**Exhibit 3.2**

 

LIMITEDLIABILITY COMPANY AGREEMENT

OF

MUELLERGROUP, LLC

 

This LIMITED LIABILITY COMPANYAGREEMENT (this “Agreement”) is executed as of October 3, 2005, bythe undersigned member (the “Member”) of the Company (as defined below).

 

The Member hereby duly adoptsthis Agreement pursuant to and in accordance with the Delaware LimitedLiability Company Act (6 Del.C. § 18-101, etseq.),as amended from time to time (the “Act”), and hereby agrees as follows:

 

ARTICLE II

 

2.1                               Name; Certificate of Formation.   Thename of the limited liability company is Mueller Group, LLC (the “Company”).The Certificate of Formation of the Company, dated October 3, 2005, wasfiled in the office of the Secretary of State of the State of Delaware on October 3,2005.

 

2.2                               Purpose.   The Company is formed for theobject and purpose of, and the nature of the business to be conducted andpromoted by the Company is, engaging in any lawful act or activity for whichlimited liability companies may be formed under the Act and engaging in any andall activities necessary or incidental to the foregoing.

 

2.3                               Designated Agent for Service of Process.   TheCompany shall maintain a registered office and a designated and duly qualifiedagent for the service of process on the Company in the State of Delaware.

 

2.4                               Perpetual Existence.   TheCompany shall have perpetual existence.

 

ARTICLE III

 

Capitalization

 

3.1                               Identification of Initial Member.   The Member is the sole member of the Companyand owns all of the limited liability company interests in, and all rights withrespect to, the Company.

 

3.2                               Limited Liability Company Interests as Units.   Eachlimited liability company interest in the Company shall be represented by units(“Units”) in such number as determined by the Board of Managers. Unitsmay be, but shall not be required to be, represented by certificates in suchform determined by the Board of Managers. The initial number of Units shall be the same number of shares of commonstock of Mueller Group, Inc. (the “Corporation”) immediately prior tothe conversion of the Corporation as a corporation to the Company as a limitedliability company (the “Conversion”).

 

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ARTICLE IV

 

Tax/Allocation of Profits and Losses/Distributions

 

The Member intends for theCompany to be disregarded as an entity for income tax purposes so long as ithas a single member. If at any time the Company has more than one member, itshall be treated as a partnership for tax purposes, and all profits, losses,credits and other items realized or recognized by the Company shall be dividedamong and allocated to the Members in accordance with their Units, The Companyshall make distributions to the Members, from time to time, as the Board ofManagers may determine to be appropriate.

 

ARTICLE V

 

Management

 

5.1                               General Powers.   Subject to Section 8.2 of this Agreementand the Act, the business and affairs of the Company shall be managed by theBoard of Managers. The Board of Managers shall have the power to do any and allacts necessary or convenient to or for the furtherance of the purposesdescribed herein, including all powers, statutory or otherwise, possessed bymembers under the laws of the State of Delaware.

 

5.2                               Management.   The Board of Managers shall have the power andauthority to act for and bind the Company. The Board of Managers shall have theright to manage the business and affairs of the Company and may delegate suchmanagement rights, powers, duties and responsibilities to one or more person orpersons designated by it as it may determine.

 

5.3                               Individual Manager Authority.   The members of the Board of Managers (each a “Manager”)shall constitute the Company’s managers for all purposes under the Act andother applicable law.  Notwithstandingthe foregoing, no Manager, acting in his or her capacity as Manager, shall beentitled to sign for or take any action individually on behalf of the Company withoutbeing authorized by the Board of Managers as provided in this ARTICLE V.

 

5.4                               Number and Qualification.   The number of Managers constituting the Boardof Managers shall be not less than one nor more than sixteen, as may be fixedfrom time to time exclusively pursuant to a resolution adopted by the Board ofManagers, and the initial Board of Managers shall consist of two Managers.  The Member may from time to time change the maximumor minimum number of Managers by amendment of this Agreement.

