Exhibit 10.2


 


NON-COMPETITION
AGREEMENT (CHINA)


 


This NON-COMPETITION AGREEMENT
(“Agreement”) is made on the 8th day of
July, 2009 between:


 


(1)           Watts (Shanghai) Management Co., Ltd., whose registered office is
at RM.B-H, 26th Floor, Huamin Empire Plaza, No.726,Yan  An Road  (West), Shanghai,
PRC ( “Watts Shanghai”); and


 


(2)           Josh C. Fu, whose address is No 52 Tomson Golf Villas, No 1
Long Dong Avenue, Pu Dong District, Shanghai, 201203 PRC and, holder of
United States of America passport No. 710715410 (“Executive”).


 


The
above-named are hereinafter individually referred to as a “Party” and
collectively as the “Parties.”


 


WHEREAS:


 


(a)           Watts Shanghai is an indirect, wholly-owned
subsidiary of Watts Water Technologies, Inc. (“Parent
Company”).


 


(b)           During the period from January 1, 2008 to July 8,
2009 (“Termination Date”), the Executive
was employed by the Parent Company.  In
the course of the Executive’s employment with
the Parent Company, the Executive
was assigned by the Parent Company to work at Watts Shanghai.


 


(c)           The Executive and the Parent Company have signed a letter agreement (“Letter Agreement”), dated June 15, 2009 , which confirms the Executive’s resignation of his employment
with the Parent Company,
and service to and position with Watts Shanghai, and sets forth the relevant
terms and conditions that the Executive
under which the Executive will be eligible for
severance benefits (“Severance Benefits”).


 


(d)           Upon the Executive’s resignation of his employment
with the Parent Company on July 8, 2009 
(the “Termination Date”), Watts Shanghai
and the Executive agree to the
restrictions set out below in relation to the Executive’s
future employment and business activities in the People’s Republic of China (“PRC”).


 

















 


NOW, THEREFORE, WATTS SHANGHAI
AND THE EXECUTIVE
AGREE AS FOLLOWS:


 


1              Non-Disclosure and Confidential
Information


 


1.1           The Executive
acknowledges that during the period of time the Executive
was working with Watts Shanghai, the Executive
has acquired knowledge of, and/or had access to, trade secrets, confidential
and proprietary information of Watts Shanghai and/or its Affiliates and of
third parties which is subject to confidentiality and other agreements by and
between Watts Shanghai and/or its Affiliates and those third parties (“Confidential Information”).  Such Confidential Information, includes, but
is not limited to: financial and pricing information; business, research, and
new product plans and strategies; patent applications and invention
disclosures; yields, designs, efficiencies, and capacities of production
methods, processes, facilities and systems at Watts Shanghai, its Affiliates,
and its contractors; customer and vendor lists, key contacts, habits, and
product and purchasing plans; marketing information, plans and strategies; existing
and anticipated agreements with customers, vendors, and other third parties;
product design and related information; information regarding the employees of
Watts Shanghai and/or its Affiliates, their projects, and their salaries,
benefits and other personnel information.


 


1.2           The Executive
agrees that he will keep confidential all non-public information concerning
Watts Shanghai and/or its Affiliates that Watts Shanghai acquired during the
course of his working with Watts Shanghai and all developments and inventions
of Watts Shanghai and/or its Affiliates.


 


2              NON-COMPETITION


 


2.1           The Executive
acknowledges that during the period of time the Executive
was working for Watts Shanghai, the Executive
has developed or may have helped develop, have access to and learn significant
secret, confidential, and proprietary information relating to the business of
Watts Shanghai and/or its Affiliates.  In
addition, the Executive has been or was provided with contact with
customers, prospective customers, suppliers and other vendors of Watts 


 

















 


Shanghai and/or its Affiliates. The Executive
has been expected to develop good customer and/or vendor relationships, as well
as intimate knowledge regarding the technology, products, services, systems,
methods, and operations Watts Shanghai and/or its Affiliates.


 


2.2           The Executive
also acknowledges that Watts Shanghai and/or its Affiliates have invested
substantial resources and time to developing the technology, products,
services, systems, methods, and operations, all of which are highly valuable
assets to the Watts Shanghai and/or its Affiliates.  The Executive
agree that the Watts Shanghai and/or its Affiliates have spent and will
continue to spend substantial effort, time, and resources in developing and
protecting its technology, products, services, systems, methods, and
operations, and relationships with its customers and vendors.  The Executive
also agree that the competitors of Watts Shanghai and/or its Affiliates would
obtain an unfair advantage if the Executive
were to disclose the Confidential Information of Watts Shanghai and/or its
Affiliates to a competitor, used it on a competitor’s behalf, or if the Executive
were able to exploit the relationships the Executive
developed in his role with Watts Shanghai and/or its Affiliates to solicit
business on behalf of a competitor.


