Document:

Exhibit 10.2
DEFERRED STOCK AWARD AGREEMENT
FOR COMPANY EMPLOYEES
UNDER THE WATTS WATER TECHNOLOGIES, INC.
THIRD AMENDED AND RESTATED 2004 STOCK INCENTIVE PLAN
The award of deferred Class A Common Stock (“Deferred Stock”) of Watts Water Technologies, Inc. (the “Company”) made to the grantee (the “Grantee”), as set forth in the Deferred Stock award notification provided through the Grantee’s stock plan account on the E*TRADE website, is subject to the provisions of the Company’s Third Amended and Restated 2004 Stock Incentive Plan (the “Plan”) and the terms and conditions contained in this Deferred Stock Award Agreement (the “Agreement”).  By accepting the award of Deferred Stock on the E*TRADE website, the Grantee agrees to the terms and conditions of this Agreement. 
1.Nature and Acceptance of Award .  The Deferred Stock award entitles the Grantee to receive that number of shares of Class A Common Stock of the Company (“Stock”) as set forth on the E*TRADE website with respect to this award upon vesting as provided in this Agreement.  The Grantee shall have no rights to the Deferred Stock or to receive the Stock upon settlement of the Deferred Stock under this Agreement unless he or she shall have accepted the Deferred Stock award and this Agreement through the E*TRADE website.  Unless and until the shares of Stock are actually issued to the Grantee upon vesting of the Deferred Stock in accordance with this Agreement, the Grantee shall not by reason of being granted the Deferred Stock be deemed to be a shareholder of the Company or to have any other right to the Stock, except as otherwise provided in this Agreement.  Accordingly, the Grantee has no right to vote or receive dividends or any other rights as a shareholder with respect to the shares of Deferred Stock.  
2.Restrictions and Conditions.
(a)The Deferred Stock granted herein may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of by the Grantee.
(b)If the Grantee’s employment with the Company and its Subsidiaries is voluntarily or involuntarily terminated for any reason (other than death, disability or due to Normal Retirement (as defined below)) prior to vesting of the Deferred Stock granted herein, the unvested shares of Deferred Stock shall be immediately and automatically forfeited to the Company upon termination of employment, without payment of any consideration to the Grantee.  The Grantee shall have no further rights with respect to the Deferred Stock or to receive shares of Stock with respect thereto.
​

1

3.Vesting of Deferred Stock.  
(a)Unless otherwise provided in this Agreement or the Plan, the Deferred Stock shall vest in accordance with the following vesting schedule:  331⁄3% of the total number of shares of Deferred Stock shall vest on the first anniversary of the date of grant, an additional 331⁄3% of the total number of shares of Deferred Stock shall vest on the second anniversary of the date of grant, and the remaining 331⁄3% of the total number of shares of Deferred Stock shall vest on the third anniversary of the date of grant.  Each anniversary of the date of grant being a “Payment Date”.
(b)Notwithstanding the foregoing, if the Grantee’s employment is terminated by reason of death or disability (as determined by the Administrator) prior to the vesting of shares of Deferred Stock granted herein, the unvested shares of Deferred Stock held by the Grantee shall become fully vested and such date of termination will be a “Payment Date”.  
(c)If the Grantee’s employment is terminated due to Normal Retirement (as defined below) prior to the vesting of the shares of Deferred Stock granted herein, then the unvested shares of such Deferred Stock held by the Grantee shall continue to vest in accordance with the vesting schedule and be settled on each Payment Date as set forth in Section 3(a) above as if Grantee remained employed, but only if Grantee (i) remains employed with the Company through the last working day of the year in which the shares of Deferred Stock granted herein were awarded to the Grantee, (ii) has complied with the provisions of Section 9 at all times during his or her employment, (iii) continues to comply with the provisions of Section 9, and (iv) if deemed necessary by the Company to have an enforceable non-compete similar to that provided by Section 9(b), then to execute and not revoke or violate a separate Non-Competition Agreement the terms of which are substantially similar to those set forth in Section 9(b). For the avoidance of doubt, if (A) the Grantee violates the provisions of Section 9, (B) fails to execute a Non-Competition Agreement as may be requested by the Company, (C) revokes or violates any Non-Competition Agreement so executed, or (D) the obligations set forth in Section 9(b) or the Non-Competition Agreement are deemed unenforceable, then the Deferred Stock shall not continue to vest pursuant to this Section 3(c) and any unvested Deferred Stock shall be immediately and automatically forfeited to the Company without any further action required by the Company.
(d)For purposes of this Agreement, the term “Normal Retirement” shall mean any termination of the Grantee’s employment (other than a Company-initiated termination for Cause) after the date the Grantee attains age 55 and completes 10 or more years of employment or service with the Company or one of its Subsidiaries (as determined by the Administrator).  “Cause” shall mean (i) an act constituting a felony; (ii) fraud or dishonesty that results in or is likely to result in economic damage to the Company; or (iii) willful misconduct in the performance of duties.
(e)The Administrator may at any time accelerate the vesting schedule specified in this Section 3.
​