 

5.5                               Designation and Term of Managers.   TheManagers shall be designated by the Member, and each Manager shall serve untilsuch Manager’s death, incapacity, resignation, removal, or until theappointment of a successor.

 

5.6                               Removal of Managers.   Any Manager may be removed at any time with orwithout cause by the Member.

 

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5.7                               Vacancies.   The Member may fill any vacancy occurring inthe Board of Managers by designating a Manager to fill such vacancy.

 

5.8                               Chairman of the Board of Managers.   Thereshall be a Chairman of the Board of Managers (the “Chairman”) elected bythe Managers from their number at any meeting of the Board of Managers.  The Chairman shall preside at all meetings ofthe Board of Managers and perform such other duties as may be directed by theBoard of Managers, and shall serve as Chairman at the pleasure of the Board ofManagers. Unless otherwise determined by the Board of Managers, the ChiefExecutive Officer of the Company shall be the Chairman.

 

5.9                               Compensation.   The Board of Managers mayprovide for the compensation of Managers for their services as such and for thepayment or reimbursement of any or all expenses incurred by them in connectionwith such services.

 

ARTICLE VI

 

MEETINGS OF THE BOARD OF MANAGERS

 

6.1                               Meetings of Board of Managers.   The Board of Managers shall hold such meetingsas may be called by the Chairman or requested by any Manager in writing to the Chairman.  Such a meeting may be held at a time and alocation fixed by the Chairman, but in any event no more than ninety (90) daysafter any proper request; provided, however, that such requirementmay waived by the Manager requesting the meeting.

 

6.2                               Notice of Meetings.   The Chairman shall, at least twelve hoursbefore the meeting, give or cause to be given notice thereof by any usual meansof communication.  Such notice need notspecify the purpose for which the meeting is called. Any duly convened meeting maybe adjourned by the Managers to a later time without further notice.

 

6.3                               Waiver of Notice.   AnyManager may waive notice of any meeting before or after the meeting. Except asprovided in the following sentence, the waiver must be in writing, signed bythe Manager entitled to the notice and delivered to the Company for inclusionin the minutes or filing with the Company’s records.  A Manager’s attendance at or participation ina meeting waives any required notice of such meeting unless the Manager at thebeginning of the meeting, or promptly upon arrival, objects to the holding ofthe meeting or to transacting business at the meeting and does not thereaftervote for or assent to action taken at the meeting.

 

6.4                               Quorum.   A majority of the number ofManagers fixed by or pursuant to this Agreement shall constitute a quorum forthe transaction of business at any meeting of the Board of Managers, or if nonumber is so fixed, a majority of Managers in office immediately before themeeting begins shall constitute a quorum.

 

6.5                               Action by the Board of Managers.   Theaffirmative vote of a majority of the Managers present at a meeting at whichthere is a quorum shall be the act of the Board of Managers; provided, however,that with respect to any matter to be determined by the Board of Managerspursuant to which one or more Managers have a direct or indirect interest thatis not

 

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shared by all Managers, such determinationmust be made by a majority of the disinterested Managers present at a meetingat which a quorum is present. As used in this Agreement, the phrase “theapproval of the Board of Managers,” “the consent of the Board ofManagers*.*” “as determined by the Board ofManagers” and similar phrases means the approval as set forth in thepreceding sentence, except as expressly provided otherwise in this Agreement.

 

6.6                               Presumption of Assent.   A Manager who is present at a meeting of theBoard of Managers or a committee of the Board of Managers when board action istaken is deemed to have assented to the action taken unless (i) he objectsat the beginning of the meeting, or promptly upon his arrival, to the holdingof the meeting or to transacting business at the meeting, (ii) his dissentor abstention from the action taken is entered in the minutes of the meeting,or (iii) he files written notice of his dissent or abstention with thepresiding chairman of the meeting before its adjournment or with the Companyimmediately after the adjournment of the meeting.  Such right of dissent or abstention is notavailable to a Manager who votes in favor of the action taken.

