Document:

Exhibit
10.22

	
  FY’2007 Executive Incentive Plan

  	
  

  

 

2007

Executive Incentive Plan

	
    

   

  

 

	
  Table of Contents

  	
   

  	
   

  
	
  INTRODUCTION AND PRINCIPLES

  	
   

  	
   

  
	
  PLAN PARTICIPATION

  	
   

  	
   

  
	
  EFFECTIVE DATE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PLAN DESIGN / MEASURES, & OBJECTIVES

  	
   

  	
   

  
	
  PLAN MIX

  	
   

  	
   

  
	
  TARGET INCENTIVE BONUS

  	
   

  	
   

  
	
  PAY-OUT CALCULATION FOR CASH INCENTIVES

  	
   

  	
   

  
	
  BASIS OF MEASURES AND PAYOUT SCHEDULE

  	
   

  	
   

  
	
  OPERATIONS OFFICERS

  	
   

  	
   

  
	
  STAFF OFFICERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CALCULATION OF BONUS PAYMENTS

  	
   

  	
   

  
	
  GENERAL RULES

  	
   

  	
   

  
	
  CASH ADVANCES

  	
   

  	
   

  
	
  INCOME TAX

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TRANSFERS/NEW HIRES/TERMINATIONS

  	
   

  	
   

  
	
  TRANSFERS

  	
   

  	
   

  
	
  NEW HIRES

  	
   

  	
   

  
	
  TERMINATIONS

  	
   

  	
   

  
	
  EXCEPTIONS TO THE PLAN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OTHER TERMS

  	
   

  	
   

  
	
  ACQUISITIONS AND OTHER UNUSUAL BUSINESS
  SITUATIONS

  	
   

  	
   

  
	
  BUSINESS UNIT REVENUE/PROFIT/EXPENSES

  	
   

  	
   

  
	
  COMPANY RIGHTS

  	
   

  	
   

  

 

 

 1
 

 

 

 

	
  Section A

  	
  Introduction and Principles

  	 

	
   

  	
  The FY’07 Executive Incentive Plan
  (EIP) provides an opportunity for executives of Cintas to share in
  the company’s success. Year-end bonus awards are paid if performance measures
  are met or exceeded. 

  	 

	
   

  	
   

  	 

	
   

  	
  Please note that the EIP
  is not just an individual incentive plan but rather, the recognition of both
  individual and organizational success. 

  	 

	
   

  	
   

  	 

	
   

  	
  Every executive will have at least 50% of their
  targeted incentive bonus based on the relevant Corporate measure (profit as a
  % of sales, % of revenue growth or EPS growth). As such, we all “succeed or
  fail as One Team”.

  	 

	
   

  	
   

  	 

	
  

  	
  Plan Participation 

  
	
   

  	
  This plan applies to all Cintas Officers.

  
	
   

  	
   

  
	
  

  	
  Effective Date

  	 

	
   

  	
  This Plan year is effective from June 1, 2006 until
  the end of our fiscal year, May 31, 2007 and it supersedes all prior EIP or officer compensation plans. Cintas reserves the
  right to amend and/or adjust this plan based on the strategic needs of our
  business. Communication to our participating partners will be made in a
  timely fashion.

  	 

				

 

	
  Section B

  	
  Plan Design / Measures, & Objectives

  
	
   

  	
   

  
	
   

  	
  Plan Mix

  
	
   

  	
  Each participating officer will share in the success
  of Cintas based on three (3) different compensation vehicles; base salary,
  incentive cash bonuses, and long term incentives (i.e. restricted stock and
  stock options).

  
	
   

  	
   

  
	
   

  	
  Operations
  Officers  will be eligible for cash and
  long-term incentives (LTI) tied to Profit as a% of Sales and percent of
  Revenue Growth, and Cintas Earnings per Share (EPS) Growth.

  
	
   

  	
   

  
	
   

  	
  Staff Officers  will be eligible for
  cash and long-term incentives (LTI) tied to Cintas EPS Growth, and Individual
  Goals. 

  
	
   

  	
   

  
	
   

  	
  All Officers covered
  by the FY’07 EIP, could earn 0% up to a maximum of 200% of the cash bonus
  award depending on their overall performance against their cash incentive
  bonus objectives. Additionally, depending on the results of the LTI objectives,
  an officer could earn 0% LTI up to a maximum of 200% of the LTI award if the
  performance target is achieved.

  
	
   

  	
   

  
	
   

  	
  Target Incentive Bonus

  
	
   

  	
  The “target incentive bonus” is the total cash
  incentive amount earned at the target objectives. “Total Targeted Cash” (TTC)
  represents an individual’s base salary plus targeted cash incentives.

