Document:

Exhibit 10.3

 

March 11, 2004

 

Watts Water Technologies, Inc.

Watts Regulator Co.

Watts Industries Europe B.V.

c/o Watts Water Technologies, Inc.

815 Chestnut Street

North Andover, Massachusetts  01845

 

Attention:                                         Chief
Financial Officer

 

Re:                             Limited
Waiver

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain
Revolving Credit Agreement, dated as of February 28, 2002 (as amended and in
effect from time to time, the “Credit Agreement”), by and among (a)
Watts Water Technologies, Inc. (f/k/a Watts Industries, Inc.), a Delaware
corporation (the “Parent”), (b) Watts Regulator Co., a Massachusetts
corporation (the “Domestic Borrower”), (c) Watts Industries Europe B.V.,
a private company with limited liability organized under the laws of The
Netherlands (the “Foreign Borrower” and, collectively with the Domestic
Borrower, the “Borrowers”, and each individually, a “Borrower”),
(d) Fleet National Bank and the other lending institutions set forth on Schedule
1 to the Credit Agreement (the “Lenders”), and (e) Fleet National
Bank, as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”).  Capitalized terms used
herein and which are not otherwise defined shall have the respective meanings
ascribed thereto in the Credit Agreement.

 

The Parent and the
Borrowers have informed the Lenders and the Administrative Agent that (a)
Taizhou Shida Plumbing Manufacturing Co. Ltd. (“Shida”), a Subsidiary of
the Parent, currently has approximately $6,000,000 of Indebtedness owing to the
Bank of China, which Indebtedness is secured by a Lien on the assets of Shida
(the “Shida Secured Debt”); and (b) Tianjin Tanggu Watts Valve Co. Ltd.
(“TWT”), a Subsidiary of the Parent, currently has approximately
$1,200,000 of Indebtedness owing to the Bank of China, which Indebtedness is
secured by a Lien on the assets of TWT (the “TWT Secured Debt”).  As you are aware, §8.1 of the Credit
Agreement does not permit either the Shida Secured Debt or the TWT Secured
Debt, and §8.2.1. of the Credit Agreement does not permit the Lien on the
assets of either Shida or TWT to secure the Shida Secured Debt or the TWT
Secured Debt, as the case may be.  As
such, the Parent and its Subsidiaries are not in compliance with the covenants
contained in §§8.1 and 8.2.1 of the Credit Agreement.

 

The Parent and the
Borrowers have requested that the Lenders and the Administrative Agent waive,
to the limited extent necessary to permit the above-

 

 

referenced non-compliance, the provisions of §§8.1 and 8.2.1 of the
Credit Agreement from the date each of the Shida Secured Debt and TWT Secured
Debt was incurred through April 30, 2004, but solely to permit the Shida
Secured Debt and the TWT Secured Debt (including the Liens on the assets of
each of Shida and TWT in favor of Bank of China to secure such Shida Secured
Debt and TWT Secured Debt, as the case may be) to remain outstanding until (but
not after) April 30, 2004.

 

In response to
your request, upon the effectiveness of this letter as described in the
paragraph below, the Lenders and the Administrative Agent hereby waive the
provision of §§8.1 and 8.2.1 of the Credit Agreement solely to the extent
necessary to permit the above-referenced non-compliance, only from the date
each of the Shida Secured Debt and the TWT Secured Debt was incurred until
April 30, 2004.  The failure by the
Parent and the Borrowers to repay all the Shida Secured Debt and the TWT
Secured Debt (including terminating all commitments thereunder) and to
demonstrate to the satisfaction of the Administrative Agent that all Liens on
the assets of each of Shida and TWT securing such Indebtedness have been
released by not later than April 30, 2004 shall constitute an immediate Event
of Default under the Credit Agreement. 
The Parent and the Borrowers hereby represent and warrant that, on and
as of the date hereof, (a) except as expressly set forth above, no Default or
Event of Default has occurred and is continuing under the Credit Agreement and
each of the other Loan Documents; and (b) each of the representations and
warranties made by it in §6 of the Credit Agreement remain true as of the date
hereof (except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and the other Loan Documents,
and to the extent that such representations and warranties relate expressly to
an earlier date).

