BADGER METER INC (Form: 10-K, Received: 03/04/2009 13:00:31)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the fiscal year ended December 31, 2008

BADGER METER, INC.

4545 W. Brown Deer Road

Milwaukee, Wisconsin 53223

(414) 355-0400

A Wisconsin Corporation

IRS Employer Identification No. 39-0143280

Commission File No. 001-06706

The Company has the following classes of securities registered pursuant to Section 12(b) of the Act:


		Name of each exchange
Title of class:		on which registered:

Common Stock		New York Stock Exchange
Common Share Purchase Rights		New York Stock Exchange

The Company does not have any securities registered pursuant to Section 12(g) of the Act.

Indicate by check mark if the Company is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the Company is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No þ

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	o	Accelerated filer	þ
Non-accelerated filer	o	Smaller Reporting company	o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No þ

The aggregate market value of the Common Stock held by non-affiliates of the Company as of June 30, 2008 was $698,775,631. For purposes of this calculation only, (i) shares of Common Stock are deemed to have a market value of $50.53 per share, the closing price of the Common Stock as reported on the New York Stock Exchange on June 30, 2008, and (ii) each of the executive officers and directors is deemed to be an affiliate of the Company.

As of February 10, 2009, there were 14,805,304 shares of Common Stock outstanding with a par value of $1 per share.

Portions of the Company’s Proxy Statement for the 2009 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission under Regulation 14A within 120 days after the end of the registrant’s fiscal year, are incorporated by reference from the definitive Proxy Statement into Part III of this Annual Report on Form 10-K.

Special Note Regarding Forward Looking Statements

Certain statements contained in this Annual Report on Form 10-K, as well as other information provided from time to time by Badger Meter, Inc. (the “Company”) or its employees, may contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “think,” “should,” “could” and “objective” or similar expressions are intended to identify forward looking statements. All such forward looking statements are based on the Company’s then current views and assumptions and involve risks and uncertainties that include, among other things:


	•	the continued shift in the Company’s business from lower cost, manual read meters toward more expensive, value-added automatic meter reading (AMR) systems and advanced metering infrastructure (AMI) systems;

	•	the success or failure of newer Company products, including the Orion ^® radio frequency AMR system, the Galaxy ^® fixed network AMI system and the low profile Recordall ^® Model LP disc series meter;

	•	changes in competitive pricing and bids in both the domestic and foreign marketplaces, and particularly in continued intense price competition on government bid contracts for lower cost, manual read meters;

	•	the actions (or lack thereof) of the Company’s competitors;

	•	changes in the Company’s relationships with its alliance partners, primarily its alliance partners that provide AMR/AMI connectivity solutions, and particularly those that sell products that do or may compete with the Company’s products;

	•	changes in the general health of the United States and foreign economies, including to some extent such things as the length and severity of the current global economic downturn, the ability of municipal water utility customers to authorize and finance purchases of the Company’s products, the Company’s ability to obtain financing, housing starts in the United States, and overall industrial activity;

	•	changes in the cost and/or availability of needed raw materials and parts, including recent volatility in the cost of brass castings as a result of fluctuations in commodity prices, particularly for copper and scrap metal, at the supplier level and plastic resin as a result of changes in petroleum and natural gas prices;

	•	the Company’s expanded role as a prime contractor for providing complete AMR/AMI systems to governmental entities, which brings with it added risks, including but not limited to, Company responsibility for subcontractor performance, additional costs and expenses if the Company and its subcontractors fail to meet the agreed-upon timetable with the governmental entity, and the Company’s expanded warranty and performance obligations;

	•	changes in foreign economic conditions, particularly currency fluctuations in the United States dollar, the euro and the peso;

	•	the loss of certain single-source suppliers; and

	•	changes in laws and regulations, particularly laws dealing with the use of lead (which can be used in the manufacture of certain meters incorporating brass housings) and the U.S. Federal Communications Commission rules affecting the use and/or licensing of radio frequencies necessary for AMR/AMI products.

All of these factors are beyond the Company’s control to varying degrees. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward looking statements and are cautioned not to place undue reliance on such forward looking statements. The forward looking statements made in this document are made only as of the date of this document and the Company assumes no obligation, and disclaims any obligation, to update any such forward looking statements to reflect subsequent events or circumstances.

PART I


ITEM 1.	*BUSINESS*

Badger Meter (the “Company”) is a leading manufacturer and marketer of products incorporating liquid flow measurement and control technologies serving markets worldwide. The Company was incorporated in 1905.

Available Information

The Company’s Internet address is http://www.badgermeter.com . The Company makes available free of charge (other than an investor’s own Internet access charges) through its Internet website its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports, on the same day they are electronically filed with, or furnished to, the Securities and Exchange Commission. The Company is not including the information contained on or available through its website as a part of, or incorporating such information by reference into, this Annual Report on Form 10-K.

Markets and Products

The Company is a leading manufacturer and marketer of products incorporating liquid flow measurement and control technologies, developed both internally and in conjunction with other technology companies. Its products are used in a wide variety of applications to measure and control the flow of liquids, but primarily water. The Company’s product lines fall into two general categories, utility and industrial. The utility category is comprised of two primary product lines — residential and commercial water meters that are used by water utilities as the basis for generating water and wastewater revenues. The market for these product lines is North America, primarily the United States, because these meters are designed and manufactured to conform to standards promulgated by the American Water Works Association. The utility flow measurement products constitute a majority of the Company’s sales.

Industrial product line sales comprise the remainder of the Company’s sales and include precision valves, electromagnetic inductive flow meters, impeller flow meters, and turbine and positive displacement industrial flow meters. Rounding out the industrial product line are automotive fluid meters used for the measurement of various types of automotive fluids.

Residential and commercial water meters have generally been classified as either manually read meters or remotely read meters via radio technology. A meter that is manually read consists of the water meter and a register that gives a visual display of the meter reading. Meters equipped with radio transmitters convert the mechanical measurement to a digital format which is then transmitted via radio frequency to a receiver that collects and formats the data appropriately for a water utility’s billing computer. Drive-by systems are referred to as automatic meter reading (AMR) systems and have been the primary technology deployed by water utilities over the past decade, providing cost effective and accurate billing data. In a drive-by AMR system, a vehicle equipped for meter reading purposes, including a radio receiver and computer, collects meter reading data.

Of growing interest to water utilities are fixed network advanced metering infrastructure (AMI) systems. These systems do not rely on a drive-by data collector, but rather incorporate a network of permanent radio receivers or data collectors that are always active or listening to the radio transmission from the utility’s meters. Not only do fixed network systems eliminate the need for meter readers, but they have the ability to provide the utility with more frequent and diverse data at specified intervals. The Company’s response to these market requirements is detailed further in the “Business Trends” section of Item 7 in Part II of this 2008 Annual Report on Form 10-K.

The Company’s net sales and corresponding net earnings depend on unit volume and mix of products, with the Company generally earning higher margins on meters equipped with AMR or AMI technology. In addition to selling its proprietary AMR/AMI products including the Orion ^® drive-by AMR technology and the Galaxy ^® fixed network AMI system, the Company also remarkets the Itron ^® drive-by AMR product under a license and distribution agreement. The Company’s proprietary AMR/AMI products generally result in higher margins than the non-proprietary AMR/AMI products that the Company remarkets. The Company also sells registers and radios separately to customers who wish to perform a field upgrade of their existing meters.

One distinctive advantage of the Orion ^® AMR technology is that while it is fundamentally a drive-by AMR system, the proprietary receiver technology of Orion ^® has been licensed to other technology providers, including those providing AMR/AMI products that communicate over power lines, broadband networks, and proprietary radio frequency networks. In addition, the Company produces a universal gateway receiver for Orion ^® that enables Orion ^® AMR data to be transmitted to a utility customer over a variety of public wireless networks.

Utility meter and AMR/AMI product sales are generally derived from the water meter replacement requirements of customers, along with their plans for adoption and deployment of new technology. To a much lesser extent, housing starts also contribute to the base of new product sales. Over the last decade there has been a growing trend in the conversion to AMR/AMI from manually read water meters. This conversion rate is accelerating and contributing to an increased base of business available to meter and AMR/AMI producers. It is currently estimated that less than 30% of water meters installed in the United States have been converted to AMR/AMI systems. Badger Meter’s strategy is to fulfill customers’ metering expectations and requirements with its proprietary meter reading systems or other systems available through its alliance partners in the marketplace.

The industrial products generally serve a variety of niche flow measurement applications across a broad range of industries. For instance, the impeller product line is widely used in irrigation, HVAC and fire prevention equipment. Some of the flow measurement technologies used for industrial applications have been derived from utility meter technologies, such as positive displacement and turbine flow measurement. Other technologies are very specific to industrial applications. In addition, a growing requirement is for industrial meters to be equipped with specialized communication protocols that control the entire flow measurement process. Serving both the utility and industrial flow measurement market enables the Company to use its wide variety of technology for specific flow measurement and control applications, as well as to utilize existing capacity and spread fixed costs over a larger sales base.

The Company’s products are primarily manufactured and assembled in the Company’s Milwaukee, Wisconsin; Tulsa, Oklahoma; Nogales, Mexico; Neuffen, Germany; and Brno, Czech Republic facilities.

The Company’s products are sold throughout the world through various distribution channels including direct sales representatives, distributors and independent sales representatives. There is a moderate seasonal impact on sales, primarily relating to higher sales of certain utility products during the spring and summer months. No single customer accounts for more than 10% of the Company’s sales.

Competition

There are competitors in each of the markets in which the Company sells its products, and the competition varies from moderate to intense. Major competitors for utility water meters include Sensus Metering Systems, Inc., Neptune Technologies and Elster Water Meter. The Company’s primary competitors for water utility AMR and AMI products are Itron, Inc., Neptune Technologies and Sensus Metering Systems, Inc. While the Company sells its own proprietary AMR/AMI systems (Orion ^® and Galaxy ^® ), it is also a reseller of the Itron products. A number of the Company’s competitors in certain markets have greater financial resources than the Company. However, the Company believes it currently provides the leading technology in water meters and AMR/AMI systems for water utilities. As a result of significant research and development activities, the Company enjoys favorable patent positions and trade secrets for several of its products.

Backlog

The dollar amounts of the Company’s total backlog of unshipped orders at December 31, 2008 and 2007 were $30.1 million and $38.7 million, respectively. The backlog is comprised of firm orders and signed contractual commitments, or portions of such commitments, that call for shipment within 12 months. Backlog can be significantly affected by the timing of orders for large utility projects and the amounts can vary due to the timing of work performed.

Raw Materials

Raw materials used in the manufacture of the Company’s products include metal or alloys (such as bronze, which uses copper as its main component, aluminum, stainless steel, cast iron, brass and stellite), plastic resins, glass, microprocessors and other electronic subassemblies and components. There are multiple sources for these raw materials, but the Company purchases most bronze castings and certain electronic subassemblies from single suppliers. The Company believes these items would be available from other sources, but that the loss of its current suppliers would result in higher cost of materials, delivery delays, short-term increases in inventory and higher quality control costs in the short term. The Company carries business interruption insurance on key suppliers. World commodity markets and currency exchange rates may also affect prices.

Research and Development

Expenditures for research and development activities relating to the development of new products, improvement of existing products and manufacturing process improvements were $7.1 million in 2008 compared to $5.7 million in 2007 and $5.5 million in 2006. Research and development activities are primarily sponsored by the Company. The Company also engages in some joint research and development with other companies.

Intangible Assets

The Company owns or controls many patents, trademarks and trade names, directly and through license agreements, in the United States and other countries that relate to its products and technologies. No single patent, trademark, trade name or license is material to the Company’s business as a whole. During 2008, the Company acquired the North American rights for the Galaxy ^® fixed network AMI technology for $25.7 million.

Environmental Protection

The Company is subject to contingencies related to environmental laws and regulations. Currently, the Company is in the process of resolving matters relating to two landfill sites where it has been named as one of many potentially responsible parties and to a parcel of land adjoining the Company’s property. The landfill sites are impacted by the Federal Comprehensive Environmental Response, Compensation and Liability Act and other environmental laws and regulations. At this time, the Company does not believe the ultimate resolution of these issues will have a material adverse effect on the Company’s financial position or results of operations, either from a cash flow perspective or on the financial statements as a whole. This belief is based on the Company’s assessment of its limited past involvement with these landfill sites as well as the substantial involvement of other named third parties in these matters. However, due to the inherent uncertainties of such proceedings, the Company cannot predict the ultimate outcome of these matters. A future change in circumstances with respect to these specific matters or with respect to sites formerly or currently owned or operated by the Company, or with respect to off-site disposal locations used by the Company, could result in future costs to the Company and such amounts could be material. Expenditures during 2008, 2007 and 2006 for compliance with environmental control provisions and regulations were not material.

Employees

The Company and its subsidiaries employed 1,224 persons at December 31, 2008, 207 of whom are covered by a collective bargaining agreement with District 10 of the International Association of Machinists. The Company is currently operating under a four-year contract with the union, which expires on October 31, 2012. The Company believes it has good relations with the union and all of its employees.

Foreign Operations and Export Sales

The Company has distributors, direct sales representatives and independent sales representatives throughout the world. Additionally, the Company has a sales, distribution and manufacturing facility in Neuffen, Germany; sales and customer service offices in Mexico, Singapore and Slovakia; manufacturing facilities in Nogales, Mexico; and a manufacturing and sales facility in Brno, Czech Republic. The Company exports products from the United States that are manufactured in Milwaukee, Wisconsin and Tulsa, Oklahoma.

Information about the Company’s foreign operations and export sales is included in Note 10 “Industry Segment and Geographic Areas” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2008 Annual Report on Form 10-K.

Financial Information about Industry Segments

The Company operates in one industry segment as a manufacturer and marketer of products incorporating liquid flow measurement and control technologies as described in Note 10 “Industry Segment and Geographic Areas” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2008 Annual Report on Form 10-K.


ITEM 1A.	*RISK FACTORS*

Shareholders, potential investors and other readers are urged to consider the significant business risks described below in addition to the other information set forth or incorporated by reference in this 2008 Annual Report on Form 10-K. If any of the events contemplated by the following risks actually occur, our financial condition or results of operations could be materially adversely affected. The following list of risk factors may not be exhaustive. We operate in a continually changing business, economic and geopolitical environment, and new risk factors may emerge from time to time. We can neither predict these new risk factors with certainty nor assess the precise impact, if any, on the business, or the extent to which any factor, or combination of factors, may cause the actual results of operations to differ materially. While there is much uncertainty, we do analyze the risks we face, perform a probability assessment of their impacts and attempt to soften their potential impact when and if possible.

Competitive pressures in the marketplace could decrease revenues and profits:

Competitive pressures in the marketplace for our products could adversely affect our competitive position, leading to a possible loss of market share or a decrease in prices, either of which could result in decreased revenues and profits. We operate in an environment where competition varies from moderate to intense and a number of our competitors have greater financial resources. Our competitors also include alliance partners that sell products that do or may compete with our products, particularly those that provide AMR or AMI connectivity solutions. The principal elements of competition for our most significant product lines, residential and commercial water meters for the utility market (with various AMR/AMI technology systems), are price, product technology, quality and service. The competitive environment is also affected by the movement toward AMR or AMI technologies away from manual read meters, the demand for replacement units and, to some extent such things as the length and severity of the current global economic downturn, the ability of municipal water utility customers to authorize and finance purchases of our products, our ability to obtain financing, housing starts in the United States, and overall industrial activity. For our industrial products, the competitive environment is affected by the general economic health of various industrial sectors particularly in the United States and Europe.

Technological developments could harm future success:

We believe that our future success depends, in part, on our ability to develop technologically advanced products that meet or exceed appropriate industry standards. Although we believe that we currently have a competitive advantage in this area, maintaining such advantage will require continued investment in research and development, sales and marketing. There can be no assurance that we will have sufficient resources to make such investments or that we will be able to make the technological advances necessary to maintain such competitive advantage. If we are unable to maintain such competitive advantage, our future financial performance may be adversely affected. We are not currently aware of any emerging standards or new products that could render our existing products obsolete.

The inability to obtain adequate supplies of raw materials and component parts could decrease profit margins and negatively impact timely delivery to customers:

We are affected by the availability and prices for raw materials, including metal or alloys (such as bronze, which uses copper as its main component, aluminum, stainless steel, cast iron, brass and stellite), plastic resins,

glass, microprocessors and other electronic subassemblies, and components that are used in the manufacturing process. The inability to obtain adequate supplies of raw materials and component parts for our products at favorable prices could have a material adverse effect on our business, financial condition or results of operations by decreasing profit margins and by negatively impacting timely deliveries to customers. In the past, we have been able to offset increases in raw materials and component parts by increased sales prices, active materials management, product engineering programs and the diversity of materials used in the production processes. However, we cannot be certain that we will be able to accomplish this in the future. Since we do not control the actual production of these raw materials and component parts, there may be delays caused by interruption in the production of these materials for reasons that are beyond our control. World commodity markets and inflation may also affect raw material and component part prices.

The length and severity of the current economic downturn could cause a material adverse impact on sales and operating results:

As a supplier of products primarily to water utilities, we may be adversely affected by the length and severity of the current global economic downturn that affects independent distributors, large city utilities, private water companies and numerous smaller municipal water utilities. These customers may delay capital projects, including non-critical maintenance and upgrades, or not have the ability to authorize and finance purchases during economic downturns or instability in world markets. While we also serve several industrial markets to reduce our dependency on the water utility market, a significant downturn in these markets could also cause a material adverse impact on sales and operating results. Therefore, the continued downturn in general economic conditions, as well as in our customers’ markets, could result in a reduction in demand for our products and services and could harm the business.

Failure to manufacture quality products could have a material adverse effect on our business:

If we fail to maintain and enforce quality control and testing procedures, our products will not meet the performance standards in the industry. Product quality and performance are a priority for us since our products are used in various industries where precise control of fluids is essential, and we believe we have a very good reputation for product quality. Substandard products would seriously harm our reputation, resulting in both a loss of current customers to competitors and damage to our ability to attract new customers. In addition, if any of our products proves to be defective, we may be required to participate in a recall involving such products. A successful claim brought against us with respect to a defective product in excess of available insurance coverage, if any, or a requirement to participate in a major product recall, could have a material adverse effect on our business, results of operations or financial condition.

Litigation against us could be costly, time consuming to defend and could adversely affect profitability:

From time to time, we are subject to legal proceedings and claims that arise in the ordinary course of business. We may also be subject to workers’ compensation claims, employment disputes, unfair labor practice charges, customer and supplier disputes, product liability claims and contractual disputes related to warranties arising out of the conduct of our business. Litigation may result in substantial costs and may divert management’s attention and resources, which could adversely affect our profitability or financial condition.

Changes in environmental or regulatory requirements could entail additional expenses that could decrease profitability:

We cannot predict the nature, scope or effect of future environmental or regulatory requirements to which our operations might be subject or the manner in which existing or future laws will be administered or interpreted. Compliance with such laws or regulations may entail additional expenses that could decrease profitability. We are subject to a variety of environmental laws, such as lead content in certain meters incorporating brass housings, and regulatory laws affecting the use and/or licensing of radio frequencies necessary for AMR/AMI products, as well as regulations related to customs and trade practices. Currently, the cost of complying with existing laws is included as part of our on-going expenses and does not have a material effect on our business or financial position.

Risks related to foreign markets could decrease profitability:

Since we sell products worldwide as well as manufacture products in several countries, we are subject to risks associated with doing business internationally. These risks include changes in foreign currency exchange rates, changes in a specific country’s or region’s political or economic conditions, potentially negative consequences from changes in tax laws or regulatory requirements, differing labor regulations, and the difficulty of managing widespread operations.

Operational dependence on attracting and retaining skilled employees could negatively impact growth and decrease profitability:

Our success depends on our continued ability to identify, attract, develop and retain skilled personnel throughout our organization. Current and future compensation arrangements, including benefits, may not be sufficient to attract new employees or retain existing employees, which may hinder our growth. In addition, we estimate liabilities and expenses for pensions and other postretirement benefits that require the use of assumptions relating to the rates used to discount the future estimated liability, rate of return on any assets and various assumptions related to the age and cost of the workforce. Actual results may differ from the estimates and have a material adverse effect on future results of operations or on the financial statements as a whole. Rising healthcare and retirement benefit costs in the United States may also add to cost pressures and decrease our profitability.

Risks to the Company’s reputation could adversely affect success:

The Company has a history of good corporate governance, including procedures and processes that existed prior to the enactment of the Sarbanes-Oxley Act of 2002, as well as related rules and regulations, such as board committee charters, and a Code of Business Conduct that defines how employees interact with various Company stakeholders and addresses issues such as confidentiality, conflict of interest and fair dealing. Failure to maintain this reputation could have a material adverse effect on our business and results of operations.

Failure to successfully integrate acquired businesses or products in the future could adversely affect the operations:

As part of our business strategy, we will continue to evaluate and may pursue selected business or product acquisition opportunities that we believe may provide us with certain operating and financial benefits. If we complete any such acquisitions, they may require integration into our existing business with respect to administrative, financial, sales and marketing, manufacturing and other functions to realize these anticipated benefits. If we are unable to successfully integrate a business or product acquisition, we may not realize the benefits identified in our due diligence process, and our financial results may be negatively impacted. Additionally, significant unexpected liabilities may arise during or after completion of an acquisition.


ITEM 1B.	*UNRESOLVED STAFF COMMENTS*

None.


ITEM 2.	*PROPERTIES*

The principal facilities utilized by the Company at December 31, 2008 are listed below. The Company owns all such facilities in fee simple. The Company believes that its facilities are generally well maintained and have sufficient capacity for its current needs.


		Approximate area
Location	Principal use	(square feet)

Milwaukee, Wisconsin	Manufacturing and offices		323,000
Tulsa, Oklahoma	Manufacturing and offices		59,500
Brno, Czech Republic	Manufacturing and offices		27,000
Neuffen, Germany	Manufacturing and offices		21,500
Nogales, Mexico	Manufacturing and offices		140,000
Nogales, Mexico	Manufacturing and offices		41,300


ITEM 3.	*LEGAL PROCEEDINGS*

In the normal course of business, the Company is named in legal proceedings from time to time. There are currently no material legal proceedings pending with respect to the Company. The more significant legal proceedings are discussed below.

Like other companies in recent years, the Company has been named as a defendant in numerous multi-claimant/multi-defendant lawsuits alleging personal injury as a result of exposure to asbestos, manufactured by third parties, and integrated into or sold with a very limited number of the Company’s products. The Company is vigorously defending itself against these claims. Although it is not possible to predict the ultimate outcome of these matters, the Company does not believe the ultimate resolution of these issues will have a material adverse effect on the Company’s financial position or results of operations, either from a cash flow perspective or on the financial statements as a whole. This belief is based in part on the fact that no claimant has demonstrated exposure to products manufactured or sold by the Company and that a number of cases have been voluntarily dismissed.

The Company is subject to contingencies related to environmental laws and regulations. Information about the Company’s compliance with environmental regulations is included in Part I, Item 1 of this 2008 Annual Report on Form 10-K under the heading “Environmental Protection.”


ITEM 4.	*SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS*

No matters were submitted to a vote of the Company’s shareholders during the quarter ended December 31, 2008.


ITEM 4A.	*EXECUTIVE OFFICERS OF THE COMPANY*

The following table sets forth certain information regarding the executive officers of the Company.