  
	
   

  	
   

  
	
   

  	
  Pay-Out Calculation for Cash
  Incentives

  
	
   

  	
  To receive a cash incentive bonus, the partner must
  perform at the “threshold” level (or above). The actual amount of the cash
  bonus will be calculated based upon the actual performance against the
  objectives. In the event that the actual result is between two performance
  levels, the actual amount will be calculated.

  
	
   

  	
   

  
	
   

  	
  Basis of Measures & Payout
  Schedule

  
	
   

  	
  The following charts describe the Basis of Measures,
  Objectives, and Payout Schedules for Corporate Staff and Division Officers
  annual cash bonus and LTI Awards.

  

 

 2
 

 

 

 

Operations Officers

 

Cash Incentive Bonus

 

Business Unit Profit as a % of Sales

 

	
  Weighting

  	
   

  	
  Level of Achievement

  	
   

  	
  Bonus Payout %

  	
   

  
	
  50%

  	
   

  	
  Below Threshold

  	
   

  	
  0

  	
  %

  
	
   

  	
   

  	
  Threshold

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
  Target

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
  Maximum

  	
   

  	
  200

  	
  %

  

 

Business Unit Percent of Revenue Growth

 

	
  Weighting

  	
   

  	
  Level of Achievement

  	
   

  	
  Bonus Payout %

  	
   

  
	
  50%

  	
   

  	
  Below Threshold

  	
   

  	
  0

  	
  %

  
	
   

  	
   

  	
  Threshold

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
  Target

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
  Maximum

  	
   

  	
  200

  	
  %

  

 

LTI Award

Operational Goals (Combination of Revenue Growth %
Plus Profit %) — 

Rule 35 Calculation

	
  Weighting

  	
   

  	
  Level of Achievement

  	
   

  	
  LTI Award %

  	
   

  	 

	
  50%

  	
   

  	
  Below
  Threshold

  	
   

  	
  0%

  	
   

  
	
   

  	
   

  	
  Threshold
  to Target

  	
   

  	
  50% of target
  and then predetermined levels based on hitting performance targets

  	
   

  
	
   

  	
   

  	
  Target

  	
   

  	
  100%

  	
   

  
	
   

  	
   

  	
  Target
  to Maximum

  	
   

  	
  Predetermined
  levels based on hitting performance targets

  	
   

  
	
   

  	
   

  	
  Maximum

  	
   

  	
  200%

  	
   

  
										

 

Cintas EPS

	
  Weighting

  	
   

  	
  Level of Achievement

  	
   

  	
  LTI Award %

  	
   

  	 

	
  50%

  	
   

  	
  Below
  Threshold

  	
   

  	
  0%

  	
   

  
	
   

  	
   

  	
  Threshold
  to Target

  	
   

  	
  50% of target
  and then predetermined levels based on hitting EPS performance targets

  	
   

  
	
   

  	
   

  	
  Target

  	
   

  	
  100%

  	
   

  
	
   

  	
   

  	
  Target
  to Maximum

  	
   

  	
  Predetermined
  levels based on hitting EPS performance targets

  	
   

  
	
   

  	
   

  	
  Maximum

  	
   

  	
  200%

  	
   

  
										

 

Staff
Officers

Cash Incentive Bonus

Individual Goals 

	
  Weighting

  	
   

  	
  Level of Achievement

  	
   

  	
  Bonus Payout %

  	
   

  
	
  50%

  	
   

  	
  Does Not Meet Goals

  	
   

  	
  0

  	
  %

  
	
   

  	
   

  	
  Meets Most Goals

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
  Meets Goals

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
  Exceeds Goals

  	
   

  	
  150

  	
  %

  
	
   

  	
   

  	
  Outstanding Achievement

  	
   

  	
  200

  	
  %

  

 

Cintas EPS

 

	
  Weighting

  	
   

  	
  Level of Achievement

  	
   

  	
  Bonus Payout %

  	
   

  
	
  50%

  	
   

  	
  Below Threshold

  	
   

  	
  0

  	
  %

  
	
   

  	
   

  	
  Threshold

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
  Target

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
  Maximum

  	
   

  	
  200

  	
  %

  

 

 3
 

 

LTI Award

Individual Goals

	
  Weighting

  	
   

  	
  Level of Achievement

  	
   

  	
  LTI Award %

  	
   

  
	
  50%

  	
   

  	
  Does Not Meet

  	
   

  	
  0%

  	
   

  
	
   

  	
   

  	
  Meets Most Goals

  	
   

  	
  50% and then
  predetermined levels based on hitting performance targets

  	
   

  
	
   

  	
   