 

This waiver letter
shall not become effective until the Administrative Agent receives an original
counterpart of this letter, duly executed by the Parent, the Borrowers, the
Guarantors, the Required Lenders and the Administrative Agent.

 

Nothing contained
in this waiver letter shall be construed to imply a willingness on the part of
the Administrative Agent and the Lenders to grant any similar or other future
waivers of any of the terms and conditions of the Credit Agreement or the other
Loan Documents.

 

Except as
specifically waived hereby, each of the terms and conditions of the Credit
Agreement and the other Loan Documents are hereby ratified and confirmed and
shall remain in full force and effect. 
Nothing contained herein shall in any way prejudice, impair or effect
any rights or remedies of the Administrative Agent and the Lenders under the
Credit Agreement and the other Loan Documents.

 

This waiver letter
may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument.

 

2

 

THIS WAIVER LETTER SHALL FOR ALL PURPOSES BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICTS OF LAW).

 

3

 

Please acknowledge the foregoing by executing
and returning five (5) copies of this letter to Alicia Szendiuch, Managing
Director, Fleet National Bank, 100 Federal Street, Boston, MA  02110.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FLEET NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Christopher
  J. Wickles

  	
   

  
	
   

  	
   

  	
  Name:  Christopher J. Wickles

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Jonathan
  M. Phillips

  	
   

  
	
   

  	
   

  	
  Name:  Jonathan M. Phillips

  
	
   

  	
   

  	
  Title:  VP

  
	
   

  	
   

  	
   

  
	
   

  	
  CITIZENS BANK OF MASSACHUSETTS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Stephanie
  Epkins

  	
   

  
	
   

  	
   

  	
  Name:  Stephanie Epkins

  
	
   

  	
   

  	
  Title:  VP

  
	
   

  	
   

  	
   

  
	
   

  	
  MELLON
  BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NA successor to

  FIRST UNION NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Sarah T.
  Warren

  	
   

  
	
   

  	
   

  	
  Name:  Sarah T. Warren

  
	
   

  	
   

  	
  Title:  Director

  
									

 

4

 

	
   

  	
  BROWN BROTHERS HARRIMAN & CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  John D.
  Rogers

  	
   

  
	
   

  	
   

  	
  Name:  John D. Rogers

  
	
   

  	
   

  	
  Title:  SVP

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  A. Neil
  Sweeny

  	
   

  
	
   

  	
   

  	
  Name:  A. Neil Sweeny

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Thomas J. Purcell

  	
   

  
	
   

  	
   

  	
  Name:  Thomas J. Purcell

  
	
   

  	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND
  AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS REGULATOR CO.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS INDUSTRIES EUROPE B.V.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  J. van Kouterik

  	
   

  
	
  Title:  C.F.O. Europe

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS WATER TECHNOLOGIES, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
													

 

5

 

	
  WATTS PREMIER, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS SPACEMAKER, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS RADIANT, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ANDERSON-BARROWS METALS CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS DRAINAGE PRODUCTS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WEBSTER VALVE, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
								

 

6

 

	
  WATTS DISTRIBUTION COMPANY, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JAMECO INDUSTRIES, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS OCEAN B.V.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  J. van Kouterik

  	
   

  
	
  Title:  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS CAZZANIGA SPA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  J. van Kouterik

  	
   

  
	
  Title:  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS INTERMES SRL

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  J. van Kouterik

  	
   

  
	
  Title:  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HUNTER INNOVATIONS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
													

 

7Exhibit 10.1

 

	
  

  	
  Zebra Techologies Corporation

  
	
  333
  Corporate Woods Parkway

  
	
  Vernon Hills, Illinois 60061.3109 U.S.A.

