Document:

Exhibit 10.1

 

WAIVER AGREEMENT

 

THIS AGREEMENT (the “Agreement”),
effective as of August 12, 2005, is made and entered into by and among
Mueller Water Products, Inc., a Delaware corporation (the “Company”), Mueller Group, Inc., a Delaware corporation
(“Mueller Group”), and [            ] (“Executive”).

 

WHEREAS, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”) dated as of June 17, 2005 among
the Company, Walter Industries, Inc., a Delaware corporation (“Walter”), JW MergerCo, Inc., a Delaware
corporation (“MergerCo”), and DLJ Merchant
Banking II, Inc., a Delaware corporation (“DLJMB”),
the Company will merge with and into MergerCo (the “Merger”);

 

WHEREAS, upon consummation of the Merger, the Executive may be entitled
to receive a transaction bonus (the “Transaction Payment”)
and, if the Executive is terminated in connection with the Merger, the
Executive will be entitled to receive severance benefits (the “Severance Payments”) under the Employment Agreement dated as
of                      between
Mueller Group and the Executive (the “Employment Agreement”);

 

WHEREAS, the consummation of the Merger could result in the payment of
the Transaction Payment and Severance Payments to the Executive (Transaction
Payments and Severance Payments, together, the “Change of
Control Payments”);

 

WHEREAS, the payment of the Change of Control Payments in connection
with the Merger could constitute “parachute payments” made in connection with a
“change in control” of a corporation, within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the “Code”),
which could result in the imposition of certain excise taxes on Executive under
Section 4999 of the Code and in the loss of certain income tax deductions
by the Company under Section 280G of the Code if the value of any such “parachute
payments” constitutes “excess parachute payments,” within the meaning of Section 280G
of the Code;

 

WHEREAS, Section 280G(b)(5)(B) of the Code provides that
payments which would otherwise be “parachute payments” will not be subject to
Sections 280G and 4999 of the Code if the payments are disclosed to and
approved by the shareholders of the corporation which is subject to the “change
in control,” provided that such approval is a condition to the recipient’s
right to receive the payments in question; and

 

WHEREAS, in order to ensure that the Change of Control Payments are not
subject to Sections 280G and 4999 of the Code, the Company and Executive have
determined that it is in their interest to enter into an agreement that limits
the amount of the Change of Control Payments and any other payments which would
otherwise constitute “parachute payments” subject to Section 280G of the
Code to amounts which would not result in “excess parachute payments” under Section 280G
of the Code, and pursuant to which the Company would undertake to formally
obtain approval by the Company’s shareholders pursuant to 

 

 

 

Section 280G(b)(5)(B) of
the Code of any portion of the Change of Control Payments which could give rise
to “excess parachute payments”;

 

NOW THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the parties hereto agree as
follows:

 

1.             Except as otherwise
provided in Paragraph 2 below, in the event that the Change of Control Payments
or any other payment or benefit received or to be received by Executive in
connection with the Merger and/or the transactions contemplated by the Merger
Agreement (whether pursuant to the terms of the Employment Agreement, the
Merger Agreement or any other plan, arrangement or agreement with the Company
or its subsidiaries or affiliates) (all such payments and benefits, being
hereinafter called “Total Payments”)
would as a result of Section 280G of the Code not be deductible (in whole
or in part) by the Company, a subsidiary or affiliate thereof, or any other
person making such payment or providing such benefit, then, to the extent
necessary to make such portion of the Total Payments deductible (and after
taking into account any reduction in the Total Payments provided by reason of Section 280G
of the Code in such other plan, arrangement or agreement), any cash portion of
the Total Payments shall be reduced (if necessary, to zero).  For purposes of this limitation, (i) no
portion of the Total Payments the receipt or enjoyment of which Executive shall
have effectively waived in writing prior to their receipt shall be taken into
account, (ii) no portion of the Total Payments shall be taken into account
which in the opinion of tax counsel selected by the Accounting Firm (as defined
below) does not constitute a “parachute payment” within the meaning of Section 280G(b) of
the Code, including by reason of Section 280G(b)(4)(A) of the Code, (iii) those
Total Payments provided shall be reduced only to the extent necessary so that
the Total Payments (other than those referred to in clauses (i) or (ii))
in their entirety constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4)(B) of the Code or
are otherwise not subject to disallowance as deductions, in the opinion of the
tax counsel referred to in clause (ii), (iv) the value of any non-cash
benefit or any deferred payment or benefit included in the Total Payments shall
be determined by a nationally recognized accounting firm selected by the
Company’s Board of Directors (the “Accounting Firm”)
in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code, and (v) any value attributable to the acceleration of the lapse
of the restrictions on the sale of the common stock by reason of the Merger
which is included in the Total Payments shall be determined by the Accounting
Firm in accordance with the principles of Treasury Regulations Section 1.280G-1.

