Document:

Exhibit 10.3

AMENDMENT 2007-1

TO THE

CEPHALON, INC.

2000 EQUITY COMPENSATION
PLAN

FOR EMPLOYEES AND KEY
ADVISORS

WHEREAS,
the Cephalon, Inc. (the “Company”) maintains the Cephalon, Inc. 2000 Equity
Compensation Plan for Employees and Key Advisors (the “2000 Plan”) for the
benefit of its eligible employees and 
certain consultants and advisors who perform services for the Company;

WHEREAS,
pursuant to Section 10(a) of the 2000 Plan, the Board of Directors of the
Company (the “Board”) may amend the 2000 Plan at any time;

WHEREAS,
pursuant to Section 141 of the Delaware General Corporation Law, the Board has
delegated its authority to amend or modify any of the Company’s existing equity
compensation plans, including the 2000 Plan, to the Stock Option and
Compensation Committee of the Board of Directors (the “Committee”), as more fully described in Section III of
the Committee’s charter; and

WHEREAS, the Committee desires to amend the 2000 Plan to
provide for the mandatory adjustment to the number of shares of Company Stock
available for grant as stock options, the number of shares of Company Stock
covering outstanding stock options, the kind of shares of Company Stock issued
under the 2000 Plan, and the price per share of stock option grants in the
event of certain specified equity events.

NOW, THEREFORE, in accordance with the foregoing, the 2000 Plan
shall be amended as follows:

1.             Effective
February 8, 2007, Section 3(b) of the 2000 Plan shall be amended in its
entirety to read as follows:

“(b)         Adjustments.  If there is any change in the number or kind
of shares of Company Stock outstanding
(i) by reason of a stock dividend, spin-off, recapitalization, stock split, or
combination or exchange of shares, (ii) by reason of a merger, reorganization
or consolidation, (iii) by reason of a reclassification or change in par value,
or (iv) by reason of any other extraordinary or unusual event affecting the
outstanding Company Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spin-off or the Company’s payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Options, the number of shares covered by 

outstanding Options, the
kind of shares issued under the Plan, and the price per share of such Options
shall be equitably adjusted by the Committee, in such manner as the Committee
deems appropriate, to reflect any increase or decrease in the number of, or
change in the kind or value of, the issued shares of Company Stock to preclude,
to the extent practicable, the enlargement or dilution of rights and benefits
under the Plan and such outstanding Options; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated.  In addition, in the event of a Change of
Control or Corporate Transaction, the provisions of Section 8 shall apply.  Any adjustments to outstanding Options shall
be consistent with section 409A of the Code (as defined below), to the extent
applicable.  Any adjustments determined
by the Committee shall be final, binding and conclusive.”

2.             As thus amended, the 2000 Plan is hereby ratified,
republished and reconfirmed and said 2000 Plan and this amendment thereto
hereby constitute the 2000 Plan.

IN WITNESS WHEREOF, and as evidence of the adoption of Amendment 2007-1
to the 2000 Plan as set forth herein, the Committee has caused this Amendment
2007-1 to be executed this 8th day of February 2007.

	
  

  	
   

  	
  CEPHALON, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Carl A.
  Savini

  
	
   

  	
   

  	
   

  	
  Carl A. Savini

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, Chief 

  
	
   

  	
   

  	
   

  	
  Administrative OfficerExhibit 10.17

The following named executive
officers of Mueller Water Products, Inc. (the “Company”) have executed
Executive Change-in-Control Severance Agreements with the company in the form
attached hereto:

Gregory E. Hyland

Jeffery W. Sprick

Raymond P. Torok

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Mueller Water Products, Inc. 

Executive Change-in-Control Severance Agreement

THIS EXECUTIVE CHANGE-IN-CONTROL SEVERANCE AGREEMENT
is made, entered into, and is effective as of the           
day of March, 2007 (hereinafter referred to as the “Effective Date”), by
and between Mueller Water Products, Inc. (the “Company”), a Delaware
corporation, and                          
(the “Executive”).