 


2.3           In view of the Confidential Information of Watts
Shanghai, which the Executive has had access to during the
period of time the Executive was working for Watts Shanghai,
the Executive agrees that for a period of nine (9) months following the
Termination Date (“Non-Compete Term”),
for any reason, the Executive will not directly or
indirectly, on his own behalf, or as an employee, representative or agent of a
third party, by ownership or any type of interest in any business enterprise,
or by any other means whatsoever, engage in any business located in or
otherwise engaging in business in the PRC that designs, manufactures or sells
water-based heating, ventilation or air conditioning (“HVAC”) products, water
distribution products, water safety products or flow control products primarily
for the HVAC, water distribution, water quality, water safety, water flow
control or water conservation markets (collectively, a “Competitor’s Business”), or become
associated with or render services to a Competitor’s Business so engaged.


 

















 


3              NON-SOLICITATION OF CUSTOMERS


 


3.1           The Executive agrees that for
a period of nine (9) months following
the Termination Date for any reason (whether with or without cause) the Executive shall not,
directly or indirectly, call upon or solicit any customer of Watts Shanghai
and/or its Affiliates for any purpose or business that is competitive with
the  business of Watts Shanghai and/or
its Affiliates, nor shall the Executive permit a Competitor’s Business
controlled directly or indirectly by the Executive to do so.  Mere ownership as a passive investor of not
more than five percent (5%) of the securities of a corporation or other
business enterprise shall not be deemed control of or an association with such
corporation or enterprise for purposes of this Agreement.


 


4              NON-SOLICITATION OF EMPLOYEES


 


4.1           The Executive
agrees that for a period of nine (9) months
following the Termination Date, the Executive
shall not directly or indirectly, personally or through others, solicit or
attempt to solicit (on his own behalf or on behalf of any other person or
entity) the employment or termination of any employee or consultant of the
Watts Shanghai and/or its Affiliates. 
This provision shall not apply to employees of Watts Shanghai and/or its
Affiliates that have been terminated for a period of six months or longer.


 


5              CONSIDERATION


 


5.1           In consideration of the Executive’s
being subject to the restrictions provided by this Agreement, the Parent
Company, for and on behalf of Watts Shanghai, will make payments (“Compensation”)
to the Executive. The Executive
acknowledges and agrees that the Compensation is included in the total amount
of the Severance Benefits which will be provided by the Parent Company
according to the Letter Agreement.


 


5.2           The Executive
agrees that the Compensation set out under this Article 5 is fair and
reasonable compensation for his restriction under this Agreement.  The Executive
will not seek or demand any other compensation from Watts Shanghai and/or it Affiliates.  Should there
be any change in the applicable 


 

















 


laws or regulations such that the Compensation would
no longer be sufficient to render the restriction under this Agreement enforceable under PRC law, Watts Shanghai and/or its Affiliates shall have the right to pay to the Executive
the amount necessary to make up for any insufficiency in the Compensation and
render the Executive’s obligation under this Agreement
enforceable.


 


5.3           The Executive
agrees that the restrictions
under this Agreement are reasonable, no greater than what is
required to protect Watts Shanghai
and/or its Affiliates’  legitimate
interests with respect to trade secrets, confidential information and
customers, and customer relationships, and do not impair or prevent the Executive
from earning a living.


 


5.4           It is the intention of both Parties
to restrict the Executive’s activities only to the extent necessary for the
protection of the Watts Shanghai
and/or its Affiliates’
legitimate business interests. To the extent that this restrictive covenants of this Agreement
shall be determined to be invalid or unenforceable in any respect or to any
extent, the covenants shall not be rendered invalid, but
instead shall be automatically amended for such lesser term or to such lesser
extent, or in such other degree, as may grant Watts Shanghai and/or its Affiliates the maximum protection and restrictions on your
activities permitted by applicable law in such circumstances. The restrictions contained
in this Agreement shall be extended by the length of time
during which the Executive shall have been in breach of any of said
provisions.


