UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
_______________________
 
FORM 8-K
 
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 
_______________________
 
Date of Report
 
 
(Date of earliest event reported)
September 24, 2018
 
 
 
 
 
Badger Meter, Inc.  
(Exact name of registrant as specified in its charter)
 
 
Wisconsin  
 
1-6706  
 
39-0143280  
(State or other
jurisdiction of
incorporation)
 
(Commission File
Number)
 
(IRS Employer
Identification No.)
 
4545 W. Brown Deer Rd., Milwaukee, Wisconsin 53223
(Address of principal executive offices, including zip code)
 
(414) 355-0400
(Registrant's telephone number, including area code)
 
Not Applicable
(Former name or former address, if changed since last report)
_______________________
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers .
 
On September 24, 2018, Badger Meter, Inc. (the “ Company ”) issued a press release announcing that Richard A. Meeusen, the Company’s Chief Executive Officer since 2002, will retire effective December 31, 2018.  Mr. Meeusen will remain Chairman of the Company’s board of directors (the “ Board ”).  Kenneth C. Bockhorst, age 45, currently the Company’s President, was appointed to the Board effective immediately and is slated to become the Company’s Chief Executive Officer upon Mr. Meeusen’s retirement, to serve for an indefinite term.  He is expected to continue to serve as the Company’s President.  In connection with Mr. Bockhorst’s appointment to the Board, the Board increased the number of authorized directors from eight to nine directors.  Mr. Bockhorst has not been and is not expected to be appointed to any committee of the Board.  Mr. Bockhorst was not appointed to the Board pursuant to any agreement or understanding between him and any other person, nor is he slated to become the Chief Executive Officer pursuant to any agreement or understanding between him and any other person.  Mr. Bockhorst does not have any direct or indirect material interest in any transaction requiring disclosure under Item 404(a) of Regulation S-K nor any family relationships reportable under Item 401(d) of Regulation S-K.  See the Company’s Current Report on Form 8-K filed April 27, 2018 for Mr. Bockhorst’s biographical information, which is incorporated herein by reference.
 
In connection with Mr. Meeusen’s retirement, the Company and Mr. Meeusen entered into a Post-Retirement Agreement, dated as of September 24, 2018 (the “ Agreement ”), which describes Mr. Meeusen’s responsibilities until the effective date of his retirement and the benefits he will receive in connection therewith.
 
Under the Agreement, Mr. Meeusen will continue to serve as Chairman of the Board and his compensation will be commensurate with compensation paid to all other non-employee directors, which is described in the Company’s Definitive Proxy Statement for the 2018 Annual Meeting of Shareholders, filed with the U.S. Securities and Exchange Commission on March 16, 2018.  Mr. Meeusen’s unvested stock options and restricted stock shall vest on September 30, 2018, with no further restrictions, and the Company shall pay out any accrued value for outstanding, but unvested, long-term incentive plan awards as of December 31, 2018.  The estimated value of this accelerated vesting and payout of Mr. Meeusen’s outstanding long-term incentive plan awards, based on the closing price of the Company’s common stock on September 21, 2018, is $2.0 – 2.5 million.  Additionally, Mr. Meeusen may continue to use the Company car until the expiration of the lease in November 2019.  For the period from December 31, 2018 to March 2, 2023, Mr. Meeusen will provide consulting services to the Chief Executive Officer and the Board.  Mr. Meeusen will serve in this capacity at no additional cost but will be reimbursed for expenses incurred in connection with providing the consulting services according to Company policy.
 
As a condition to receiving benefits under the Agreement, Mr. Meeusen (1) is required to provide consulting services if requested and (2) may not accept a position as an employee, consultant or director with another organization that engages in substantial competition with the Company or its subsidiaries without the consent of the Board’s Compensation Committee.
 
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement.  The Agreement is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
 
Item 7.01                            Regulation FD Disclosure .
 
The Company issued a press release announcing the retirement of Mr. Meeusen and the appointment of Mr. Bockhorst.  A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
 
In accordance with General Instruction B.2 of Form 8-K, the information contained in Item 7.01 of this Current Report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
 



 
Item 9.01                            Financial Statements and Exhibits .
 