		Age at
Name	Position	2/28/2009

Richard A. Meeusen	Chairman, President and Chief Executive Officer	54
Ronald H. Dix	Senior Vice President — Administration	64
Richard E. Johnson	Senior Vice President — Finance, Chief Financial Officer and Treasurer	54
William R. A. Bergum	Vice President — General Counsel and Secretary	44
Gregory M. Gomez	Vice President — Engineering	44
Horst E. Gras	Vice President — International Operations	53
Raymond G. Serdynski	Vice President — Manufacturing	52
Beverly L. P. Smiley	Vice President — Controller	59
Dennis J. Webb	Vice President — Sales and Marketing	61
Daniel D. Zandron	Vice President — Business Development	60

There are no family relationships between any of the executive officers. Officers are elected annually at the first meeting of the Board of Directors held after each annual meeting of the shareholders. Each officer holds office until his or her successor has been elected or until his or her death, resignation or removal. There is no arrangement or understanding between any executive officer and any other person pursuant to which he or she was elected as an officer.

Mr. Meeusen was elected Chairman, President and Chief Executive Officer in April 2004. From April 2002 to April 2004, Mr. Meeusen served as President and Chief Executive Officer.

Mr. Dix was elected Senior Vice President — Administration in February 2006, and served as Senior Vice President — Administration and Secretary from February 2005 to February 2006. Mr. Dix served as Senior Vice President — Administration/Human Resources from May 2003 to February 2005 and Secretary from August 2003 to February 2005.

Mr. Johnson has served as Senior Vice President — Finance, Chief Financial Officer and Treasurer for more than five years.

Mr. Bergum was elected Vice President — General Counsel and Secretary in February 2006, and served as General Counsel from September 2003 to February 2006.

Mr. Gomez was elected Vice President — Engineering in February 2008. Mr. Gomez served as Director of Engineering from July 2007 to February 2008 and served as Manager — Mechanical Engineering from January 2006 to July 2007. Prior to January 2006, Mr. Gomez served as Manager — Research and Development.

Mr. Gras has served as Vice President — International Operations for more than five years.

Mr. Serdynski was elected Vice President — Manufacturing in February 2008. Mr. Serdynski served as Director of Manufacturing Operations from April 2005 to February 2008 and served as Director of Manufacturing — Milwaukee from February 2004 to April 2005. Prior to February 2004, Mr. Serdynski served as General Plant Manager — Residential.

Ms. Smiley has served as Vice President — Controller for more than five years.

Mr. Webb was elected Vice President — Sales and Marketing in February 2008. Mr. Webb served as Vice President — Sales, Marketing and Engineering from August 2005 to February 2008 and served as Vice President — Engineering from November 2001 to August 2005.

Mr. Zandron has served as Vice President — Business Development for more than five years.

PART II


Item 5.	*MARKET FOR THE REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES*

Information required by this Item is set forth in Note 11 “Unaudited: Quarterly Results of Operations, Common Stock Price and Dividends” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2008 Annual Report on Form 10-K.

The following information in Item 5 of this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates it by reference into such a filing.

The following graph compares on a cumulative basis the yearly percentage change since January 1, 2004 in (a) the total shareholder return on the Common Stock with (b) the total return on the Russell 2000 Index, (c) the total return on the American Stock Exchange (AMEX), and (d) the total return of a peer group made up of 11 companies in similar industries and with similar market capitalization as selected by an independent consulting firm. The graph assumes $100 invested on December 31, 2003. It further assumes the reinvestment of dividends. The returns of each component company in the peer group have also been weighted based on such company’s relative market capitalization.

Comparison of 5-Year Cumulative Total Return
Among Badger Meter, Inc., Russell Market Index,
American Stock Exchange and Peer Group Index


December 31	2003		2004		2005		2006		2007		2008
Badger Meter, Inc.	$	100.00	$	160.99	$	214.17	$	305.88	$	501.80	$	327.25
Peer Group Index*	$	100.00	$	99.46	$	103.62	$	130.26	$	140.39	$	88.21
AMEX Market Index**	$	100.00	$	114.51	$	126.29	$	141.39	$	158.74	$	94.93
Russell 2000 Index**	$	100.00	$	118.33	$	123.72	$	146.44	$	144.15	$	95.44


*		Peer Group consists of Axcess International, Inc., Badger Meter, Inc., Bio-Rad Labs, Inc., Candela Corporation, Frequency Electronics, Inc., Innovex, Inc., Integral Vision, Inc., K-Tron International, Inc., Keithley Instruments, Inc., Newport Corporation, and Research Frontiers, Inc.

**		Due to the fact that Badger Meter, Inc. moved to the NYSE in June 2008, the Broad Market consists of both the AMEX Market Index, as used in past years, and the Russell 2000 Index.


ITEM 6.	*SELECTED FINANCIAL DATA*

BADGER METER, INC.

Ten Year Summary of Selected Consolidated Financial Data


	Years ended December 31,
	2008			2007			2006			2005			2004			2003			2002			2001			2000			1999
	(Dollars in thousands except per share data)

Operating results
Net sales	$	279,552			234,816			229,754			203,637			188,663			168,728			160,350			138,537			146,389			150,877
Research and development	$	7,136			5,714			5,458			5,343			4,572			6,070			5,658			5,422			6,562			6,012
Earnings from continuing operations
before income taxes	$	39,555			29,325			27,489			25,664			20,325			15,658			12,359			5,010			10,727			15,659
Earnings from continuing operations	$	25,084			18,386			16,568			16,164			12,056			9,798			7,819			3,364			6,941			9,700
Loss from discontinued operations	$	n/a			(1,929	)		(9,020	)		(2,911	)		(2,423	)		(2,221	)		(548	)		n/a			n/a			n/a
Net earnings	$	25,084			16,457			7,548			13,253			9,633			7,577			7,271			3,364			6,941			9,700
Earnings from continuing operations to sales		9.0	%		7.8	%		7.2	%		7.4	%		6.4	%		5.8	%		4.9	%		2.4	%		4.7	%		6.4	%

Per Common share
Basic earnings from continuing operations	$	1.72			1.29			1.19			1.20			0.91			0.76			0.62			0.27			0.53			0.70
Basic loss from discontinued operations	$	n/a			(0.13	)		(0.65	)		(0.22	)		(0.18	)		(0.17	)		(0.04	)		n/a			n/a			n/a
Total basic earnings	$	1.72			1.16			0.54			0.98			0.73			0.59			0.58			0.27			0.53			0.70
Diluted earnings from continuing operations	$	1.69			1.26			1.15			1.15			0.89			0.75			0.59			0.26			0.50			0.65
Diluted loss from discontinued operations	$	n/a			(0.13	)		(0.63	)		(0.20	)		(0.18	)		(0.17	)		(0.04	)		n/a			n/a			n/a
Total diluted earnings	$	1.69			1.13			0.52			0.95			0.71			0.58			0.55			0.26			0.50			0.65
Cash dividends declared:
Common Stock	$	0.40			0.34			0.31			0.29			0.28			0.27			0.26			0.25			0.22			0.18
Price range — high	$	62.74			46.43			32.20			25.63			16.00			9.94			8.50			8.31			9.35			10.03
Price range — low	$	17.58			23.00			19.51			13.23			8.53			6.13			5.52			4.94			5.75			9.85
Closing price	$	29.02			44.95			27.70			19.62			14.98			9.54			8.00			5.61			5.75			7.54
Book value*	$	7.50			6.33			5.07			5.36			4.77			4.19			3.74			3.38			3.38			3.22

Shares outstanding at year-end
Common Stock		14,808			14,519			14,154			13,696			13,444			13,170			12,882			12,720			12,828			13,360

Financial position
Working capital*	$	35,740			38,725			33,648			32,923			25,461			25,946			6,825			23,170			6,822			11,150
Current ratio*		1.7 to 1			1.9 to 1			1.7 to 1			1.8 to 1			1.6 to 1			1.7 to 1			1.1 to 1			2.0 to 1			1.2 to 1			1.3 to 1
Net cash provided by operations	$	22,631			28,275			16,750			18,361			6,297			15,221			12,234			8,587			13,251			15,652
Capital expenditures	$	13,237			15,971			11,060			9,088			5,582			5,214			5,914			5,007			6,403			9,981
Total assets	$	195,358			150,301			139,383			145,867			142,961			133,851			126,463			101,375			98,023			102,186
Short-term and current portion of long-term debt	$	19,670			13,582			17,037			13,328			22,887			9,188			26,290			8,264			23,017			16,589
Long-term debt	$	5,504			3,129			5,928			15,360			14,819			24,450			13,046			20,498			5,944			11,493
Shareholders’ equity	$	111,023			91,969			71,819			73,416			64,066			55,171			48,095			43,002			43,319			43,009
Debt as a percent of total debt and equity*		18.5	%		15.4	%		26.8	%		30.1	%		37.0	%		37.9	%		45.0	%		40.1	%		40.1	%		39.5	%
Return on shareholders’ equity*		22.6	%		20.0	%		23.1	%		22.0	%		18.8	%		17.8	%		16.3	%		7.8	%		16.0	%		22.6	%
Price/earnings ratio*		17.2			35.7			24.1			17.1			16.8			12.7			11.1			21.6			11.5			11.6


(1)		The Company’s French operations have been presented as discontinued operations for 2002 through 2007, the years of ownership.

(2)		The Company adopted SFAS 123(R), “Share-Based Payments,” effective January 1, 2006, which required the Company to recognize the grant date fair value of share-based awards as compensation expense.

(3)		The Company adopted the provisions of SFAS 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” on December 31, 2006, with respect to recognizing the funded status of pension and postretirement benefit plans, and at December 31, 2008, with respect to changing the measurement date.


*		Description of calculations as of the applicable year end:

Book value equals total shareholders’ equity at year-end divided by the number of common shares outstanding.

Working capital equals total current assets less total current liabilities.

Current ratio equals total current assets divided by total current liabilities.

Debt as a percent of total debt and equity equals total debt (the sum of short-term debt, current portion of long-term debt and long-term debt) divided by the sum of total debt and total shareholders’ equity at year-end. The debt of the discontinued French operations is included in this calculation for 2002 through 2007, the years of ownership, although there was no debt at the end of 2007 related to the French operations.

Return on shareholders’ equity equals earnings from continuing operations divided by total shareholders’ equity at year-end.

Price/earnings ratio equals the closing stock price for common stock divided by diluted earnings per share from continuing operations.


ITEM 7.	*MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS*

BUSINESS DESCRIPTION AND OVERVIEW

the non-proprietary AMR/AMI products that the Company remarkets. The Company also sells registers and radios separately to customers who wish to perform a field upgrade of their existing meters.

Business Trends

AMI is the growing standard of technology deployment in the electric utility industry. AMI provides an electric utility with two-way communication to monitor and control electrical devices at the customer’s site. AMI deployments are fixed network technologies. Although the Company does not participate in the electric market, the trend toward AMI is now affecting the markets the Company does participate in, namely water and gas utility markets. Specifically, in the water industry, fixed network AMI enables the water utility to capture interval readings from each meter on a daily basis. While two-way communication is limited in water fixed network AMI, utilities are contemplating how two-way networks could benefit them. As noted above, the Company markets the Orion ^® drive-by AMR product line as well as the Galaxy ^® fixed network AMI product line. The Company is positioned to sell either product in responding to customer requirements. Since both products have comparable margins, any acceleration or slowdown in this trend is not expected to have a significant impact on the Company.

Although there is growing interest in fixed network communication by water utilities, the vast majority of utilities currently installing AMR/AMI continue to select drive-by AMR technologies for their applications. The Company’s Orion ^® technology has experienced rapid acceptance in the United States. By the end of 2008, more than 1,150 water utilities had selected Orion ^® as their AMR solution of choice. There are approximately 53,000 water utilities in the United States and the Company estimates that less than 30% of them have converted to an AMR or AMI technology. It is anticipated that even with growing interest in fixed network AMI, drive-by AMR will continue to be the primary product of choice by water utilities for a number of years. Drive-by AMR technology is simply the most cost effective form of AMR currently available to water utilities.

Revenue and Product Mix

Prior to the Company’s introduction of its own proprietary Orion ^® products, Itron ^® water utility-related products were a dominant AMR contributor to the Company’s results. Itron ^® products are sold under an agreement between the Company and Itron, Inc. that was recently extended to early 2011. The Company’s Orion ^® products directly compete with Itron ^® water AMR products and, in recent years, many of the Company’s customers have

selected Orion ^® products. In 2008, Orion ^® sales increased 20.3% while Itron ^® licensed product sales increased 29.4% compared to 2007. For the year, Orion ^® sales were 2.4 times greater than those of the Itron ^® licensed products. The Company expects this relationship to continue and expects that the Itron ^® products will remain a significant component of utility sales. The increases in both product lines underscores the continued acceptance of the AMR technology by water utilities and affirms the Company’s strategy of selling Itron ^® products in addition to its own proprietary products.

As the industry continues to evolve, there may be additional opportunities for revenue enhancement. For instance, in recent years the Company has been asked to oversee and perform installation of its products in the field for a limited number of customers. This is usually accomplished by the Company assuming the role of the general contractor, hiring a subcontractor and supervising their work. In 2008, revenues for these types of services totaled approximately $7.1 million compared to $2.9 million in 2007, with most of the increase coming from the installation work for the City of Chicago during 2008. The Company also sells certain extended warranty programs for the technology sold with meters. The extended warranties provide additional services beyond the one-year standard warranty. Revenues for these services are not yet significant. The Company has also begun to sell the Orion ^® technology to natural gas utilities for installation on their gas meters. In 2008, sales of these products totaled $3.4 million, an increase over 2007 sales of $1.7 million. At this time, it is uncertain as to the extent of growth for these other types of products and services on future periods.

Discontinued Operations

During 2006, the Company carefully evaluated strategic alternatives for its subsidiaries in Nancy, France, including restructuring, sale or shutdown. In the third quarter of 2006, the Company began the process under French law to obtain the requisite governmental and regulatory approvals to close the operation. On October 16, 2006, the decision was finalized. From that date through 2007, all assets and liabilities were liquidated resulting in total after-tax charges of $7.3 million, of which $5.4 million of charges, net of the income tax benefit, were recognized in 2006. All results associated with the Company’s French operations during 2006 and 2007 have been removed from continuing operations and are presented as results of discontinued operations. See Note 3 “Discontinued Operations” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2008 Annual Report on Form 10-K. All remaining comments in this section relate to continuing operations.

RESULTS OF OPERATIONS

Net Sales

Badger Meter’s net sales increased 19.1% in 2008 to $279.6 million from $234.8 million in 2007. The increase was the net result of higher utility sales, partially offset by lower sales of industrial products.

Residential and commercial water meter and related technology sales represented 83.0% of total net sales in 2008 compared to 79.2% in 2007. These sales increased to $232.0 million, a 24.8% increase over sales in 2007 of $185.9 million. This increase was driven by increased volumes in AMR/AMI sales. Sales of the Company’s Orion ^® AMR technology increased over 20% from 2007 levels and its sales were 2.4 times greater than the Itron ^® related products, which saw a 29.4% increase from 2007 levels. Commercial meter sales increased over 33% due to both volume and price increases. Offsetting these increases was a decline in local read meters.

Industrial sales are affected by economic conditions, domestically and internationally, in each of the markets served by the Company’s various product lines. These sales declined 2.8% to $47.6 million in 2008 from $48.9 million in 2007 due to volume declines caused by the economic climate. With the exception of the precision valve products, sales for the Company’s industrial products declined in 2008.

International sales for utility products are generally to customers in Canada and Mexico, which use similar mechanical technology for the water meter itself. International sales for the industrial products are comprised primarily of sales of small valves, electromagnetic meters and automotive fluid meters in Europe, sales of electromagnetic meters with water meters and related technologies in Latin America, and sales of valves and other metering products throughout the world. In Europe, sales are made primarily in Euros. Other international sales are

made in U.S. Dollars or local currencies. International sales increased 19.9% to $32.7 million in 2008 from $27.3 million in 2007 due principally to higher sales of industrial products in Europe and higher sales into Mexico.

Badger Meter’s net sales of $234.8 million increased $5.1 million, or 2.2%, for 2007 compared to $229.7 million for 2006. The increase was the result of sales increases in industrial products, while utility sales were approximately the same between years, as further explained below.

Residential and commercial water meter net sales represented 79.2% of total net sales in 2007 compared to 80.9% in 2006. These sales of $185.9 million increased just $20,000 in 2007 compared to 2006. Overall volume declines in bronze manual read meters, meters with Itron ^® licensed technology and commercial meters were offset by volume increases in plastic meters and in meters with the Company’s Orion ^® AMR technology. In 2007, sales of Orion ^® products increased nearly 25%, due mostly to volume increases. By contrast, sales of Itron ^® related products declined nearly 22% due to lower volumes.

Industrial product net sales increased 11.5% in 2007 over 2006 levels. In total, the sales of industrial products represented 20.8% of total net sales in 2007 compared to 19.1% in 2006. Industrial product net sales increased $5.0 million to $48.9 million in 2007 compared to $43.9 million in 2006 primarily due to higher sales of automotive fluid products, precision valves and other industrial products.

International sales increased 28.8% to $27.3 million in 2007 from $21.2 million in 2006 due principally to higher sales of industrial products in Europe. Favorable foreign exchange rate changes also contributed to the sales increase, notably the strengthening of the Euro against the U.S. Dollar.

Gross Margins

Gross margins were 35.2%, 34.7% and 33.4% for 2008, 2007 and 2006, respectively. Gross margins increased in 2008 as a result of increases in AMR volumes driven by sales of Orion ^® and Itron ^® related products as well as price increases put into effect to recover higher cost of materials. Also included in gross margin for 2008 was $994,000 of pre-tax gain associated with the sale of the Company’s Rio Rico, Arizona facility. The increase in gross margin in 2008 was partially offset by lower industrial sales (which generally have higher margins), the mix of AMR technologies sold, and higher sales of turnkey or installation projects on which margins are lower for the services provided. Gross margins increased in 2007 as a result of increases in AMR volumes driven mainly by sales of Orion ^® products, as well as price increases put into effect to recover the higher cost of materials.

Operating Expenses

Selling, engineering and administration costs increased 13.3% in 2008 compared to 2007 and were the result of increased selling costs related to efforts to establish a presence for Orion ^® in the natural gas industry, increased costs associated with higher sales volumes, consulting costs associated with sales process enhancements, increased research and development costs, the effects of foreign exchange, and increased intangible amortization related to the acquisition of the North American rights for the Galaxy ^® fixed network AMI technology in the second quarter of 2008. In addition, the Company experienced normal inflationary increases, which were somewhat offset by continuing cost containment efforts. Selling, engineering and administration costs increased 6.1% in 2007 compared to 2006 as a net result of higher legal fees associated with successfully completed litigation, increased reserves for uncollectible receivables, increased product development costs and normal inflationary pressures, partially offset by continued cost controls.

Interest Expense

Interest expense increased slightly in 2008 compared to 2007 as the result of higher debt levels primarily due to the acquisition of the North American rights for the Galaxy ^® fixed network AMI technology. Interest expense was approximately the same between 2007 and 2006.

Income Taxes

Income taxes as a percentage of earnings from continuing operations before income taxes were 36.6%, 37.3% and 39.7% for 2008, 2007 and 2006, respectively. The decrease in the effective tax rate in 2008 and 2007 was due to

an increase in the U.S. income tax deduction available to manufacturers for qualified production activities (Section 199 Deduction).

Earnings and Diluted Earnings Per Share from Continuing Operations

As a result of the above-mentioned items, earnings from continuing operations were $25.1 million, $18.4 million and $16.6 million in 2008, 2007 and 2006, respectively. On a diluted basis, earnings per share from continuing operations were $1.69, $1.26 and $1.15 respectively, for the same periods.

LIQUIDITY AND CAPITAL RESOURCES

The main sources of liquidity for the Company are cash from operations and borrowing capacity. Cash provided by operations in 2008 was $27.1 million compared to $28.3 million in 2007. The decrease in cash provided by operations in 2008 was due to higher receivable and inventory balances, partially offset by improved earnings. Cash provided by operations in 2007 was $28.3 million compared to $16.8 million in 2006. The increase in cash provided by operations in 2007 was due principally to improved earnings.

Receivables at December 31, 2008 increased by 16.7% compared to December 31, 2007, due primarily to higher fourth quarter sales, which increased 18.3% in 2008 compared to the fourth quarter of 2007. Inventories at December 31, 2008 increased by 15.3% compared to December 31, 2007, due to the increased sales activity and the timing of inventory purchases.

Prepaid expenses and other current assets decreased $1.1 million between December 31, 2008 and 2007. The main reason for the decrease was that the prior year balance included $0.7 million of remaining book value related to the Rio Rico, Arizona facility that was sold in 2008.

Capital expenditures totaled $13.2 million in 2008, $16.0 million in 2007 and $11.1 million in 2006. These amounts vary due to the timing of capital expenditures. Included in capital expenditures for 2008 and 2007 was approximately $6.2 million and $8.0 million, respectively, related to the construction of two facilities in Mexico and a small addition to the Czech Republic facility compared to $6.2 million of construction in 2006 for new facilities in Mexico and Germany. The Company believes it now has capacity to increase production levels with minimal additional capital expenditures.

Intangible assets increased to $25.0 million at December 31, 2008 from $0.5 million at December 31, 2007 due to the acquisition of the North American rights for the Galaxy ^® fixed network AMI technology.

Long-term deferred income tax assets increased to $9.3 million at December 31, 2008 from $3.4 million at December 31, 2007 principally due to the tax impact of the increased pension liabilities.

Short-term debt, the current portion of long-term debt and long-term debt all vary individually due to the amounts borrowed and the timing of payments. These accounts totaled $25.2 million at December 31, 2008, which was an increase from $16.7 million at December 31, 2007. The debt levels increased primarily because of the acquisition of the Galaxy ^® fixed network AMI technology in the second quarter of 2008. At December 31, 2008, debt represented 18.5% of the Company’s total capitalization. None of the Company’s debt carries financial covenants or is secured.

The $1.9 million increase in payables between years was primarily the result of the timing of purchases. Accrued compensation and employee benefits increased $2.7 million between years due primarily to higher employee incentives. Warranty and after-sale costs decreased $0.6 million to $1.3 million at December 31, 2008 due to fewer warranty claims as the result of improved manufacturing processes for products introduced in recent years.

Other accrued employee benefits increased to $21.3 million at December 31, 2008 from $7.0 million at December 31, 2007, primarily due to an increase in the Company’s pension liability, resulting from the negative return on pension plan assets in 2008.

Common Stock and capital in excess of par value both increased during 2008 due primarily to the exercise of stock options, stock compensation expense and the tax benefit on stock options. Treasury stock decreased due to shares issued in connection the Company’s dividend reinvestment program.

Accumulated other comprehensive loss increased by $7.5 million, net of tax, primarily due to changes in the funded status of the Company’s pension plan and other post-employment benefits.

Despite the current economic climate, Badger Meter’s financial condition remains strong. The Company believes that its operating cash flows, available borrowing capacity including $36.0 million of unused credit lines at December 31, 2008, and its ability to raise capital provide adequate resources to fund ongoing operating requirements, future capital expenditures and development of new products. The Company continues to take advantage of its local commercial paper market and carefully monitors the current borrowing market. The Company’s principal line of credit is in effect until October 31, 2009.

OFF-BALANCE SHEET ARRANGEMENTS

The Company had no off-balance sheet arrangements at December 31, 2008.

