Exhibit 10.1


 





 


815 Chestnut Street · North Andover, MA · 01845-6098 · Tel. (978)
688-1811


 


June 15, 2009


 


Mr. Josh C. Fu


No 52 Tomson Golf Villas, No 1 Long Dong Avenue


Pu
Dong District, Shanghai, 201203 PRC


 


Dear
Josh:


 


This
letter agreement confirms your resignation of employment with Watts Water
Technologies, Inc. and (if and when applicable) all of its subsidiaries
(including, in particular, its Asia/China subsidiaries) (collectively, the
“Company”), and your resignation from any and all other offices or positions
you officially or unofficially hold with respect to any divisions or business
units of the Company.  In connection with your resignation,
you are eligible to receive the listed severance benefits described in the
“Description of Severance Benefit” attached to this letter agreement as
Attachment A if you sign and return this letter agreement to Gregory Michaud,
EVP of Human Resources at 815 Chestnut Street, North Andover MA 01845 or by fax
to 978-689-6023, by July 8, 2009  and it becomes
binding between you and the Company.  By
signing and returning this letter agreement and not revoking your acceptance,
you will be agreeing to the terms and conditions set forth in the numbered
paragraphs below, including the release of claims set forth in paragraph
3.  Therefore, you are advised to consult with an attorney before signing
this letter agreement and you have been given more than twenty-one (21) days to
do so.  If you sign this letter agreement, you may change your mind and
revoke your agreement during the seven (7) day period after you have
signed it.  You must deliver a written notice of such revocation to
Gregory Michaud at the Company.  If you
do not so revoke, this letter agreement will become a binding agreement between
you and the Company upon the expiration of the seven (7) day revocation
period.


 


If
you choose not to sign and return this letter agreement by July 8, 2009  or if you timely revoke your acceptance in writing, your
employment with the Company will be terminated and you will not receive any
severance benefits from the Company.  You will, however, receive payment
as soon as administratively feasible  for any wages
and unused vacation time accrued through the Resignation Date.  Also, regardless of signing this letter
agreement, you may elect to continue receiving group sponsored health insurance
pursuant to the federal “COBRA” law, 29 U.S.C. § 1161 et  seq. 
You shall pay all premium costs for “COBRA” on a monthly basis for as long as,
and to the extent that, you remain eligible for COBRA continuation.  You
should consult the COBRA materials to be provided by the Company for details
regarding these benefits.  All other benefits, including life insurance
and long-term disability insurance, will cease upon your Resignation Date.


 


Watts
Water Technologies, Inc.


 

















 


All unvested
stock options will be cancelled and all unvested shares of restricted stock
will be forfeited to the Company on the Resignation Date.


 


The
following numbered paragraphs set forth the terms and conditions that will
apply if you timely sign and return this letter agreement and do not revoke it
within the seven (7) day period:


 


1.               Resignation Date — Your effective date of
resignation from the Company will be the date you sign this letter agreement
(the “Resignation Date”).


 


2.               Description of Severance Benefits — The severance benefits
paid to you if you timely sign and return this letter agreement and do not
revoke your acceptance are described in the “Description of Severance Benefit”
attached as Attachment A (the “severance benefit”).  In connection with the severance benefit provided to you pursuant to this letter
agreement, the Company shall withhold and remit to the tax authorities the
amounts required under all applicable laws, and you shall be solely and
ultimately responsible for all applicable taxes with respect to such severance
benefits under all applicable laws.  You
acknowledge that you are not relying upon advice or representation of the
Company with respect to the tax treatment of any of the severance benefits set
forth in Attachment A.


 