 

6.7                               Action Without Meeting.   Onany matter that is to be voted on, consented to or approved by the Board ofManagers, the Board of Managers may take such action without a meeting, withoutprior notice and without a vote if a consent or consents in writing, settingforth the action so taken, shall be signed by the Managers having not less thanthe minimum number of votes that would be necessary to authorize or take suchaction at a meeting at which all Managers entitled to vote thereon were presentand voted. On any matter that is to be voted on by Managers, the Managers mayvote in person or by proxy, and such proxy may be granted in writing, by meansof electronic transmission or as otherwise permitted by applicable law.  A consent transmitted by electronictransmission by a Manager or by a person or persons authorized to act for aManager shall be deemed to be written and signed for purposes of this Agreement.For purposes of this Agreement, the term “electronic transmission” means anyform of communication not directly involving the physical transmission of paperthat creates a record that may be retained, retrieved and reviewed by arecipient thereof and that may be directly reproduced in paper form by such arecipient through an automated process.

 

6.8                               Committees of the Board of Managers.   The Board of Managers may create an executivecommittee, a compensation committee and other committees of the Board ofManagers and appoint Managers to serve on such committees. The creation of acommittee of the Board of Managers and the appointment of Managers to it mustbe approved by the greater of (i) a majority of the number of Managers inoffice when the action is taken or (ii) the number of Managers required totake action pursuant to this Agreement. Each committee of the Board of Managers must have two or more Managersand, to the extent authorized by the Board of Managers, shall have and mayexercise all of the authority of the Board of Managers in the management of theCompany.  Each committee member shallserve at the pleasure of the Board of Managers. The provisions in this Agreement governing meetings, action withoutmeetings, notice and waiver of notice, and quorum and voting requirements ofthe Board of Managers apply to committees of the Board of Managers establishedunder this Section 6.8.

 

6.9                               Participation in Meeting by Telephone.   Members of the Board of Managers, or of anycommittee thereof, may participate in a meeting of such board or committee bymeans of

 

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conference telephone or similarcommunications equipment by means of which all persons participating in themeeting can hear each other, and such participation shall constitute presencein person at such meeting.

 

ARTICLE VII

 

OFFICERS

 

7.1                               Delegation of Authority.

 

(a)                                The Board of Managers may from time to timeappoint and delegate to one or more individuals (each an “Officer”) anyportion of its authority granted hereunder and under the Act as the Board ofManagers deems appropriate. No such delegation shall relieve any Manager of hisduties and obligations, or limit the power and authority of the Board ofManagers, set forth herein and under the Act.

 

(b)                               Initially, the Officers of the Company shallconsist of a Chief Executive Officer, a Secretary, a Treasurer and suchVice-Presidents, Assistant Secretaries, Assistant Treasurers, and otherOfficers as may from time to time be appointed by or under the authority of theBoard of Managers. Any two or more offices may be held by the same individual,but no Officer may act in more than one capacity where action of two or moreOfficers is required.

 

7.2*                              *Appointment and Term.   TheOfficers of the Company shall be appointed and removed by the Board ofManagers, the Chairman, or by a duly appointed Officer authorized by the Boardof Managers to appoint one or more Officers or assistant Officers. Each Officershall hold office until such Officer’s death, incapacity, resignation, removal,or until the appointment of a successor.

 

7.3                               Compensation of Officers.   Thecompensation of all Officers of the Company shall be fixed by or under theauthority of the Board of Managers, and no Officer shall serve the Company inany other capacity and receive compensation there for unless such additional compensationshall be duly authorized.  Theappointment of an Officer does not itself create contractual rights.

 

7.4                               Bonds.   The Board of Managers may require any Officer,agent, or employee of the Company to give bond to the Company, with sufficientsureties, conditioned on the faithful performance of the duties of hisrespective office or position, and to comply with such other conditions as mayfrom time to time be required by the Board of Managers.

 

7.5                               Chief Executive Officer.   TheChief Executive Officer shall act in a general executive capacity, shall beresponsible for the general administration and operation of the affairs of theCompany and shall perform all duties incidental to such person’s office thatmay be required by law and all such other duties as are properly required ofhim by the Board of Managers. He or she shall make reports to the Board ofManagers and the Member and shall see that all orders and resolutions of theBoard of Managers and of any committee thereof are carried into effect.