CONTRACTUAL OBLIGATIONS

The Company guarantees the outstanding debt of its Employee Savings and Stock Option Plan (the “ESSOP”) that is recorded in long-term debt, offset by a similar amount of unearned compensation that has been recorded as a reduction of shareholders’ equity. The loan amount is secured by shares of the Company’s Common Stock. Payments of $23,000 and $62,000 in 2008 and 2007, respectively, reduced the loan to $659,000 at December 31, 2008. The terms of the loan allow variable payments of principal with the final principal and interest payment due on April 30, 2010.

The following table includes the Company’s significant contractual obligations as of December 31, 2008. There are no undisclosed guarantees.


	Payments due by period
			Less than
	Total		1 year		1-3 years		4-6 years
	(In thousands)

Current portion and long-term debt	$	14,520	$	9,675	$	4,845	$	—
Interest on current portion and long-term debt		600		528		72		—
Short-term debt		9,995		9,995		—		—
Construction of facilities		138		138		—		—
ESSOP		659		74		585		—
Operating leases		630		299		253		78

Total contractual obligations	$	26,542	$	20,709	$	5,755	$	78

Other than items included in the preceding table, as of December 31, 2008, the Company had no additional material purchase obligations other than those created in the ordinary course of business related to inventory and property, plant and equipment, which generally have terms of less than 90 days. The Company also has long-term obligations related to its pension and postretirement plans which are discussed in detail in Note 7 “Employee Benefit Plans” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2008 Annual Report on Form 10-K. As of the most recent actuarial measurement date, a contribution to the pension plan is initially anticipated to be $4.9 million in 2009 due to the reduction in the market value of the underlying investments. However, this estimate is subject to further calculations prior to the actual payment. Postretirement medical claims are paid by the Company as they are submitted, and they are anticipated to be $595,000 in 2009 based on actuarial estimates; however, these amounts can vary significantly from year to year because the Company is self-insured.

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

The Company’s accounting policies are more fully described in Note 1 “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2008 Annual Report on Form 10-K. As discussed in Note 1, the preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s more significant estimates relate primarily to the following judgmental reserves: allowance for doubtful accounts, reserve for obsolete inventories,

warranty and after-sale costs reserve, and the health care reserve for claims incurred, as well as claims incurred but not reported. Each of these reserves is evaluated quarterly and is reviewed with the Company’s Disclosure Committee and the Audit and Compliance Committee of the Board of Directors. The basis for the reserve amounts is determined by analyzing the anticipated exposure for each account, and then selecting the most likely amount based upon historical experience and various other considerations that are believed to be reasonable under the circumstances. This method has been used for all years in the presented financials and has been used consistently throughout each year. Actual results may differ from these estimates under different assumptions or conditions.

The criteria used for calculating each of the reserve amounts varies by type of reserve. For the allowance for doubtful accounts reserve, significant past due balances are individually reviewed for collectibility, while the balance of accounts are reviewed in conjunction with applying historical write-off ratios. The calculation for the obsolete inventories reserve is determined by analyzing the relationship between the age and quantity of items on hand versus estimated usage to determine if excess quantities exist. The calculation for warranty and after-sale costs reserve uses criteria that include known potential problems on past sales as well as historical claim experience and current warranty trends. The health care reserve for claims incurred, but not reported is determined by using medical cost trend analyses, reviewing subsequent payments made and estimating unbilled amounts. The changes in the balances of these reserves at December 31, 2008 compared to the prior year were due to normal business conditions and are not deemed to be significant. While the Company continually tries to improve its estimates, no significant changes in the underlying processes are expected in 2009.

The Company also uses estimates in three other significant areas: (i) pension and other postretirement obligations and costs, (ii) stock-based compensation , and (iii) income taxes. The actuarial valuation of benefit obligations and net periodic benefit costs rely on key assumptions including discount rates, long-term expected return on plan assets, future compensation and healthcare cost trend rates. The total cost of the Company’s share-based awards is equal to the grant date fair value per award multiplied by the number of awards granted, adjusted for forfeitures. Forfeitures are initially estimated based on historical Company information and subsequently updated over the life of the awards to ultimately reflect actual forfeitures, which could have an impact on the amount of stock compensation cost recognized from period to period. In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances known at each interim period. On a quarterly basis, the actual effective tax rate is adjusted as appropriate based upon the actual results as compared to those forecasted at the beginning of the fiscal year. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company evaluates and updates all of these assumptions quarterly. Actual results may differ from these estimates.

OTHER MATTERS

matters, the Company does not believe the ultimate resolution of these issues will have a material adverse effect on the Company’s financial position or results of operations, either from a cash flow perspective or on the financial statements as a whole. This belief is based in part on the fact that no claimant has demonstrated exposure to products manufactured or sold by the Company and that a number of cases have been voluntarily dismissed.

MARKET RISKS

In the ordinary course of business, the Company is exposed to various market risks. The Company operates in an environment where competition varies from moderate to intense. The Company believes it currently provides the leading technology in water meters and AMR/AMI systems for water utilities. A number of the Company’s competitors in certain markets have greater financial resources. Competitors also include alliance partners that sell products that do or may compete with our products, particularly those that provide AMR/AMI connectivity solutions. In addition, the market’s level of acceptance of the Company’s newer products may have a significant effect on the Company’s results of operations. As a result of significant research and development activities, the Company enjoys favorable patent positions for several of its products.

The Company’s ability to generate operating income and to increase profitability depends somewhat on the general health of the United States and foreign economies, including to some extent such things as the length and severity of the current global economic downturn, the ability of municipal water utility customers to authorize and finance purchases of the Company’s products, the Company’s ability to obtain financing, housing starts in the United States, and overall industrial activity. In addition, changes in governmental laws and regulations, particularly laws dealing with the use of lead or rules affecting the use and/or licensing of radio frequencies necessary for AMR/AMI products may impact the results of operations. These factors are largely beyond the Company’s control and depend on the economic condition and regulatory environment of the geographic region of the Company’s operations.

The Company does rely on single suppliers for certain castings and components in several of its product lines. Although alternate sources of supply exist for these items, loss of certain suppliers could temporarily disrupt operations in the short term. The Company attempts to mitigate these risks by working closely with key suppliers, purchasing minimal amounts from alternative suppliers and by purchasing business interruption insurance where appropriate.

Raw materials used in the manufacture of the Company’s products include metal or alloys (such as bronze, which uses copper as its main component, aluminum, stainless steel, cast iron, brass and stellite), plastic resins, glass, microprocessors and other electronic subassemblies and components. The price and availability of raw materials is influenced by economic and industry conditions, including supply and demand factors that are difficult to anticipate and cannot be controlled by the Company. Commodity risk is managed by keeping abreast of economic conditions and locking in purchase prices for quantities that correspond to the Company’s forecasted usage.

The Company’s foreign currency risk relates to the sales of products to foreign customers and purchases of material from foreign vendors. The Company uses lines of credit with U.S. and European banks to offset currency exposure related to European receivables and other monetary assets. As of December 31, 2008 and 2007, the Company’s foreign currency net monetary assets were substantially offset by comparable debt resulting in no material exposure to the results of operations.

The Company typically does not hold or issue derivative instruments and has a policy specifically prohibiting the use of such instruments for trading purposes.

The Company’s short-term debt on December 31, 2008 was floating rate debt with market values approximating carrying value. Fixed rate debt was principally two U.S. dollar term loans with a 5.04% and 5.59% interest rate, respectively, and a Euro revolving term loan with a 4.71% interest rate. For the short-term floating rate debt, future annual interest costs will fluctuate based upon short-term interest rates. For the short-term debt on hand on December 31, 2008, the effect of a 1% change in interest rates is approximately $100,000.


ITEM 7A.	*QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK*

Information required by this Item is set forth in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Market Risks” in this 2008 Annual Report on Form 10-K.


ITEM 8.	*FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA*

BADGER METER, INC.

Management’s Annual Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2008 using the criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, the Company’s management believes that, as of December 31, 2008, the Company’s internal control over financial reporting was effective based on those criteria.

Ernst & Young LLP, an independent registered public accounting firm, has audited the Consolidated Financial Statements included in this Annual Report on Form 10-K and, as part of its audit, has issued an attestation report, included herein, on the effectiveness of the Company’s internal control over financial reporting.

BADGER METER, INC.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Badger Meter, Inc.

We have audited Badger Meter, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Badger Meter, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Badger Meter, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Badger Meter, Inc. as of December 31, 2008 and 2007, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2008 of Badger Meter, Inc. and our report dated February 27, 2009, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Milwaukee, Wisconsin

February 27, 2009

BADGER METER, INC.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Badger Meter, Inc.

We have audited the accompanying consolidated balance sheets of Badger Meter, Inc. (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Badger Meter, Inc. at December 31, 2008 and 2007, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 7 to the Consolidated Financial Statements, on December 31, 2008, the Company changed the measurement date for its defined benefit pension and postretirement healthcare plans to coincide with its balance sheet date.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Badger Meter, Inc.’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2009 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Milwaukee, Wisconsin

February 27, 2009

BADGER METER, INC.

Consolidated Balance Sheets


	December 31,
	2008			2007
	(Dollars in thousands except share and per share amounts)

ASSETS
Current assets:
Cash	$	6,217		$	8,670
Receivables		35,767			30,638
Inventories:
Finished goods		13,484			8,225
Work in process		10,990			10,660
Raw materials		14,841			15,209

Total inventories		39,315			34,094
Prepaid expenses and other current assets		2,316			3,450
Deferred income taxes		2,914			3,082

Total current assets		86,529			79,934
Property, plant and equipment, at cost:
Land and improvements		7,097			7,177
Buildings and improvements		45,522			39,448
Machinery and equipment		81,315			79,053

		133,934			125,678
Less accumulated depreciation		(72,111	)		(71,100	)

Net property, plant and equipment		61,823			54,578
Intangible assets, at cost less accumulated amortization		25,030			477
Other assets		5,713			4,919
Deferred income taxes		9,305			3,435
Goodwill		6,958			6,958

Total assets	$	195,358		$	150,301


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	9,995		$	10,844
Current portion of long-term debt		9,675			2,738
Payables		13,230			11,363
Accrued compensation and employee benefits		8,714			5,988
Warranty and after-sale costs		1,327			1,917
Income and other taxes		7,848			8,359

Total current liabilities		50,789			41,209
Other long-term liabilities		1,059			627
Deferred income taxes		133			244
Accrued non-pension postretirement benefits		5,585			6,083
Other accrued employee benefits		21,265			7,040
Long-term debt		5,504			3,129
Commitments and contingencies (Note 6)
Shareholders’ equity:
Common Stock, $1 par; authorized 40,000,000 shares; issued 21,074,170 shares in 2008 and 20,902,236 shares in 2007		21,074			20,902
Capital in excess of par value		31,563			24,655
Reinvested earnings		107,887			89,061
Accumulated other comprehensive loss		(16,672	)		(9,191	)
Less:Employee benefit stock		(659	)		(682	)
Treasury stock, at cost; 6,265,708 shares in 2008 and 6,383,690 shares in 2007		(32,170	)		(32,776	)

Total shareholders’ equity		111,023			91,969

Total liabilities and shareholders’ equity	$	195,358		$	150,301

See accompanying notes.

BADGER METER, INC.

Consolidated Statements of Operations


	Years ended December 31,
	2008		2007			2006
	(In thousands except per share amounts)

Net sales	$	279,552	$	234,816		$	229,754
Cost of sales		181,094		153,418			153,126

Gross margin		98,458		81,398			76,628
Selling, engineering and administration		57,556		50,782			47,840

Operating earnings		40,902		30,616			28,788
Interest expense		1,347		1,291			1,299

Earnings from continuing operations before income taxes		39,555		29,325			27,489
Provision for income taxes (Note 8)		14,471		10,939			10,921

Earnings from continuing operations		25,084		18,386			16,568
Loss from discontinued operations net of income taxes (Note 3)		—		(1,929	)		(9,020	)

Net earnings	$	25,084	$	16,457		$	7,548

Earnings (loss) per share:
Basic:
from continuing operations	$	1.72	$	1.29		$	1.19
from discontinued operations	$	—	$	(0.13	)	$	(0.65	)

Total basic	$	1.72	$	1.16		$	0.54

Diluted:
from continuing operations	$	1.69	$	1.26		$	1.15
from discontinued operations	$	—	$	(0.13	)	$	(0.63	)

Total diluted	$	1.69	$	1.13		$	0.52

Shares used in computation of earnings (loss) per share:
Basic		14,556		14,211			13,868
Impact of dilutive securities		281		406			521

Diluted		14,837		14,617			14,389

See accompanying notes.

BADGER METER, INC.

Consolidated Statements of Cash Flows


	Years ended December 31,
	2008			2007			2006
	(Dollars in thousands)

Operating activities:
Net earnings	$	25,084		$	16,457		$	7,548
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation		5,954			6,308			6,589
Amortization		1,097			159			418
Deferred income taxes		(1,489	)		(1,149	)		(2,081	)
Long-lived asset impairment		—			—			1,369
Gain on disposal of long-lived assets		(994	)		(495	)		—
Noncurrent employee benefits		3,398			3,167			3,116
Stock-based compensation expense		1,272			1,202			1,031
Changes in:
Receivables		(6,028	)		301			1,373
Inventories		(5,577	)		241			(1,531	)
Prepaid expenses and other current assets		371			(58	)		302
Current liabilities other than debt		3,964			2,142			(1,384	)

Total adjustments		1,968			11,818			9,202

Net cash provided by operations		27,052			28,275			16,750

Investing activities:
Property, plant and equipment additions		(13,237	)		(15,971	)		(11,060	)
Proceeds on disposal of long-lived assets		1,632			3,194			—
Acquisition of intangible assets		(25,650	)		—			—
Other — net		(909	)		(341	)		(516	)

Net cash used for investing activities		(38,164	)		(13,118	)		(11,576	)

Financing activities:
Net increase (decrease) in short-term debt		(755	)		(7,957	)		8,971
Issuance of long-term debt		15,000			—			—
Repayments of long-term debt		(5,688	)		(1,943	)		(14,919	)
Dividends paid		(5,851	)		(4,866	)		(4,327	)
Proceeds from exercise of stock options		2,045			1,517			3,057
Tax benefit on stock options		3,988			1,997			2,935
Issuance of treasury stock		176			170			579

Net cash provided by (used for) financing activities		8,915			(11,082	)		(3,704	)

Effect of foreign exchange rates on cash		(256	)		(453	)		(825	)

Increase (decrease) in cash		(2,453	)		3,622			645
Cash — beginning of period from continuing operations		8,670			3,002			3,215
Cash — beginning of period from discontinued operations		—			2,046			1,188

Cash — beginning of period		8,670			5,048			4,403

Cash — end of period from continuing operations		6,217			8,670			3,002
Cash — end of period from discontinued operations		—			—			2,046

Cash — end of period	$	6,217		$	8,670		$	5,048

Supplemental disclosures of cash flow information:
Cash paid during the year for:
Income taxes	$	10,861		$	4,735		$	10,846
Interest (including $647 and $282 of capitalized interest in 2008 and 2007, respectively)	$	1,541		$	1,699		$	1,609

See accompanying notes.

BADGER METER, INC.

Consolidated Statements of Shareholders’ Equity


	Years Ended December 31,
										Accumulated			Employee
										other			benefit
				Capital in						comprehensive			and
	Common			excess of			Reinvested			income			restricted			Treasury
	stock			par value			earnings			(loss)			stock			stock			Total
	(In thousands except per share amounts)

Balance, December 31, 2005	$	20,112		$	13,320		$	74,258		$	1		$	(1,357	)	$	(32,918	)	$	73,416

Comprehensive income (loss):
Net earnings		—			—			7,548			—			—			—			7,548
Other comprehensive income (loss):
Minimum employee benefit liability (net of $6,525 tax effect)		—			—			—			(10,548	)		—			—			(10,548	)
Foreign currency translation		—			—			—			1,183			—			—			1,183

Comprehensive loss																				(1,817	)
Impact of adoption of SFAS 158 (net of $1,658 tax effect)		—			—			—			(2,677	)		—			—			(2,677	)
Cash dividends of $0.31 per share		—			—			(4,327	)		—			—			—			(4,327	)
Stock options exercised		393			2,329			—			—			—			—			2,722
Tax benefit on stock options and dividends		—			2,935			—			—			—			—			2,935
ESSOP transactions		—			158			—			—			171			—			329
Stock-based compensation		48			769			—			—			—			—			817
Impact of adoption of SFAS 123(R)		—			(442	)		—			—			442			—			—
Issuance of treasury stock		—			359			—			—			—			62			421

Balance, December 31, 2006		20,553			19,428			77,479			(12,041	)		(744	)		(32,856	)		71,819

Comprehensive income:
Net earnings		—			—			16,457			—			—			—			16,457
Other comprehensive income:
Employee benefit funded status adjustment (net of $1,731 tax effect)		—			—			—			2,795			—			—			2,795
Foreign currency translation		—			—			—			55			—			—			55

Comprehensive income																				19,307
Cash dividends of $0.34 per share		—			—			(4,875	)		—			—			—			(4,875	)
Stock options exercised		329			1,796			—			—			—			—			2,125
Tax benefit on stock options and dividends		—			1,997			—			—			—			—			1,997
ESSOP transactions		—			190			—			—			62			—			252
Stock-based compensation		20			915			—			—			—			—			935
Issuance of treasury stock		—			329			—			—			—			80			409

Balance, December 31, 2007		20,902			24,655			89,061			(9,191	)		(682	)		(32,776	)		91,969

Comprehensive income:
Net earnings		—			—			25,084			—			—			—			25,084
Other comprehensive income (loss):
Employee benefit funded status adjustment (net of $4,402 tax effect)		—			—			—			(7,407	)		—			—			(7,407	)
Foreign currency translation		—			—			—			(74	)		—			—			(74	)

Comprehensive income																				17,603
Change in SFAS 158 benefit measurement date (net of $242 tax effect)		—			—			(397	)		—			—			—			(397	)
Cash dividends of $0.40 per share		—			—			(5,861	)		—			—			—			(5,861	)
Stock options exercised		271			1,821			—			—			—			—			2,092
Tax benefit on stock options and dividends		—			3,988			—			—			—			—			3,988
ESSOP transactions		—			160			—			—			23			—			183
Reclass Common and treasury shares		(99	)		(461	)		—			—			—			560			—
Stock-based compensation		—			1,031			—			—			—			—			1,031
Issuance of treasury stock		—			369			—			—			—			46			415

Balance, December 31, 2008	$	21,074		$	31,563		$	107,887		$	(16,672	)	$	(659	)	$	(32,170	)	$	111,023

See accompanying notes.

BADGER METER, INC.

Notes to Consolidated Financial Statements

December 31, 2008, 2007 and 2006


Note 1	Summary of Significant Accounting Policies

Profile

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.

Receivables

Receivables consist primarily of trade receivables. The Company does not require collateral or other security and evaluates the collectibility of its receivables based on a number of factors. An allowance for doubtful accounts is recorded for significant past due receivable balances based on a review of the past due items and the customer’s ability and likelihood to pay, as well as applying a historical write-off ratio to the remaining balances. Changes in the Company’s allowance for doubtful accounts are as follows:


	Balance at		Provision			Write-offs			Balance
	beginning		and reserve			less			at end
	of year		adjustments			recoveries			of year
	(In thousands)

2008	$	536	$	243		$	(219	)	$	560
2007	$	542	$	439		$	(445	)	$	536
2006	$	622	$	(78	)	$	(2	)	$	542

Inventories

Inventories are valued primarily at the lower of cost or market. Cost is determined using the first-in, first-out method. Market is determined based on the net realizable value. The Company estimates and records provisions for obsolete inventories. Changes to the Company’s obsolete inventories reserve are as follows:


	Balance at		Net additions					Balance
	beginning		charged to					at end
	of year		earnings		Disposals			of year
	(In thousands)

2008	$	1,662	$	1,506	$	(1,422	)	$	1,746
2007	$	1,327	$	972	$	(637	)	$	1,662
2006	$	1,140	$	802	$	(615	)	$	1,327

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is provided over the estimated useful lives of the respective assets, principally by the straight-line method. The estimated useful lives of assets are: for land improvements, 15 years; for buildings and improvements, 10 — 39 years; and for machinery and equipment, 3 — 20 years.

Long-Lived Assets

Property, plant and equipment and identifiable intangible assets are reviewed for impairment, in accordance with Financial Accounting Standards Board (FASB) Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. See Note 3 for a discussion of the impairment loss recognized during 2006.

Intangible Assets

Intangible assets are amortized on a straight-line basis over their estimated useful lives ranging from 5.5 to 20 years. The Company does not have any intangible assets deemed to have indefinite lives. Amortization expense expected to be recognized is $1.4 million in each of the subsequent five years beginning with 2009. The increase in the technology and non-compete agreement intangibles in 2008 was due to the acquisition of the North American rights for the Galaxy ^® fixed network AMI technology for $25.7 million. The carrying value and accumulated amortization by major class of intangible assets are as follows:


	December 31, 2008				December 31, 2007
	Gross carrying		Accumulated		Gross carrying		Accumulated
	amount		amortization		amount		amortization
	(In thousands)

Technologies	$	24,472	$	1,439	$	572	$	518
Non-compete agreement		1,750		131		—		—
Licenses		700		372		700		342
Trademarks		150		100		150		85

Total intangibles	$	27,072	$	2,042	$	1,422	$	945

Goodwill

Goodwill is tested for impairment annually during the fourth fiscal quarter or more frequently if an event indicates that the goodwill might be impaired in accordance with FASB Statement No. 142, “Goodwill and Other Intangible Assets.” No adjustments were recorded to goodwill as a result of those reviews during 2008 and 2007.

Revenue Recognition

Revenues are generally recognized upon shipment of product, which corresponds with the transfer of title. The costs of shipping are billed to the customer upon shipment and are included in cost of sales. A small portion of the Company’s sales includes shipments of products combined with services, such as meters sold with installation. The product and installation components of these multiple deliverable arrangements are considered separate units of accounting. The value of these separate units of accounting is determined based on their relative fair values determined on a stand-alone basis. Revenue is generally recognized when the last element is delivered, which corresponds with installation and acceptance by the customer. The Company also sells extended service and warranty agreements on certain products for the period subsequent to the normal warranty provided with the original product sale. Revenue is recognized over the service agreement period, which is generally one year. Revenues associated with the Company’s services increased from 2007 to 2008, but are not yet in excess of 10% of total revenues.

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

Warranty and After-Sale Costs

The Company estimates and records provisions for warranties and other after-sale costs in the period in which the sale is recorded, based on a lag factor and historical warranty claim experience. After-sale costs represent a variety of activities outside of the written warranty policy, such as investigation of unanticipated problems after the customer has installed the product, or analysis of water quality issues. Changes in the Company’s warranty and after-sale costs reserve are as follows:


	Balance at		Net additions		Costs			Balance
	beginning		charged to		incurred and			at end
	of year		earnings		adjustments			of year
	(In thousands)

2008	$	1,917	$	195	$	(785	)	$	1,327
2007	$	2,954	$	28	$	(1,065	)	$	1,917
2006	$	3,047	$	1,341	$	(1,434	)	$	2,954

Net warranty additions charged to earnings in 2006 include a $0.3 million specific reserve for a known industrial product warranty/recall matter. Actual claims during the recall period were less than originally estimated and therefore the remaining reserve was reversed in 2007. In addition, actual warranty claims for residential products continue to decrease due to improved industrialization of existing and new products.

Research and Development

Research and development costs are charged to expense as incurred and amounted to $7.1 million, $5.7 million and $5.5 million in 2008, 2007 and 2006, respectively.

Stock-Based Compensation Plans

At December 31, 2008, the Company had two types of stock-based employee compensation plans as described in Note 5, “Stock Compensation.”