(a)              Not applicable.
 
(b)              Not applicable.
 
(c)              Not applicable.
 
(d)
Exhibits .
 
EXHIBIT INDEX
 
Exhibit No.
 
Description
 
 

 



 
SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
BADGER METER, INC.
 
 
 
 
 
 
 
 
 
 
 
 
 
Date: September 24, 2018
By:
  /s/ Richard E. Johnson
 
 
 
Richard E. Johnson
 
 
 
Senior Vice President – Finance and Treasurer
Chief Financial Officer
 
 
   
 





 

 
POST-RETIREMENT AGREEMENT
 

 
Mr. Richard A. Meeusen
Chairman, President and Chief Executive Officer
Badger Meter, Inc.


Re: Retirement Agreement
 
Dear Rich:
 
I am pleased to confirm in this letter (the “ Agreement ”) additional terms and conditions related to the valuable services that you provide to Badger Meter, Inc. (“ Badger Meter ” or the “ Company ”) and its shareholders.  This Agreement shall become effective upon being signed by you and the Company.  The benefits and support described herein are being provided in consideration for your agreement to (1) remain as the Chairman of the Board of Directors of the Company (the “ Board ”) for the period specified herein, (2) provide the consulting services described in Section 3 , and (3) refrain from taking certain actions as described in Section 4 .
 
1.              Retirement Date
 
You agree to continue to serve as Chief Executive Officer (“ CEO ”) of the Company until your retirement on December 31, 2018.  Beginning January 1, 2019, you agree to serve as Chairman of the Board of Directors of the Company until such time as the Board determines that your services in that role are no longer required.  In your role as a director of the Company, you will receive director compensation commensurate with the compensation paid to all other directors.
 
2.              Benefit Plans
 
Your existing unvested stock options and restricted stock shall vest as of September 30, 2018, with no further restrictions.  The original exercise period will remain in place for all outstanding stock options.  In addition, the Company shall pay out any accrued value for your outstanding but unvested long-term incentive plans as of December 31, 2018.
 
3.              Post-Retirement Consulting Services
 
For the period from December 31, 2018 until March 2, 2023 (the “ Consulting Period ”), you agree to make yourself reasonably available during normal working hours to consult with the CEO or the Board, or their respective delegates, at their discretion and at no additional cost, for up to 40 hours (the “ Consulting Services ”).  You will be reimbursed for expenses incurred in connection with providing the Consulting Services in accordance with Company policy.
 
1

 
4.              Conditions Applicable to Benefits and Support Granted Under This Agreement
 
The rights and benefits described in this Agreement are subject to the following terms and conditions (collectively, the “ Conditions Precedent ”):
 
·
Prior to the end of the Consulting Period, and other than positions you currently hold, you may not accept a position as an employee, consultant or director with another company, organization or entity that engages in substantial competition with the Company or its subsidiaries unless the Compensation Committee has otherwise consented to your service in such position; and
 
·
You must provide the Consulting Services if requested.
 
If the Company determines, in its good faith judgment, that you have not satisfied one or more of the Conditions Precedent, Badger Meter shall have the right to cease providing the value of any consideration you realize pursuant to this Agreement; provided, however , that the Company shall not have any of the rights or remedies described in this sentence unless (A) the Company gives you written notice of its intention to terminate your benefits and support under this Agreement, setting forth in reasonable detail your specific conduct that the Company considers to constitute a violation of the Conditions Precedent and the specific provision of this Section 4 on which it relies, and stating the date, time and place of a Compensation Committee meeting relating thereto (which shall be no less than thirty (30) days following the date you receive such written notice), (B) you are given an opportunity to cure such conduct within thirty (30) days following receipt of such notice, if cure is possible, and an opportunity to be heard at the Compensation Committee meeting, and (C) a resolution is duly adopted at the Compensation Committee meeting stating that, in the good faith determination of the Compensation Committee, you are guilty of the conduct described in the written notice, such conduct has not been cured and such conduct constitutes a violation of the Conditions Precedent.  It is further understood and agreed that money damages may not be a sufficient remedy for any breach of this Agreement by you and that the Company shall be entitled to seek equitable relief, including injunction and specific performance, as a remedy for any such breach.  Such remedy shall not be deemed to be the exclusive remedy for the breach of this Agreement by you, but shall be in addition to all other remedies at law or equity to the Company.
 