WHEREAS, the Executive is currently employed by the
Company and possesses considerable experience and knowledge of the business and
affairs of the Company concerning its policies, methods, personnel, and
operations; and

WHEREAS, the Company is desirous of assuring insofar
as possible, that it will continue to have the benefit of the Executive’s
services; and the Executive is desirous of having such assurances; and

WHEREAS, the Company recognizes that circumstances may
arise in which a Change in Control of the Company occurs, through acquisition
or otherwise, thereby causing uncertainty of employment without regard to the
Executive’s competence or past contributions. Such uncertainty may result in
the loss of the valuable services of the Executive to the detriment of the
Company and its shareholders; and

WHEREAS, both the Company and the Executive are
desirous that any proposal for a Change in Control or acquisition will be
considered by the Executive objectively and with reference only to the business
interests of the Company and its shareholders; and

WHEREAS, the Executive will be in a better position to
consider the Company’s best interests if the Executive is afforded reasonable
security, as provided in this Agreement, against altered conditions of
employment which could result from any such Change in Control or acquisition.

NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and agreements of
the parties set forth in this Agreement, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, agree as follows:

Article 1.
Definitions

Wherever used in
this Agreement, the following terms shall have the meanings set forth below
and, when the meaning is intended, the initial letter of the word is
capitalized:

(a)          “Agreement” means this Executive Change-in-Control
Severance Agreement.

(b)         “Base Salary” means, at any time, the then
regular annual rate of pay which the Executive is receiving as annual salary,
excluding amounts: (i) received under short-term or long-term incentive or
other bonus plans, regardless of whether or not the amounts are deferred, or (ii) designated
by the Company as payment toward reimbursement of expenses.

(c)          “Beneficial Owner” shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.

(d)         “Board” means the Board of Directors of the
Company.

(e)          “Cause” shall be determined solely by the
Committee in the exercise of good faith and reasonable judgment, and shall mean
the occurrence of any one or more of the following:

(i)             The Executive’s
willful and continued failure to substantially perform his duties with the
Company (other than any such failure resulting from the Executive’s
Disability), after a written demand for substantial performance is delivered to
the Executive that specifically identifies the manner in which the Committee
believes that the Executive has not 

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substantially performed
his duties, and the Executive has failed to remedy the situation within fifteen
(15) business days of such written notice from the Company; or

(ii)         The Executive’s
conviction of a felony; or

(iii)     The Executive’s willful
engaging in conduct that is demonstrably and materially injurious to the
Company, monetarily or otherwise. However, no act or failure to act on the
Executive’s part shall be deemed “willful” unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
action or omission was in the best interests of the Company.

(f)            “Change in Control” of the Company shall
mean the occurrence of any one (1) or more of the following events:

(i)             Any Person (other
than the Company or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, and any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or such
proportionately owned corporation) is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing more than
thirty percent (30%) of the combined voting power of the Company’s
then outstanding securities;

(ii)         During any period of not
more than thirty-six (36) consecutive months, individuals who at the beginning
of such period constitute the Board of Directors of the Company, and any new
director whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least a majority (rounded up to the
nearest whole number) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at
least a majority thereof;

(iii)     The consummation of a merger
or consolidation of the Company with any other corporation, other than: (i) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) more than sixty-six and two-thirds percent (66-2¤3%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation;
or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
acquires more than thirty percent (30%) of the combined voting power of the
Company’s then outstanding securities; or

(iv)       The Company’s stockholders
approve a plan or an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets (or any transaction or series
of transactions having a similar effect).

(g)          “Code” means the Internal Revenue Code of
1986, as amended.

(h)         “Committee” means the Compensation Committee
of the Board of Directors of the Company, or, if no Compensation Committee
exists, then the full Board of Directors of the Company, or a committee of
Board members, as appointed by the full Board to administer this Agreement.

(i)            “Company” means Mueller Water Products, Inc.,
a Delaware corporation (including any and all subsidiaries), or any successor
thereto as provided in Article 9 herein.