The Company recognizes the cost of stock-based awards for all of its stock-based compensation plans on a straight-line basis over the service period of the awards. Total stock compensation expense recognized by the Company was $1.3 million for 2008, $1.2 million for 2007 and $1.0 million for 2006.

Effective January 1, 2006, the Company adopted the fair value recognition provisions of FASB Statement No. 123(R), “Share-Based Payment” (SFAS 123(R)), using the modified-prospective-transition method. Under this transition method, compensation cost recognized in 2006 included compensation costs for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123 and compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123(R). The Company estimates the fair value of its option awards using the Black-Scholes option-pricing formula. The Company records compensation expense for stock options ratably over the stock option plans’ vesting period.

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) at December 31 are as follows:


	2008			2007
	(In thousands)

Cumulative foreign currency translation adjustment	$	1,639		$	1,713
Unrecognized pension and postretirement benefit plan liabilities net of tax		(18,311	)		(10,904	)

Accumulated other comprehensive loss	$	(16,672	)	$	(9,191	)

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Earnings Per Share

Basic earnings per share is computed by dividing net earnings/loss by the weighted average number of shares of Common Stock outstanding during the period. Diluted earnings per share is computed reflecting the potential dilutive effect of share-based awards under the treasury stock method, which assumes the Company uses proceeds from the exercise of share-based awards to repurchase the Company’s Common Stock at the average market price during the period. In applying the treasury stock method, the market price for the Company’s Common Stock was determined based on observable market prices and valuation techniques.

Fair Value Measurements

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 became effective for the Company on January 1, 2008. The adoption of SFAS 157 had no impact on the Company’s consolidated financial statements and notes thereto.

New Accounting Pronouncements

In December 2007, the FASB issued Statement No. 141 (Revised 2007), “Business Combinations” (SFAS 141(R)), which replaces SFAS No. 141, “Business Combinations.” SFAS 141(R) establishes principles and requirements for how an acquirer recognizes and measures in the financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree, and the goodwill acquired. The statement also establishes disclosure requirements that enable users to evaluate the nature and financial effects of the business combination. SFAS 141(R) was effective for the Company on January 1, 2009 and must be applied prospectively to all new acquisitions closing on or after January 1, 2009. The Company does not expect that the adoption of SFAS 141(R) will have a material impact on its consolidated financial statements or notes thereto.

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements — An Amendment of ARB No. 51” (SFAS 160). SFAS 160 requires that accounting and reporting for minority interests be recharacterized as noncontrolling interests and classified as a component of equity. The standard was effective for the Company on January 1, 2009 and must be applied prospectively. The Company does not expect that the adoption of SFAS 160 will have a material impact on its consolidated financial statements.

In March 2008, the FASB issued Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS 161). Effective January 1, 2009, companies are required to provide enhanced disclosures about: (a) how and why a company uses derivative instruments; (b) how

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

derivative instruments and related hedge items are accounted for under SFAS No. 133 and its related interpretations; and (c) how derivative instruments and related hedge items affect a company’s financial position, financial performance and cash flows. The Company does not expect that the adoption of SFAS No. 161 will have a material impact on its consolidated financial statements or notes thereto.


Note 2	Common Stock


A.	*Common Stock and Rights Agreement*

The Company has Common Stock and also Common Share Purchase Rights that trade with the Common Stock. The Common Share Purchase Rights were issued pursuant to the shareholder rights plan discussed below.

On February 15, 2008, the Board of Directors of the Company adopted a shareholder rights plan and declared a dividend of one common share purchase right for each outstanding share of Common Stock of the Company payable to the stockholders of record on May 26, 2008. The plan was effective as of May 27, 2008. Each right entitles the registered holder to purchase from the Company one share of Common Stock at a price of $200.00 per share, subject to adjustment. Subject to certain conditions, the rights are redeemable by the Company and are exchangeable for shares of Common Stock at a favorable price. The rights have no voting power and unless the rights are redeemed, exchanged or terminated earlier, they will expire on May 26, 2018.


B.	*Stock Options*

Stock options to purchase 67,920 shares of the Company’s Stock in 2008 and 36,200 shares of the Company’s Common Stock in 2006 were not included in the computation of dilutive securities because the exercise price was greater than the average stock price for that period, and accordingly their inclusion would have been anti-dilutive.


Note 3	Discontinued Operations

During 2006, the Company carefully evaluated strategic alternatives for its subsidiaries in Nancy, France, including restructuring, sale or shutdown. In the third quarter of 2006, the Company began the process under French law to obtain the approvals to close the operations. On October 16, 2006, the decision to discontinue the Company’s French operations was finalized, and the subsidiaries were completely dissolved at December 31, 2007. The total shutdown charges were $7.3 million net of income taxes, of which $5.4 million of charges, net of the income tax benefit, were recognized in 2006, and $1.9 million of charges, net of income taxes, were recognized in 2007 as assets were liquidated and liabilities satisfied.

The charges recognized in 2006, net of income taxes, included increased reserves for receivables and inventories totaling $2.0 million, recording an impairment of long-lived assets of $1.4 million, recognizing liabilities for severance costs of $1.1 million, contract termination costs of $0.4 million, and $0.5 million of shutdown costs incurred in 2006. The long-lived asset group included the intangible assets and fixed assets of the French operations. As a result of the continued operating losses, the shutdown of the French subsidiaries, and the evaluation that the carrying amount of the long-lived asset group exceeded the expected undiscounted future cash flows, an impairment charge of $1.4 million was recognized for the difference between the carrying value of the asset group and their fair value.

In 2007, charges of $1.9 million, net of income taxes, were recognized in discontinued operations as the French subsidiaries were legally dissolved. This amount was comprised of $0.9 million of shutdown and liquidation costs, the realization of the unfavorable cumulative translation adjustment previously recognized in equity of $0.3 million, and $0.7 million of income tax expense.

In accordance with the provisions of SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the results of operations of the Company’s French subsidiaries have been reported as discontinued operations for 2006 and 2007. Revenues from the Company’s French subsidiaries for the years ended December 31,

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

2007 and 2006 were $1.9 million and $11.2 million, respectively. Losses before income taxes for the years ended December 31, 2007 and 2006 were $1.2 million and $10.7 million, respectively.

There were no assets or liabilities of discontinued operations included in the Consolidated Balance Sheet as of December 31, 2007.


Note 4	Short-term Debt and Credit Lines

Short-term debt at December 31, 2008 and 2007 consisted of:


	2008		2007
	(In thousands)

Notes payable to banks	$	5,740	$	10,844
Commercial paper		4,255		—

Total short-term debt	$	9,995	$	10,844

Included in notes payable to banks for 2008 was $3.4 million borrowed under a 3.7 million euro-based (U.S. dollar equivalent of $5.1 million at December 31, 2008) revolving loan facility that bears interest at 4.71% and expires in October 2009, and $2.3 million outstanding under revolving credit facilities which bear interest at 4.81%. The Company has $46.0 million of short-term credit lines with domestic and foreign banks, which includes a $30.0 million line of credit that can also support the issuance of commercial paper.


Note 5	Stock Compensation


A.	*Stock Options*

The Company has six stock option plans which provide for the issuance of options to key employees and directors of the Company or for which issued options are still outstanding. Each plan authorizes the issuance of options to purchase up to an aggregate of 800,000 shares of the Company’s Common Stock, with vesting periods of up to ten years and maximum option terms of ten years. Stock option compensation expense recognized by the Company for the year ended December 31, 2008 was $232,000 compared to $209,000 in 2007 and $298,000 in 2006. As of December 31, 2008, options to purchase 504,280 shares of the Company’s Common Stock were available for grant under two of these plans.

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table summarizes the transactions of the Company’s stock option plans for the three-year period ended December 31, 2008:


				Weighted-average
	Number of shares			exercise price

Options outstanding — December 31, 2005		1,289,756		$	7.35
Options granted		28,200		$	31.41
Options exercised		(395,564	)	$	6.89
Options forfeited		(5,040	)	$	8.59

Options outstanding — December 31, 2006		917,352		$	8.27
Options granted		23,100		$	24.94
Options exercised		(328,902	)	$	6.46
Options forfeited		(7,680	)	$	23.44

Options outstanding — December 31, 2007		603,870		$	9.71
Options granted		21,300		$	52.81
Options exercised		(270,800	)	$	7.73
Options forfeited		(5,440	)	$	10.02

Options outstanding — December 31, 2008		348,930		$	13.87

Price range $5.75 — $7.00 (weighted-average contractual life of 4.1 years)		98,050		$	6.81
Price range $7.01 — $10.00 (weighted-average contractual life of 1.4 years)		139,240		$	7.84
Price range $10.01 — $52.81 (weighted-average contractual life of 6.5 years)		111,640		$	27.60

Exercisable options —
December 31, 2006		606,552		$	7.12
December 31, 2007		447,522		$	8.01
December 31, 2008		246,262		$	9.14

The following assumptions were used for valuing options granted in the years ended December 31:


	2008			2007

Per share fair value of options granted during the period	$	20.25		$	7.36
Risk-free interest rate		3.08	%		4.56	%
Dividend yield		0.68	%		1.28	%
Volatility factor		39	%		36	%
Weighted-average expected life in years		5.4			3.5

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table summarizes the aggregate intrinsic value related to options exercised, outstanding and exercisable as of and for the years ended December 31:


	2008		2007
	(In thousands)

Exercised	$	10,860	$	7,432
Outstanding	$	5,287	$	21,283
Exercisable	$	4,895	$	16,533

As of December 31, 2008, the unrecognized compensation cost related to stock options is approximately $0.7 million, which will be recognized over a weighted average period of 2.8 years.


B.	*Nonvested Stock*

Director Stock Grant Plan: Non-employee directors receive an annual award of $40,000 worth of shares of the Company’s Common Stock under the shareholder-approved 2007 Director Stock Grant Plan. The Company records compensation expense for this plan ratably over the annual service period beginning May 1. Director stock compensation expense recognized by the Company for the year ended December 31, 2008 was $240,000 compared to $267,000 of compensation expense recognized in 2007, and $214,000 recognized in 2006. As of December 31, 2008, the unrecognized compensation cost related to the nonvested director stock award that is expected to be recognized over the remaining four months is estimated to be approximately $80,000.

Restricted Stock: The Company has two restricted stock plans which provide for the issuance of nonvested shares of the Company’s Common Stock to certain eligible employees. The Company records compensation expense for these plans ratably over the vesting periods. Each plan authorizes the issuance of up to an aggregate of 100,000 shares of Common Stock generally with a three-year cliff vesting period contingent on employment. Nonvested stock compensation expense recognized by the Company for the year ended December 31, 2008 was $799,000 compared to $726,000 in 2007 and $519,000 in 2006. As of December 31, 2008, there were 96,734 shares available for grant under these plans.

The fair value of nonvested shares is determined based on the market price of the shares on the grant date.


				Fair value
	Shares			per share
	(In thousands except per share amounts)

Nonvested at December 31, 2005		31,000		$	18.33
Granted		48,000		$	31.41
Vested		(1,200	)	$	18.33

Nonvested at December 31, 2006		77,800		$	26.40
Granted		19,866		$	24.94
Forfeited		(4,800	)	$	—

Nonvested at December 31, 2007		92,866		$	25.86
Granted		11,600		$	52.81
Vested		(28,400	)	$	18.33
Forfeited		(2,400	)	$	—

Nonvested at December 31, 2008		73,666		$	33.05

As of December 31, 2008, there was $0.8 million of unrecognized compensation cost related to nonvested restricted stock that is expected to be recognized over a weighted average period of 0.98 years.

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)


Note 6	Commitments and Contingencies


A.	*Commitments*

The Company leases equipment and facilities under non-cancelable operating leases, some of which contain renewal options. Total future minimum lease payments consisted of the following at December 31, 2008:


	Total leases
	(In thousands)

2009	$	299
2010		128
2011		84
2012		41
2013		41
Thereafter		37

Total lease obligations	$	630

Total rental expense charged to operations under all operating leases was $1.4 million, $1.5 million and $1.3 million in 2008, 2007 and 2006, respectively.

The Company makes commitments in the normal course of business. At December 31, 2008, the Company had various contractual obligations, including facility construction contracts and operating leases that totaled $0.8 million, of which $0.4 million is due in 2009 and the remainder due between 2010 and 2014.


B.	*Contingencies*

In the normal course of business, the Company is named in legal proceedings. There are currently no material legal proceedings pending with respect to the Company. The more significant legal proceedings are discussed below.

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

statements as a whole. This belief is based in part on the fact that no claimant has demonstrated exposure to products manufactured or sold by the Company and that a number of cases have been voluntarily dismissed.

The Company reevaluates its exposures on a periodic basis and makes adjustments to reserves as appropriate.


Note 7	Employee Benefit Plans

The Company maintains a non-contributory defined benefit pension plan that covers substantially all U.S. employees, and supplemental non-qualified pension plans for certain officers and other key employees. Pension benefits are based primarily on years of service and, for certain plans, levels of compensation.

The Company also has certain postretirement healthcare benefit plans that provide medical benefits for certain retirees and eligible dependents. Employees are eligible to receive postretirement healthcare benefits upon meeting certain age and service requirements. These plans require employee contributions to offset benefit costs.

The Company adopted SFAS 158, as it relates to recognizing the funded status of its defined benefit pension and postretirement benefit plans in its Consolidated Balance Sheets and related disclosure provisions, on December 31, 2006. Funded status is defined as the difference between the projected benefit obligation and the fair value of plan assets. Upon adoption, the Company recorded an unrealized loss of $2.7 million to accumulated other comprehensive income (loss) representing the recognition of previously unrecorded pension and postretirement healthcare liabilities related to net unrecognized actuarial losses, unrecognized prior service costs and unrecognized prior service credits. These amounts will be subsequently recognized as a component of net periodic pension cost pursuant to the Company’s historical accounting policy for recognizing such amounts. In addition, the requirement to measure the funded status as of the date of the year-end Consolidated Balance Sheet was adopted on December 31, 2008. Upon adoption, the Company recorded a reduction to retained earnings of $0.6 million ($0.4 million, net of tax) and an increase to accumulated other comprehensive loss of $11.8 million ($7.4 million, net of tax).

Amounts included in accumulated other comprehensive loss, net of tax, at December 31, 2008 that have not yet been recognized in net periodic benefit cost are as follows:


			Other
	Pension		postretirement
	plans		benefits
	(In thousands)

Prior service cost	$	608	$	109
Net actuarial loss	$	7,369	$	460

Amounts included in accumulated other comprehensive loss, net of tax, at December 31, 2008 expected to be recognized in net periodic benefit cost during the fiscal year ending December 31, 2009 are as follows:


				Other
	Pension			postretirement
	plans			benefits
	(In thousands)

Prior service credit	$	(40	)	$	109
Net actuarial loss	$	731		$	—

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

A. Qualified Pension Plan

The Company maintains a non-contributory defined benefit pension plan for certain employees. The following table sets forth the components of net periodic pension cost for the years ended December 31, 2008, 2007 and 2006 based on a December 31 measurement date for 2008 and a September 30 measurement date for 2007 and 2006:


	2008			2007			2006
	(In thousands)

Service cost — benefits earned during the year	$	1,972		$	1,982		$	1,937
Interest cost on projected benefit obligations		2,746			2,518			2,380
Expected return on plan assets		(3,456	)		(3,530	)		(3,670	)
Amortization of prior service cost		(147	)		(147	)		(112	)
Amortization of net loss		1,161			1,127			1,273

Net periodic pension cost	$	2,276		$	1,950		$	1,808

Actuarial assumptions used in the determination of the net periodic pension cost were:


	2008			2007			2006

Discount rate		6.25	%		5.75	%		5.25	%
Expected long-term return on plan assets		8.25	%		8.5	%		8.5	%
Rate of compensation increase		5.0	%		5.0	%		5.0	%

The following table provides a reconciliation of benefit obligations, plan assets and funded status based on a December 31 measurement date for 2008 and a September 30 measurement date for 2007:


	2008			2007
	(In thousands)

Change in benefit obligation:
Benefit obligation at beginning of plan year	$	46,196		$	46,138
Service cost		2,466			1,982
Interest cost		3,432			2,518
Plan amendments		786			—
Actuarial gain		(2,149	)		(184	)
Benefits paid		(4,270	)		(4,258	)

Projected benefit obligation at measurement date	$	46,461		$	46,196

Change in plan assets:
Fair value of plan assets at beginning of plan year	$	45,527		$	44,267
Actual return (loss) on plan assets		(11,166	)		5,518
Benefits paid		(4,270	)		(4,258	)

Fair value of plan assets at measurement date	$	30,091		$	45,527

Funded status of the plan:
Benefit obligation in excess of plan assets		(16,370	)		(669	)

Accrued pension liability	$	(16,370	)	$	(669	)

Actuarial assumptions used in the determination of the benefit obligation of the above data were:


	2008			2007

Discount rate		6.90	%		6.25	%
Rate of compensation increase		5.0	%		5.0	%

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

The fair value of the pension plan assets was $30.1 million at December 31, 2008 and $45.5 million at December 31, 2007. The variation in the fair value of the assets between years was primarily from the change in the market value of the underlying investments. Estimated future benefit payments expected to be paid in each of the next five years beginning with 2009 are $4.8 million, $4.2 million, $4.2 million, $4.6 million and $5.0 million with an aggregate of $23.8 million for the five years thereafter. The Company initially expects to contribute $4.9 million to fund its pension plan in 2009 due to the reduction in the market value of the underlying investments; however, this estimate is subject to further calculation prior to actual payment.

The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of short- and long-term plan liabilities, plan funded status and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across various stocks, as well as growth, value, and small and large capitalizations. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements and periodic asset/liability studies. The Company’s pension plan weighted-average asset allocations by asset category at December 31 are as follows:


	2008			2007

Stocks		56	%		59	%
Fixed income funds		41			38
Cash and cash equivalents		3			3

Total		100	%		100	%

The pension plan has a separately determined accumulated benefit obligation that is the actuarial present value of benefits based on service rendered and current and past compensation levels. This differs from the projected benefit obligation in that it includes no assumption about future compensation levels. The accumulated benefit obligation was $46.4 million at December 31, 2008 and $45.8 million at September 30, 2007.


B.	*Supplemental Non-qualified Unfunded Plans*

The Company also maintains supplemental non-qualified unfunded plans for certain officers and other key employees. Expense for these plans was $333,000, $334,000 and $372,000 for years ended 2008, 2007 and 2006, respectively, and the amount accrued was $1.5 million and $1.8 million as of December 31, 2008 and 2007 respectively. Amounts were determined based on similar assumptions as the Qualified Pension Plan as of the December 31 measurement date for 2008 and the September 30 measurement date for 2007 and 2006.


C.	*Other Postretirement Benefits*

The Company has certain postretirement plans that provide medical benefits for certain retirees and eligible dependents. The following table sets forth the components of net periodic postretirement benefit cost for the years ended December 31, 2008, 2007 and 2006:


	2008		2007		2006
	(In thousands)

Service cost, benefits attributed for service of active employees for the period	$	141	$	173	$	224
Interest cost on the accumulated postretirement benefit obligation		394		401		422
Amortization of prior service cost (credit)		179		2		(36	)
Recognized net actuarial loss		19		105		155

Net periodic postretirement benefit cost	$	733	$	681	$	765

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

The discount rate used to measure the net periodic postretirement benefit cost was 6.35% for 2008, 5.75% for 2007 and 5.25% for 2006. It is the Company’s policy to fund health care benefits on a cash basis. Because the plans are unfunded, there are no plan assets. The following table provides a reconciliation of the projected benefit obligation at the Company’s December 31 measurement date.


	2008			2007
	(In thousands)

Benefit obligation at beginning of year	$	6,675		$	7,659
Service cost		141			173
Interest cost		394			401
Amendments		—			24
Actuarial gain		(733	)		(1,175	)
Plan participants contributions		442			453
Benefits paid		(759	)		(860	)

Benefit obligation and funded status at end of year	$	6,160		$	6,675

Amounts recognized in the Consolidated Balance Sheets at December 31:
Accrued compensation and employee benefits	$	575		$	592
Accrued non-pension postretirement benefits		5,585			6,083

Amounts recognized at December 31	$	6,160		$	6,675

The discount rate used to measure the accumulated postretirement benefit obligation was 6.90% for 2008 and 6.35% for 2007. Because the plan requires the Company to establish fixed Company contribution amounts for retiree health care benefits, future health care cost trends do not generally impact the Company’s accruals or provisions.

Estimated future benefit payments of postretirement benefits, assuming increased cost sharing, expected to be paid in each of the next five years beginning with 2009 are $0.6 million in each year with an aggregate of $2.8 million for the five years thereafter. These amounts can vary significantly from year to year because the cost sharing estimates can vary from actual expenses as the Company is self-insured.


D.	*Badger Meter Employee Savings and Stock Ownership Plan*

The Badger Meter Employee Savings and Stock Ownership Plan (the “ESSOP”) has used proceeds from loans, guaranteed by the Company, to purchase the Company’s shares of Common Stock that are held in treasury. The Company is obligated to contribute sufficient cash to the ESSOP to enable it to repay the loan principal and interest. The principal amount of the loan was $659,000 as of December 31, 2008 and $682,000 as of December 31, 2007. This principal amount has been recorded as long-term debt and a like amount of unearned compensation has been recorded as a reduction of shareholders’ equity in the accompanying Consolidated Balance Sheets.

The Company made principal payments of $23,000, $62,000 and $171,000 in 2008, 2007 and 2006, respectively. The associated commitments released shares of Common Stock in 2008 for the 2007 obligation (10,750 shares in 2008 for the 2007 obligation, 17,145 shares in 2007 for the 2006 obligation, and 11,671 shares in 2006 for the 2005 obligation), for allocation to participants in the ESSOP. The ESSOP held unreleased shares of 126,743, 137,493 and 154,538 as of December 31, 2008, 2007 and 2006, respectively, with a fair value of $3.7 million, $6.2 million and $4.3 million as of December 31, 2008, 2007 and 2006, respectively. Unreleased shares are not considered outstanding for purposes of computing earnings per share.

The ESSOP includes a voluntary 401(k) savings plan that allows certain employees to defer up to 20% of their income on a pretax basis subject to limits on maximum amounts. The Company matches 25% of each employee’s

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

contribution, with the match percentage applying to a maximum of 7% of the employee’s salary. The match is paid using the Company’s Common Stock released through the ESSOP loan payments. For ESSOP shares purchased prior to 1993, compensation expense is recognized based on the original purchase price of the shares released and dividends on unreleased shares are charged to retained earnings. For shares purchased after 1992, expense is based on the market value of the shares on the date released and dividends on unreleased shares are accounted for as additional interest expense. At December 31, 2008, the Company intends to use proceeds of $35,000 from the ESSOP to reduce the existing loan in 2009. This commitment releases shares to satisfy the 401(k) match for 2008. Compensation expense of $234,000, $190,000 and $209,000 was recognized for the match for 2008, 2007 and 2006, respectively.


Note 8	Income Taxes

The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related deferred tax assets and liabilities.