  	
  Meets Goals

  	
   

  	
  100%

  	
   

  
	
   

  	
   

  	
  Exceeds Goals

  	
   

  	
  Predetermined levels
  based on hitting performance targets

  	
   

  
	
   

  	
   

  	
  Outstanding Achievement

  	
   

  	
  200%

  	
   

  

 

Cintas EPS

 

	
  Weighting

  	
   

  	
  Level of Achievement

  	
   

  	
  LTI Award %

  	
   

  
	
  50%

  	
   

  	
  Below
  Threshold

  	
   

  	
  0%

  	
   

  
	
   

  	
   

  	
  Threshold
  to Target

  	
   

  	
  50% and then
  predetermined levels based on hitting EPS performance targets

  	
   

  
	
   

  	
   

  	
  Target

  	
   

  	
  100%

  	
   

  
	
   

  	
   

  	
  Target
  to Maximum

  	
   

  	
  Predetermined
  levels based on hitting EPS performance targets

  	
   

  
	
   

  	
   

  	
  Maximum

  	
   

  	
  200%

  	
   

  

 

	
  Section C

  	
  Calculation of Bonus Payments

  
	
   

  	
   

  
	
   

  	
  General Rules 

  
	
   

  	
  Bonus calculations will be made using actual
  results, subject to adjustment at the discretion of the CEO to exclude items
  that are not operational and therefore do not reflect the year’s performance
  against objectives, such as accounting principle changes or revenue from an
  acquisition that was not in the business plan. (See Section E for more
  detail).

  
	
   

  	
   

  
	
   

  	
  In addition, any automatic payroll deductions
  elected by the partners (e.g. 401K, or company loan repayments as the CEO
  deems necessary, etc) will be deducted from their bonus. 

  
	
   

  	
   

  
	
   

  	
  In the unlikely event the Partner receives an
  overpayment of their award they are responsible for reimbursing Cintas the
  amount of the overpayment.

  
	
   

  	
   

  
	
   

  	
  Cash Advances 

  
	
   

  	
  No cash advances will be paid against EIP awards.

  
	
   

  	
   

  
	
   

  	
  Income Tax 

  
	
   

  	
  Cash payments are treated as ordinary income, or
  according to local legislation, and are subject to withholding for all
  applicable taxes.

  
	
   

  	
   

  
	
  Section D

  	
  Transfers/New Hires/Terminations

  
	
   

  	
   

  
	
   

  	
  Transfers 

  
	
   

  	
  The partner’s Comp Plan will be changed to properly
  incentivise the partner for their new responsibility, at the discretion of
  the CEO. Any final award calculation will be calculated by taking into
  account the time spent under each plan. of Human Resources. Any bonus will be
  paid on the normal payment cycle on the designated pay date.

  
	
   

  	
   

  
	
   

  	
  If a partner is transferred from another incentive
  program or non-EIP-eligible position to an EIP-eligible role, or vice versa, the partner will be
  aligned to the appropriate measures for the months spent in the eligible
  position.In the case of a performance based demotion to a non-eligible
  position, any bonus earned up to the date of demotion will be payable at the
  discretion of the Officer in charge with approval from the VP 

  

 

 4
 

 

 

	
  

  	
  New Hires 

  
	
   

  	
  EIP eligible Officers hired
  during the year may receive a pro-rated award or may be given a special plan
  for the remainder of the fiscal year as determined by the CEO.

  
	
   

  	
   

  
	
   

  	
  Terminations

  
	
   

  	
  The Company will pay the partner a pro rata share of
  the bonus earned from the beginning of the fiscal year until the point of the
  employee’s termination in the event that the employee retires, or their
  position is eliminated. If the partner is terminated because of poor
  performance, any bonus to be paid will be determined at the sole discretion
  of the Company, using its best judgment, taking all factors into consideration
  so as to be fair to both the partner and the Company. In the event that the
  partner leaves the Company during the year for any reason, or in the event
  the partner is terminated because of dishonesty, insubordination, or gross neglect,
  etc., the partner shall not be entitled to any of the bonus earned up to the
  point of termination.

  
	
   

  	
   

  
	
   

  	
  Exceptions to the plan

  
	
   

  	
  In general, no exceptions are made to the plan. If
  special circumstances cause the Annual Bonus or LTI alignment to be unfair to
  a particular individual or the Company, an exception request must be approved
  by the CEO who may approve the request at his discretion.