 

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7.6                               Vice Presidents.   EachExecutive Vice President and Senior Vice President and any Vice President shallhave such powers and shall perform such duties as shall be assigned to him bythe Board of Managers or the Chairman.

 

7.7                               Treasurer.

 

(a)                                The Treasurer shall exercise generalsupervision over the receipt, custody and disbursement of Company funds.  The Treasurer shall cause the funds of theCompany to be deposited in such banks as may be authorized by the Board ofManagers, or in such banks as may be designated as depositories in the mannerprovided by resolutions of the Board of Managers.  The Treasurer shall, in general, perform allduties incident to the office of the Treasurer and shall have such furtherpowers and duties and shall be subject to such directions as may be granted orimposed from time to time by the Board of Managers or the Chairman.

 

(b)                               Assistant Treasurers shall have such of theauthority and perform such of the duties of the Treasurer as may be provided inthis Agreement or assigned to them by the Board of Managers, the Chairman orthe Treasurer.  Assistant Treasurersshall assist the Treasurer in the performance of the duties assigned to theTreasurer, and in assisting the Treasurer, each Assistant Treasurer shall forsuch purpose have the powers of the Treasurer.  During the Treasurer’s absence or inability,the Treasurer’s authority and duties shall be possessed by such AssistantTreasurer or Assistant Treasurers as the Board of Managers or the Chairman may designate.

 

7.8                               Secretary.

 

(a)                                The Secretary shall keep or cause to be kept,in one or more books provided for that purpose, the minutes of all meetings ofthe Board of Managers, the committees of the Board of Managers and theMember.  The Secretary shall see that allnotices are duly given in accordance with the provisions of this Agreement andas required by law; shall be custodian of the records and the seal of theCompany and affix and attest the seal to all certificates for Units of theCompany (unless the seal of the Company on such certificates shall be afacsimile, as hereinafter provided) and affix and attest the seal to all otherdocuments to be executed on behalf of the Company under its seal; shall seethat the books, reports, statements, certificates and other documents andrecords required by law to be kept and filed are properly kept and filed; andin general, shall perform all the duties incident to the office of Secretaryand such other duties as from time to time may be assigned to the Secretary ofthe Board of Managers or the Chairman.

 

(b)                               Assistant Secretaries shall have such of theauthority and perform such of the duties of the Secretary as may be provided inthis Agreement or assigned to them by the Board of Managers, the Chairman orthe Secretary. Assistant Secretaries shall assist the Secretary in the performanceof the duties assigned to the Secretary, and in assisting the Secretary; eachAssistant Secretary shall for such purpose have the powers of the Secretary.  During the Secretary’s absence or inability,the Secretary’s authority and duties shall be possessed by such Assistant Secretaryor Assistant Secretaries as the Board of Managers or the Chairman maydesignate.

 

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7.9                               Removal.   Any Officer elected, or agentappointed, by the Board of Managers may be removed by the Board of Managerswhenever, in their judgment, the best interests of the Company would be servedthereby.  Any Officer or agent appointedby the Chairman may be removed by him or her whenever, in the judgment of theChairman, the best interests of the Company would be served thereby. No electedOfficer shall have any contractual rights against the Company for compensationby virtue of such election beyond the date of the election of such person’ssuccessor, such person’s death, such person’s resignation or such person’sremoval, whichever event shall first occur, except as otherwise provided in anemployment contract or under any employee deferred compensation plan.

 

7.10                         Authority of Officers to Bind the Company.   Other than the Managers, only the Officers,acting within their authority as provided herein, shall have the authority tobind the Company.

 

ARTICLE VIII

 

THE MEMBER

 

8.1                               Action With or Without Meeting.   TheMember may take action with or without a meeting.  Any action of the Member may be taken withouta meeting if a written consent, describing the action so taken, shall be signedby the Member and delivered to the Company for inclusion in the minutes orfiling with its records.