Details of earnings from continuing operations before income taxes and the related provision for income taxes are as follows:


	2008		2007		2006
	(In thousands)

Domestic	$	38,517	$	28,040	$	26,804
Foreign		1,038		1,285		685

Total	$	39,555	$	29,325	$	27,489

Income tax expense is included in the accompanying Consolidated Statements of Operations as follows:


	2008		2007		2006
	(In thousands)

Income tax expense:
Continuing operations	$	14,471	$	10,939	$	10,921
Discontinued operations		—		661		(1,655	)

Total	$	14,471	$	11,600	$	9,266

Provision for income taxes from continuing operations:


	2008			2007			2006
	(In thousands)

Current:
Federal	$	13,833		$	10,065		$	10,885
State		1,617			1,747			1,709
Foreign		510			429			256
Deferred:
Federal		(1,133	)		(1,209	)		(1,682	)
State		(257	)		(182	)		(302	)
Foreign		(99	)		89			55

Total	$	14,471		$	10,939		$	10,921

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

The provision for income tax differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate in each year due to the following items:


	2008			2007			2006
	(In thousands)

Provision at statutory rate	$	13,844		$	10,263		$	9,622
State income taxes, net of federal tax benefit		872			1,017			1,067
Foreign income taxes		(1,287	)		68			71
Domestic production activities deduction		(435	)		(355	)		—
Valuation allowance		1,606			—			—
Other		(129	)		(54	)		161

Actual provision	$	14,471		$	10,939		$	10,921

The components of the net deferred taxes as of December 31 were as follows (in thousands):


	2008			2007

Deferred tax assets:
Reserve for receivables	$	200		$	196
Reserve for inventories		1,027			1,065
Accrued compensation		839			814
Payables		503			733
Non-pension postretirement benefits		2,332			2,553
Accrued pension benefits		7,242			256
Accrued employee benefits		1,727			2,968
Currency translation loss		1,522			—
Valuation allowance on currency translation		(1,606	)		—
Net operating loss and tax credit carryforwards		110			147
Other		714			620

Total deferred tax assets		14,610			9,352

Deferred tax liabilities:
Depreciation		2,524			3,079

Total deferred tax liabilities		2,524			3,079

Net deferred tax assets	$	12,086		$	6,273

No provision for federal income taxes was made on the earnings of foreign subsidiaries that are considered permanently invested or that would be offset by foreign tax credits upon distribution. Such undistributed earnings at December 31, 2008 were $8.2 million.

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

The Company follows the provisions of Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48). Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows:


	(In thousands)

Balance at January 1, 2008	$	7,840
Decreases in unrecognized tax benefits as a result of positions taken during the prior period		(3	)
Increases in unrecognized tax benefits as a result of positions taken during the current period		166
Decreases in unrecognized tax benefits relating to settlements with taxing authorities		(125	)
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations		(27	)

Balance at December 31, 2008	$	7,851

The Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits during the fiscal year ending December 31, 2009. However, the Company is under regular audit by tax authorities and is in the initial stages of a 2006 Federal income tax audit. The gross liability for unrecognized tax benefits includes certain deductions that were taken on the 2006 federal tax return related to the shutdown of the Company’s French subsidiaries. To the extent these unrecognized tax benefits are ultimately recognized, they will impact the effective tax rate in a future period, possibly as early as the fiscal year ending December 31, 2009.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2004. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. Accrued interest was $1.0 million at December 31, 2008 and there are no penalties accrued. The total amount of interest expense recognized during 2008 in the Company’s Consolidated Statements of Operations was $0.6 million.

The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.


Note 9	Long-Term Debt and Fair Value of Financial Instruments

Long-term debt consists of the following:


	2008			2007
	(In thousands)

ESSOP debt (Note 7 D)	$	659		$	682
Term loans		14,520			5,185

Total debt		15,179			5,867
Less: current maturities		(9,675	)		(2,738	)

Long-term debt	$	5,504		$	3,129

Interest on the ESSOP debt may be charged at either prime rate or at LIBOR plus 1.5%. As of December 31, 2008, the LIBOR-based loan had an interest rate of 4.75%. The terms of the loan allow variable payments of principal with the final principal and interest payment due April 30, 2010. The interest expense on the ESSOP debt was $21,000, $19,000 and $20,000, which was net of dividends on unallocated ESSOP shares of $30,000, $28,000 and $28,000 for 2008, 2007 and 2006, respectively.

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)

In May 2005, the Company obtained a long-term, unsecured loan to replace existing short-term debt. The Company secured a $10 million, five-year term loan that bears interest at 5.59% with remaining annual principal payments of $2.2 million in 2009 and $0.9 million in 2010.

In July 2008, the Company obtained a long-term, unsecured loan primarily to purchase the Galaxy ^® technology in the second quarter of 2008. The Company secured a $15 million, two-year term loan that bears interest at 5.04% with remaining annual principal payments of $7.5 million in 2009 and $3.9 million in 2010.

Cash, receivables and payables are reflected in the financial statements at fair value. Short-term debt is comprised of notes payable drawn against the Company’s lines of credit and commercial paper. Because of the short-term nature of these instruments, the carrying value approximates the fair value. The $5.7 million of short-term debt outstanding under the euro-based revolving loan facilities was renewed at December 31, 2008 at current interest rates and therefore carrying value approximates fair market value. The five-year term loan with $3.1 million outstanding and the two-year term loan with $11.4 million outstanding has an estimated fair value equal to their carrying values at December 31, 2008, based on quoted market rates.


Note 10	Industry Segment and Geographic Areas

The Company is a manufacturer and a marketer of products incorporating liquid flow measurement and control technologies, which comprise one reportable segment. The Company manages and evaluates its operations as one segment primarily due to similarities in the nature of the products, production processes, customers and methods of distribution.

Information regarding revenues from continuing operations by geographic area is as follows:


	2008		2007		2006
	(In thousands)

Revenues:
United States	$	246,901	$	207,545	$	208,579
Foreign:
Europe	$	11,546	$	11,404	$	9,979
Mexico	$	9,581	$	6,254	$	4,055
Other	$	11,524	$	9,613	$	7,141

Information regarding assets related to continuing operations by geographic area is as follows:


	2008		2007
	(In thousands)

Long-lived assets (all non-current assets except deferred tax asset):
United States	$	67,696	$	42,299
Foreign:
Europe	$	11,033	$	10,267
Mexico	$	20,795	$	14,366
Total assets:
United States	$	151,068	$	113,068
Foreign:
Europe	$	20,349	$	19,208
Mexico	$	23,941	$	18,025

BADGER METER, INC.

Notes to Consolidated Financial Statements — (Continued)


Note 11	Unaudited: Quarterly Results of Operations, Common Stock Price and Dividends


	Quarter Ended
	March 31		June 30			September 30			December 31
	(In thousands except per share data)

2008
Net sales	$	68,420	$	74,660		$	68,826		$	67,646
Gross margin	$	24,524	$	26,374		$	23,408		$	24,152
Net earnings	$	6,020	$	7,041		$	5,828		$	6,195
Earnings per share:
Basic	$	0.42	$	0.49		$	0.40		$	0.42
Diluted	$	0.41	$	0.48		$	0.39		$	0.42
Dividends declared	$	0.09	$	0.09		$	0.11		$	0.11
Stock price:
High	$	47.40	$	55.00		$	62.74		$	47.00
Low	$	34.61	$	41.36		$	42.13		$	17.58
Quarter-end close	$	43.20	$	50.53		$	46.95		$	29.02

2007
Net sales	$	52,663	$	62,173		$	62,782		$	57,198
Gross margin	$	16,255	$	22,534		$	22,668		$	19,941
Earnings from continuing operations	$	2,469	$	5,720		$	6,016		$	4,181
Earnings (loss) from discontinued operations	$	103	$	(252	)	$	(265	)	$	(1,515	)
Net earnings	$	2,572	$	5,468		$	5,751		$	2,666
Earnings (loss) per share:
Basic:
Continuing operations	$	0.17	$	0.40		$	0.42		$	0.29
Discontinued operations	$	0.01	$	(0.01	)	$	(0.02	)	$	(0.10	)
Total basic	$	0.18	$	0.39		$	0.40		$	0.19
Diluted:
Continuing operations	$	0.17	$	0.39		$	0.41		$	0.28
Discontinued operations	$	0.01	$	(0.01	)	$	(0.02	)	$	(0.10	)
Total diluted	$	0.18	$	0.38		$	0.39		$	0.18
Dividends declared	$	0.08	$	0.08		$	0.09		$	0.09
Stock price:
High	$	31.91	$	29.50		$	36.74		$	46.43
Low	$	25.06	$	23.00		$	27.87		$	31.91
Quarter-end close	$	26.55	$	28.26		$	32.05		$	44.95

An adjustment relating specifically to the provision for income taxes for discontinued French operations was recorded in the fourth quarter of 2007. This adjustment resulted in lower fourth quarter earnings from discontinued operations of approximately $0.8 million, or $0.06 per diluted share, and was deemed to be immaterial with respect to the impact on prior quarters.

The Company’s Common Stock is listed on the New York Stock Exchange under the symbol BMI. Earnings per share is computed independently for each quarter. As such, the annual per share amount may not equal the sum of the quarterly amounts due to rounding. The Company currently anticipates continuing to pay cash dividends. Shareholders of record as of December 31, 2008 and 2007 totaled 797 and 631, respectively, for Common Stock. Voting trusts and street name shareholders are counted as single shareholders for this purpose.


ITEM 9.	*CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE*

None.


ITEM 9A.	*CONTROLS AND PROCEDURES*

Evaluation of Disclosure Controls and Procedures

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), the Company’s management evaluated, with the participation of the Company’s Chairman, President and Chief Executive Officer and the Company’s Senior Vice President — Finance, Chief Financial Officer and Treasurer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the year ended December 31, 2008. Based upon their evaluation of these disclosure controls and procedures, the Company’s Chairman, President and Chief Executive Officer and the Company’s Senior Vice President — Finance, Chief Financial Officer and Treasurer concluded that, as of the date of such evaluation, the Company’s disclosure controls and procedures were effective in accumulating and timely alerting them to information relating to the Company, including its consolidated subsidiaries, as appropriate to allow timely decisions regarding required disclosure to be included in its periodic SEC filings, particularly during the period in which this Annual Report on Form 10-K was being prepared.

Changes in Internal Controls over Financial Reporting

There was no change in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 2008 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Annual Report on Internal Control over Financial Reporting

The report of management required under this Item 9A. is contained in Item 8 of this 2008 Annual Report on Form 10-K under the heading “Management’s Annual Report on Internal Control over Financial Reporting.”

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

The attestation report required under this Item 9A. is contained in Item 8 of this 2008 Annual Report on Form 10-K under the heading “Report of Independent Registered Public Accounting Firm.”


ITEM 9B.	*OTHER INFORMATION*

None.

PART III


ITEM 10.	*DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE*

Information required by this Item with respect to directors is included under the headings “Nomination and Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s definitive Proxy Statement relating to the Annual Meeting of Shareholders to be held on April 24, 2009, and is incorporated herein by reference.

Information concerning the executive officers of the Company is included in Part I, Item 4A of this 2008 Annual Report on Form 10-K.

The Company has adopted the Badger Meter, Inc. Code of Conduct for Financial Executives that applies to the Company’s Chairman, President and Chief Executive Officer, the Company’s Senior Vice President — Finance, Chief Financial Officer and Treasurer and other persons performing similar functions. A copy of the Badger Meter, Inc. Code of Conduct for Financial Executives is posted on the Company’s website at www.badgermeter.com . The Badger Meter, Inc. Code of Conduct for Financial Executives is also available in print to any shareholder who requests it in writing from the Secretary of the Company. The Company satisfies the disclosure requirements under Item 5.05 of Form 8-K regarding amendments to, or waivers from, the Badger Meter, Inc. Code of Conduct for Financial Executives by posting such information on the Company’s website at www.badgermeter.com.

The Company is not including the information contained on its website as part of, or incorporating it by reference into, this Annual Report on Form 10-K.


ITEM 11.	*EXECUTIVE COMPENSATION*

Information required by this Item is included under the headings “Executive Compensation” and “Compensation Committee Interlocks and Insider Participation” in the Company’s definitive Proxy Statement relating to the Annual Meeting of Shareholders to be held on April 24, 2009, and is incorporated herein by reference; provided, however, that the information under the subsection “Executive Compensation — Compensation Committee Report” is not deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to be the liabilities of Section 18 of the Securities Exchange Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent it is specifically incorporated by reference into such a filing.


ITEM 12.	*SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS*

Information required by this Item is included under the headings “Stock Ownership of Beneficial Owners Holding More than Five Percent”, “Stock Ownership of Management” and “Equity Compensation Plan Information” in the Company’s definitive Proxy Statement relating to the Annual Meeting of Shareholders to be held on April 24, 2009, and is incorporated herein by reference.


ITEM 13.	*CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE*

Information required by this Item is included under the headings “Related Person Transactions” and “Nomination and Election of Directors — Independence, Committees, Meetings and Attendance” in the Company’s definitive Proxy Statement relating to the Annual Meeting of Shareholders to be held on April 24, 2009, and is incorporated herein by reference.


ITEM 14.	*PRINCIPAL ACCOUNTANT FEES AND SERVICES*

Information required by this Item is included under the heading “Principal Accounting Firm Fees” in the Company’s definitive Proxy Statement relating to the Annual Meeting of Shareholders to be held on April 24, 2009, and is incorporated herein by reference.

PART IV


ITEM 15.	*EXHIBITS AND FINANCIAL STATEMENT SCHEDULES*

Documents filed as part of this Annual Report on Form 10-K:

1. Financial Statements. See the financial statements included in Part II, Item 8 “Financial Statements and Supplementary Data” in this 2008 Annual Report on Form 10-K, under the headings “Consolidated Balance Sheets,” “Consolidated Statements of Operations,” “Consolidated Statements of Cash Flows” and “Consolidated Statements of Shareholders’ Equity.”

2. Financial Statement Schedules. Financial statement schedules are omitted because the information required in these schedules is included in the Notes to Consolidated Financial Statements.

3. Exhibits. See the Exhibit Index included in this 2008 Annual Report on Form 10-K that is incorporated herein by reference.

SIGNATURE

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 thereunto duly authorized.

BADGER METER, INC.


	By	/s/ Richard A. Meeusen

Richard A. Meeusen

Chairman, President and Chief Executive Officer


	By	/s/ Richard E. Johnson

Richard E. Johnson

Senior Vice President — Finance, Chief Financial

Officer and Treasurer


	By	/s/ Beverly L. P. Smiley

Beverly L. P. Smiley

Vice President — Controller

Dated: February 27, 2009

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:


/s/ Richard A. Meeusen		/s/ Ulice Payne, Jr.
Richard A. Meeusen Chairman, President and Chief Executive Officer, and Director February 27, 2009		Ulice Payne, Jr. Director February 27, 2009
/s/ Ronald H. Dix		/s/ Andrew J. Policano
Ronald H. Dix Director February 27, 2009		Andrew J. Policano Director February 27, 2009
/s/ Thomas J. Fischer		/s/ Steven J. Smith
Thomas J. Fischer Director February 27, 2009		Steven J. Smith Director February 27, 2009
/s/ Kenneth P. Manning		/s/ John J. Stollenwerk
Kenneth P. Manning Director February 27, 2009		John J. Stollenwerk Director February 27, 2009

EXHIBIT INDEX


Exhibit No.			Exhibit Description

	(3	.0)	Restated Articles of Incorporation (as in effect as of August 8, 2008).
			[Incorporated by reference to Exhibit (3.2) to Badger Meter, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2008 (Commission File No. 001-06706)].
	(3	.1)	Restated By-Laws (as in effect as of August 8, 2008).
			[Incorporated by reference to Exhibit (3.4) to Badger Meter, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2008 (Commission File No. 001-06706)].
	(4	.0)	Loan Agreement between Bank One, N.A. and the Badger Meter Employee Savings and Stock Ownership Plan and Trust, dated June 20, 2003.
			[Incorporated by reference from Exhibit (4) to Badger Meter, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2003 (Commission File No. 001-06706)].
	(4	.1)	Note Modification Agreement and Amendment to Loan Agreement dated June 20, 2003 between JPMorgan Chase Bank, N.A. and the Badger Meter Employee Savings and Stock Ownership Plan and Trust, dated April 28, 2008.
	(4	.2)	Rights Agreement, dated February 15, 2008, between Badger Meter, Inc. and American Stock Transfer & Trust Company.
			[Incorporated by reference to Exhibit (4.1) to Badger Meter, Inc.’s Current Report on Form 8-K, dated February 22, 2008 (Commission File No. 001-06706)].
	(4	.3)	Loan Agreement dated October 14, 2008 between Badger Meter, Inc. and the M&I Marshall & Ilsley Bank relating to Badger Meter, Inc.’s Euro note.
			[Incorporated by reference from Exhibit (4.2) to Badger Meter, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2008 (Commission File No. 001-06706)].
	(4	.4)	Loan Agreement dated November 1, 2008 between Badger Meter, Inc. and the M&I Marshall & Ilsley Bank relating to Badger Meter, Inc.’s revolving credit loan.
			[Incorporated by reference to Exhibit (4.1) to Badger Meter, Inc.’s Quarterly Report on Form 10-Q dated September 30, 2008 (Commission File No. 001-06706)].
	(4	.5)	Loan Agreement dated May 20, 2005 between Badger Meter, Inc. and the M&I Marshall & Ilsley Bank relating to Badger Meter, Inc.’s business note.
			[Incorporated by reference from Exhibit (4.2) to Badger Meter, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2005 (Commission File No. 001-06706)].
	(4	.6)	Loan Agreement dated July 1, 2008 between Badger Meter, Inc. and the M&I Marshall & Ilsley Bank relating to Badger Meter, Inc.’s business note.
			[Incorporated by reference from Exhibit (4.1) to Badger Meter, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2008 (Commission File No. 001-06706)].
	(10	.0)*	Badger Meter, Inc. Employee Savings and Stock Ownership Plan.
			[Incorporated by reference from Exhibit (4.1) to Badger Meter, Inc.’s Form S-8 Registration Statement (Registration No. 33-62241)].
	(10	.1)*	Badger Meter, Inc. 1993 Stock Option Plan.
			[Incorporated by reference from Exhibit (4.3) to Badger Meter, Inc.’s Form S-8 Registration Statement (Registration No. 33-65618)].
	(10	.2)*	Badger Meter, Inc. 1995 Stock Option Plan.
			[Incorporated by reference from Exhibit (4.1) to Badger Meter, Inc.’s Form S-8 Registration Statement (Registration No. 33-62239)].
	(10	.3)*	Badger Meter, Inc. 1997 Stock Option Plan.
			[Incorporated by reference from Exhibit (4.1) to Badger Meter, Inc.’s Form S-8 Registration Statement (Registration No. 333-28617)].
	(10	.4)*	Badger Meter, Inc. 1999 Stock Option Plan.
			[Incorporated by reference from Exhibit (4.1) to Badger Meter, Inc.’s Form S-8 Registration Statement (Registration No. 333-73228)].


Exhibit No.			Exhibit Description

	(10	.5)*	Badger Meter, Inc. 2003 Stock Option Plan.
			[Incorporated by reference from Exhibit (4.1) to Badger Meter, Inc.’s Form S-8 Registration Statement (Registration No. 333-107850)].
	(10	.6)*	Long-Term Incentive Plan.
			[Incorporated by reference from Exhibit (10.6) to Badger Meter, Inc.’s Annual Report on Form 10-K for the year ended December 31, 1995 (Commission No. 001-06706)].
	(10	.7)*	Badger Meter, Inc. 2005 Restricted Stock Plan.
			[Incorporated by reference to Appendix A to Badger Meter, Inc.’s Proxy statement for the Annual Meeting of Shareholders on April 29, 2005 (Commission No. 001-06706)].
	(10	.8)*	Form of Restricted Stock Award Agreement under Badger Meter, Inc. 2005 Restricted Stock Plan.
			[Incorporated by reference from Badger Meter, Inc.’s Form 8-K dated May 5, 2005 (Commission No. 001-06706)].
	(10	.9)*	Badger Meter, Inc. 2008 Restricted Stock Plan.
			[Incorporated by reference to Exhibit 4.1 to Badger Meter, Inc.’s Registration Statement on Form S-8 (Registration No. 333-150567)].
	(10	.10)*	Form of Restricted Stock Agreement under Badger Meter, Inc. 2008 Restricted Stock Plan.
			[Incorporated by reference from Badger Meter, Inc.’s Registration Statement on Form S-8 (Registration No. 333-150567)].
	(10	.11)*	2007 Director Stock Grant Plan.
			[Incorporated by reference to Exhibit 10.1 to Badger Meter, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2007 (Commission File No. 001-06706)].
	(10	.12)*	Form of the Key Executive Employment and Severance Agreements between Badger Meter, Inc. and the applicable executive officers.
	(10	.13)*	Amended and Restated Badger Meter, Inc. Executive Supplemental Plan.
	(10	.14)*	Amended and Restated Badger Meter, Inc. Deferred Compensation Plan.
	(10	.15)*	Amended and Restated Deferred Compensation Plan for Certain Directors.
	(10	.16)*	Amended and Restated Executive Supplemental Plan II.
	(21	.0)	Subsidiaries of the Registrant.
	(23	.0)	Consent of Ernst & Young LLP.
	(31	.1)	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	(31	.2)	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	(32	.0)	Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	(99	.0)	Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 24, 2009. To be filed with the Securities and Exchange Commission under Regulation 14A within 120 days after the end of the Registrant’s fiscal year. With the exception of the information incorporated by reference into Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K, the definitive Proxy Statement is not deemed filed as part of this report.

* A management contract or compensatory plan or arrangement.

Exhibit (4.1)

Note Modification Agreement and Amendment to Loan Agreement dated June 20, 2003 between JPMorgan Chase Bank, N.A. and the Badger Meter Employee Savings and Stock Ownership Plan and Trust, dated April 28, 2008.

Amendment to Loan Agreement dated June 20, 2003

This agreement is dated as of April 28, 2008, to be effective as of April 28, 2008 by and between Badger Meter Employee Savings and Stock Ownership Plan and Trust (the “Borrower”) and JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA with its main office in Chicago, IL (the “Bank”), and its successors and assigns.

WHEREAS , the Borrower and the Bank entered into a Loan Agreement dated June 20, 2003, as amended (if applicable) (the “Credit Agreement”); and

WHEREAS , the Borrower has requested and the Bank has agreed to amend the Credit Agreement as set forth below;

NOW, THEREFORE , in mutual consideration of the agreements contained herein and for other good and valuable consideration, the parties agree as follows;

DEFINED TERMS . Capitalized terms not defined herein shall have the meaning ascribed in the Credit Agreement.

MODIFICATION OF CREDIT AGREEMENT . The Credit Agreement is hereby amended as follows:

Section 1.13 of the Credit Agreement captioned “Termination Date” and Section 2.1 of the Credit Agreement captioned “Stock Acquisition Loan” are hereby amended by deleting the date “April 30, 2006” contained therein and replacing it with “April 30, 2010”.

RATIFICATION . The Borrower confirms that the Credit Agreement remains in full force and effect, other than as specifically modified herein.

EXECUTION AND DELIVERY . This agreement shall become effective only after it is fully executed by the Borrower, Badger Meter, Inc., and the Bank, and the Bank shall have received from the Borrower the following documents: Note Modification Agreement.

ACKNOWLEDGEMENT OF BORROWER . The Borrower, the Bank and Badger Meter, Inc. acknowledge and agree that this agreement is limited to the terms outlined above, and shall not be construed as an agreement to change any other terms or provisions of the Credit Agreement. This agreement shall not establish a course of dealing or be construed as evidence of any willingness on the Bank’s part to grant other or future agreements, should any be requested.