  
	
   

  	
   

  
	
  Section E

  	
  Other Terms

  
	
   

  	
   

  
	
   

  	
  Acquisitions and Other Unusual
  Business Situations

  
	
   

  	
  The purpose of the Incentive Plan is to reward
  individuals for normal operating profits earned within their area of
  responsibility. Any incidences that abnormally inflate the profits of an
  operation such as the purchase or the sale of rental volume, the unusual sale
  of operating assets, or any other abnormal operational situation that causes
  the profits of the individual operation to abnormally increase, the Plan
  shall be adjusted so as to avoid any inequitable results to the partner or
  the Company.

  
	
   

  	
   

  
	
   

  	
  Business Unit Revenue/Profit/Expenses

  
	
   

  	
  All financial numbers related to business
  unit/Cintas performance will be determined by the Cintas Accounting
  Department with the approval of our CFO and CEO. In cases of dispute, the
  Cintas Accounting Department figures will govern performance as it relates to
  calculating all bonus plan payouts. 

  
	
   

  	
   

  
	
   

  	
  Company Rights

  
	
   

  	
  Even though it is the
  intention of the Company to continue this Plan on an ongoing basis, the Company
  does reserve the right to alter the program as it sees fit, from year to
  year.

  

 

 

 5Exhibit
10.1

INDEMNIFICATION
AGREEMENT

This Agreement
made and entered into this ___ day of ________ ____, (the “Agreement”), by and
between Watts Water Technologies, Inc., a Delaware corporation (the “Company,”
which term shall include, where appropriate, any Entity (as hereinafter
defined) controlled directly or indirectly by the Company) and ____________
(the “Indemnitee”):

WHEREAS, it is
essential to the Company that it be able to retain and attract as directors and
officers the most capable persons available;

WHEREAS, increased
corporate litigation has subjected directors and officers to litigation risks
and expenses, and the limitations on the availability of directors and officers
liability insurance have made it increasingly difficult for the Company to
attract and retain such persons;

WHEREAS, the
Company’s Certificate of Incorporation and By-laws (the “Certificate of
Incorporation” and “By-laws,” respectively) require it to indemnify its directors and officers to the fullest
extent permitted by law and permit it to make other indemnification
arrangements and agreements;

WHEREAS, the Company desires to provide Indemnitee
with specific contractual assurance of Indemnitee’s rights to full
indemnification against litigation risks and expenses (regardless, among other
things, of any amendment to or revocation of the Certificate of Incorporation
or By-laws or any change in the ownership of the Company or the
composition of its Board of Directors);

WHEREAS, the
Company intends that this Agreement provide Indemnitee with greater protection
than that which is provided by the Company’s Certificate of Incorporation and
By-laws; and

WHEREAS,
Indemnitee is relying upon the rights afforded under this Agreement in
continuing as a director or
officer of the Company.

NOW, THEREFORE, in
consideration of the promises and the covenants contained herein, the Company
and Indemnitee do hereby covenant and agree as follows:

1.             Definitions.

(a)           “Corporate Status”
describes the status of a person who is serving or has served (i) as a
director or officer of the Company, (ii) in
any capacity with respect to any employee benefit plan of the Company, or
(iii) as a director, partner, trustee, officer, employee, or agent of any
other Entity at the request of the Company. 
For purposes of subsection (iii) of this Section 1(a), if Indemnitee is serving or has served as a director, partner, trustee,
officer, employee or agent of a Subsidiary, Indemnitee shall be deemed to be
serving at the request of the Company.

 

 

(b)           “Entity” shall mean
any corporation, partnership, limited liability company, joint venture, trust,
foundation, association, organization or other legal entity.

(c)           “Expenses” shall
mean all fees, costs and expenses incurred by Indemnitee in connection with any
Proceeding (as defined below), including, without limitation, attorneys’ fees,
disbursements and retainers (including, without limitation, any such fees,
disbursements and retainers incurred by Indemnitee pursuant to Sections 10
and 11(c) of this Agreement), fees and disbursements of expert witnesses,
private investigators and professional advisors (including, without limitation,
accountants and investment bankers), court costs, transcript costs, fees of
experts, travel expenses, duplicating, printing and binding costs, telephone
and fax transmission charges, postage, delivery services, secretarial services,
and other disbursements and expenses.

(d)           “Indemnifiable
Expenses,” “Indemnifiable Liabilities” and “Indemnifiable Amounts” shall have
the meanings ascribed to those terms in Section 3(a) below.

(e)           “Liabilities” shall
mean judgments, damages, liabilities, losses, penalties, excise taxes, fines
and amounts paid in settlement.

(f)            “Proceeding” shall
mean any threatened, pending or completed claim, action, suit, arbitration,
alternate dispute resolution process, investigation, administrative hearing,
appeal, or any other proceeding, whether civil, criminal, administrative,
arbitrative or investigative, whether formal or informal, including a
proceeding initiated by Indemnitee pursuant to Section 10 of this
Agreement to enforce Indemnitee’s rights hereunder.