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(j)             “Disability” or “Disabled” shall have the meaning ascribed to such term in the
Executive’s governing long-term disability plan, or if no such plan exists, at
the discretion of the Board.

(k)         “Effective Date” means the date this
Agreement is approved by the Board, or such other date as the Board shall
designate in its resolution approving this Agreement, and as specified in the
opening sentence of this Agreement.

(l)            “Effective Date of Termination” means the
date on which a Qualifying Termination occurs, as provided in Section 2.2
herein, which triggers the payment of Severance Benefits hereunder.

(m)     “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

(n)         “Good Reason” means, without the Executive’s
express written consent, the occurrence after a Change in Control of the
Company of any one (1) or more of the following:

(i)             The assignment of the
Executive to duties materially inconsistent with the Executive’s authorities,
duties, responsibilities, and status (including offices, titles, and reporting
requirements) as an executive and/or officer of the Company, or a material
reduction or alteration in the nature or status of the Executive’s authorities,
duties, or responsibilities from those in effect as of ninety (90) calendar
days prior to the Change in Control, other than an insubstantial and
inadvertent act that is remedied by the Company promptly after receipt of
notice thereof given by the Executive;

(ii)         The Company’s requiring
the Executive to be based at a location in excess of fifty (50) miles from the
location of the Executive’s principal job location or office immediately prior
to the Change in Control; except for required travel on the Company’s business
to an extent substantially consistent with the Executive’s then present
business travel obligations;

(iii)     A reduction by the Company of
the Executive’s Base Salary in effect on the Effective Date hereof, or as the
same shall be increased from time to time;

(iv)       The failure of the Company
to continue in effect any of the Company’s short- and long-term incentive
compensation plans, or employee benefit or retirement plans, policies,
practices, or other compensation arrangements in which the Executive
participates unless such failure to continue the plan, policy, practice, or
arrangement pertains to all plan participants generally; or the failure by the
Company to continue the Executive’s participation therein on substantially the
same basis, both in terms of the amount of benefits provided and the level of
the Executive’s participation relative to other participants, as existed immediately
prior to the Change in Control of the Company;

(v)           The failure of the
Company to obtain a satisfactory agreement from any successor to the Company to
assume and agree to perform the Company’s obligations under this Agreement, as
contemplated in Article 9 herein; and

(vi)       A material breach of this
Agreement by the Company which is not remedied by the Company within ten (10) business
days of receipt of written notice of such breach delivered by the Executive to
the Company.

Unless the Executive becomes Disabled, the Executive’s
right to terminate employment for Good Reason shall not be affected by the
Executive’s incapacity due to physical or mental illness. The Executive’s
continued employment shall not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason herein.

(o)         “Notice of Termination” shall mean a written
notice which shall indicate the specific termination provision in this
Agreement relied upon, and shall set forth in reasonable detail the facts and 

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circumstances
claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated.

(p)         “Person” shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act and used in Sections
13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

(q)         “Qualifying Termination” means any of the
events described in Section 2.2 herein, the occurrence of which triggers
the payment of Severance Benefits hereunder.

(r)           “Severance Benefits” mean the payment of
severance compensation as provided in Section 2.3 herein.

Article 2. Severance Benefits

2.1   Right to Severance Benefits.   The
Executive shall be entitled to receive from the Company Severance Benefits as
described in Section 2.3 herein, if there has been a Change in Control of
the Company and if, within twenty-four (24) calendar months thereafter, the
Executive’s employment with the Company shall end for any reason specified in Section 2.2
herein as being a Qualifying Termination.

The Executive shall not be
entitled to receive Severance Benefits if he is terminated for Cause, or if his
employment with the Company ends due to death, Disability, voluntary normal
retirement (as defined under the then established rules of the Company’s
tax-qualified retirement plan), or due to a voluntary termination of employment
for reasons other than as specified in Section 2.2(b) herein.

No
Executive shall be entitled to receive duplicative severance benefits under any
other Company-related plans or programs if benefits are triggered hereunder.