NOT A NOVATION . This agreement is a modification only and not a novation. Except for the above-quoted modification(s), the Credit Agreement, any loan agreements, credit agreements, reimbursement agreements, security agreements, mortgages, deeds of trust, pledge agreements, assignments, guaranties, instruments or documents executed in connection with the Credit Agreement, and all the terms and conditions thereof, shall be and remain in full force and effect with the changes herein deemed to be incorporated therein. This agreement is to be considered attached to the Credit Agreement and made a part thereof. This agreement shall not release or affect the liability of any guarantor of any promissory note or credit facility executed in reference to the Credit Agreement or release any owner of collateral granted as security for the Credit Agreement. The validity, priority and enforceability of the Credit Agreement shall not be impaired hereby. To the extent that any provision of this agreement conflicts with any term or condition set forth in the Credit Agreement, or any document executed in conjunction therewith, the provisions of this agreement shall supersede and control. The Borrower and the Bank, respectfully, each expressly reserves all rights against all parties to the Credit Agreement.

Bank:


JPMorgan Chase Bank, N.A.

By:		/s/ Fred J. Nehrling, Vice President


Date Signed: 4/30/08


BORROWER: Badger Meter Employee Savings and Stock Ownership Plan and Trust

By:		/s/ Michael C. Wieber, Vice President, Marshall & Ilsley Trust Company N.A., Trustee


Date Signed: 4/28/08

By:		/s/ Lora C. Sykora, Vice President, Marshall & Ilsley Trust Company N.A., Trustee


Date Signed: 4/28/08

The undersigned, Badger Meter, Inc., is signing below to acknowledge, ratify, and reaffirm the representation, warranties and convenants set forth in Sections 3, 5, and 7 of the Loan Agreement dated June 20, 2003.


Badger Meter, Inc.

By:		/s/ Ronald H. Dix, Sr. Vice President — Administration


Date Signed: 4/28/08

Note Modification Agreement

This agreement is dated as of April 28, 2008 (the “Agreement Date”), to be effective as of April 28, 2008 (the “Effective Date”), by and between Badger Meter Employee Savings and Stock Ownership Plan and Trust (the “Borrower”) and JP Morgan Chase Bank, NA, successor by merger to Bank One, NA with its main office in Chicago, IL (the “Bank”).

WHEREAS , the Borrower executed a Promissory Note as evidence of indebtedness in the original face amount of One Million Two Hundred Eight-Five Thousand and 00/100 Dollars ($1,285,000.00), dated June 20, 2003 owing by the Borrower to the Bank, as same may have been amended or modified from time to time (the “Note”), which Note has at all times been, and is now, continuously and without interruption outstanding in favor of the Bank; and,

WHEREAS , the Borrower has requested and the Bank has agreed that the Note be modified to the limited extent as hereinafter set forth;

NOW THEREFORE , in mutual consideration of the agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.		ACCURARY OF RECITALS. The Borrower acknowledges the accuracy of the Recitals stated above.

2.		MODIFICATION OF NOTE.

From and after the Effective Date, the date in which the entire unpaid principal balance plus all accrued interest shall be due and payable is hereby changed from April 30, 2008 to April 30, 2010.

RATIFICATION OF RELATED DOCUMENTS AND COLLAERAL. The Note shall remain in full force and effect as IT may be modified herein.

4. EXECUTION AND DELIVERY OF AGREEMENT BY THE BANK. Neither the Borrower nor the Bank shall be bound by this agreement until both the Borrower and the Bank have executed this Agreement.

5. INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER. The Note as modified herein (along with the related Loan Agreement dated June 20, 2003, as amended, between JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA and Badger Meter Employee Savings and Stock Ownership Plan and Trust) contain the complete understanding and agreement of the Borrower and the Bank in respect of the loan and supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations. No provision of the Note as modified herein may be changed, discharged, supplemented, terminated, or waived except in a writing signed by the party against whom it is being enforced.

6. COUNTERPART EXECUTION . This agreement may be executed in multiple counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts, taken together, shall constitute one and the same agreement.

7. NOT A NOVATION . This agreement is a modification only and not a novation. In addition to all amounts hereafter due under the Note as modified herein, all accrued interest evidenced by the Note being modified by this agreement shall continue to be due and payable until paid. Except for the above-quoted modification(s), the Note, and all the terms and conditions thereof, shall be and remain in full force and effect with the changes herein deemed to be incorporated therein. This agreement is to be considered attached to the Note and made a part thereof. This agreement shall not release or affect the liability of any guarantor, surety or endorser of the Note or release any owner of collateral securing the Note. The validity, priority and enforceability of the Note shall not be impaired hereby.


Bank:

JPMorgan Chase Bank, N.A.

By:		/s/ Fred J. Nehrling, Vice President


Date Signed: 4/30/08

BORROWER: Badger Meter Employee Savings and Stock Ownership Plan and Trust

By:		/s/ Michael C. Wieber, Vice President, Marshall & Ilsley Trust Company N.A., Trustee


Date Signed: 4/28/08

By:		/s/ Lora C. Sykora, Vice President, Marshall & Ilsley Trust Company N.A., Trustee


Date Signed: 4/28/08

Exhibit (10.12)

FORM OF THE KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT

THIS KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT (this “Agreement”) is made and entered into as of the ___day of , 20___, by and between Badger Meter, Inc., a Wisconsin corporation (hereinafter referred to as the “Company”), and (hereinafter referred to as the “Executive”).

W I T N E S S E T H :

WHEREAS , the Executive is employed by the Company and/or a subsidiary of the Company in a key executive capacity, and the Executive’s services are valuable to the conduct of the business of the Company;

WHEREAS , the Board of Directors of the Company (the “Board”) recognizes that circumstances may arise in which a change in control of the Company occurs, through acquisition or otherwise, thereby causing uncertainty about the Executive’s future employment with the Company and/or any such subsidiary without regard to the Executive’s competence or past contributions, which uncertainty may result in the loss of valuable services of the Executive to the detriment of the Company and its shareholders, and the Company and the Executive wish to provide reasonable security to the Executive against changes in the Executive’s relationship with the Company in the event of any such change in control;

WHEREAS , the Company and the Executive desire that any proposal for a change in control or acquisition of the Company will be considered by the Executive objectively and with reference only to the best interests of the Company and its shareholders;

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

WHEREAS , if the Executive and the Company have previously entered into a similar agreement, this Agreement supersedes all prior agreements between the Executive and the Company with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the agreement between the Executive and the Company with respect to its subject matter.

NOW, THEREFORE , in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto mutually covenant and agree as follows:

1. Definitions . The following terms are used in this Agreement as defined in Exhibit A :


Act		Covered Termination
Accrued Benefits		Effective Date
Affiliate and Associate		Employer
Annual Cash Compensation		Good Reason
Cause		Normal Retirement
Change in Control		Notice of Termination
Code		Person
Competitive Activity		Termination Date

2. Termination or Cancellation Prior to the Effective Date . The Employer shall retain the right to terminate the employment of the Executive at any time prior to the Effective Date. If the Executive’s employment is terminated prior to the Effective Date, then this Agreement shall be terminated and cancelled and of no further force or effect and any and all rights and obligations of the parties hereunder shall cease. In addition, this Agreement shall terminate upon the Executive ceasing to be an officer of the Employer prior to a Change in Control unless the Executive can reasonably demonstrate that such change in status occurred under circumstances described in clause (iii)(B)(1) or (iii)(B)(2) of the definition of “Effective Date” in Exhibit A .

3. Employment Period . If the Executive is employed by the Employer on the Effective Date, then the Company will, or will cause the Employer to, continue thereafter to employ the Executive during the Employment Period (as hereinafter defined), and the Executive will remain in the employ of the Employer, in accordance with and subject to the terms and provisions of this Agreement. For purposes of this Agreement, the term “Employment Period” means a period (i) commencing on the Effective Date, and (ii) ending at 11:59 p.m. Milwaukee Time on the second anniversary [or third anniversary for the CEO] of such date.

4. Duties . During the Employment Period, the Executive shall devote the Executive’s best efforts and all of the Executive’s business time, attention and skill to the business and affairs of the Employer, as such business and affairs now exist and as they may hereafter be conducted.

5. Compensation . During the Employment Period, the Executive shall be compensated as follows:

(a) The Executive shall receive, at reasonable intervals (but not less often than monthly) and in accordance with such standard policies as may be in effect immediately prior to the Effective Date, an annual base salary in cash equivalent of not less than twelve times the Executive’s highest monthly base salary for the twelve-month period immediately preceding the month in which the Effective Date occurs or, if higher, annual base salary at the rate in effect immediately prior to the Effective Date (which base salary shall, unless otherwise agreed in writing by the Executive, include the current receipt by the Executive of any amounts which, prior to the Effective Date, the Executive had elected to defer, whether such compensation is deferred under Section 401(k) of the Code or otherwise), subject to upward adjustment as provided in Section 6 (such salary amount as adjusted upward from time to time is hereafter referred to as the “Annual Base Salary”).

(b) The Executive shall receive fringe benefits at least equal in value to those provided for the Executive at any time during the 180-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to any executives of the Company and its Affiliates of comparable status and position to the Executive. The Executive shall be reimbursed, at such intervals and in accordance with such standard policies that are most favorable to the Executive that were in effect at any time during the 180-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to any executives of the Company and its Affiliates of comparable status and position to the Executive, for any and all monies advanced in connection with the Executive’s employment for reasonable and necessary expenses incurred by the Executive on behalf of the Company and its Affiliates, including travel expenses.

(c) The Executive and/or the Executive’s family, as the case may be, shall be included, to the extent eligible thereunder (which eligibility shall not be conditioned on the Executive’s salary grade or on any other requirement that excludes executives of the Company and its Affiliates of comparable status and position to the Executive unless such exclusion was in effect for such plan or an equivalent plan on the date 180 days prior to the Effective Date), in any and all welfare benefit plans, practices, policies and programs providing benefits for the Company’s salaried employees in general or, if more favorable to the Executive, to any executives of the Company and its Affiliates of comparable status and position to the Executive, including but not limited to group life insurance, hospitalization, medical and dental plans; provided , that , in no event shall the aggregate level of benefits under such plans, practices, policies and programs in which the Executive is included be less than the greater of: (i) the aggregate level of benefits under plans, practices, policies and programs of the type referred to in this Section 5(c) in which the Executive was participating at any time during the 180-day period immediately preceding the Effective Date and (ii) the aggregate level of benefits under plans, practices, policies and programs of the type referred to in this Section 5(c) provided at any time after the Effective Date to any executive of the Company and its Affiliates of comparable status and position to the Executive.

(d) The Executive shall annually be entitled to not less than the amount of paid vacation and not fewer than the number of paid holidays to which the Executive was entitled annually at any time during the 180-day period immediately preceding the Effective Date or such greater amount of paid vacation and number of paid holidays as may be made available annually to any other executive of the Company and its Affiliates of comparable status and position to the Executive at any time after the Effective Date.

(e) The Executive shall be included in all plans providing additional benefits to any executives of the Company and its Affiliates of comparable status and position to the Executive, including but not limited to deferred compensation, split-dollar life insurance, retirement, supplemental retirement, stock option, stock appreciation, stock bonus and similar or comparable plans; provided, that, in no event shall the aggregate level of benefits under such plans be less than the greater of: (i) the aggregate level of benefits under plans of the type referred to in this Section 5(e) in which the Executive was participating at any time during the 180-day period immediately preceding the Effective Date and (ii) the aggregate level of benefits under plans of the type referred to in this Section 5(e) provided at any time after the Effective Date to any executive of the Company and its Affiliates of comparable status and position to the Executive. The Company’s obligation to include the Executive in bonus or incentive compensation plans shall be determined by Section 5(f) .

(f) To assure that the Executive will have an opportunity to earn incentive compensation after the Effective Date, the Executive shall be included in a bonus plan of the Company that shall satisfy the standards described below (the “Bonus Plan”). Bonuses under the Bonus Plan shall be payable with respect to achieving such financial or other goals reasonably related to the business of the Company, including the Employer, as the Company shall establish (the “Goals”), all of which Goals shall be attainable, prior to the end of the Employment Period, with approximately the same degree of probability as the goals under the Employer’s annual incentive plan currently in effect,

or the successor to such plan, in the form most favorable to the Executive that was in effect at any time during the 180-day period prior to the Effective Date (the “Existing Plan”) and in view of the Company’s existing and projected financial and business circumstances applicable at the time. The amount of the bonus (the “Bonus Amount”) that the Executive is eligible to earn under the Bonus Plan shall be no less than the amount of the Executive’s highest maximum potential award under the Existing Plan at any time during the 180-day period prior to the Effective Date or, if higher, any maximum potential award under the Bonus Plan or any other bonus or incentive compensation plan in effect after the Effective Date for the Executive or for any executive of the Company and its Affiliates of comparable status and position to the Executive (such bonus amount herein referred to as the “Targeted Bonus”), and if the Goals are not achieved (and, therefore, the entire Targeted Bonus is not payable), then the Bonus Plan shall provide for a payment of a Bonus Amount not less than a portion of the Targeted Bonus reasonably related to that portion of the Goals that were achieved. Payment of the Bonus Amount (i) shall be in cash, unless otherwise agreed by the Executive, and (ii) shall not be affected by any circumstance occurring subsequent to the end of the Employment Period, including termination of the Executive’s employment.

6. Annual Compensation Adjustments . During the Employment Period, the Board of Directors of the Company (or an appropriate committee thereof) will consider and appraise, at least annually, the contributions of the Executive to the Employer, and in accordance with the Company’s practice prior to the Effective Date, due consideration shall be given, at least annually, to the upward adjustment of the Executive’s Annual Base Salary (i) commensurate with increases generally given to other executives of the Company and its Affiliates of comparable status and position to the Executive, and (ii) as the scope of the Company’s operations or the Executive’s duties expand.

7. Termination During Employment Period .

(a) Right to Terminate . During the Employment Period, (i) the Company shall be entitled to terminate the Executive’s employment (A) for Cause, (B) by reason of the Executive’s disability pursuant to Section 11 , or (C) for any other reason, and (ii) the Executive shall be entitled to terminate the Executive’s employment for any reason. Any such termination shall be subject to the procedures set forth in Section 12 and shall be subject to any consequences of such termination set forth in this Agreement. Any termination of the Executive’s employment during the Employment Period by the Employer shall be deemed a termination by the Company for purposes of this Agreement.

(b) Termination for Cause or Without Good Reason . If there is a Covered Termination for Cause under the circumstances described in clause (i)(B) of the definition of Cause, or due to the Executive’s voluntarily terminating the Executive’s employment other than for Good Reason, then the Executive shall be entitled to receive only Accrued Benefits. If there is a Covered Termination for Cause under the circumstances described in any of clauses (i)(A), (i)(C), (i)(D) or (i)(E) of the definition of Cause, then the Executive shall not be entitled to receive Accrued Benefits or any other payment or benefit under this Agreement, and shall only be entitled to receive payments or benefits to which the Executive is entitled under applicable law.

(c) Termination Giving Rise to a Termination Payment . If there is a Covered Termination by the Executive for Good Reason, or by the Company other than by reason of (i) death, (ii) disability pursuant to Section 11 , or (iii) Cause, then the Executive shall be entitled to receive, and the Company shall pay, Accrued Benefits and, in lieu of further base salary for periods following the Termination Date, as liquidated damages and additional severance pay and in consideration of the covenant of the Executive set forth in Section 13(a) , the Termination Payment pursuant to Section 8(a) .

8. Payments Upon Termination .

(a) Termination Payment .

(i) Subject to the limits set forth in Section 8(a)(ii) , for purposes of this Agreement, the “Termination Payment” shall be an amount equal to the Annual Cash Compensation multiplied by the number of years or fractional portion thereof remaining in the Employment Period determined as of the Termination Date, except that the Termination Payment shall not be less than the amount of Annual Cash Compensation. The Termination Payment shall be paid to the Executive in cash not later than ten business days after the Termination Date. The Executive shall not be required to mitigate the amount of the Termination Payment by securing other employment or otherwise, nor will such Termination Payment be reduced by reason of the Executive securing other employment or for any other reason.

(ii) Notwithstanding any other provision of this Agreement, if any portion of the Termination Payment or any other payment under this Agreement, or under any other agreement with or plan of the

Company or the Employer (in the aggregate “Total Payments”), would constitute an “excess parachute payment,” then the Total Payments to be made to the Executive shall be reduced such that the value of the aggregate Total Payments that the Executive is entitled to receive shall be One Dollar ($1) less than the maximum amount which the Executive may receive without becoming subject to the tax imposed by Section 4999 of the Code (or any successor provision) or which the Company may pay without loss of deduction under Section 280G(a) of the Code (or any successor provision). For purposes of this Agreement, the terms “excess parachute payment” and “parachute payments” shall have the meanings assigned to them in Section 280G of the Code (or any successor provision), and such “parachute payments” shall be valued as provided therein. Present value for purposes of this Agreement shall be calculated in accordance with Section 1274(b)(2) of the Code (or any successor provision). Within sixty days following delivery of the Notice of Termination or notice by the Company to the Executive of its belief that there is a payment or benefit due the Executive which will result in an excess parachute payment as defined in Section 280G of the Code (or any successor provision), the Executive and the Company, at the Company’s expense, shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel selected by the Company’s independent auditors and acceptable to the Executive in the Executive’s sole discretion, which sets forth (A) the amount of the Base Period Income, (B) the amount and present value of Total Payments and (C) the amount and present value of any excess parachute payments without regard to the limitations of this Section 8(a)(ii) . As used in this Section 8(a)(ii) , the term “Base Period Income” means an amount equal to the Executive’s “annualized includable compensation for the base period” as defined in Section 280G(d)(1) of the Code (or any successor provision). For purposes of such opinion, the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code (or any successor provisions), which determination shall be evidenced in a certificate of such auditors addressed to the Company and the Executive. Such opinion shall be dated as of the Termination Date and addressed to the Company and the Executive and shall be binding upon the Company and the Executive. If such opinion determines that there would be an excess parachute payment, then the Termination Payment hereunder or any other payment determined by such counsel to be includable in Total Payments shall be reduced or eliminated as specified by the Executive in writing delivered to the Company within thirty days of the Executive’s receipt of such opinion or, if the Executive fails to so notify the Company, then as the Company shall reasonably determine, so that under the bases of calculations set forth in such opinion there will be no excess parachute payment. If such counsel so requests in connection with the opinion required by this Section, the Executive and the Company shall obtain, at the Company’s expense, and the counsel may rely on in providing the opinion, the advice of a firm of recognized executive compensation consultants as to the reasonableness of any item of compensation to be received by the Executive. Notwithstanding the foregoing, the provisions of this Section 8(a)(ii) , including the calculations, notices and opinions provided for herein, shall be based upon the conclusive presumption that the following are reasonable: (1) the compensation and benefits provided for in Section 5 and (2) any other compensation, including but not limited to the Accrued Benefits, earned prior to the Termination Date by the Executive pursuant to the Company’s compensation programs if such payments would have been made in the future in any event, even though the timing of such payment is triggered by the Change in Control or the Termination Date. If the provisions of Sections 280G and 4999 of the Code (or any successor provisions) are repealed without succession, then this Section 8(a)(ii) shall be of no further force or effect.

(b) Additional Benefits . If there is a Covered Termination and the Executive is entitled to Accrued Benefits and the Termination Payment, then the Executive shall be entitled to the following additional benefits:

(i) The Executive will be entitled to pension benefits in addition to the most favorable benefits provided for the Executive under any version of the Badger Meter Pension Plan and the Badger Meter, Inc. Executive Supplemental Plan (or any successors to such plans) in effect at any time during the 180-day period prior to the Effective Date (the “Retirement Plans”). The amount of additional pension benefits will be equal to the difference between the amount the Executive (or in the event of the Executive’s death, the Executive’s surviving spouse or other beneficiary) would be actually entitled to receive upon “retirement” under the terms and conditions of the Retirement Plans and the amount the Executive (or such surviving spouse or beneficiary) would have been entitled to receive under such terms and conditions if the Executive’s benefits under the Retirement Plans had been fully vested on the Termination Date and the Executive had continued to work for the remainder of the Employment Period at a salary rate equal to the Executive’s Annual Base Salary; provided , however , that in no event will the assumed period of continued employment extend beyond the date on which the Executive elects to begin receiving the additional pension benefits. The Executive shall receive the Executive’s additional pension benefits in cash not later than ten (10) business days after the Termination Date. The amount of such payment shall be calculated in the same manner as a lump sum payment of accrued benefits is calculated under the Badger Meter Pension Plan.

(ii) Until the earlier of the end of the Employment Period or such time as the Executive has obtained new employment and is covered by benefits which in the aggregate are at least equal in value to the following benefits, the Executive shall continue to be covered, at the expense of the Company, by the most favorable

life insurance, hospitalization, medical and dental coverage and other welfare benefits provided to the Executive and the Executive’s family during the 180-day period immediately preceding the Effective Date or at any time thereafter or, if more favorable to the Executive, coverage as was required hereunder with respect to the Executive immediately prior to the date Notice of Termination is given; provided , however , that if the Executive is otherwise entitled to receive hospitalization and/or medical coverage under a plan or plans for early retirees sponsored by the Company or a subsidiary thereof, then the Executive shall not be eligible for such hospitalization or medical coverage under this Section 8(b)(ii) . If the Executive is eligible for Medicare, the Executive shall be obligated to apply for coverage thereunder at the earliest opportunity and the Company will reimburse the Executive for the Part B premium cost.

(iii) Until the earlier of the end of the Employment Period or such time as the Executive has obtained new employment, the Executive shall be entitled to receive, at the expense of the Company, outplacement services, on an individualized basis at a level of service commensurate with the Executive’s most senior status with the Company during the 180-day period prior to the Effective Date (or, if higher, at any time after the Effective Date), provided by a nationally recognized executive placement firm selected by the Company with the consent of the Executive, which consent will not be unreasonably withheld; provided that the cost to the Company of such services shall not exceed 15% of the Executive’s Annual Base Salary.

(iv) The Company shall bear up to $5,000 in the aggregate of fees and expenses of consultants and/or legal or accounting advisors engaged by the Executive to advise the Executive as to matters relating to the computation of benefits due and payable under this Section 8.

9. Death .

(a) In the event of a Covered Termination due to the Executive’s death, the Executive’s estate, heirs and beneficiaries shall receive a payment of all the Executive’s Accrued Benefits through the Termination Date in cash payable not later than ten (10) business days after the Termination Date.

(b) If the Executive dies after a Notice of Termination is given (i) by the Company or (ii) by the Executive for Good Reason, then the Executive’s estate, heirs and beneficiaries shall be entitled to the benefits described in Section 9(a) and, subject to the provisions of this Agreement, to such Termination Payment to which the Executive would have been entitled had the Executive lived. In such event, the Termination Date shall be thirty days following the giving of the Notice of Termination, subject to extension pursuant to the definition of “Termination Date” in Exhibit A .

10. Retirement . If, during the Employment Period, the Executive and the Employer shall execute an agreement providing for the early retirement of the Executive from the Employer, or the Executive shall otherwise give notice that the Executive is voluntarily choosing to retire early from the Employer, then the Executive shall receive Accrued Benefits through the Termination Date; provided , that if the Executive’s employment is terminated by the Executive for Good Reason or by the Company other than by reason of death, disability or Cause and the Executive also, in connection with such termination, elects voluntary early retirement, then the Executive shall also be entitled to receive a Termination Payment pursuant to Section 8(a) .