(g)           “Subsidiary” shall
mean any corporation, partnership, limited liability company, joint venture,
trust or other Entity of which the Company owns (either directly or through or
together with another Subsidiary of the Company) either (i) a general partner,
managing member or other similar interest or (ii) (A) 50% or more of the voting
power of the voting capital equity interests of such corporation, partnership,
limited liability company, joint venture or other Entity, or (B) 50% or more of
the outstanding voting capital stock or other voting equity interests of such
corporation, partnership, limited liability company, joint venture or other
Entity.

 

 

2.             Services of Indemnitee.  In consideration of the Company’s covenants
and commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director and/or officer of the Company. 
However, this Agreement shall not impose any obligation on Indemnitee or
the Company to continue Indemnitee’s service to the Company beyond any period
otherwise required by law or by other agreements or commitments of the parties,
if any.

3.             Agreement to Indemnify.  The
Company agrees to indemnify Indemnitee as follows:

(a)           Proceedings Other
Than By or In the Right of the Company. 
Subject to the exceptions contained in Section 4(a) below, if Indemnitee
was or is a party or is threatened to be made a party to any Proceeding (other
than an action by or in the right of the Company) by reason of Indemnitee’s
Corporate Status, Indemnitee shall be indemnified by the Company against all
Expenses and Liabilities incurred or paid by Indemnitee in connection with such
Proceeding (referred to herein as “Indemnifiable Expenses” and “Indemnifiable
Liabilities,” respectively, and collectively as “Indemnifiable Amounts”).

(b)           Proceedings By or
In the Right of the Company.  Subject
to the exceptions contained in Section 4(b) below, if Indemnitee was or is a
party or is threatened to be made a party to any Proceeding by or in the right
of the Company by reason of Indemnitee’s Corporate Status, Indemnitee shall be
indemnified by the Company against all Indemnifiable Expenses.

(c)           Conclusive
Presumption Regarding Standard of Care. 
In making any determination required to be made under Delaware law with
respect to entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee submitted a request therefor
in accordance with Section 5 of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that presumption.

4.             Exceptions
to Indemnification.  Indemnitee shall
be entitled to indemnification under Sections 3(a) and 3(b) above in all
circumstances other than with respect to any specific claim, issue or matter
involved in the Proceeding out of which Indemnitee’s claim for indemnification
has arisen, as follows:

(a)           Proceedings Other
Than By or In the Right of the Company. 
If indemnification is requested under Section 3(a) and it has been
finally adjudicated by a court of competent jurisdiction that, in connection
with such specific claim, issue or matter, Indemnitee failed to act (i) in good
faith and (ii) in a manner 

 

 

Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, or, with respect to any criminal Proceeding, Indemnitee
had reasonable cause to believe that Indemnitee’s conduct was unlawful,
Indemnitee shall not be entitled to payment of Indemnifiable Amounts hereunder.

(b)           Proceedings By or
In the Right of the Company.  If
indemnification is requested under Section 3(b) and

(i) it has been finally adjudicated by a court of
competent jurisdiction that, in connection with such specific claim, issue or
matter, Indemnitee failed to act (A) in good faith and (B) in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, Indemnitee shall not be entitled to payment of Indemnifiable
Expenses hereunder; or

(ii) it has been finally adjudicated by a court of
competent jurisdiction that Indemnitee is liable to the Company with respect to
such specific claim, Indemnitee shall not be entitled to payment of
Indemnifiable Expenses hereunder with respect to such claim, issue or matter
unless the Court of Chancery or another court in which such Proceeding was
brought shall determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnification for such Indemnifiable
Expenses which such court shall deem proper; or

(iii) it has been finally adjudicated by a court of
competent jurisdiction that Indemnitee is liable to the Company for an
accounting of profits made from the purchase or sale by the Indemnitee of
securities of the Company pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, the rules and regulations promulgated
thereunder and amendments thereto or similar provisions of any federal, state
or local statutory law, Indemnitee shall not be entitled to payment of
Indemnifiable Expenses hereunder.

(c)           Insurance
Proceeds.  To the extent payment is
actually made to the Indemnitee under a valid and collectible insurance policy
in respect of Indemnifiable Amounts in connection with such specific claim,
issue or matter, Indemnitee shall not be entitled to payment of Indemnifiable
Amounts hereunder except in respect of any excess beyond the amount of payment
under such insurance.