2

4.Delivery of Stock.  As soon as practicable following a Payment Date and subject to vesting under Section 3, the Company shall issue in the name of the Grantee that number of shares of Stock corresponding to this award, without any of the restrictions contained in Paragraph 2 applicable thereto. Notwithstanding anything herein to the contrary, the Company may postpone the issuance of the shares of Stock until it is satisfied that the issuance of such Stock will not violate any applicable law. The actual issuance of the shares of Stock shall be subject to the terms and conditions as the Company may establish from time to time in order to comply with applicable law.
5.Dividend Equivalents.  An account shall be established for the Grantee, to which shall be credited dividend equivalents equal to the product of (a) the number of shares of Deferred Stock subject to this award, and (b) the dividend declared on a single share of Stock.  To the extent the Grantee becomes vested in the Deferred Stock, the Grantee shall be entitled to a cash distribution of the dividend equivalents credited to his or her account at the same time as the shares of Stock are issued with respect to the Deferred Stock so vesting.
6.Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Agreement shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.
7.Limitations on Transferability.  This Agreement is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.
8.Tax Withholding.  The Grantee acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Grantee any federal, state, local or other taxes of any kind required by law to be withheld with respect to the grant or vesting of the Deferred Stock and/or payment of dividend equivalents thereon under Paragraph 5.  The Grantee shall satisfy such tax withholding obligations on the Deferred Stock by transferring to the Company, on each date on which such tax liability shall arise, such number of shares of Stock or Deferred Stock as have a Fair Market Value equal to the amount of the Company’s tax withholding obligation in connection with such shares of Stock or Deferred Stock.  Such delivery of Stock or Deferred Stock to the Company shall be deemed to happen automatically, without any action required on the part of the Grantee, and the Company is hereby authorized to take such actions as are necessary to effect such delivery.  With respect to the dividend equivalents, the Grantee authorizes the Company to withhold from any cash payments thereof, the amount of all required tax withholdings.  
​