 


6              DAMAGES


 


6.1           If Watts Shanghai and/or its Affiliates incurs and/or seeks redress for any violation by the Executive of this Agreement, the Executive promises and agrees to pay all costs,
court costs, fees and expenses, including actual attorney’s fees, incurred
by  Watts Shanghai and/or its Affiliates to enforce this Agreement
and/or recover and collect damages for any violation, whether or not litigation
is commenced.


 


6.2           The Executive
acknowledge that any violation of the restrictions under this Agreement would
result in irreparable injury to Watts Shanghai and/or its 


 

















 


Affiliates, which are
serious yet difficult to measure.  The Executive therefore agrees to pay to Watts Shanghai and/or its
Affiliates a one-time liquidated damages payment which is equivalent to three
times the total amount of the Severance Benefits, if the Executive violates the restrictions in this Agreement. The Executive agrees that the liquidated damages under this Article  are fair and reasonable to compensate
Watts Shanghai   and/or its Affiliates in the event that the Executive violates the restriction under this Agreement.


 


7              AFFILIATES


 


7.1           Articles 1, 2, 3 and 4 shall
apply as though references to the “Affiliate” were substituted for references
to “Watts Shanghai.” 
The obligations undertaken by the Executive
pursuant to this Agreement shall, with respect to each Affiliate, constitute a
separate and distinct covenant and the invalidity or unenforceability of any
such covenant shall not affect the validity or enforceability of the covenants
in favor of Watts Shanghai or any other Affiliate.


 


7.2           Watts Shanghai hereby signs this
Agreement on behalf of all its Affiliates and any breach of the above mentioned
articles vis-à-vis any Affiliate shall constitute a breach of this Agreement
and upon subsequent written authorization from the harmed Affiliate, Watts
Shanghai may sue the Executive for his breach of this
Agreement. The Executive agrees that, if required to do so by Watts
Shanghai, he will enter into covenants in the same terms as those set out in
Articles 1,2, 3 and 4 hereof directly with all or any of
such Affiliates, mutatis mutandis.


 


7.3           As used herein, an “Affiliate”
shall mean in relation to Watts Shanghai, any direct or indirect subsidiary of
Watts Shanghai or any direct or indirect Chinese subsidiary of Watts Water
Technologies, Inc.  The Affiliates
include but are not limited to Watts Plumbing Technologies (Taizhou) Co. Ltd.,
Tianjin Watts Valve Company Ltd., Watts Valve (Changsha) Co., Ltd., Watts Valve
(Ningbo) Co., Ltd., and Watts (Ningbo) International Trading Co., Ltd.


 

















 


8              GENERAL


 


8.1           The Parties agree that the terms of this Agreement are
confidential and shall not be disclosed by any party (other than their
respective professional advisors in strict confidence and, in the case of Watts
Shanghai, its shareholders and directors), unless required to do so by law.


 


8.2           The Executive
undertakes not knowingly to make, publish or otherwise issue and detrimental or
derogatory statements concerning Watts Shanghai or any of Watts Shanghai’s
officers, directors or employees.


 


8.3           This Agreement constitutes the entire understanding
between the Parties relating to the subject matter hereof, and may not be
modified or amended except by instrument in writing by both Parties.


 


8.4           Any waiver by Watts Shanghai of a breach of any
provisions of the Agreement shall not operate or be construed as a waiver of
any subsequent breach of such provision or any other provision hereof.  Watts Shanghai shall not be deemed to have
issued a waiver of any breach of this Agreement by the Executive
unless it has done so in writing and unless such written waiver was signed by
an authorized representative of Watts Shanghai.


 


8.5           This Agreement may be executed in several
counterparts, each of which is deemed an original but all of which constitute
one and the same instrument, and delivery of an executed counterpart by fax or
e-mail shall be equally effective as delivery of a manually executed
counterpart of this Agreement.


 


8.6           This Agreement shall be governed by the laws of the
People’s Republic of China and the Parties shall submit to the non-exclusive
jurisdiction of the Courts of the People’s Republic of China.


 

















 


AS WITNESS WHEREOF the Parties have executed this Agreement
on the first date written above.


 


	
  WATTS SHANGHAI:

  
	
   

  
	
  /s/ Michael P. Flanders          9
  July 2009

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
  For and on behalf of

  
	
  Watts (Shanghai) Management Co., Ltd.

  
	
  Name: Michael P. Flanders

  
	
  Title: President, Asia

  
	
   

  
	
   

  
	
  [Watts Shanghai Chop]

  
	
   

  
	
  EXECUTIVE:

  
	
   

  
	
  /s/ Josh C. Fu          July 8,
  2009

  	
   

  
	
   

  
	
  Josh C. Fu