3.               Release — In consideration of the payment of the severance
benefit, which you acknowledge you would not otherwise be entitled to receive,
you hereby fully, forever, irrevocably and unconditionally release, remise and
discharge the Watts Water Technologies, Inc., and its respective,
officers, directors, stockholders, corporate affiliates, subsidiaries, parent
companies, agents and employees (each in their individual and corporate
capacities), and all employee benefit plans and plan fiduciaries (collectively,
the “Released Parties”) from any and all claims, charges, complaints, demands,
actions, causes of action, suits, rights, debts, sums of money, costs,
accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions,
damages, executions, obligations, liabilities and expenses (including
attorneys’ fees and costs), of every kind and nature that you ever had or now
have (or may have) against the Released Parties, including, but not limited to,
any and all claims arising out of your employment (legal or de-facto) with
and/or separation from the Company, including, but not limited to, all
employment discrimination claims under Title VII of the Civil Rights Act of
1964, 42 U.S.C. § 2000e et  seq., the Age Discrimination in
Employment Act, 29 U.S.C. § 621 et  seq., the Americans With
Disabilities Act of 1990, 42 U.S.C. § 12101 et  seq., the
Family and Medical Leave Act, 29 U.S.C. § 2601 et  seq., the
Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et.
seq., Section 806 of the Corporate and Criminal Fraud Accountability
Act of 2002, 18 U.S.C. 1514(A), the Rehabilitation Act of 1973, 29 U.S.C.
§ 701 et  seq., the Fair Credit Reporting Act, 15 U.S.C.
§ 1681 et  seq., the Employee 


 

















 


Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et  seq.,
Executive Order 11246, and Executive Order 11141, all as amended; all claims
arising out of the Massachusetts Fair Employment Practices Act., M.G.L. c.
151B, § 1 et  seq., the Massachusetts Civil Rights Act,
M.G.L. c. 12, §§ 11H and 11I, the Massachusetts Equal Rights Act, M.G.L.
c. 93, § 102 and M.G.L. c. 214, § 1C, the Massachusetts Labor and
Industries Act, M.G.L. c. 149, §1 et  seq., the Massachusetts
Privacy Act, M.G.L. c. 214, § 1B, the Massachusetts Maternity Leave Act,
M.G.L. c. 149, § 105D, and the Massachusetts Small Necessities Leave
Act, M.G.L. c. 149, § 52D, all as amended; all common law claims including, but
not limited to, actions in tort, defamation and breach of contract; all claims
to any non-vested ownership interest in the Company, contractual or otherwise,
including, but not limited to, claims to stock or stock options; and any claim
or damage arising out of your employment with and/or separation from the
Company (including a claim for retaliation) under any common law theory,  any federal, state or local statute or
ordinance or any laws or regulations of the People’s Republic of China (“PRC”)
not expressly referenced above; provided, however, that nothing in this letter agreement: (a) prevents
you from filing, cooperating with or participating in any proceeding before the
EEOC or a state Fair Employment Practices Agency (except that you acknowledge
that you may not be able to recover any monetary benefits in connection with
any such claim, charge or proceeding); or (b) waives any rights you have
to receive your accrued benefits under the Company’s Pension Plan in accordance
with its respective terms.


 


4.               Non-Disclosure and Confidential Information — You agree
that you will keep confidential all non-public information concerning the
Company or any of the Released Parties that you acquired during the course of
your employment with the Company and all developments and inventions.  You further agree to comply with any
obligations regarding confidential information, non-solicitation,
non-competition and inventions set forth in any agreements previously entered
into by you with the Company or its predecessors. Such provisions and
obligations shall remain in effect notwithstanding this letter agreement and
the ending of your employment.  You
acknowledge that during the course of your employment with the Company you have
acquired knowledge of, and/or had access to, trade secrets, confidential and
proprietary information of the Company and of third parties which is subject to
confidentiality and other agreements by and between the Company 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 the Company 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 


 

















 


Company
employees, their projects, and their salaries, benefits and other personnel
information.  You agree that you will not
use or disclose to others any Confidential Information.


 


5.               Non-Solicitation
of Employees - You agree that for a period of 9 months following
the termination of your employment with the Company you shall not directly or
indirectly, personally or through others, solicit or attempt to solicit (on
your own behalf or on behalf of any other person or entity) the employment or
termination of any employee or consultant of the Company or any of the
Company’s parents, subsidiaries, or affiliates. 
This provision shall not apply to employees of the Company or of the
Company’s subsidiaries, or affiliates that have been terminated for a period of
six months or longer.


 


6.              Non-Competition
and Non-Solicitation of Customers.  In your
employment with the Company, you have developed or may have helped developed,
have access to and learn significant secret, confidential, and proprietary information
relating to the business of the company. 
In addition, you have been or were provided with contact with customers,
prospective customers, suppliers and other vendors of the Company.  You have been expected to develop good
customer and/or vendor relationships, as well as intimate knowledge regarding
the Company’s technology, products, services, systems, methods, and operations.