5.              Company Car
 
You will continue to have use of the Company car until the expiration of the lease in November 2019, including reimbursement for cost of operation, maintenance and insurance.
 
6.              Death
 
For the avoidance of doubt (without limitation to any rights you have under any other plan, agreement or arrangement with Badger Meter), upon your death, your surviving spouse shall be entitled to the benefits described in this Agreement, if any (you will be deemed to have complied with and satisfied all of the Conditions Precedent with respect to such benefits).
 
7.              Modification and Waiver
 
This Agreement may be amended or modified only by an agreement in writing.  The failure by you or the Company to declare a breach or otherwise to assert its rights under this Agreement shall not be construed as a waiver of any right that you or the Company has under this Agreement.
 
2

 
8.              Dispute Resolution and Governing Law
 
This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Wisconsin, without reference to the conflict of law principles thereof.  Any dispute arising out of this Agreement shall, at your election, be determined by arbitration under the rules of the American Arbitration Association then in effect (in which case both parties shall be bound by the arbitration award) or by litigation.  Whether the dispute is to be settled by arbitration or litigation, the venue for the arbitration or litigation shall be Milwaukee, Wisconsin or, at your election, if you are not then residing or working in the Milwaukee, Wisconsin metropolitan area, in the judicial district encompassing the city in which you reside; provided, that , if you are not then residing in the United States, your election with respect to such venue shall be either Milwaukee, Wisconsin or in the judicial district encompassing that city in the United States among the thirty cities having the largest population (as determined by the most recent United States Census data available at December 31, 2018) which is closest to your residence.  The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction notwithstanding their residence or situs, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices.
 
9.              Section 409A
 
You and the Company intend that any amounts payable hereunder that could constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“ Section 409A ”) shall comply with Section 409A, and this Agreement shall be administered, interpreted and construed in a manner that does not result in the imposition of additional taxes, penalties or interest under Section 409A.  If any in-kind benefit or expense reimbursement made hereunder shall be determined to be “deferred compensation” within the meaning of Section 409A, then (a) the amount of the in-kind benefit or expense reimbursement during one taxable year shall not affect the amount of the in-kind benefits or expense reimbursement during any other taxable year, (b) the expense reimbursement shall be made on or before the last day of your taxable year following the year in which the expense was incurred and (c) the right to in-kind benefits or expense reimbursement hereunder shall not be subject to liquidation or exchange for another benefit.
 
*******
 
[ Signatures follow on the next page. ]
 
3
Please indicate your acceptance of the terms and conditions of this letter by returning a signed copy of this letter to my attention. Thank you. We look forward to your continued leadership.
 

 
/s/ Todd Teske                                                                                                                                                                 /s/ Gale Klappa

Todd Teske, Lead Director                                                                                                                                Gale Klappa, Chair, Compensation Committee





Read and Accepted:

/s/ Richard A. Meeusen                                                                                                                                      Date:  September 24, 2018
Richard A. Meeusen
 
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News Release

From:                            Badger Meter, Inc.
4545 W. Brown Deer Road, Milwaukee, WI  53223
         P.O. Box 245036, Milwaukee, WI  53224-9536


FOR IMMEDIATE RELEASE
For Additional Information Contact:
Karen Bauer at (414) 371-7276 kbauer@badgermeter.com

MEEUSEN TO RETIRE AS BADGER METER CEO; BOCKHORST NAMED AS SUCCESSOR

Milwaukee, WI, September 24, 2018 – Badger Meter, Inc. (NYSE:BMI) today announced that Richard A. Meeusen will retire as Chief Executive Officer (CEO) of the company, effective December 31, 2018.  He will remain Chairman of the Board through 2019.  Kenneth C. Bockhorst, currently President, was appointed to the Board effective immediately and will become CEO effective January 1, 2019.