 

8.2                               Member Approval.   Except as otherwise specifically set forthherein, none of the following actions may be taken without the approval of theMember:

 

(a)                                The amendment of this Agreement or the Company’scertificate of formation;

 

(b)                               The creation, authorization, designation,reclassification, modification, issuance or sale of any class or series ofUnits or rights, options, warrants or other securities convertible into orexchangeable for any Units, any “phantom” equity or equity appreciation rights,or any other membership interest in the Company;

 

(c)                                The dissolution of the Company;

 

(d)                               The sale, lease, transfer, assignment or otherdisposition of all or substantially all of the assets of the Company other thanin connection with the dissolution of the Company;

 

(e)                                The conversion of the Company into another formof business entity or into a limited liability company organized under ajurisdiction other than Delaware; or

 

(f)                                  The merger of the Company with or into anotherentity or the consummation of any other similar business transaction.

 

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ARTICLE IX

 

Duties; Liability; Indemnification

 

9.1                               Duties of Managers.   TheManagers shall have the same duties to the Company that they would have underthe law of the State of Delaware if the Company were a corporation and theManagers were its directors.

 

9.2                               Liability of Member; Indemnification of Member.   TheMember shall not have any liability to the Company or any third party for theobligations or liabilities of the Company except to the extent explicitlyrequired by the Act.  The Company shall,to the fall extent permitted by applicable law, indemnify and hold harmless theMember against any and all liabilities incurred by it in connection with anyaction, suit or proceeding to which it may be made a party or otherwiseinvolved or with which such Member shall be threatened by reason of its being aMember or while acting as a Member on behalf of the Company or in its interest,including, without limitation, reasonable costs, expenses and attorneys’ feesincurred by the Member in connection with the enforcement of theindemnification rights provided herein.

 

9.3                               Indemnification.   TheCompany shall indemnify to the full extent permitted by applicable law anyperson who is or was serving as a Manager or Officer, and may, but shall not berequired to, indemnify any other person who is or was serving as employee oragent of the Company or who, at the request of the Company, is or was servingas a Manager, Officer, employee or agent of another corporation, partnership,joint venture, trust or other enterprise or as a trustee or administrator underan employee benefit plan, against (a) litigation expenses, includingcosts,  expenses and reasonable attorneys’  fees incurred by any such person in connectionwith any threatened, pending or completed action, suit or proceedings, whethercivil, criminal, administrative or investigative, whether formal or informal,and whether or not brought by or on behalf of the Company, arising out of suchperson’s status as such or such person’s activities in any of the foregoingcapacities, (b) liability, including payments made by such person insatisfaction of any judgment, money, decree, fine (including any excise taxassessed with respect to an employee benefit plan), penalty or settlement forwhich such person may have become liable in any such action, suit orproceeding, and (c) reasonable costs, expenses and attorneys’ feesincurred by such person in connection with the enforcement of the indemnificationrights provided herein.

 

Any such litigation expensesmay, and shall be required for the Member, Managers and Officers to be, paid bythe Company in advance of the final disposition of any action, suit orproceeding upon receipt of an unsecured written promise by or on behalf of anysuch person to repay such amount unless it shall ultimately be determined thatsuch person is entitled to be indemnified by the Company against such expenses.

 

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ARTICLEX

 

Miscellaneous

 

10.1                         Amendments.   This Agreement may not bemodified or amended except with the written consent of the Member, and suchwriting must refer specifically to this Agreement.

 

10.2                         Applicable Law.   ThisAgreement shall be governed by and construed in accordance with the laws of theState of Delaware.

 

[Signaturesbegin on following page]

 

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IN WITNESS WHEREOF, the Member has executedthis Limited Liability Company Agreement of Mueller Group, LLC as of the dayand year first above written.

 

 
|   | MUELLER WATER PRODUCTS, LLC |
|--------|-----------------------------|
|   |                        |
|   |                        |
|   | By:                         |   /s/  Miles C. Dearden III |   |
|   | Name:                       | Miles C. Dearden, III |
|   | Title:                      | Vice President |
|        |                             |  |  |  |

 

 

[MG LLC Agreement]

 

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