 


You
also acknowledge that the Company has invested substantial resources and time
to developing the technology, products, services, systems, methods, and
operations, all of which are highly valuable assets to the Company.  You agree that the Company has 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.  You also agree that the Company’s competitors
would obtain an unfair advantage if you were to disclose the Company’s Confidential
Information (as defined below) to a competitor, used it on a competitor’s
behalf, or if you were able to exploit the relationships you developed in your
role with the Company to solicit business on behalf of a competitor.


 


Accordingly,
you agree that:


 


a) You shall not, for a period of 9 months
after the termination of your employment for any reason, directly or
indirectly, on your 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 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.


 


b) For a period of 9 months after termination
of your employment for any reason (whether with or without cause) you shall
not, directly or indirectly, call upon or solicit any Company customer for any
purpose or business that is competitive with the Company’s business, nor shall
you permit a Competitor’s Business controlled directly or indirectly by you 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.


 


You
agree that these restrictions are reasonable, no greater than what is required
to protect the Company’s legitimate interests with respect to trade secrets,
confidential information and customers, and customer relationships, and do not
impair or prevent you from earning a living.


 


It is
the intention of the parties to restrict your activities only to the extent
necessary for the protection of the Company’s legitimate business interests. To
the extent that this restrictive covenant of this letter agreement shall be
determined to be invalid or unenforceable in any respect or to any extent, the
covenant 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 the Company the maximum protection and restrictions on your activities
permitted by applicable law in such circumstances. The non-competition and
non-solicitation obligations contained in this letter agreement shall be
extended by the length of time during which you shall have been in breach of
any of said provisions.


 


You
acknowledge that any violation of the confidentiality, non-competition or
non-solicitation provisions of this letter agreement would result in
irreparable injury to the Company, which are serious yet difficult to
measure.  You therefore agree to pay to
the Company as liquidated damages a one-time amount equal to three times the
total amount of severance benefit paid to you pursuant to this letter agreement
in the event that you are found to have breached any of the confidentiality,
non-competition and non-solicitation provisions in this letter agreement. You
acknowledge and agree that the liquidated damages provided for in this
paragraph are fair and reasonable.  If
the Company incurs and/or seeks redress for any violation, you promise and
agree to pay all costs, court costs, fees and expenses, including actual attorney’s
fees, incurred by the Company to enforce this letter agreement and/or recover
and collect damages for any violation, whether or not litigation is commenced.


 

















 


7.               Return of Company Property — You confirm that you have
returned to the Company in good working order all keys, files, records (and
copies thereof), equipment (including, but not limited to, computer hardware,
software and printers, wireless handheld devices, cellular phones and pagers),
Company identification, Company proprietary and confidential information and
any other Company-owned property in your possession or control and have left
intact all electronic Company documents, including, but not limited to, those
that you developed or helped to develop during your employment.  You
further confirm that you have cancelled all accounts for your benefit, if any,
in the Company’s name, including, but not limited to, credit cards, telephone
charge cards, cellular phone and/or pager accounts and computer accounts.


 


8.               Business Expenses and Compensation — You acknowledge that you
have been reimbursed by the Company for all business expenses incurred in
conjunction with the performance of your employment and that no other
reimbursements are owed to you.  You further acknowledge that you have
received payment in full for all services rendered in conjunction with your
employment by the Company and that no other compensation is owed to you.


 


9.               Cooperation - You agree to
make yourself available upon reasonable notice from the Company or its
attorneys to provide testimony as a witness through declarations, affidavits,
depositions or at a hearing or trial, and to work with the Company in
preparation for such event, and to cooperate with any other reasonable request
by the Company in connection with the investigation, defense or prosecution of
any mediation, arbitration, administrative hearing, or lawsuit to which the
Company is a party, currently pending or filed after the Resignation Date.  If the Company so requests your cooperation
in connection with any legal matter then the Company agrees to pay for any
reasonable out-of-pocket expenses, such as economy class airfare or lodging,
that you incur in connection with assisting the Company, provided you notify
the Company in advance of what your reasonable expenses are expected to be and
receive prior written approval from the Company for such expenses.


 


10.         Non-Disparagement — To the extent permitted
by all applicable laws, you understand and agree that as a condition for
payment to you of the severance benefits, you shall not make any false, disparaging
or derogatory statements in public or private to any person, entity or media
outlet regarding the Company or the Released Parties, or about the Company’s or
the Released Parties’ business affairs, practices, products, services, and
financial condition.