 

 

5.             Procedure
for Payment of Indemnifiable Amounts. 
Indemnitee shall submit to the Company a written request specifying the Indemnifiable
Amounts for which Indemnitee seeks payment under Section 3 of this
Agreement and the basis for the claim. 
The Company shall pay such Indemnifiable Amounts to Indemnitee within
sixty (60) calendar days of receipt of the request.  At the request of the Company, Indemnitee
shall furnish such documentation and information as are reasonably available to
Indemnitee and necessary to establish that Indemnitee is entitled to
indemnification hereunder.

6.             Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding
any other provision of this Agreement, and without limiting any such provision,
to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a
party to and is successful, on the merits or otherwise, in any Proceeding,
Indemnitee shall be indemnified against all Expenses reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection therewith.  If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee against all Expenses reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved
claim, issue or matter.  For purposes of
this Agreement, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, by reason of settlement,
judgment, order or otherwise, shall be deemed to be a successful result as to
such claim, issue or matter.

7.             Effect of
Certain Resolutions.  Neither the
settlement or termination of any Proceeding nor the failure of the Company to
award indemnification or to determine that indemnification is payable shall
create a presumption that Indemnitee is not entitled to indemnification
hereunder.  In addition, the termination
of any proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent shall not create a presumption that Indemnitee
did not act in good faith and in a manner which Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company or, with respect
to any criminal Proceeding, had reasonable cause to believe that Indemnitee’s
action was unlawful.

8.             Agreement to
Advance Expenses; Undertaking.  The
Company shall advance all Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding, including a Proceeding by or in the right of
the Company, in which Indemnitee is involved by reason of such Indemnitee’s
Corporate Status within ten (10) calendar days after the receipt by the Company
of a written statement from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such
Proceeding.  To the extent required by
Delaware law, Indemnitee hereby undertakes to repay any and all of the amount
of Indemnifiable Expenses paid to Indemnitee if it is finally determined by a
court of competent jurisdiction that Indemnitee is not entitled under this
Agreement to indemnification with respect to such Expenses.  This undertaking is an unlimited general
obligation of Indemnitee.

9.             Procedure for
Advance Payment of Expenses. 
Indemnitee shall submit to the Company a written request specifying the
Indemnifiable Expenses for which Indemnitee seeks an advancement under Section
8 of this Agreement, together with documentation evidencing that Indemnitee has
incurred such Indemnifiable Expenses. 
Payment of Indemnifiable Expenses under Section 8 shall be made no later
than ten (10) calendar days after the Company’s receipt of such request.

 

 

10.          Remedies of
Indemnitee.

(a)           Right to Petition
Court.  In the event that Indemnitee
makes a request for payment of Indemnifiable Amounts under Sections 3
and 5 above or a request for an advancement of Indemnifiable Expenses
under Sections 8 and 9 above and the Company fails to make such payment or
advancement in a timely manner pursuant to the terms of this Agreement,
Indemnitee may petition the Court of Chancery to enforce the Company’s
obligations under this Agreement.

(b)           Burden of Proof.  In any judicial proceeding brought under
Section 10(a) above, the Company shall have the burden of proving that
Indemnitee is not entitled to payment of Indemnifiable Amounts hereunder.

(c)           Expenses.  The Company agrees to reimburse Indemnitee in
full for any Expenses incurred by Indemnitee in connection with investigating,
preparing for, litigating, defending or settling any action brought by
Indemnitee under Section 10(a) above, or in connection with any claim or
counterclaim brought by the Company in connection therewith, whether or not
Indemnitee is successful in whole or in part in connection with any such
action.

(d)           Failure to Act
Not a Defense.  The failure of the
Company (including its Board of Directors or any committee thereof, independent
legal counsel, or stockholders) to make a determination concerning the
permissibility of the payment of Indemnifiable Amounts or the advancement of
Indemnifiable Expenses under this Agreement shall not be a defense in any
action brought under Section 10(a) above, and shall not create a
presumption that such payment or advancement is not permissible.

11.          Defense of the
Underlying Proceeding.

(a)           Notice by
Indemnitee.  Indemnitee agrees to
notify the Company promptly upon being served with any summons, citation,
subpoena, complaint, indictment, information, or other document relating to any
Proceeding which may result in the payment of Indemnifiable Amounts or the
advancement of Indemnifiable Expenses hereunder; provided, however, that the
failure to give any such notice shall not disqualify Indemnitee from the right,
or otherwise affect in any manner any right of Indemnitee, to receive payments
of Indemnifiable Amounts or advancements of Indemnifiable Expenses unless the
Company’s ability to defend in such Proceeding is materially and adversely
prejudiced thereby.