2.2   Qualifying Termination.   The
occurrence of any one of the following events within twenty-four (24) calendar
months after a Change in Control of the Company shall trigger the payment of
Severance Benefits to the Executive under this Agreement:

(a)          The
Company’s involuntary termination of the Executive’s employment without Cause;
and

(b)         The
Executive’s voluntary employment termination for Good Reason.

For purposes of this
Agreement, a Qualifying Termination shall not include a termination of
employment by reason of death, Disability, or voluntary normal retirement (as
such term is defined under the then established rules of the Company’s
tax-qualified retirement plan), the Executive’s voluntary termination for
reasons other than as specified in Section 2.2(b) herein, or the
Company’s involuntary termination for Cause.

2.3   Description of
Severance Benefits.   In the event the Executive becomes
entitled to receive Severance Benefits, as provided in Sections 2.1 and
2.2 herein, the Company shall pay to the Executive and provide him with the
following Severance Benefits:

(a)           A
lump-sum amount equal to the Executive’s unpaid Base Salary, accrued vacation
pay, unreimbursed business expenses, and all other items earned by and owed to
the Executive through and including the Effective Date of Termination.

(b)          A
lump-sum amount equal to the Executive’s annual bonus award earned as of the
Effective Date of Termination, based on actual year-to-date performance, as
determined at the Committee’s discretion (excluding any special bonus
payments). This payment will be in lieu of any other payment to be made to the
Executive under the annual bonus plan in which the Executive is then
participating for the plan year.

(c)           A lump-sum amount equal
to one and one-half (1.5) multiplied by the sum of the following: (i) the
higher of: (A) the Executive’s annual rate of Base Salary in effect upon
the Effective Date of Termination, or (B) the Executive’s annual rate of
Base Salary in effect on the date 

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of the Change in Control;
and (ii) the average of the actual annual bonus earned (whether or not
deferred) by the Executive under the annual bonus plan (excluding any special
bonus payments) in which the Executive participated in the three (3) years
preceding the year in which the Executive’s Effective Date of Termination
occurs. If the Executive has less than three (3) years of annual bonus
participation preceding the year in which the Executive’s Effective Date of
Termination occurs, then the Executive’s annual target bonus established under
the annual bonus plan in which the Executive is then participating for the
bonus plan year in which the Executive’s Effective Date of Termination occurs
shall be used for each year that the Executive did not participate in the
annual bonus plan, up to a maximum of three (3) years, to calculate the
three (3) year average bonus payment.

(d)          A lump-sum amount equal
to one-half (.5) multiplied by the sum of the following: (i) the higher
of: (A) the Executive’s annual rate of Base Salary in effect upon the
Effective Date of Termination, or (B) the Executive’s annual rate of Base
Salary in effect on the date of the Change in Control; and (ii) the
average of the actual annual bonus earned (whether or not deferred) by the
Executive under the annual bonus plan (excluding any special bonus payments) in
which the Executive participated in the three (3) years preceding the year
in which the Executive’s Effective Date of Termination occurs. If the Executive
has less than three (3) years of annual bonus participation preceding the
year in which the Executive’s Effective Date of Termination occurs, then the
Executive’s annual target bonus established under the annual bonus plan in
which the Executive is then participating for the bonus plan year in which the
Executive’s Effective Date of Termination occurs shall be used for each year
that the Executive did not participate in the annual bonus plan, up to a
maximum of three (3) years, to calculate the three (3) year average
bonus payment. Such amount shall be in consideration for the Executive entering
into a noncompete agreement as described in Article 4 herein.

(e)           Upon a Qualifying
Termination, vesting and cash-out of any and all outstanding cash-based
long-term incentive awards held by the Executive, as granted to the Executive
by the Company as a component of the Executive’s compensation. The
cash-out shall be in a lump-sum amount equal to the target award level
established for each award, multiplied by a fraction the numerator of which is
the full number of completed days in the preestablished performance period as
of the Effective Date of Termination, and the denominator of which is the full
number of days in the entire performance period (i.e., typically
thirty-six (36) months). This payment will be in lieu of any other payment
to be made to the Executive under these long-term performance-based award
plans.

