) all steps necessary and desirable to obtain all
required third-party,
<PAGE>
governmental and regulatory consents and approvals and take all other actions
necessary and desirable to facilitate consummation of such repurchase in a
timely manner.

      4.    LEGEND.

      The certificates representing the Executive Stock will bear the following
legend:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
      REPURCHASE AND CERTAIN OTHER AGREEMENTS SET FORTH IN A RESTRICTED STOCK
      AGREEMENT DATED AS OF NOVEMBER , 2002, BETWEEN THE COMPANY AND THE OTHER
      SIGNATORY THERETO. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER
      HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.

            THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, OR ENCUMBRANCE OF THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE HOLDER OF
      SUCH SECURITIES IN RESPECT OF THE ELECTION OF DIRECTORS ARE SUBJECT TO A
      STOCKHOLDERS' AGREEMENT DATED NOVEMBER 22, 2002 AMONG NATIONAL WATERWORKS
      HOLDINGS, INC. AND CERTAIN HOLDERS OF ITS OUTSTANDING CAPITAL STOCK.
      COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
      MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF
      NATIONAL WATERWORKS HOLDINGS, INC.

            THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
      FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
      1933, AS AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS. THESE
      SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
      REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR LAWS."

      5.    RESTRICTIONS ON TRANSFER, CONVERSION AND VOTING.

      (a) The Company and the Executive acknowledge and agree that the shares of
Executive Stock are subject to and restricted by the Stockholders' Agreement and
with respect to such shares of Executive Stock, the Executive shall be an "Other
Stockholder" as such term is used in the Stockholders' Agreement.
Notwithstanding anything to the contrary contained in the Stockholders'
Agreement, no shares of Executive Stock that have not vested pursuant to Section
2 hereof may be transferred to any Person and no shares of vested Executive
Stock may be transferred to any Person who is not an Affiliate of the Executive.
The shares of vested Executive Stock may be transferred by will or the laws of
descent and distribution.
<PAGE>
      (b) Prior to any Transfer, the transferee shall agree, by execution of a
Joinder Agreement, to be bound by this Agreement as holder of Executive Stock
and by the Stockholders' Agreement as an Other Stockholder. Any Transfer or
attempted Transfer of any Executive Stock in violation of the preceding sentence
shall be void, and the Company shall not record such Transfer on its books or
treat any purported transferee of such Executive Stock as the owner of such
stock for any purpose.

      (c) The Executive agrees that so long as the Executive owns shares of
Executive Stock which have not vested pursuant to Section 2 hereof, the
Executive shall be obligated to vote all of his, her or its shares of Executive
Stock which have not vested pursuant to Section 2 hereof in the same manner and
proportions as the votes cast by the holders of the Company's voting capital
stock not subject to such repurchase rights. If the Executive fails or refuses
to vote his, her or its shares of Executive Stock which have not vested pursuant
to Section 2 hereof as required by, or votes his, her or its shares of Executive
Stock which have not vested pursuant to Section 2 hereof in contravention of
this Section 5(c), then the Executive hereby grants to each of the President and
Treasurer of the Company, acting solely in his or her capacity as such, an
irrevocable proxy, coupled with an interest, to vote such shares in accordance
with Section 5(c).

      6.    DEFINITIONS.

      Capitalized terms used herein, but not defined herein, shall have the
meanings given to them in the Employment Agreement. The following terms shall
have the meanings ascribed below:

      "Class A Common Stock" has the meaning set forth in Section 1(a) hereof.

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

      "Employment Agreement" shall mean the amended and restated employment
agreement between National Waterworks, Inc. and the Executive dated as of
November 22, 2002.

      "Executive Stock" has the meaning set forth in Section 1(a) hereof. The
Executive Stock will continue to be Executive Stock in the hands of any holder
other than the Executive (except for the Company and except for transferees in a
Public Sale) and, except as otherwise provided herein, each such other holder of
the Executive Stock will succeed to all rights and obligations attributable to
the Executive as a holder of the Executive Stock hereunder. The Executive Stock
will also include shares of the Company's capital stock issued with respect to
the Executive Stock by way of a stock split, stock dividend or other
recapitalization.

      "Fair Market Value" means the fair market value of a share of Common Stock
as the same is determined in good faith by the Board of Directors of the
Company.

      "Person" shall be construed broadly and shall include, without limitation,
an individual, a partnership, an investment fund, a limited liability company, a
<PAGE>
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

      "Public Sale" means any sale of Class A Common Stock to the public
pursuant to an offering registered under the Securities Act or subsequent to the
Company registering any stock under the Securities Act to the public through a
broker, dealer or market maker (pursuant to the provisions of Rule 144 adopted
under the Securities Act or otherwise).

      "Representative" means, with respect to the deceased Executive, the duly
appointed, qualified and acting personal representative (or personal
representatives collectively) of the estate of the deceased Executive (or
portion of such estate that includes Executive Stock), whether such personal
representative holds the position of executor, administrator or other similar
position qualified to act on behalf of such estate.

      "Sale" shall mean the sale of the Company or National Waterworks, Inc. to
one or more independent third parties, pursuant to which such party or parties
acquire (A) capital stock of the Company possessing the voting power to elect a
majority in voting power of the Board of Directors of the Company or National
Waterworks, Inc. (whether by merger, consolidation or issuance, sale, or
transfer of the Company's capital stock) or (B) all or substantially all of the
Company's assets determined on a consolidated basis.