 

 

(b)           Defense by
Company.  Subject to the provisions
of the last sentence of this Section 11(b) and of Section 11(c) below, the
Company shall have the right to defend Indemnitee in any Proceeding which may
give rise to the payment of Indemnifiable Amounts hereunder; provided, however
that the Company shall notify Indemnitee of any such decision to defend within
ten (10) calendar days of receipt of notice of any such Proceeding under
Section 11(a) above.  The Company shall
not, without the prior written consent of Indemnitee, consent to the entry of
any judgment against Indemnitee or enter into any settlement or compromise which
(i) includes an admission of fault of Indemnitee or (ii) does not include, as
an unconditional term thereof, the full release of Indemnitee from all
liability in respect of such Proceeding, which release shall be in form and
substance reasonably satisfactory to Indemnitee.  This Section 11(b) shall not apply to a
Proceeding brought by Indemnitee under Section 10(a) above or pursuant to
Section 19 below.

(c)           Indemnitee’s
Right to Counsel.  Notwithstanding
the provisions of Section 11(b) above, if in a Proceeding to which Indemnitee
is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee
reasonably concludes that he or she may have separate defenses or counterclaims
to assert with respect to any issue which may not be consistent with the position
of other defendants in such Proceeding, (ii) a conflict of interest or
potential conflict of interest exists between Indemnitee and the Company, or
(iii) if the Company fails to assume the defense of such proceeding in a timely
manner, Indemnitee shall be entitled to be represented by separate legal
counsel of Indemnitee’s choice at the expense of the Company.  In addition, if the Company fails to comply
with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any action, suit or proceeding to deny or to
recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s
choice, at the expense of the Company, to represent Indemnitee in connection
with any such matter.

12.          Representations
and Warranties of the Company.  The
Company hereby represents and warrants to Indemnitee as follows:

(a)           Authority.  The Company has all necessary power and
authority to enter into, and be bound by the terms of, this Agreement, and the
execution, delivery and performance of the undertakings contemplated by this
Agreement have been duly authorized by the Company.

(b)           Enforceability.  This Agreement, when executed and delivered
by the Company in accordance with the provisions hereof, shall be a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting the enforcement of creditors’ rights generally.

 

 

13.          Insurance.  For a period of six (6) years following the
date on which Indemnitee no longer serves as a director, officer or employee of
the Company or any Subsidiary, and for such longer period, if any, for which
Indemnitee may be subject to a Proceeding by reason of Indemnitee’s Corporate
Status, the Company (i) shall maintain a policy or policies of insurance with
one or more reputable insurance companies providing the Indemnitee with
coverage in an amount not less than, and of a type and scope not materially
less favorable to Indemnitee than, the directors’ and officers’ liability
insurance coverage presently maintained by the Company, (ii) shall pay on a
timely basis all premiums on such insurance and (iii) shall provide such
notices and renewals in a complete and timely manner and take such other
actions as may be required in order to keep such insurance in full force and
effect.  In all policies of director and
officer liability insurance, Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee the same rights and benefits as are accorded to
the most favorably insured of the Company’s officers and directors.

14.          Contract Rights
Not Exclusive.  The rights to payment
of Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by
this Agreement shall be in addition to, but not exclusive of, any other rights
which Indemnitee may have at any time under applicable law, the Company’s
Certificate of Incorporation or By-laws, or any other agreement, vote of
stockholders or directors (or a committee of directors), or otherwise, both as
to action in Indemnitee’s official capacity and as to action in any other
capacity as a result of Indemnitee’s serving as a director or officer of the Company.

15.          Successors.  This Agreement shall be (a) binding upon all
successors and assigns of the Company (including any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the heirs,
personal representatives, executors and administrators of Indemnitee.  In the event that the Company or any of its
successors or assigns (i) consolidates with or merges into any other person or
entity and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any person or entity, then, and in each
such case, proper provision shall be made so that the successors and assigns of
the Company assume the obligations of the Company under this Agreement.  This Agreement shall continue for the benefit
of Indemnitee and such heirs, personal representatives, executors and
administrators after Indemnitee has ceased to have Corporate Status.

16.          Subrogation.  In the event of any payment of Indemnifiable
Amounts under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of contribution or recovery of Indemnitee
against other persons, and Indemnitee shall take, at the request of the
Company, all reasonable action necessary to secure such rights, including the
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

17.          Change in Law.  To the extent that a change in Delaware law
(whether by statute or judicial decision) shall permit broader indemnification
or advancement of expenses than is 

 

 

provided under the terms of the By-laws and this
Agreement, Indemnitee shall be entitled to such broader indemnification and
advancements, and this Agreement shall be deemed to be amended to such extent.