(f)             Upon the occurrence
of a change in control, an immediate full vesting and lapse of all restrictions
on any and all outstanding equity-based long-term incentives, including but not
limited to stock options and restricted stock awards held by the Executive. This
provision shall override any conflicting language contained in the Executive’s
respective Award Agreements.

(g)           Retirement benefits
under the Mueller Water Products, Inc. Profit Sharing Plan will become
immediately fully vested, to the extent not already fully vested, upon a
Qualifying Termination.

(h)          Continuation for
twenty-four (24) months of the Executive’s medical insurance and life insurance
coverage. These benefits shall be provided by the Company to the Executive
beginning immediately upon the Effective Date of Termination. Such benefits
shall be provided to the Executive at the same coverage level and cost to the
Executive as in effect immediately prior to the Executive’s Effective Date of
Termination.

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The Executive shall qualify for full COBRA health
benefit continuation coverage beginning upon the expiration of the
aforementioned twenty-four (24) month period.

Notwithstanding the above, these medical and life
insurance benefits shall be discontinued prior to the end of the stated
continuation period in the event the Executive receives substantially similar
benefits from a subsequent employer, as determined solely by the Committee in
good faith. For purposes of enforcing this offset provision, the Executive
shall be deemed to have a duty to keep the Company informed as to the terms and
conditions of any subsequent employment and the corresponding benefits earned
from such employment, and shall provide, or cause to provide, to the Company in
writing correct, complete, and timely information concerning the same.

(i)             For a period of up to
twenty-four (24) months following a Qualifying Termination, the Executive shall
be entitled, at the expense of the Company, to receive standard outplacement
services from a nationally recognized outplacement firm of the Executive’s
selection. However, the Company’s total obligation shall not exceed thirty-five
percent (35%) of the Executive’s final annual rate of Base Salary with the
Company, and such Company obligation shall end prior to the end of the
twenty-four (24) month period upon the Executive becoming employed by a
subsequent employer.

2.4   Termination
for Total and Permanent Disability.   Following a Change
in Control, if the Executive’s employment is terminated with the Company due to
Disability, the Executive’s benefits shall be determined in accordance with the
Company’s retirement, insurance, and other applicable plans and programs then
in effect.

2.5   Termination
for Retirement or Death.   Following a Change in Control,
if the Executive’s employment with the Company is terminated by reason of his
voluntary normal retirement (as defined under the then established rules of
the Company’s tax-qualified retirement plan), or death, the Executive’s
benefits shall be determined in accordance with the Company’s retirement,
survivor’s benefits, insurance, and other applicable programs then in effect.

2.6   Termination
for Cause or by the Executive Other Than for Good Reason.   Following
a Change in Control, if the Executive’s employment is terminated either: (i) by
the Company for Cause; or (ii) voluntarily by the Executive for reasons
other than as specified in Section 2.2(b) herein, the Company shall
pay the Executive his full Base Salary at the rate then in effect, accrued
vacation, and other items earned by and owed to the Executive through the
Effective Date of Termination, plus all other amounts to which the Executive is
entitled under any compensation plans of the Company at the time such payments
are due, and the Company shall have no further obligations to the Executive
under this Agreement.

2.7   Notice of Termination.   Any
termination of the Executive’s employment by the Company for Cause or by the
Executive for Good Reason shall be communicated by Notice of Termination to the
other party.

Article 3. Form and
Timing of Severance Benefits

3.1   Form and
Timing of Severance Benefits.   The Severance Benefits
described in Sections 2.3(a), 2.3(b), 2.3(c), and 2.3(d) herein shall
be paid in cash to the Executive in a single lump sum as soon as practicable
following the Effective Date of Termination, but in no event beyond ten (10) calendar
days from such date.

3.2   Withholding of Taxes.   The
Company shall withhold from any amounts payable under this Agreement all
federal, state, city, or other taxes as legally shall be required.