3

9.Non-Solicitation, Non-Disparagement and Non-Competition for Retiree Vesting.
(a)In consideration of the Company entering into this Agreement with the Grantee, the Grantee agrees that throughout his or her term of employment with the Company and for a period of twelve (12) months following the Grantee’s date of termination with the Company, the Grantee shall not, directly or indirectly: (i) divert or attempt to divert or assist others in diverting any business of the Company by soliciting, contacting or communicating with any customer or supplier of the Company with whom the Grantee has direct or indirect contact or upon termination of employment has had direct or indirect contact during the twelve (12) month period immediately preceding the Grantee’s date of termination with the Company; (ii) solicit, induce, attempt to induce or assist others in attempting to induce any employee of or other service provider to the Company with whom the Grantee has worked or had material contact with, during the twelve (12) month period immediately preceding the termination of the Grantee’s employment, to leave the employment of the Company or a subsidiary of the Company or to accept employment or affiliation with any other company or firm of which the Grantee becomes an employee, owner, partner or consultant; or (iii) make any statements, orally or in writing, cause to be published or in any way disseminate any information concerning the Company or any subsidiaries of the Company concerning the Company’s business, business operations or business practices that in any way, in form or substance, harms, disparages or otherwise casts an unfavorable light upon the Company or any subsidiaries of the Company or upon any of their reputations or standing in the business community or the community as a whole.  The provisions of this Section 9 do not prohibit the Grantee from communicating with, cooperating with, or providing information to the Securities and Exchange Commission, the Department of Labor, the EEOC, the NLRB, or any government agency that might be interpreted as disparaging.    In consideration of the Company entering into this Agreement with the Grantee, the Grantee further agrees that throughout his or her term of employment with the Company, except on behalf of the Company, the Grantee shall not, directly or indirectly, engage in or participate in, or prepare to engage in or participate in, the Business, or provide services in any capacity to any person or entity engaged in or preparing to engage in the Business in competition with the Company. For purposes of this Section 9 and each subpart, “Company” shall include the Company and any parent company, subsidiary, or affiliated company of the Company and any of their respective successors or assigns.
(b)In consideration of the continued vesting of the Grantee’s Deferred Stock pursuant to Section 3(c) above, the Grantee agrees that throughout his or her term of employment with the Company and following the Grantee’s termination with the Company due to Normal Retirement through the last Payment Date provided in Section 3(a), the Grantee will not, directly or indirectly, either through any form of ownership (other than ownership of securities of a publicly-held corporation of which the Grantee owns, or has real or contingent rights to own, two percent (2%) or less of any class of outstanding securities) or as a director, officer, principal, agent, employee, employer, advisor, consultant, investor, member, partner or in any other individual or representative capacity whatsoever, either for Grantee’s own benefit or for the benefit of any other person, (i) engage or participate in, or prepare to engage in or participate in, the Business or (ii) manage, join, operate, lend to, invest in, control, or render any services to any person or entity engaged in or preparing to engage in the Business, in each case (i) and (ii) in competition with the Company anywhere in the Restricted Territory.  For purposes of this Agreement, the “Restricted Territory” means each city, county, state, territory and country in 

4

which (i) Grantee provided services or had a material presence or influence at any time during the last two (2) years of Grantee’s employment with the Company or (ii) the Company is engaged in or is preparing to engage in the Business as of the date of Grantee’s termination of employment, which Grantee acknowledges includes the Americas, Europe, and Asia-Pacific, Middle East and Africa.  For purposes of this Agreement, “Business” means the business of (i) supplying products and systems that manage and conserve the flow of fluids and energy into, through and out of buildings in the residential and commercial markets, (ii)  designing, fabricating and distributing residential and commercial flow control products, HVAC and gas products, drainage and water re-use products as well as water quality products, and (iii) any other business the Company is engaged in or preparing to engage in as of the date of Grantee’s termination of employment.
(c)The Grantee and the Company acknowledge and mutually agree that the continued vesting of the Deferred Stock pursuant to Section 3(c) above following the Grantee’s termination is sufficient consideration to enforce the non-competition provision set forth in Section 9(b) above.  The non-competition provision set forth in Section 9(b) shall take effect on the date Grantee accepts this Agreement through the E*TRADE website.
10.Compensation Recovery Policy.  Notwithstanding anything contained in this Agreement to the contrary, all Deferred Stock awarded under this Agreement, and any shares of Class A Common Stock issued upon settlement hereunder shall be subject to forfeiture or repayment pursuant to the terms of the Company’s Compensation Recovery Policy as in effect from time to time, including any amendments necessary for compliance with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
11.Miscellaneous.
(a)Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Grantee at the address set forth below, or in either case at such other address as one party may subsequently furnish to the other party in writing.
(b)This Agreement does not confer upon the Grantee any rights with respect to continuation of employment by the Company or any Subsidiary. Further, Grantee understands and agrees that Grantee’s employment with the Company is and shall remain at-will. Nothing in this Agreement is intended to modify the at-will nature of Grantee’s employment relationship with the Company. 
(c)Grantee acknowledges that Grantee has the right to consult with independent legal counsel prior to accepting this Agreement and that Grantee either consulted, or on Grantee’s own volition chose not to consult, with such counsel.

5Document

Exhibit 4.2
DESCRIPTION OF CAPITAL STOCK 

General

Our authorized capital stock consists of 130,000,000 shares of common stock, par value $0.0001 per share, and 20,000,000 shares of preferred stock, par value $0.0001 per share.