  
	
  Telephone +1.847.793.2690

  
	
   

  	
  Facsimile +1.847.913.2575

  
	
   

  	
  ceturnbu@zebra.com

  
	
   

  	
  www.zebra.com

  

 

Charles E. Turnbull

President

 

 

August 16, 1999

 

Mr. Michael T. Edicola

36 Copperfield Drive

Hawthorn Woods, Illinois  60047

 

Dear Mike,

 

This letter confirms my offer
to you to join Zebra Techologies Corporation, start date September 7, 1999, as
Vice President, Human Resources, reporting directly to me.  This updated version also includes a short
paragraph on severance in the event of termination.

 

With acceptance of this position, you will be part of
the top-level management team and we are all excited about your ability to
contribute to our continued success. 
Developing our organizational strength and building to the vision of a much
larger company will be a challenge, but one that I know you will enjoy...as will
I.  I look forward to your arrival.

 

Base and Pay Bonus.  Your base
salary of $6,923.08 will be payable bi-weekly. 
This computes to $180,000 on an annual basis.  There is also a significant Management Bonus Plan opportunity
that has a target equal to 25% of base earnings, which when annualized is
$45,000.

 

Participation in our Management Bonus Plan is based on
full calendar quarters of employment, with a portion of the bonus paid each
quarter.  In your case the bonus will be
pro-rated as of your start date and will be guaranteed to pay at least at the
target level described above.  The bonus
is based on a mix of sales, gross margin, and operating profit performance
versus targets plus accomplishments compared to MBO’s.  Individual objectives will require your
input, and when finalized, will be the basis of the MBO portion of your bonus
plan.

 

Stock Options.  Also, you
will be granted a Stock Option for 20,000 share of Zebra Class A Common Stock
on your first day of employment.  Zebra
Techologies Corporation Stock Options vest over 5 years at the rate of 15% on
the first anniversary of the grant, 17.5% on the second anniversary, 20% on the
third anniversary, 22.5% on the fourth anniversary and the remaining 25% on the
fifth anniversary.  Zebra options have a
ten-year life from the date of grant. 
This means that the value of your option can appreciate for ten years
from the Grant Date before you are required to exercise.  You may sell up to 100% of the shares you
acquire upon exercise of each of your options with no holding period.

 

Future options are granted at the discretion of the
Board of Directors and the CEO.

 

Other Benefits.  Zebra offers
family coverage in the Zebra healthcare plan (medical/dental), life insurance
coverage of $150,000 and other Zebra employee benefit plans in accordance with
the plan documents or company policy. 
You will be eligible to participate in the company’s Profit Sharing and
Savings Plan and the Employee Stock Purchase Plan (attached) in accordance with
the plan documents.  The Company retains
its existing right to amend or terminate at any time any employee benefit plan.

 

 

Vacation.  With respect
to vacation, in addition to the standard vacation plan, you will receive
additional paid vacation days so that in total, you will not have less than
three weeks vacation per year.

 

Termination.  If you are
terminated for other than cause, you will receive 6 months base salary
continuation and outplacement assistance. 
All salary continuation payments cease when you accept other employment.

 

Zebra Techologies Corporation expects each of its
employees who have access to confidential business information to keep such
information confidential.  It is also
our policy to avoid the use of confidential information, which you may have
concerning your previous employer.  We
are including our standard form Employment Agreement and request you review it
and upon acceptance of our offer, sign and return it with the signed offer
letter to my attention.  If there are
any conflicts between the referenced Employment Agreement and this letter, this
letter will prevail.

 

This offer is contingent upon successful completion of
the referencing process.  Your
employment is also subject to passing a drug screening which you will schedule
with the Human Resources team.

 

Your employment is for no specific period of time, and
both you and the Company may terminate the employment relationship per the
above agreement.

 

The letter contains the entire agreement concerning
our offer of employment and may not be modified or changed unless in writing
signed by me.

 

To acknowledge acceptance of this offer, please sign
and return to me one copy of this letter.

 

	
  Best regards,

  	
  ACCEPTED:

  
	
   

  	
   

  
	
  /s/Charles E. Turnbull

  	
   

  	
  /s/Michael T. Edicola

  	
   

  
	
   

  	
   

  
	
  Charles E. Turnbull

  	
  Michael T. Edicola

  
	
  President

  	
   

  
	
   

  	
  8/17/99

  	
   

  
	
   

  	
  Date

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