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Article 4.
Noncompetition and Confidentiality

In the event the
Executive becomes entitled to receive Severance Benefits as provided in Section 2.3
herein, the following shall apply:

(a)          Noncompetition.   During the term of
employment and for a period of twelve (12) months after the Effective Date of
Termination, the Executive shall not: (i) directly or indirectly act in
concert or conspire with any person employed by the Company in order to engage
in or prepare to engage in or to have a financial or other interest in any
business or any activity which he knows (or reasonably should have known) to be
directly competitive with the business of the Company as then being carried on;
or (ii) serve as an employee, agent, partner, shareholder, director or
consultant for, or in any other capacity participate, engage, or have a
financial or other interest in any business or any activity which he knows (or
reasonably should have known) to be directly competitive with the business of
the Company as then being carried on (provided, however, that notwithstanding
anything to the contrary contained in this Agreement, the Executive may own up
to two percent (2%) of the outstanding shares of the capital stock of a
company whose securities are registered under Section 12 of the Securities
Exchange Act of 1934).

(b)         Confidentiality.   The Company has
advised the Executive and the Executive acknowledges that it is the policy of
the Company to maintain as secret and confidential all Protected Information
(as defined below), and that Protected Information has been and will be
developed at substantial cost and effort to the Company. All Protected
Information shall remain confidential permanently and no Executive shall at any
time, directly or indirectly, divulge, furnish, or make accessible to any
person, firm, corporation, association, or other entity (otherwise than as may
be required in the regular course of the Executive’s employment with the
Company), nor use in any manner, either during the term of employment or after
termination, at any time, for any reason, any Protected Information, or cause
any such information of the Company to enter the public domain.

For purposes of this
Agreement, “Protected Information” means trade secrets, confidential and
proprietary business information of the Company, and any other information of
the Company, including, but not limited to, customer lists (including potential
customers), sources of supply, processes, plans, materials, pricing
information, internal memoranda, marketing plans, internal policies, and
products and services which may be developed from time to time by the Company
and its agents or employees, including the Executive; provided, however, that
information that is in the public domain (other than as a result of a breach of
this Agreement), approved for release by the Company or lawfully obtained from
third parties who are not bound by a confidentiality agreement with the
Company, is not Protected Information.

(c)          Nonsolicitation.   During the term of
employment and for a period of twelve (12) months after the Effective Date of
Termination, the Executive shall not employ or retain or solicit for employment
or arrange to have any other person, firm, or other entity employ or retain or
solicit for employment or otherwise participate in the employment or retention
of any person who is an employee or consultant of the Company.

(d)         Cooperation.   Executive agrees to
cooperate with the Company and its attorneys in connection with any and all lawsuits,
claims, investigations, or similar proceedings that have been or could be
asserted at any time arising out of or related in any way to Executive’s
employment by the Company or any of its subsidiaries.

(e)          Nondisparagement.   At all times, the
Executive agrees not to disparage the Company or otherwise make comments
harmful to the Company’s reputation.

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Article 5.
Excise Tax Equalization Payment

5.1   Excise
Tax Equalization Payment.   If any portion of the
Severance Benefits or any other payment under this Agreement, or under any
other agreement with, or plan of the Company (in the aggregate, “Total Payments”)
would constitute an “excess parachute payment,” such that a golden parachute
excise tax is due, the Company shall provide to the Executive, in cash, an
additional payment in an amount sufficient to cover the full cost of any excise
tax and all of the Executive’s additional federal, state, and local income,
excise, and employment taxes that arise on this additional payment
(cumulatively, the “Full Gross-Up Payment”), such that the Executive is in the
same after-tax position as if he had not been subject to the excise tax. For
this purpose, the Executive shall be deemed to be in the highest marginal rate
of federal, state, and local income taxes in the state and locality of the
Executive’s residence on the Effective Date of Termination. This payment shall
be made as soon as possible following the date of the Executive’s Qualifying
Termination, but in no event later than ten (10) calendar days from such
date.

