<PAGE>

                                                                   EXHIBIT 10.21

                                                                  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 Phil Keipp (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 Executive Restricted Stock 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 11,897.45 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. Upon your execution of this
Agreement, (i) the Executive represents that the Executive is not bound by any
employment contract, restrictive covenant or other restriction preventing the
Executive from entering into employment with or carrying out your
responsibilities for National Waterworks, Inc., or which is in any way
inconsistent with the terms of this Agreement; and (ii) the Executive and the
Company agree to terminate that certain Employment Security Agreement dated on
or about April 18, 2002 by and between the Executive and U.S. Filter
Distribution, Inc. ("Distribution") which has been assigned to the Company's
subsidiary, National Waterworks, Inc. The Company's issuance of the

<PAGE>

Executive Stock is contingent upon the execution of this Agreement and the
Company's standard Employee Noncompeition, NonDisclosure, and Developments
Agreement attached hereto as Exhibit B.

                  (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; 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             12.5% of the Executive Stock
                Date

After the first anniversary of the Effective       An additional 1.0417% of the Executive Stock
 Date 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.

                  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.

                  "Executive Restricted Stock Agreements" shall mean the
restricted stock agreements between the Company and each of Harry K. Hornish,
Jr., Mechelle Slaughter and Terry Howell, each 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 corporation, an association, a joint stock company, a
trust, a joint venture, an

<PAGE>

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 jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this

<PAGE>

Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.

                  (b)      Entire Agreement. This Agreement, the Executive
Subscription Agreement and the Stockholders' 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 CONSTITUTE VALID AND LAWFUL SERVICE OF
PROCESS AGAINST THEM,

<PAGE>

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:

                           Phil Keipp

                           _________________________

                           _________________________

                           _________________________

                  (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/ Phil Keipp
                                              --------------
                                              Phil Keipp