11. Termination for Disability . If, during the Employment Period, as a result of the Executive’s disability due to physical or mental illness or injury (regardless of whether such illness or injury is job-related), the Executive shall have been absent from the Executive’s duties hereunder on a full-time basis for a period of 182 days and, within thirty days after the Company notifies the Executive in writing that it intends to terminate the Executive’s employment (which notice shall not constitute the Notice of Termination contemplated below), the Executive shall not have returned to the performance of the Executive’s duties hereunder on a full-time basis, then the Company may terminate the Executive’s employment for purposes of this Agreement pursuant to a Notice of Termination. If the Executive’s employment is terminated on account of the Executive’s disability in accordance with this Section, then the Executive shall receive Accrued Benefits in accordance with Section 8(a) and shall remain eligible for all benefits provided by any disability programs of the Employer in effect with respect to the Executive at the time the Company sends notice to the Executive of its intent to terminate pursuant to this Section.

12. Termination Notice and Procedure . a. Any termination of the Executive’s employment during the Employment Period by the Company or the Executive (other than a termination of the Executive’s employment referenced in the second sentence of the definition of “Effective Date” in Exhibit A ) shall be communicated by written Notice of Termination to the Executive, if such Notice is given by the Company, and to the Company, if such Notice is given by the Executive, all in accordance with the following procedures and those set forth in Section 22 :

(i) If such termination is for disability, Cause or Good Reason, the Notice of Termination shall indicate in reasonable detail the facts and circumstances alleged to provide a basis for such termination.

(ii) Any Notice of Termination by the Company shall have been approved, prior to the giving thereof to the Executive, by a resolution duly adopted by a majority of the directors of the Company (or any successor corporation) then in office, a copy of which shall accompany the Notice.

(iii) If the Notice is given by the Executive for Good Reason, then the Executive may cease performing the Executive’s duties hereunder on or after the date 15 days after the delivery of Notice of Termination (unless the Notice of Termination is based upon clause (vii) of the definition of “Good Reason” in Exhibit A , in which case the Executive may cease performing his duties at the time the Executive’s employment is terminated) and shall in any event cease employment on the Termination Date, if any, arising from the delivery of such Notice. If the Notice is given by the Company, then the Executive may cease performing the Executive’s duties hereunder on the date of receipt of the Notice of Termination, subject to the Executive’s rights hereunder.

(iv) The recipient of any Notice of Termination shall deliver in accordance with Section 22 written notice of any dispute relating to such Notice of Termination to the party giving such Notice within fifteen days after receipt thereof. After the expiration of such fifteen days, in the absence of such notice of dispute, the contents of the Notice of Termination shall become final and not subject to dispute.

Notwithstanding the foregoing, (a) if the Executive terminates the Executive’s employment after a Change in Control without complying with this Section 12 , then the Executive will be deemed to have voluntarily terminated the Executive’s employment other than for Good Reason and deemed to have delivered a written Notice of Termination to that effect to the Company as of the date of such termination and (B) if the Company terminates the Executive’s employment after a Change in Control without complying with this Section 12 , then the Company will be deemed to have terminated the Executive’s employment other than by reason of death, disability or Cause and the Company will be deemed to have delivered a written Notice of Termination to that effect to the Executive as of the date of such termination.

(b) If a Change in Control occurs and the Executive’s employment with the Employer terminates (whether by the Company, the Executive or otherwise) within 180 days prior to the Change in Control, then the Executive may assert that such termination is a Covered Termination by sending a written Notice of Termination to the Company at any time prior to the first anniversary of the Change in Control in accordance with the procedures set forth in this Section 12(b) and those set forth in Section 22 . If the Executive asserts that the Executive terminated the Executive’s employment for Good Reason or that the Company terminated the Executive’s employment other than for disability or Cause, then the Notice of Termination shall indicate in reasonable detail the facts and circumstances alleged to provide a basis for such assertions. The Company shall, in accordance with Section 22 , give written notice of any dispute relating to such Notice of Termination to the Executive within fifteen days after receipt thereof. After the expiration of such fifteen days, in the absence of such notice of dispute, the contents of the Notice of Termination shall become final and not subject to dispute.

13. Further Obligations of the Executive .

(a) Competition . The Executive agrees that, in the event of any Covered Termination where the Executive is entitled to (and receives) Accrued Benefits and the Termination Payment, the Executive shall not, for a period of six months after the Termination Date, without the prior written approval of the Company’s Board of Directors, engage in any Competitive Activity.

(b) Confidentiality . During and following the Executive’s employment by the Employer, the Executive shall hold in confidence and not directly or indirectly disclose or use or copy or make lists of any confidential information or proprietary data of the Company (including that of the Employer), except to the extent authorized in writing by the Board of Directors of the Company or required by any court or administrative agency, other than to an employee of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of duties as an executive of the Company or the Employer. Confidential information shall not include any information known generally to the public or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that of the Company. All records, files, documents and materials, or copies thereof, relating to the business of the Company which the Executive shall prepare, or use, or come

into contact with, shall be and remain the sole property of the Company and shall be promptly returned to the Company upon termination of employment with the Employer.

14. Expenses and Interest . If, after the Effective Date, (i) a dispute arises with respect to the enforcement of the Executive’s rights under this Agreement, (ii) any legal or arbitration proceeding shall be brought to enforce or interpret any provision contained herein or to recover damages for breach hereof, or (iii) any tax audit or proceeding is commenced that is attributable in part to the application of Section 4999 of the Code, in any case so long as the Executive is not acting in bad faith, then the Company shall reimburse the Executive for any reasonable attorneys’ fees and necessary costs and disbursements incurred as a result of such dispute, legal or arbitration proceeding or tax audit or proceeding (“Expenses”), and prejudgment interest on any money judgment or arbitration award obtained by the Executive calculated at the rate of interest announced by Firstar Bank, Milwaukee, Wisconsin, from time to time as its prime or base lending rate from the date that payments to the Executive should have been made under this Agreement. Within ten days after the Executive’s written request therefor, the Company shall pay to the Executive, or such other person or entity as the Executive may designate in writing to the Company, the Executive’s reasonable Expenses in advance of the final disposition or conclusion of any such dispute, legal or arbitration proceeding.

15. Payment Obligations Absolute . The Company’s obligation during and after the Employment Period to pay the Executive the amounts and to make the benefit and other arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any setoff, counterclaim, recoupment, defense or other right which the Company may have against the Executive or anyone else. Except as provided in Section 14 , all amounts payable by the Company hereunder shall be paid without notice or demand. Each and every payment made hereunder by the Company shall be final, and the Company will not seek to recover all or any part of such payment from the Executive, or from whomsoever may be entitled thereto, for any reason whatsoever.

16. Successors .

(a) If the Company sells, assigns or transfers all or substantially all of its business and assets to any Person or if the Company merges into or consolidates or otherwise combines (where the Company does not survive such combination) with any Person (any such event, a “Sale of Business”), then the Company shall assign all of its right, title and interest in this Agreement as of the date of such event to such Person, and the Company shall cause such Person, by written agreement in form and substance reasonably satisfactory to the Executive, to expressly assume and agree to perform from and after the date of such assignment all of the terms, conditions and provisions imposed by this Agreement upon the Company. Failure of the Company to obtain such agreement prior to the effective date of such Sale of Business shall be a breach of this Agreement constituting “Good Reason” hereunder, except that for purposes of implementing the foregoing, the date upon which such Sale of Business becomes effective shall be deemed the Termination Date. In case of such assignment by the Company and of assumption and agreement by such Person, as used in this Agreement, “Company” shall thereafter mean such Person which executes and delivers the agreement provided for in this Section 16 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law, and this Agreement shall inure to the benefit of, and be enforceable by, such Person. The Executive shall, in the Executive’s discretion, be entitled to proceed against any or all of such Persons, any Person which theretofore was such a successor to the Company (as defined in the first paragraph of this Agreement) and the Company (as so defined) in any action to enforce any rights of the Executive hereunder. Except as provided in this Subsection, this Agreement shall not be assignable by the Company. This Agreement shall not be terminated by the voluntary or involuntary dissolution of the Company.

(b) This Agreement and all rights of the Executive shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, heirs and beneficiaries. In the event of the Executive’s death after a Covered Termination, all amounts payable to the Executive under Sections 7, 8, 9, 10, 11 and 14 if the Executive had lived shall be paid to the Executive’s heirs and representatives; provided, however, that the foregoing shall not be construed to modify any terms of any benefit plan of the Employer, as such terms are in effect on the Effective Date, that expressly govern benefits under such plan in the event of the Executive’s death.

17. Severability . The provisions of this Agreement shall be regarded as divisible, and if any of said provisions or any part hereof are declared invalid or unenforceable by a court of competent jurisdiction, then the validity and enforceability of the remainder of such provisions or parts hereof and the applicability thereof shall not be affected thereby.

18. Amendment . This Agreement may not be amended or modified at any time except by written instrument executed by the Company and the Executive.

19. Withholding . The Employer shall be entitled to withhold from amounts to be paid to the Executive hereunder any federal, state or local withholding or other taxes or charges which it is from time to time required to withhold; provided , that the amount so withheld shall not exceed the minimum amount required to be withheld by law. The Employer shall be entitled to rely on an opinion of nationally recognized tax counsel if any question as to the amount or requirement of any such withholding shall arise.

20. Certain Rules of Construction . No party shall be considered as being responsible for the drafting of this Agreement for the purpose of applying any rule construing ambiguities against the drafter or otherwise. No draft of this Agreement shall be taken into account in construing this Agreement. Any provision of this Agreement which requires an agreement in writing shall be deemed to require that the writing in question be signed by the Executive and an authorized representative of the Company.

21. Governing Law; Resolution of Disputes . (a) This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the internal laws of the State of Wisconsin (excluding any choice of law rules that may direct the application of the laws of another jurisdiction) except that Section 21(b) shall be construed in accordance with the Federal Arbitration Act if arbitration is chosen by the Executive as the method of dispute resolution.

(b) Any dispute arising out of this Agreement shall, at the Executive’s election, be determined by arbitration under the rules of the American Arbitration Association then in effect (but subject to any evidentiary standards set forth in this Agreement), 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 the Executive’s election, if the Executive is no longer residing or working in the Milwaukee, Wisconsin metropolitan area, in the judicial district encompassing the city in which the Executive resides; provided , that , if the Executive is not then residing in the United States, the election of the Executive 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 the Termination Date) that is closest to the Executive’s 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.

22. Notice . Notices given pursuant to this Agreement shall be in writing and shall be deemed given when actually received by the Executive or actually received by the Company’s Secretary or any officer of the Company other than the Executive. For purposes of the notice of dispute provided for under Sections 12(a)(iv) and 12(b) , notice is deemed given on the earlier of the date when actually delivered to the recipient or when mailed. If mailed, such notices shall be mailed by United States registered or certified mail, return receipt requested, addressee only, postage prepaid, if to the Company, to Badger Meter, Inc., Attention: Secretary (or, if the Executive is then Secretary, to the Chief Executive Officer), 4545 West Brown Deer Road, Milwaukee, Wisconsin 53223, or if to the Executive, at the address set forth below the Executive’s signature to this Agreement, or to such other address as the party to be notified shall have theretofore given to the other party in writing.

23. Additional Payment . (a) If, notwithstanding the provisions of Section 8(a)(ii) , but subject to subsection (b), it is ultimately determined by a court or pursuant to a final determination by the Internal Revenue Service that any portion of Total Payments is subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any successor provision), then the Company shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive after deduction of any Excise Tax and any interest charges or penalties in respect of the imposition of such Excise Tax (but not any federal, state or local income tax) on the Total Payments, and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 23 shall be equal to the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Executive’s domicile for income tax purposes on the date the Gross-Up Payment is made, net of the maximum reduction in federal income taxes that could be obtained from deduction of such state and local taxes.

(b) If legislation is enacted that would require the Company’s shareholders to approve this Agreement, prior to a Change in Control, due solely to the provision contained in subsection (a) of this Section 23 , then

(i) from and after such time as shareholder approval would be required, until shareholder approval is obtained as required by such legislation, subsection (a) shall be of no force and effect;

(ii) if the Company seeks shareholder approval of any other agreement providing similar benefits to any other executive of the Company, then the Company shall seek shareholder approval of this Agreement at the same shareholders’ meeting or meetings at which the shareholders consider any such other agreement; and

(iii) the Company and the Executive shall use their best efforts to consider and agree in writing upon an amendment to this Section 23 such that, as amended, this Subsection would provide the Executive with the benefits intended to be afforded to the Executive by subsection (a) without requiring shareholder approval.

24. No Waiver . The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

25. Headings . The headings herein contained are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement.

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


		BADGER METER, INC.

		By:
		Attest:

		EXECUTIVE

						(SEAL)


		Name:
						Address:

Exhibit A

CERTAIN DEFINED TERMS

For purposes of this Agreement,

(a) Act . The term “Act” means the Securities Exchange Act of 1934, as amended.

(b) Accrued Benefits . The term “Accrued Benefits” shall include the following amounts, payable as described herein: (i) all base salary for the time period ending with the Termination Date; (ii) reimbursement for any and all monies advanced in connection with the Executive’s employment for reasonable and necessary expenses incurred by the Executive on behalf of the Company and its Affiliates for the time period ending with the Termination Date; (iii) any and all other cash earned through the Termination Date and deferred at the election of the Executive or pursuant to any deferred compensation plan then in effect; (iv) notwithstanding any provision of any bonus or incentive compensation plan applicable to the Executive, a lump sum amount, in cash, equal to the sum of (A) any bonus or incentive compensation that has been allocated or awarded to the Executive for a fiscal year or other measuring period under the plan that ends prior to the Termination Date but has not yet been paid (pursuant to Section 5(f) or otherwise) and (B) a pro rata portion to the Termination Date of the aggregate value of all contingent bonus or incentive compensation awards to the Executive for all uncompleted periods under the plan calculated as to each such award as if the Goals with respect to such bonus or incentive compensation award had been attained; and (v) all other payments and benefits to which the Executive (or in the event of the Executive’s death, the Executive’s surviving spouse or other beneficiary) may be entitled as compensatory fringe benefits or under the terms of any benefit plan of the Employer, including severance payments under the Employer’s severance policies and practices in the form most favorable to the Executive that were in effect at any time during the 180-day period prior to the Effective Date. Payment of Accrued Benefits shall be made in accordance with the

Employer’s prevailing practice with respect to clauses (i) and (ii) or, with respect to clauses (iii), (iv) and (v), pursuant to the terms of the benefit plan or practice establishing such benefits, but in any event not later than ten business days after the Termination Date.

(c) Affiliate and Associate . The terms “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations of the Act.

(d) Annual Cash Compensation . The term “Annual Cash Compensation” shall mean the sum of (A) the Executive’s Annual Base Salary, plus (B) the highest of (1) the highest annual bonus or incentive compensation award earned by the Executive under any cash bonus or incentive compensation plan of the Company or any of its Affiliates during the three complete fiscal years of the Company immediately preceding the Termination Date or, if more favorable to the Executive, during the three complete fiscal years of the Company immediately preceding the Effective Date; (2) the Executive’s bonus or incentive compensation Targeted Bonus for the fiscal year in which the Termination Date occurs; or (3) the highest average annual bonus and/or incentive compensation earned during the three complete fiscal years of the Company immediately preceding the Termination Date (or, if more favorable to the Executive, during the three complete fiscal years of the Company immediately preceding the Effective Date) under any cash bonus or incentive compensation plan of the Company or any of its Affiliates by the group of executives of the Company and its Affiliates participating under such plan during such fiscal years at a status or position comparable to that at which the Executive participated or would have participated pursuant to the Executive’s most senior position at any time during the 180 days preceding the Effective Date or thereafter until the Termination Date.

(e) Cause . The Company may terminate the Executive’s employment after the Effective Date for “Cause” only if the conditions set forth in paragraphs (i) and (ii) have been met and the Company otherwise complies with this Agreement:

(i) (A) The Executive has committed any act of fraud, embezzlement or theft in connection with the Executive’s duties as an Executive or in the course of employment with the Company and/or its subsidiaries; (B) the Executive has willfully and continually failed to perform substantially the Executive’s duties with the Company or any of its Affiliates (other than any such failure resulting from incapacity due to physical or mental illness or injury, regardless of whether such illness or injury is job-related) for an appropriate period, which shall not be less than 30 days, after the Chief Executive Officer of the Company (or, if the Executive is then Chief Executive Officer, the Board) has delivered a written demand for performance to the Executive that specifically identifies the manner in which the Chief Executive Officer (or the Board, as the case may be) believes the Executive has not substantially performed the Executive’s duties; (C) the Executive has willfully engaged in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company; (D) the Executive has willfully and wrongfully disclosed any trade secret or other confidential information of the Company or any of its Affiliates; or (E) the Executive has engaged in any Competitive Activity; and in any such case the act or omission shall have been determined by the Board to have been materially harmful to the Company and its subsidiaries taken as a whole.

For purposes of this provision, (1) no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company and (2) any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

(ii) (A) The Company terminates the Executive’s employment by delivering a Notice of Termination to the Executive, (B) prior to the time the Company has terminated the Executive’s employment pursuant to a Notice of Termination, the Board, by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board, has adopted a resolution finding that the Executive was guilty of conduct set forth in this definition of Cause, and specifying the particulars thereof in detail, at a meeting of the Board called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) and (C) the Company delivers a copy of such resolution to the Executive with the Notice of Termination at the time the Executive’s employment is terminated.

In the event of a dispute regarding whether the Executive’s employment has been terminated for Cause, no claim by the Company that the Company has terminated the Executive’s employment for Cause in accordance with this Agreement shall be given effect unless the Company establishes by clear and convincing evidence that the Company has complied with the requirements of this Agreement to terminate the Executive’s employment for Cause.

(f) Change in Control . A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(i) any Person (other than Excluded Persons, as defined below) is or becomes the “Beneficial Owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after July 31, 1999 pursuant to express authorization by the Board that refers to this exception and not including securities of the Company subject to proxies held by such Person, but including securities of the Company subject to exercisable options held by such Person) representing 15% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities. “Excluded Persons” shall mean (A) the Company; (B) any subsidiary of the Company; (C) any employee benefit plan of the Company or any subsidiary of the Company (collectively, “Employee Benefit Plans”); (D) any entity holding securities for or pursuant to the terms of any Employee Benefit Plans; (E) any trustee, administrator or fiduciary of any Employee Benefit Plans in their capacities as such; (F) an underwriter temporarily holding securities pursuant to an offering of such securities; (G) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company; and (H) any Person who has reported or is required to report their ownership on Schedule 13G under the Act (or any comparable or successor report) or on Schedule 13D under the Act (or any comparable or successor report), which Schedule 13D does not disclose pursuant to Item 4 thereto (or any comparable successor item or section) an intent, or reserve the right, to engage in a control transaction, any contested solicitation for the election of directors or any of the other actions specified in Item 4 thereto (or any comparable successor item or section), who inadvertently becomes the Beneficial Owner of 15% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities and, within ten business days of being requested by the Company to advise it regarding the same, certifies to the Company that such Person acquired 15% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities inadvertently and who or which, together with all Affiliates and Associates, thereafter does not acquire additional shares of common stock or voting securities of the Company while the Beneficial Owner of 15% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities; provided, however, that if the Person requested to so certify fails to do so within ten business days or breaches or violates such certification, then such Person shall cease to be an Excluded Person immediately after such ten business day period or such breach or violation; or

(ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on July 31, 1999, constituted the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Act) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on July 31, 1999 or whose appointment, election or nomination for election was previously so approved; or

(iii) the shareholders of the Company approve a merger, consolidation or share exchange of the Company with any other corporation or approve the issuance of voting securities of the Company in connection with a merger, consolidation or share exchange of the Company (or any direct or indirect subsidiary of the Company) pursuant to applicable stock exchange requirements, other than (A) a merger, consolidation or share exchange which would result in the voting securities of the Company outstanding immediately prior to such merger, consolidation or share exchange continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, consolidation or share exchange, or (B) a merger, consolidation or share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Excluded Person) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after July 31, 1999 pursuant to express authorization by the Board that refers to this exception) representing 20% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities; or

(iv) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (in one transaction or a series of related transactions within any period of 24 consecutive months), other than a

sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least 75% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, no “Change in Control” shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity that owns all or substantially all of the assets or voting securities of the Company immediately following such transaction or series of transactions.

(g) Code . The term “Code” means the Internal Revenue Code of 1986, including any amendments thereto or successor tax codes thereof.

(h) Competitive Activity . The Executive shall engage in a “Competitive Activity” if the Executive participates in the management of, is employed by or owns any interest in any business enterprise at a location within the United States that engages in substantial competition with the Company or its subsidiaries, where such enterprise’s revenues from any competitive activities amount to 10% or more of such enterprise’s consolidated net revenues and sales for its most recently completed fiscal year; provided , however , that owning stock or other securities of a competitor amounting to less than five percent of the outstanding capital stock of such competitor shall not be a “Competitive Activity”.

(i) Covered Termination . The term “Covered Termination” means any termination of the Executive’s employment during the Employment Period where the Termination Date or the date Notice of Termination is delivered is any date on or prior to the end of the Employment Period.

(j) Effective Date . The term “Effective Date” shall mean the first date on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if (i) a Change in Control occurs, (ii) the Executive’s employment with the Employer terminates (whether by the Company, the Executive or otherwise) within 180 days prior to the Change in Control and (iii) it is reasonably demonstrated by the Executive that (A) any such termination of employment by the Employer (1) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (2) otherwise arose in connection with or in anticipation of a Change in Control, or (B) any such termination of employment by the Executive took place subsequent to the occurrence of an event described in clause (ii), (iii), (iv) or (v) of the definition of “Good Reason” which event (1) occurred at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (2) otherwise arose in connection with or in anticipation of a Change in Control, then for all purposes of this Agreement the term “Effective Date” shall mean the day immediately prior to the date of such termination of employment.

(k) Employer . The term “Employer” means the Company and/or any subsidiary of the Company that employed the Executive immediately prior to the Effective Date.

(l) Good Reason . The Executive shall have a “Good Reason” for termination of employment on or after the Effective Date if the Executive determines in good faith that any of the following events has occurred:

(i) any breach of this Agreement by the Company, including specifically any breach by the Company of its agreements contained in Section 5 , Section 6 , Section 8(a) or Section 16(a) , other than an isolated, insubstantial and inadvertent failure not occurring in bad faith that the Company remedies promptly after receipt of notice thereof given by the Executive;

(ii) any reduction in the Executive’s base salary, percentage of base salary available as incentive compensation or bonus opportunity or benefits, in each case relative to those most favorable to the Executive in effect at any time during the 180-day period prior to the Effective Date or, to the extent more favorable to the Executive, those in effect after the Effective Date;

(iii) a material adverse change, without the Executive’s prior written consent, in the Executive’s working conditions or status with the Company or the Employer from such working conditions or status in effect during the 180-day period prior to the Effective Date or, to the extent more favorable to the Executive, those in effect after the Effective Date, including but not limited to (A) a material change in the nature or scope of the Executive’s titles, authority, powers, functions, duties, reporting requirements or responsibilities, or (B) a material reduction in the level

of support services, staff, secretarial and other assistance, office space and accoutrements, but excluding for this purpose an isolated, insubstantial and inadvertent event not occurring in bad faith that the Company remedies promptly after receipt of notice thereof given by the Executive;

(iv) the relocation of the Executive’s principal place of employment to a location more than 35 miles from the Executive’s principal place of employment on the date 180 days prior to the Effective Date;

(v) the Employer requires the Executive to travel on Employer business to a materially greater extent than was required during the 180 day period prior to the Effective Date;

(vi) failure by the Company to obtain the agreement referred to in Section 16(a) as provided therein; or

(vii) the Company or the Employer terminates the Executive’s employment after a Change in Control without delivering a Notice of Termination in accordance with Section 12 ;

provided that (A) any such event occurs following the Effective Date or (B) in the case of any event described in clauses (ii), (iii), (iv) or (v) above, such event occurs on or prior to the Effective Date under circumstances described in clause (iii)(B)(1) or (iii)(B)(2) of the definition of “Effective Date.” In the event of a dispute regarding whether the Executive terminated the Executive’s employment for “Good Reason” in accordance with this Agreement, no claim by the Company that such termination does not constitute a Covered Termination shall be given effect unless the Company establishes by clear and convincing evidence that such termination does not constitute a Covered Termination. Any election by the Executive to terminate the Executive’s employment for Good Reason shall not be deemed a voluntary termination of employment by the Executive for purposes of any other employee benefit or other plan.