 


11.         Amendment — This letter agreement shall be binding upon the
parties and may not be abandoned, supplemented, changed or modified in any
manner, orally or otherwise, except by an instrument in writing of concurrent
or subsequent date signed by a duly authorized representative of the parties
hereto.  This letter 


 

















 


agreement
is binding upon and shall inure to the benefit of the parties and their
respective agents, assigns, heirs, executors, successors and administrators.


 


12.         Waiver of Rights — No delay or omission by
the Company in exercising any right under this letter agreement shall operate
as a waiver of that or any other right.  A waiver or consent given by the
Company on any one occasion shall be effective only in that instance and shall
not be construed as a bar to or waiver of any right on any other occasion.


 


13.         Validity — Should any provision of this letter agreement be
declared or be determined by any court (or arbitration tribunal) of competent
jurisdiction to be illegal or invalid, the validity of the remaining parts,
terms or provisions shall not be affected thereby and said illegal or invalid
part, term or provision shall be deemed not to be a part of this letter
agreement.


 


14.         Confidentiality — To the extent permitted by law, you understand
and agree that the terms and contents of this letter agreement, and the
contents of the negotiations and discussions resulting in this letter
agreement, shall be maintained as confidential by you, your agents and your
representatives and none of the above shall be disclosed except to the extent
required by federal or state law or as otherwise agreed to in writing by an
authorized agent of the Company.


 


15.         Nature of Agreement — You  understand and agree that this letter
agreement is a severance agreement and does not constitute an admission of
liability or wrongdoing on the part of the Company.


 


16.         Acknowledgments — You acknowledge that you have been given
at least twenty-one (21) days to consider this letter agreement, including
Attachment A, and that the Company advised you in writing to consult with an
attorney of your own choosing prior to signing this letter agreement.  You
understand that you may revoke this letter agreement for a period of seven (7) days
after you sign it, and that this letter agreement shall not be effective or
enforceable until the expiration of this seven (7) day revocation
period.  You understand and agree that by entering into this letter
agreement you are waiving any and all rights or claims you might have under the
Age Discrimination in Employment Act, as amended by the Older Workers Benefit
Protection Act (“ADEA”).  You understand
and agree that such waiver and release of claims under the ADEA does not apply
to any rights or claims that may arise under the ADEA after the date of
execution of this letter agreement, and that nothing in this letter agreement
prohibits you from challenging the validity of this letter agreement’s waiver
and release of claims under the ADEA. 
You also understand and agree that you have received consideration
beyond that to which you were previously entitled.


 

















 


17.         Voluntary Assent — You affirm that no other
promises or agreements of any kind have been made to or with you by any person
or entity whatsoever to cause you to sign this letter agreement, and that you
fully understand the meaning and intent of this letter agreement.  You
state and represent that you have had an opportunity to discuss fully and
review the terms of this letter agreement, including Attachment A, with an
attorney.  You further state and represent that you have carefully read
this letter agreement, including Attachment A, understand the contents herein,
freely and voluntarily assent to all of the terms and conditions hereof, and
sign your name of your own free act.


 


18.         Enforcement
and Consequences of Breach — Employee agrees that if
he breaches any provision of this Agreement, then the Company shall be entitled
to recover from him damages flowing from such breach, Employee will not be
entitled to any of the Retention Benefits described in paragraph 2 above, and
Employee will be liable for the costs and attorneys’ fees that the Company and
other Released Parties incur in any action arising as a result of his breach,
to the maximum extent permitted by law. 
However, nothing in this Agreement will interfere with Employee’s right
to challenge the enforceability of this Agreement’s release of claims under the
ADEA, and Employee shall not be required to tender back payments made to
Employee nor will Employee be liable for the costs and attorneys’ fees that the
Company and other Released Parties incur in connection with a challenge by
Employee of the release of claims under the ADEA.


 


19.         Applicable Law and Consent to Jurisdiction — This letter
agreement shall be interpreted and construed solely by the laws of the
Commonwealth of Massachusetts, without regard to conflict of laws
provisions.  You hereby irrevocably submit to and acknowledge and
recognize the jurisdiction of the courts of the Commonwealth of Massachusetts,
or if appropriate, a federal court located in the Commonwealth of Massachusetts
(which courts, for purposes of this letter agreement, are the only courts of
competent jurisdiction), over any suit, action or other proceeding arising out
of, under or in connection with this letter agreement or the subject matter
hereof.