"After nearly a year of working alongside Ken, I am confident this is an appropriate time to transition the chief executive responsibilities, said Meeusen.  “Ken has embraced the Badger Meter culture, advanced new growth paths and instituted a continuous improvement philosophy throughout the organization during his tenure as President and Chief Operating Officer.  He brings excellent strategic, operational and talent development skills to the role and is passionate about delivering outstanding returns to our stakeholders. Under his leadership, I am convinced Badger will continue to thrive.”  Meeusen continued, “It has been a privilege and a highlight of my professional career to work alongside the dedicated and talented team at Badger Meter.  I am grateful to have had the opportunity to serve as CEO for the last 16 years, and look forward to continuing to contribute to Badger’s success as a member of the Board.”

"Rich has made innumerable contributions to the success of Badger Meter during his 23-year tenure at the company, both as CEO and before that, as Chief Financial Officer.  He spearheaded the strategic direction of the company and successfully created its innovative and integrity-led culture.  His unyielding focus on delivering shareholder value is remarkable, with more than a 20% average annual shareholder return under his leadership," said Todd Teske, Lead Director of Badger Meter.


Bockhorst joined Badger Meter in October 2017 as COO and was named President in April 2018.  "The Board views this important leadership transition as thoughtful, well planned and soundly executed," Teske observed.  "Ken is a proven leader with broad industry experience, global perspective and demonstrated success in driving strategy and operational excellence,” added Teske.  “He has all the right attributes to succeed Rich as CEO and I am confident it will be a seamless transition"

“I am honored to be given the opportunity to lead the tremendous team at Badger Meter,” said Bockhorst.  “As only the sixth CEO in the company’s 113-year history, I recognize the awesome responsibility of preserving the legacy of trusted solutions, broad offerings and innovation earned since Badger Meter’s founding in 1905.  That solid foundation, coupled with prudent strategies and a strong financial position, provide us the opportunity to continue to grow both organically, and when strategically appropriate, through acquisition.  It has been a pleasure to work alongside Rich over the past year and I want to thank him for his exceptional leadership.”


Background Information

Meeusen joined Badger Meter in 1995 as vice president-finance and chief financial officer.  He was elected president and chief executive officer in 2002 and chairman in 2004.  Prior to joining Badger Meter, Meeusen served as vice president of finance and treasurer of Zenith Sintered Products, Inc., and in the audit division of the Milwaukee office of Arthur Andersen & Co.    He received a BBA degree in accounting from the University of Wisconsin-Whitewater and an MBA degree from the Kellogg Graduate School of Management at Northwestern University. He is a Certified Public Accountant (CPA).  In addition to his responsibilities at Badger Meter, Meeusen currently serves as a director of Menasha Corporation and Serigraph, Inc., a specialty printing company.  He participates in numerous not-for-profit activities including serving on the boards of Goodwill Industries of Southeastern Wisconsin, Inc., the Greater Milwaukee Committee, the Metropolitan Milwaukee Association of Commerce, the Wisconsin Policy Forum, Milwaukee Water Council (co-founder and co-chair), the Great Lakes Protection Fund and United Way of Greater Milwaukee & Waukesha County.
 
Bockhorst joined Badger Meter in October 2017.  He spent the previous six years at Actuant Corporation, most recently as executive vice president of the $330 million energy segment.  He also served as president of the Hydratight business unit and global vice president of operations for Enerpac. Prior to Actuant, he held product management and operational leadership roles at IDEX Corporation (from 2007-2011) and Eaton Corporation (from 1991-2007). Bockhorst earned a bachelor’s degree in operations management, marketing and human resources from Marian University and an Executive MBA from the University of Wisconsin-Madison.

About Badger Meter
 
 
Badger Meter is an innovator in flow measurement, control and communications solutions, serving water utilities, municipalities, and commercial and industrial customers worldwide. The Company’s products measure water, oil, chemicals, and other fluids, and are known for accuracy, long-lasting durability and for providing valuable and timely measurement data. For more information, visit www.badgermeter.com