For purposes of
this Agreement, the term “excess parachute payment” shall have the meaning
assigned to such term in Section 280G of the Internal Revenue Code, as
amended (the “Code”), and the term “excise tax” shall mean the tax imposed on
such excess parachute payment pursuant to Sections 280G and 4999 of the Code.

5.2   Subsequent Recalculation.   In
the event the Internal Revenue Service subsequently adjusts the excise tax
computation herein described, the Company shall reimburse the Executive for the
full amount necessary to make the Executive whole on an after-tax basis (less
any amounts received by the Executive that the Executive would not have
received had the computations initially been computed as subsequently
adjusted), including the value of any underpaid excise tax, and any related
interest and/or penalties due to the Internal Revenue Service.

Article 6. The
Company’s Payment Obligation

6.1   Payment
Obligations Absolute.   The Company’s obligation to make
the payments and the arrangements provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances including,
without limitation, any offset, counterclaim, recoupment, defense, or other
right which the Company may have against the Executive or anyone else. All
amounts payable by the Company hereunder shall be paid without notice or demand.
Each and every payment made hereunder by the Company shall be final, and the
Company shall not seek to recover all or any part of such payment from the
Executive or from whomsoever may be entitled thereto, for any reasons
whatsoever.

The Executive shall
not be obligated to seek other employment in mitigation of the amounts payable
or arrangements made under any provision of this Agreement, and the obtaining
of any such other employment shall in no event effect any reduction of the
Company’s obligations to make the payments and arrangements required to be made
under this Agreement, except to the extent provided in Sections 2.3(g) and 2.3(h) herein.

6.2   Contractual Rights to Benefits.   This
Agreement establishes and vests in the Executive a contractual right to the
benefits to which he is entitled hereunder. However, nothing herein contained
shall require or be deemed to require, or prohibit or be deemed to prohibit,
the Company to segregate, earmark, or otherwise set aside any funds or other
assets, in trust or otherwise, to provide for any payments to be made or
required hereunder.

Article 7.
Term of Agreement

This Agreement will commence on the Effective Date and
shall continue in effect for two (2) full years. However, at the end of
such two (2) year period and, if extended, at the end of each additional
year thereafter, the term of this Agreement shall be extended automatically for
one (1) additional year, unless 

 9
 

either party delivers
written notice six (6) months prior to the end of such term, or extended
term, stating that the Agreement will not be extended. In such case, the
Agreement will terminate at the end of the term, or extended term, then in
progress.

However, in the event of a
Change in Control of the Company, the term of this Agreement shall
automatically be extended for two (2) years from the date of the Change in
Control.

Article 8.
Legal Remedies

8.1   Dispute
Resolution.   The Executive shall have the right and
option to elect to have any good faith dispute or controversy arising under or
in connection with this Agreement settled by litigation or arbitration. If
arbitration is selected, such proceeding shall be conducted by final and
binding arbitration before a panel of three (3) arbitrators in accordance
with the laws then in effect and under the administration of the American
Arbitration Association.

8.2   Payment of Legal Fees.   In
the event that it shall be necessary or desirable for the Executive to retain
legal counsel and/or to incur other costs and expenses in connection with the
enforcement of any or all of his rights under this Agreement, the Company shall
pay (or the Executive shall be entitled to recover from the Company) the
Executive’s attorneys’ fees, costs, and expenses in connection with the
enforcement of his rights including the enforcement of any arbitration award. This
shall include, without limitation, court costs and attorneys’ fees incurred by
the Executive as a result of any claim, action, or proceeding, including any
such action against the Company arising out of, or challenging the validity or
enforceability of, this Agreement or any provision hereof.

Article 9.
Successors

9.1   Successors
to the Company.   The Company shall require any successor
(whether direct or indirect, by purchase, merger, reorganization,
consolidation, acquisition of property or stock, liquidation, or otherwise) of
all or a significant portion of the assets of the Company by agreement, in form
and substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. Regardless
of whether such agreement is executed, this Agreement shall be binding upon any
successor in accordance with the operation of law and such successor shall be
deemed the “Company” for purposes of this Agreement.