 

2.             Notwithstanding any
other provision of this Agreement, the limitation of Paragraph 1 above shall
not apply to limit the Total Payments if, in accordance with Section 280G(b)(5)(B) of
the Code and Treasury Regulations Section 1.280G-1, persons who,
immediately prior to the Merger, own stock of the Company possessing more than
seventy five percent (75%) of the voting power of all outstanding stock of the
Company held by shareholders who will not directly benefit from such approval,
vote to approve any such payments or benefits, or portion thereof, which would
be subject to disallowance of deductions under Section 280G of the Code
absent such shareholder approval.

 

3.             The Company agrees
to prepare and deliver to its shareholders by September 1,
2005, the disclosure required by Section 280G(b)(5)(B) of
the Code with respect to the Total 

 

2

 

Payments and to simultaneously
seek (and use its reasonable best efforts to thereafter obtain), by written
consent or written vote, the approval by the Company’s shareholders of the
Total Payments.

 

4.             This Agreement
shall be administered, interpreted and enforced under the internal laws of the
State of Delaware without regard to the principles of conflicts of laws
thereof.

 

5.             If any provision of
this Agreement is determined to be invalid or unenforceable, it shall be
adjusted rather than voided, to achieve the intent of the parties to the extent
possible, and the remainder of the Agreement shall be enforced to the maximum
extent possible.

 

6.             Notwithstanding the
foregoing, in the event that the Merger is not consummated on or prior to December 16,
2005, this Agreement shall thereupon terminate and be of no further force or
effect.

 

 

[SIGNATURE PAGE FOLLOWS]

 

3

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.

 

 

	
   

  	
  MUELLER WATER PRODUCTS, INC.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Walter A. Smith

  
	
   

  	
   

  	
  Vice
  President, Treasurer and

  
	
   

  	
   

  	
  Assistant
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MUELLER GROUP, INC.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Walter A. Smith

  
	
   

  	
   

  	
  Vice
  President, Treasurer and

  
	
   

  	
   

  	
  Assistant
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [                  ]

  
					

 

4Exhibit 10.2

 

Mueller Group, Inc.

 

	
   

  	
  August 12, 2005

  

 

Dale B. Smith

c/o 500 West Eldorado Street

Decatur, Illinois  62522

 

Dear Dale:

 

This
letter agreement specifically references and explicitly expresses an intent to
amend the Executive Employment Agreement, dated as of August 16, 1999,
between you and Mueller Group, Inc. (the “Company”)
(the “Agreement”).  The parties hereto hereby agree as follows:

 

1.                                       Pursuant to Section 15 of the Agreement,
the Agreement is hereby amended by adding a new Section 23 of the
Agreement, as follows:

 

“SECTION 23.  Section 409A.  Notwithstanding any provision of this
Agreement to the contrary, if at the time of Employee’s termination of
employment with the Company, he is a “specified employee” as defined in Section 409A
of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), and one or
more of the payments or benefits received or to be received by the Employee
pursuant to this Agreement would constitute deferred compensation subject to Section 409A,
no payment or benefit will be provided under this Agreement until the earliest
of (A) the date which is 6 months after his “separation from service” for
any reason, other than death or “disability” (as such terms are used in Section 409A(a)(2) of
the Code), (B) the date of his death or “disability” (as such term is used
in Section 409A(a)(2)(C) of the Code) or (C) the effective date
of a “change in the ownership or effective control” of the Company (as such
term is used in Section 409A(a)(2)(A)(v) of the Code).  The provisions of this Section 23 shall
only apply to the extent required to avoid Employee’s incurrence of any
additional tax or interest under Section 409A of the Code or any
regulations or Treasury guidance promulgated thereunder.  In addition, if any provision of this
Agreement would cause Employee to incur any additional tax or interest under Section 409A
of the Code or any regulations or Treasury guidance promulgated thereunder, the
Company may reform such provision to maintain to the maximum extent practicable
the original intent of the applicable provision without violating the
provisions of Section 409A of the Code.”

 

2.                                       Except as specifically modified pursuant to
paragraph 1 of this letter agreement, all of the terms and provisions of the
Agreement shall remain in full force and effect.

 

 

Please indicate your acceptance of the foregoing by signing below.

 

	
   

  	
   

  	
  MUELLER GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
   

  	
  Thomas E. Fish

  
	
   

  	
   

  	
   

  	
  Interim Chief Financial Officer and

  
	
   

  	
   

  	
   

  	
  Assistant Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accepted and Agreed:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
   

  	
   

  	
   

  
	
  Dale B. Smith

  	
   

  	
   

  	
   

  
						

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]