18.          Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement, or any clause
thereof, shall be determined by a court of competent jurisdiction to be
illegal, invalid or unenforceable, in whole or in part, such provision or
clause shall be limited or modified in its application to the minimum extent
necessary to make such provision or clause valid, legal and enforceable, and
the remaining provisions and clauses of this Agreement shall remain fully
enforceable and binding on the parties.

19.          Indemnitee as
Plaintiff.  Except as provided in
Section 10(c) of this Agreement and in the next sentence, Indemnitee shall not
be entitled to payment of Indemnifiable Amounts or advancement of Indemnifiable
Expenses with respect to any Proceeding brought by Indemnitee against the
Company, any Entity which it controls, any director or officer thereof, or any
third party, unless the Board of Directors of the Company has consented to the
initiation of such Proceeding.  This
Section shall not apply to counterclaims or affirmative defenses asserted by Indemnitee
in an action brought against Indemnitee.

20.          Modifications and
Waiver.  Except as provided in
Section 17 above with respect to changes in Delaware law which broaden the
right of Indemnitee to be indemnified by the Company, no supplement, modification
or amendment of this Agreement shall be binding unless executed in writing by
each of the parties hereto.  No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions of this Agreement (whether or not similar), nor
shall such waiver constitute a continuing waiver.

21.          General Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:

 

 

(i)            If to Indemnitee, to:

________________________

________________________

________________________

________________________

(ii)           If to the Company, to:

Watts Water Technologies,
Inc.

815 Chestnut Street

North Andover, MA 01845

Facsimile: (978) 688-2976

Attention:

or to such other address
as may have been furnished in the same manner by any party to the others.

22.          Governing Law;
Consent to Jurisdiction; Service of Process.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to its rules of conflict of laws.  Each
of the Company and the Indemnitee hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the Court of Chancery of
the State of Delaware and the courts of the United States of America located in
the State of Delaware (the “Delaware Courts”) for any litigation arising out of
or relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any litigation relating thereto except in such courts),
waives any objection to the laying of venue of any such litigation in the
Delaware Courts and agrees not to plead or claim in any Delaware Court that
such litigation brought therein has been brought in an inconvenient forum.  Each of the parties hereto agrees, (a) to the
extent such party is not otherwise subject to service of process in the State
of Delaware, to appoint and maintain an agent in the State of Delaware as such
party’s agent for acceptance of legal process, and (b) that service of process
may also be made on such party by prepaid certified mail with a proof of
mailing receipt validated by the United States Postal Service constituting
evidence of valid service.  Service made
pursuant to (a) or (b) above shall have the same legal force and effect as if
served upon such party personally within the State of Delaware.  For purposes of implementing the parties’
agreement to appoint and maintain an agent for service of process in the State
of Delaware, each such party does hereby appoint The Corporation Trust Company,
1209 Orange Street, Wilmington, New Castle County, Delaware 19801, as such
agent and each such party hereby agrees to complete all actions necessary for
such appointment.

23.          [Prior Agreement.  This Agreement supersedes and replaces in its
entirety the Indemnification Agreement between the Indemnitee and the Company
dated as of _______, ___.]

 

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

WATTS WATER TECHNOLOGIES, INC.

By:_________________________________

Name:

Title:

INDEMNITEE

____________________________________

Name:

 

 

Schedule
of Omitted Information

	
  Name of Indemnitee

  	
   

  	
  Date of Agreement

  	
   

  	
  Date of Prior

  Agreement (Section 23)

  	
   

  	
  Person Signing on

  behalf of the Company

  
	
  Roger A. Young

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Daniel J. Murphy, III

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Gordon W. Moran

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Kenneth J. McAvoy

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  John K. McGillicuddy

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Timothy P. Horne

  	
   

  	
  February
  10, 2004

  	
   

  	
  August
  7, 2002

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Patrick S. O’Keefe

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  William
  C. McCartney

  Chief Financial Officer

  
	
  William J. Merchant

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Lester J. Taufen

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Kenneth R. Lepage

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  William C. McCartney

  	
   

  	
  February
  10, 2004

  	
   

  	
  November
  5, 2003

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Timothy MacPhee

  	
   

  	
  February
  10, 2004

  	
   

  	
  Not
  Applicable

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Ralph E. Jackson, Jr.

  	
   

  	
  June
  23, 2004

  	
   

  	
  Not
  Applicable

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  William D. Martino

  	
   

  	
  October
  31, 2005

  	
   

  	
  Not
  Applicable

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

  
	
  Gregory J. Michaud

  	
   

  	
  August
  1, 2006

  	
   

  	
  Not
  Applicable

  	
   

  	
  Patrick
  S. O’Keefe

  Chief Executive Officer

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