      "Securities Act" means the Securities Act of 1933, as amended, or any
successor federal law then in force.

      "Stockholders' Agreement" means the Stockholders' Agreement dated on or
around the date of the Closing between the Company and certain stockholders of
the Company, as amended, modified or supplemented from time to time.

      "Transfer" means the sale, transfer, assignment, pledge or other disposal
(whether with or without consideration and whether voluntarily or involuntarily
or by operation of law) of any Executive Stock.

      7.    GENERAL PROVISIONS.

      (a) Severability. It is the desire and intent of the parties hereto that
the provisions of this Agreement be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such
<PAGE>
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

      (b) Entire Agreement. This Agreement, the Executive Subscription
Agreement, the Stockholders' Agreement and the Employment Agreement embody the
complete agreement and understanding among the parties hereto with respect to
the subject matter hereof and supersedes and preempts any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.

      (c) Counterparts. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.

      (d) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Executive, the Company, and their respective successors, assigns, heirs,
representative and estate, as the case may be (including subsequent holders of
Executive Stock); provided that the rights and obligations of the Executive
under this Agreement shall not be assignable except in connection with a
permitted transfer of Executive Stock hereunder.

      (e) Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICTS PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE,
OR ANY OTHER JURISDICTION), THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER
THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE
INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW
OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION
WOULD ORDINARILY APPLY.

      (f) Jurisdiction and Venue. SUBJECT TO THE TERMS OF THIS AGREEMENT, THE
PARTIES AGREE THAT ANY AND ALL ACTIONS ARISING UNDER OR IN RESPECT OF THIS
AGREEMENT SHALL BE LITIGATED IN THE FEDERAL OR STATE COURTS IN NEW YORK. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY IRREVOCABLY SUBMITS TO THE
PERSONAL JURISDICTION OF SUCH COURTS FOR ITSELF, HIMSELF, OR HERSELF AND IN
RESPECT OF ITS, HIS OR HER PROPERTY WITH RESPECT TO SUCH ACTION. EACH PARTY
AGREES THAT VENUE WOULD BE PROPER IN ANY OF SUCH COURTS, AND HEREBY WAIVES ANY
OBJECTION THAT ANY SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE
RESOLUTION OF ANY SUCH ACTION. THE PARTIES FURTHER AGREE THAT THE MAILING BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, OF ANY PROCESS REQUIRED
BY ANY SUCH COURT SHALL
<PAGE>
CONSTITUTE VALID AND LAWFUL SERVICE OF PROCESS AGAINST THEM, WITHOUT THE
NECESSITY FOR SERVICE BY ANY OTHER MEANS PROVIDED BY STATUTE OR RULE OF COURT.

      (g) Remedies. Each of the parties to this Agreement and any such Person
granted rights hereunder whether or not such Person is a signatory hereto shall
be entitled to enforce its rights under this Agreement specifically to recover
damages and costs (including reasonable attorney's fees) for any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that any
party and any such Person granted rights hereunder whether or not such Person is
a signatory hereto may in its sole discretion apply to any court of law or
equity of competent jurisdiction for specific performance and/or other
injunctive relief (without posting any bond or deposit) in order to enforce or
prevent any violations of the provisions of this Agreement.

      (h) Amendment and Waiver. The provisions of this Agreement may be amended
and waived only with the prior written consent of the Company and the Executive
and no course of conduct or failure or delay in enforcing the provisions of this
Agreement shall be construed as a waiver of such provisions or affect the
validity, binding effect or enforceability of this Agreement or any provision
hereof.

      (i) Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, transmitted via facsimile, mailed by
first class mail (postage prepaid and return receipt requested) or sent by
reputable overnight courier service (charges prepaid) to the recipient at the
address below indicated or at such other address or to the attention of such
other person as the recipient party has specified by prior written notice to the
sending party. Notices will be deemed to have been given hereunder and received
when delivered personally, when received if transmitted via facsimile, five (5)
days after deposit in the U.S. mail and one (1) day after deposit with a
reputable overnight courier service.

            If to the Company, to:

            National Waterworks, Inc.
            American Plaza
            200 West Highway 6
            Suite 620
            Waco, Texas 76712
            Attention:  President
            Telephone: (254) 772-5355
            Facsimile:  (254) 772-5716
<PAGE>
            If to the Executive, to:

            Terry Howell

            ---------------------------

            ---------------------------

            ---------------------------

      (j) Business Days. If any time period for giving notice or taking action
hereunder expires on a day which is a Saturday, Sunday or holiday in the state
in which the Company's chief executive office is located, the time period for
giving notice or taking action shall be automatically extended to the business
day immediately following such Saturday, Sunday or holiday.

      (k) Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements contained herein shall survive the
consummation of the transactions contemplated hereby and the termination of this
Agreement indefinitely.

      (l) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

      (m) Construction. Where specific language is used to clarify by example a
general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict in any manner the construction of the general
statement to which it relates. The language used in this Agreement shall be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any party.

      (n) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT.

      (o) Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have executed this Restricted Stock
Agreement as of the date first written above.

                                              NATIONAL WATERWORKS HOLDINGS, INC.



                                              By:  /s/ Harry K. Hornish
                                                   --------------------
                                                   Name: Harry K. Hornish
                                                   Title President and C.E.O.



                                              /s/ Terry Howell
                                              ----------------
                                              Terry Howell