9.2   Assignment by the Executive.   This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees, and legatees. If the Executive dies while any
amount would still be payable to him hereunder had he continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive’s devisee,
legatee, or other designee, or if there is no such designee, to the Executive’s
estate.

Article 10.
Miscellaneous

10.1   Employment Status.   This
Agreement is not, and nothing herein shall be deemed to create, an employment
contract between the Executive and the Company or any of its subsidiaries. The
Executive acknowledges that the rights of the Company remain wholly intact to
change or reduce at any time and from time to time his compensation, title,
responsibilities, location, and all other aspects of the employment
relationship, or to discharge him prior to a Change in Control (subject to such
discharge possibly being considered a Qualifying Termination pursuant to Section 2.2).

10.2   Entire Agreement.   This
Agreement contains the entire understanding of the Company and the Executive
with respect to the subject matter hereof and supersedes all prior agreements, 

 10
 

understandings,
negotiations, representations and statements, whether oral, written, implied or
expressed, relating to such subject matter. In addition, the payments provided
for under this Agreement in the event of the Executive’s termination of
employment shall be in lieu of any severance benefits payable under any
severance plan, program, or policy of the Company to which he might otherwise
be entitled.

10.3   Notices.   All
notices, requests, demands, and other communications hereunder shall be
sufficient if in writing and shall be deemed to have been duly given if
delivered by hand or if sent by registered or certified mail to the Executive
at the last address he has filed in writing with the Company or, in the case of
the Company, at its principal offices.

10.4   Execution in Counterparts.   This
Agreement may be executed by the parties hereto in counterparts, each of which
shall be deemed to be original, but all such counterparts shall constitute one
and the same instrument, and all signatures need not appear on any one
counterpart.

10.5   Conflicting Agreements.   The
Executive hereby represents and warrants to the Company that his entering into
this Agreement, and the obligations and duties undertaken by him hereunder,
will not conflict with, constitute a breach of, or otherwise violate the terms
of, any other employment or other agreement to which he is a party, except to
the extent any such conflict, breach, or violation under any such agreement has
been disclosed to the Board in writing in advance of the signing of this
Agreement.

Notwithstanding any other provisions of this Agreement
to the contrary, if there is any inconsistency between the terms and provisions
of this Agreement and the terms and provisions of Company-sponsored
compensation and welfare plans and programs, the Agreement’s terms and
provisions shall completely supersede and replace the conflicting terms of the
Company-sponsored compensation and welfare plans and programs, where
applicable.

10.6   Severability.   In
the event any provision of this Agreement shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts
of the Agreement, and the Agreement shall be construed and enforced as if the
illegal or invalid provision had not been included. Further, the captions of
this Agreement are not part of the provisions hereof and shall have no force
and effect.

Notwithstanding any other provisions of this Agreement
to the contrary, the Company shall have no obligation to make any payment to
the Executive hereunder to the extent, but only to the extent, that such
payment is prohibited by the terms of any final order of a federal or state
court or regulatory agency of competent jurisdiction; provided, however, that
such an order shall not affect, impair, or invalidate any provision of this
Agreement not expressly subject to such order.

10.7   Modification.   No
provision of this Agreement may be modified, waived, or discharged unless such
modification, waiver, or discharge is agreed to in writing and signed by the
Executive and by a member of the Board, as applicable, or by the respective
parties’ legal representatives or successors.

10.8   Applicable Law.   To
the extent not preempted by the laws of the United States, the laws of Delaware
shall be the controlling law in all matters relating to this Agreement without
giving effect to principles of conflicts of laws.

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IN
WITNESS WHEREOF, the parties have executed this Agreement on this                 
day of March, 2007.

	
  

  	
  ATTEST

  	
   

  	
  MUELLER
  WATER PRODUCTS, INC.

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Chairman of the Board,
  President and

  Chief Executive Officer

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Executive

  
										

 

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