 


20.         Non-PRC
Employee Status — As an employee/officer of Watts Water Technologies, Inc.
incorporated in the Commonwealth of Massachusetts of the United States, you
undertake not to claim or enjoy any PRC employee
status or any rights, privileges, benefits or entitlements associated with such
status, or to initiate any legal proceedings, under the PRC laws or
regulations, notwithstanding your primary office in the PRC or your
registration with any PRC authorities as an expatriate employee (seconded to
the PRC) for PRC work permit application and/or tax registration purposes, and
will indemnify the Company against any claims or liabilities, losses or
damages, expenses or penalties resulting from your breach of this undertaking.


 

















 


21.         Entire Agreement — This letter agreement,
including Attachment A, contains and constitutes the entire understanding and
agreement between the parties hereto with respect to your resignation of
employment with the Company, your severance benefits and the settlement of
claims against the Company, except as provided in Paragraph 4 above, and
cancels all previous oral and written negotiations, agreements, commitments and
writings (including, but not limited to, the offer letter issued by Watts Water
Technologies, Inc. on Nov. 21, 2007 and accepted by you on Nov. 28,
2007, and all other employment documents 
that may have been issued to you by Watts Water Technologies, Inc.
or any of its subsidiaries) in connection therewith.  This letter
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 letter agreement.


 


If
you have any questions about the matters covered in this letter agreement,
please call Gregory Michaud at 978-689-6043.


 


Very
truly yours,


 


Watts Water Technologies, Inc. (also for and on behalf of its subsidiaries)


 


 


	
  By:
  

  	
  /s/
  Gregory J. Michaud

  	
   

  
	
   

  	
  Name:
  

  	
  Gregory
  J. Michaud

  
	
   

  	
  Title:

  	
  Executive
  Vice President, Human Resources

  
				



 


 


I hereby agree to the terms and conditions set forth above and in
Attachment A.  I have been given at least twenty-one (21) days to consider
this letter agreement (including Attachment A) and I have chosen to execute
this on the date below.  I have been advised to consult an attorney before
signing this letter agreement.  I
acknowledge that I have not relied on any representation or statement other
than those contained in this letter agreement. 
I intend that this letter agreement will become a binding agreement
between the Company and me if I do not revoke my acceptance in seven (7) days.


 


 


	
  /s/
  Josh C. Fu

  	
   

  	
  July 8,
  2009

  
	
  Josh C. Fu

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  To
  be returned by July 8, 2009

  	
   

  	
   

  



 

















 


ATTACHMENT
A


 


DESCRIPTION
OF SEVERANCE BENEFIT


 


1.               The Company will pay you
$106,125, less all applicable taxes and withholdings (including, but not
limited to, PRC taxes and withholdings).  This payment will be paid in one
lump sum in accordance with the Company’s normal payroll practices, but in no
event earlier than the eighth (8th) day after execution, timely return, and
non-revocation of this letter agreement. 
At your request, the Company will pay this amount to you in China in
Renminbi using the exchange rate on the day the conversion or comparison is
made.


 


2.               The Company will pay you
$106,125, less all applicable taxes and withholdings (including, but not
limited to, PRC taxes and withholdings).  This second payment will be paid
in one lump sum nine months after the date of execution of this letter
agreement provided that this letter agreement is timely executed, you do not
revoke your acceptance, and the letter agreement becomes binding between you
and the Company.  At your request, the
Company will pay this amount to you in China in Renminbi using the exchange
rate on the day the conversion or comparison is made.


 


3.               Effective as of the
Resignation Date, if you elect to continue receiving group health coverage
pursuant to the federal “COBRA” law, 29 U.S.C. § 1161 et seq., during the nine month period from July 1,
2009 through March 31, 2010, the Company will pay the full COBRA costs
associated with the medical and dental coverage you have elected.  The remaining balance of any COBRA premium
costs after this nine month period, shall be paid by you on a monthly basis for
as long as, and to the extent that, you remain eligible for COBRA continuation.
You should consult the COBRA materials to be provided by the Company for
details regarding these benefits.


 


4.               The Company will waive any
and all claims for repayment of $72,237 in overpayments of your base salary for
the ten month period between September 2008 and June 2009 provided
that this letter agreement is timely executed, you do not revoke your
acceptance, and the letter agreement becomes binding between you and the
Company.