The following description of our common stock summarizes its material terms and provisions, but it is not complete. For the complete terms of our common stock, please refer to our certificate of incorporation and our bylaws that are incorporated by reference into the Annual Report on Form 10-K of which this exhibit is a part.

Common Stock

As of December 31, 2020, there were 21,168,240 shares of common stock outstanding. The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. The holders of common stock are not entitled to cumulative voting rights with respect to the election of directors, and as a consequence, minority stockholders will not be able to elect directors on the basis of their votes alone.

Subject to preferences that may be applicable to any then outstanding shares of preferred stock, holders of common stock are entitled to receive ratably such dividends as may be declared by the board of directors out of funds legally available therefor. In the event of a liquidation, dissolution or winding up of us, holders of the common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any then outstanding shares of preferred stock. Holders of common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to our common stock. All outstanding shares of common stock are fully paid and non-assessable. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any of our outstanding preferred stock.

Listing

Our common stock is listed on the Nasdaq Global Select Market under the symbol “IMUX.”

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC (“AST”). The transfer agent and registrar’s address is 6201 15th Avenue, Brooklyn, New York 11219.

Dividends

We have not declared any cash dividends on our common stock since inception and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

Possible Anti-Takeover Effects of Delaware Law and our Charter Documents

Some provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws could make the following transactions more difficult: an acquisition of us by means of a tender offer, an acquisition of us by means of a proxy contest or otherwise, or the removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interest, including transactions which provide for payment of a premium over the market price for our shares.

These provisions, summarized below, are intended to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of the increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.

Delaware Anti-Takeover Statute

We are subject to Section 203 of the Delaware General Corporation Law (the “DGCL”), an anti-takeover statute. In general, Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the time the person became an interested stockholder, unless the business combination or the acquisition of shares that resulted in a stockholder becoming an interested stockholder is approved in a prescribed manner. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years prior to the determination of interested stockholder status did own) 15% or more of a corporation’s voting stock. The existence of this provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by our stockholders.

Undesignated Preferred Stock.

The ability of our board of directors, without action by the stockholders, to issue up to 20,000,000 shares of undesignated preferred stock with voting or other rights or preferences as designated by our board of directors could impede the success of any attempt to effect a change in control of us. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of our company.

Requirements for Advance Notification of Stockholder Nominations and Proposals.

Our amended and restated bylaws establish advance notice procedures with respect to stockholder proposals to be brought before a stockholder meeting and the nomination of candidates for election as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors.

Elimination of Stockholder Action by Written Consent.

Our amended and restated certificate of incorporation eliminates the right of stockholders to act by written consent without a meeting.

Staggered Board.

Our board of directors is divided into three classes. The directors in each class will serve for a three-year term, one class being elected each year by our stockholders. This system of electing and removing directors may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of us, because it generally makes it more difficult for stockholders to replace a majority of the directors.

Removal of Directors.

Our amended and restated certificate of incorporation provides that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of the holders of at least two-thirds in voting power of the outstanding shares of stock entitled to vote in the election of directors.

Stockholders Not Entitled to Cumulative Voting.

Our amended and restated certificate of incorporation does not permit stockholders to cumulate their votes in the election of directors. Accordingly, the holders of a majority of the outstanding shares of our common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they choose, other than any directors that holders of our preferred stock may be entitled to elect.

Authorized but Unissued Shares

Our authorized but unissued shares of common stock and preferred stock will be available for future issuance without stockholder approval. We may use additional shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions and as employee compensation. The existence of authorized but unissued shares of undesignated preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary 

obligations, our board of directors were to determine that a takeover proposal is not in the best interests of us or our stockholders, our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the proposed acquirer, stockholder or stockholder group. The rights of holders of our common stock described above will be subject to, and may be adversely affected by, the rights of any preferred stock that we may designate and issue in the future. The issuance of shares of undesignated preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring or preventing a change in control of us.

Director Liability

Our bylaws limit the extent to which our directors are personally liable to us and our stockholders, to the fullest extent permitted by the DGCL. The inclusion of this provision in our bylaws may reduce the likelihood of derivative litigation against directors and may discourage or deter stockholders or management from bringing a lawsuit against directors for breach of their duty of care.

The provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in the composition of our board and management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interest.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00347-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00347-of-00352.parquet"}]]