The Executive shall be deemed to have “Good Reason” for termination of employment as described above, only if the Executive shall, within thirty (30) days after first becoming aware of the circumstances giving rise to Good Reason, deliver a Notice of Termination for Good Reason to the Board of Directors of the Company, and the Company thereafter fails to cure the circumstances giving rise to Good Reason within thirty (30) days following its receipt of the Executive’s Notice of Termination for Good Reason.

(m) Normal Retirement Date . The term “Normal Retirement Date” means the date the Executive reaches “Normal Retirement Age” as defined in the Badger Meter Pension Plan as in effect on the date hereof, or the corresponding date under any successor plan of the Employer as in effect on the Effective Date.

(n) Notice of Termination . The term “Notice of Termination” means a written notice as contemplated by Section 12.

(o) Person . The term “Person” shall have the meaning given in Section 3(a)(9) of the Act, as modified and used in Sections 13(d) and 14(d) thereof.

(p) Termination Date . Except as otherwise provided in Section 9(b) , Section 12 and Section 16(a) , the term ”Termination Date” means (i) if the Executive’s employment is terminated by the Executive’s death, the date of death; (ii) if the Executive’s employment is terminated by reason of voluntary early retirement, as agreed in writing by the Company and the Executive, the date of such early retirement that is set forth in such written agreement; (iii) if the Executive’s employment is terminated for purposes of this Agreement by reason of disability pursuant to Section 11 , thirty days after the Notice of Termination is given; (iv) if the Executive’s employment is terminated by the Executive voluntarily (other than for Good Reason) or by the Company for Cause, the date the Notice of Termination is given; and (v) if the Executive’s employment is terminated by the Company (other than for Cause or by reason of disability pursuant to Section 11 ) or by the Executive for Good Reason, thirty days after the Notice of Termination is given. Notwithstanding the foregoing,

(A) If the Executive shall in good faith give a Notice of Termination for Good Reason and the Company notifies the Executive that a dispute exists concerning the termination within the fifteen-day period following receipt thereof, then the Executive may elect to continue the Executive’s employment during such dispute and the Termination Date shall be determined under this paragraph. If the Executive so elects and it is thereafter determined that the Executive terminated the Executive’s employment for Good Reason in accordance with this Agreement, then the

Termination Date shall be the earlier of (1) the date on which the dispute is finally determined, either (x) by mutual written agreement of the parties or (y) in accordance with Section 21 or (2) the date of the Executive’s death. If the Executive so elects and it is thereafter determined that the Executive did not terminate the Executive’s employment for Good Reason in accordance with this Agreement, then the employment of the Executive hereunder shall continue after such determination as if the Executive had not delivered the Notice of Termination asserting Good Reason and there shall be no Termination Date arising out of such Notice. In either case, this Agreement continues, until the Termination Date, if any, as if the Executive had not delivered the Notice of Termination except that, if it is finally determined that the Executive terminated the Executive’s employment for Good Reason in accordance with this Agreement, then the Executive shall in no case be denied the benefits described in Section 8 (including a Termination Payment) based on events occurring after the Executive delivered the Executive’s Notice of Termination.

(B) If an opinion is required to be delivered pursuant to Section 8(a)(ii) and such opinion shall not have been delivered, then the Termination Date shall be the date on which such opinion is delivered.

(C) Except as provided in paragraph (A) above, if the party receiving the Notice of Termination notifies the other party that a dispute exists concerning the termination within the fifteen-day period following receipt thereof and it is finally determined that termination of the Executive’s employment for the reason asserted in such Notice of Termination was not in accordance with this Agreement, then (1) if such Notice was delivered by the Executive, then the Executive will be deemed to have voluntarily terminated the Executive’s employment other than for Good Reason by means of such Notice and (2) if delivered by the Company, then the Company will be deemed to have terminated the Executive’s employment other than by reason of death, disability or Cause by means of such Notice.

Exhibit (10.13)

BADGER METER, INC.
AMENDED AND RESTATED BADGER METER, INC. EXECUTIVE SUPPLEMENTAL PLAN

(approved December 12, 2008 and retroactively effective on January 1, 2008 for deferrals occurring on or after January 1, 2005)

Section 1 . Establishment, Purposes, Administration and Interpretation of the Plan .

1.1 Badger Meter, Inc. (hereinafter called “Company”) has established, originally effective as of January 1, 1997, and amended and restated effective as of January 1, 2008, this program to provide supplemental benefits to certain of the Company’s employees to replace benefits which cannot be provided by the Company’s qualified pension plan to such employees, due to certain compensation limits applicable to qualified plans. This plan shall be known as the Badger Meter, Inc. Amended and Restated Executive Supplemental Plan (hereinafter called “Plan”). This Plan applies to compensation deferrals occurring after 2004. Deferrals occurring prior to 2005 are controlled by the terms of the Plan as in effect in 2004.

1.2 The Plan shall be administered by the Badger Meter, Inc. Pension Plan Committee (hereinafter called “Administrative Committee”). The Administrative Committee shall have all such powers that may be necessary to carry out the provisions of the Plan including without reservation the power to delegate administrative matters to other persons and to construe and interpret the Plan at any time or on any matter in the absence of any action by the Board of Directors. Subject to the foregoing, all decisions and determinations by the Administrative Committee shall be final, binding and conclusive as to all parties – including the Company, any personnel participating hereunder and all other employees and persons.

Section 2 . Eligible Executives .

Employees who shall participate in this Plan (hereinafter called “Executives”) are those whose benefits under the Badger Meter Pension Plan (the “Pension Plan”) are limited by reason of the compensation limit contained in Internal Revenue Code section 401(a)(17) or the maximum benefit limitation of Internal Revenue Code section 415. The Administrative Committee shall, in its sole discretion, determine whether an employee is eligible to participate in the Plan, and shall inform each eligible employee that he has been selected to participate in the Plan.

Section 3. [Intentionally Omitted.]

Section 4. Supplemental Retirement Benefits Under the Plan .

4.1 Supplemental Retirement Benefits . Upon an Executive’s termination from the Company’s employ under circumstances where he is entitled to receive retirement benefits under the Pension Plan, and provided the Executive’s termination from the Company’s employ under such circumstances satisfies the requirements set forth of Section 5.2 of this Plan, such Executive shall be entitled to a benefit under this Plan in an amount equal to the difference, if any, between the lump sum amount available under the Pension Plan compared to the lump sum amount the Pension Plan would have provided if there were no limit on the amount of compensation that could be considered under the Pension Plan, and no limit on the maximum benefit amount. Notwithstanding the foregoing, the amount of the Executive’s Plan benefit with respect to the first calendar year in which he is eligible to participate in the Plan shall be calculated as if the Executive first began participating in the Pension Plan and in this Plan on the date on which the Administrative Committee determined that the Executive was eligible to participate in this Plan, and any limits (prorated as necessary) on the amount of compensation considered under the Pension Plan or on the maximum benefit amount for such calendar year shall be imposed only on the amounts earned by the Executive after such date.

4.2 Special Supplemental Benefit . This paragraph shall apply solely to the individual who is the Senior Vice-President of Administration as of November 1, 2008. That individual is entitled to an amount equal to 20% of his final monthly base salary, payable for a period of 120 months. Payment of this amount shall commence on the first day of the 7 ^th month following his Termination Date. The first such payment will be equal in amount to 7 times the monthly amount, and payment of the monthly amount shall continue thereafter on the first of each month for each of the next 113 months. Section 5 shall not apply to these payments, except for section 5.4. Should the Executive die before all payments are completed, the balance will be paid as scheduled to Executive’s beneficiary, designated pursuant to Section 6. This paragraph shall apply to amounts accrued both before and on and after January 1, 2005.

Section 5 . Payments .

5.1 The Executive shall become entitled to receive the amount specified in Section 4.1 upon his termination of active employment with the Company for any reason, provided such termination satisfies the requirements set forth of Section 5.2 of this Plan, below.

5.2 In the absence of an effective election to the contrary, the Executive’s benefit hereunder will be paid in a single lump sum on the first day of the 7 ^th month following his Termination Date. The Executive may elect, subject to the approval of the Administrative Committee, to have the amount paid in annual or quarterly installments over not more than 5 years, with the first installment being paid on the first day of the 7 ^th month following his Termination Date and remaining installments being paid on each annual or quarterly anniversary thereof, using the “declining digits” method (i.e., if the installments are over 10 quarters, the first is 1/10 of the balance, the second 1/9, etc.). The unpaid balance shall be credited with interest at the same time and at the same rate as Pension Plan participants’ account balances are so credited. In addition, the Executive may elect, subject to the approval of the Administrative Committee, the form of payment of his benefit hereunder to his designated beneficiary, in the event of the Executive’s death before his entire Plan benefit has been paid to him.

For purposes of this Plan, the term “Termination Date” shall mean the date of the Executive’s termination of employment from the Company within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, subject to the following conditions:

(a) If the Executive takes a leave of absence from the Company for purposes of military leave, sick leave or other bona fide leave of absence, the Executive’s employment will be deemed to continue for the first six (6) months of the leave of absence, or if longer, for so long as the Executive’s right to reemployment is provided by either by statute or by contract. If the period of the leave exceeds six (6) months and the Executive’s right to reemployment is not provided by either statute or contract, the Executive’s Termination Date will be considered to be the first day of the seventh (7th) month of the leave of absence.

(b) The Executive’s Termination Date will be deemed to have occurred on the date on which the level of bona fide services performed by the Executive for the Company (whether as an employee or as an independent contractor) permanently decreases to a level equal to twenty percent (20%) or less of the average level of services performed by the Executive during the immediately preceding thirty-six (36)-month period (or the Executive’s actual period of service, if less). The Executive will not be deemed to have terminated employment with the Company, and no Termination Date will be deemed to have occurred, if the Executive continues to provide bona fide services to the Company in any capacity (whether as an employee or an independent contractor) at a level that is greater than twenty percent (20%) of the average level of services performed by the Executive during the immediately preceding thirty-six (36)-month period (or the Executive’s actual period of service, if less).

5.3 The Executive’s election as to the time and form of payment of the benefits owed him under this Plan, as described in section 5.2, above, shall be filed in writing with the Administrative Committee. If the Executive elects to change the form of payment with respect to the first calendar year in which the Executive is eligible to participate in the Plan, his election must be made within thirty (30) days of the date on which the Administrative Committee determines that the Executive is eligible to participate in the Plan. Such election shall apply only with respect to amounts earned by the Executive after such date. If the Executive makes an election as to the time and form of payment of benefits under the Plan for any subsequent calendar year or changes a previously filed election, such election must be made prior to the beginning of that calendar year, and shall apply only with respect to amounts earned in calendar years following the date the changed election is filed with the Administrative Committee. The Company shall establish separate subaccounts as needed to identify amounts subject to different payment intervals.

5.4 Notwithstanding the provisions in this Section 5 and Section 6 below, in the event of an “unforeseeable

emergency” occurring in the personal affairs of the Executive or beneficiary prior to or during the payout period, the Administrative Committee shall accelerate the payout. The term “unforeseeable emergency” for this purpose shall mean a severe financial hardship to the Executive resulting from an illness or accident of the Executive, the Executive’s spouse, or the Executive’s dependent (as defined in section 152(a) of the Internal Revenue Code without regard to Code Sections 152(b)(1), 152(b)(2), and 152(d)(1)(B)), loss of the Executive’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Executive. The amount distributed with respect to an unforeseeable emergency may not exceed the amount necessary to satisfy such emergency plus the amount necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Executive’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

Section 6 . Designation of Beneficiary .

The Executive shall have the right to designate a beneficiary or beneficiaries to receive any portion unpaid at his death, and to specify the manner in which such amounts shall be paid to his beneficiary or beneficiaries in accordance with the options available under Section 5 hereof. Such beneficiary designation shall be effected by filing written notification with the Administrative Committee in the form prescribed by it and may be changed from time to time by similar action. If the Executive does not make a beneficiary designation, any such unpaid portion of the Executive’s benefit shall be paid to his estate. Upon the Executive’s death, the unpaid portion of the Executive’s benefit shall be paid to the Executive’s beneficiary (or to his estate, if applicable) in the form selected by the Executive as described above. Such payment or payments shall be made, or commence to be made, not later than thirty (30) days after the date of the Executive’s death. If the Executive has not made an election as to the manner in which his benefit shall be paid to his beneficiary, the unpaid portion of the Executive’s benefit shall be paid to his beneficiary (or to his estate, if applicable) in a single lump sum payment not later than thirty (30) days after the date of the Executive’s death.

Section 7 . Non-Alienation of Payments .

Any amount payable to an Executive hereunder shall not be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, garnishment or encumbrance of any kind, by will, or by inter vivos instrument. Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such payment, whether presently or thereafter payable, shall not be recognized by the Administrative Committee or the Company. Any payment due hereunder shall not in any manner be liable for or subject to the debts or liabilities of the Executive. If the Executive shall attempt to alienate, sell, transfer, assign, pledge or otherwise encumber his payments under the Plan or any part thereof, or if by reason of his bankruptcy or other event happening at any time, such payments would devolve upon anyone else or would not be enjoyed by him, then the Administrative Committee, in its discretion, may terminate his interest in any such benefit, and hold or apply it to or for the benefit of the Executive, his spouse, children, or other dependents, or any of them, in such manner as the Administrative Committee may deem proper.

Section 8 . Incompetency .

Every person receiving or claiming payments under this Plan shall be conclusively presumed to be mentally competent until the date on which the Administrative Committee receives a written notice, in form and manner acceptable to the Administrative Committee, that such person is incompetent and that a guardian, conservator, or other person legally vested with the care of his estate has been appointed. In the event a guardian or conservator of the estate of any person receiving or claiming payments under this Plan shall be appointed by a court of competent jurisdiction, payments may be made to such guardian or conservator provided that proper proof of appointment and continuing qualification is furnished in a form and manner acceptable to the Administrative Committee. Any such payment so made shall be a complete discharge of any liability therefor.

Section 9 . Tax Withholding .

The Company shall have the right to deduct from all payments made from the Plan, or from any other amount owed to the Executive or his beneficiary, any Federal, state, or local income or payroll taxes (including all taxes required under the Federal Insurance Contributions Act) that the Company determines required by law to be withheld with respect to such payments. If the amount so withheld by the Company is insufficient for such purpose, then the Company may require the Executive or his beneficiary to pay to the Company, upon its demand, or otherwise make arrangements satisfactory to the Company for payment of, such amount as may be requested by the Company in order to satisfy the Company’s obligation to withhold any such taxes.

Section 10 . Limitation of Rights Against the Company .

Participation in this Plan, or any modifications thereof, or the payments of any benefits hereunder, shall not be construed as giving to the Executive any right to be retained in the service of the Company, limiting in any way the right of the Company to terminate the Executive’s employment at any time, evidencing any agreement or understanding, express or implied, that the Company will employ the Executive in any particular position or at any particular rate of compensation and/or guaranteeing the Executive any right to receive a salary increase and/or incentive bonus in any calendar year, such increase and/or bonus being granted only at the sole discretion of the Board of Directors of the Company or its delegate for such purposes.

Section 11 . Applicable Laws .

The Plan shall be construed, administered and governed in all respects under and by the laws of the State of Wisconsin, except to the extent such law is preempted by the Employee Retirement Income Security Act of 1974.

Section 12 . Gender and Number .

Except as otherwise indicated by context, any masculine terminology used herein also shall include the feminine gender, and the definition of any term herein in the singular shall also include the plural.

Section 13 . Liability .

Neither the Company nor any officer or director of the Company or any member of the Administrative Committee or any other person shall be liable for any act or failure to act hereunder, except for gross negligence or fraud.

Section 14 . Amendment or Termination of the Plan .

14.1 The Board of Directors of the Company reserves the right to amend, modify, terminate, or discontinue the Plan or its application to any Executive at any time; provided, however, no such action shall deprive the Executive of the benefit accrued hereunder to that date, based upon the Executive’s service and compensation as of that date, without the consent of the Executive, if living, or his designated beneficiary or beneficiaries, if the Executive is not living. Likewise, the Company may not, without the consent of the affected Executive or his designated beneficiary or beneficiaries, terminate the Plan or amend it in any manner that would cause the imposition of additional tax on the Executive or his designated beneficiary or beneficiaries under Code section 409A.

Section 15 . Claims Appeal Procedure.

15.1 In the event a Participant disagrees with the determination of the Administrative Committee regarding the Participant’s right to benefits hereunder, the Participant must submit his written request for reconsideration to the Administrative Committee setting forth the basis for his disagreement. The Administrative Committee shall review the claim and provide a written response within 60 days after receipt of the claim, although the Administrative Committee may extend this period to 120 days by notice to the Participant within the initial 60-day period.

15.2 If the Participant disagrees with the Administrative Committee’s determination on review, the Participant may file a written objection within 60 days from the date of the Administrative Committee’s written response requesting review by the Board of Directors. The Board of Directors’ decision will be transmitted to the Participant within 60 days of receipt of the written objections, although the Board of Directors may extend this period to 120 days by written notice to the Participant within the initial 60-day period. The Board of Directors’ decision on appeal shall be final and binding on all parties.

Exhibit (10.14)

BADGER METER, INC.
AMENDED AND RESTATED BADGER METER, INC. DEFERRED COMPENSATION PLAN
(approved December 12, 2008 and retroactively effective on January 1, 2008)

Section 1: Establishment and Purposes

1.1. Establishment . Badger Meter, Inc., a Wisconsin corporation (the “Company”), hereby adopts, effective as of January 1, 2008, this Amended and Restated Badger Meter, Inc. Deferred Compensation Plan (the “Plan”), a nonqualified deferred compensation plan designed to benefit key employees of the Company. The Plan, as amended and restated herein, supersedes all prior versions of such plan and applies with respect to any amounts deferred after December 31, 2005. Amounts deferred prior to that date are subject to the terms of the plan as in effect in 2004.

1.2. Purposes . The purposes of this Plan are to enable the Company to attract and retain persons of outstanding competence, and to provide a means whereby the receipt of certain amounts payable by the Company to selected key employees may be deferred to some future period.

Section 2: Definitions

2.1. Definitions. Whenever used herein, the following terms shall have the meanings set forth below:

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

(b) “Change of Control” means the events determined by the Committee to constitute a change of control of the Company within the meaning of Code Section 409A and the default rules of Treas. Reg § 1.409A-3(i)(5). The Committee shall have the discretion to determine when events constituting a change of control of the Company have occurred; provided, however, that such a determination shall not be unreasonably withheld.

(d) “Compensation” means the gross Salary and Bonuses payable to a Participant during a Year.

(i) “Salary” means all regular, basic Compensation, before reduction for amounts deferred pursuant to this Plan or any other plan of the Company, payable in cash to a Participant for services during the Year, exclusive of any Bonuses or incentive compensation, special fees or awards, allowances, or amounts designated by the Company as payment toward or reimbursement of expenses.

(ii) “Bonus” or “Bonuses” means any annual incentive award based on an assessment of performance, payable by the Company to a Participant in a Year.

(e) “Growth Increment” means the amount of interest earned on a Participant’s deferred amounts.

(f) “Participant’” means an individual selected by the Committee for participation in the Plan.

(g) “Separation from Service” shall occur when an individual has a termination of employment with the Company within the meaning of Code Section 409A, subject to the following conditions:

(i) If the Participant takes a leave of absence from the Company for purposes of military leave, sick leave or other bona fide leave of absence, the Participant’s employment will be deemed to continue for the first six (6) months of the leave of absence, or if longer, for so long as the Participant’s right to reemployment is provided by either by statute or by contract. If the period of the leave exceeds six (6) months and the Participant’s right to reemployment is not provided by either statute or contract, the Participant will be considered to have incurred a Separation from Service on the first day of the seventh (7th) month of the leave of absence.

(ii) The Participant will be deemed to have incurred a Separation from Service when the level of bona fide services performed by the Participant for the Company (whether as an employee or as an independent contractor) permanently decreases to a level equal to twenty percent (20%) or less of the average level of services performed by the

Participant during the immediately preceding thirty-six (36)-month period (or the Participant’s actual period of service, if less). The Participant will not be deemed to have incurred a Separation from Service if the Participant continues to provide bona fide services to the Company in any capacity (whether as an employee or an independent contractor) at a level that is greater than twenty percent (20%) of the average level of services performed by the Participant during the immediately preceding thirty-six (36)-month period (or the Participant’s actual period of service, if less).

(h) “Total and Permanent Disability” shall be deemed to have occurred when the Participant (i) is unable to engage in any substantial, gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company. The occurrence of a disability and the date of onset of disability shall be determined by the Company in its sole discretion, relying on such information as Company deems necessary or appropriate.

(i) “Year” means the fiscal year of the Company ending on December 31.

2.2. Gender and Number . Except when otherwise indicated by the context, any masculine terminology used herein also shall include the feminine gender, and the definition of any term herein in the singular also shall include the plural.

Section 3: Eligibility and Participation

3.1. Eligibility . The officers of the Company and other key employees approved by the Committee shall be eligible to participate in this Plan. It is intended that participation in this Plan is to be limited to a select group of management or highly compensated employees and the Committee shall not include in the Plan any employee who does not fall into that category.

3.2. Participation . The Committee of the Board shall approve individuals for participation in the Plan. In the event a Participant no longer meets the requirements for participation in this Plan, he shall become an inactive Participant, retaining all the rights described under this Plan (including the right to receive any Salary or Bonuses previously deferred under this Plan and credited to his deferred compensation account as described in Section 5, as well as any Growth Increments earned on such amounts), except the right to make any further deferrals, until the time he again becomes an active Participant or incurs a Separation from Service from the Company, dies or suffers a Total and Permanent Disability.

3.3. Partial Year Participation . In the event that an individual becomes an employee of the Company after the beginning of a Year, or otherwise becomes eligible to participate after the beginning of a Year, the Committee may, in its sole discretion, approve such individual for participation in the Plan. Such participation shall be effective as of the first day of the Year immediately following the Year in which the individual becomes eligible for participation.

Section 4: Election to Defer

4.1. Deferral Elections . Except as provided in Subsection 4.2 below, prior to the beginning of each Year, a Participant irrevocably may elect to defer a percentage of Salary, Bonus, or both Salary and Bonus that will be earned in the subsequent year. The deferral election shall be in such form as is prescribed by the Company.

(a) Salary Deferral . A Participant may elect to defer a percentage, not to exceed 50%, of his annual Salary. The deferral percentage elected shall be applied to the Participant’s Salary for each pay period of the Year to which the deferral election applies.

(b) Bonus Deferral . Participant may elect to defer all or a portion of his Bonus in 25% increments. The deferral percentage elected shall apply only to the Participant’s Bonus payable with respect to

service to be performed in the immediately following Year.

4.2. Deferral Election for Initial Year . For the initial Year of this Plan ending December 31, 2005 only, a Participant may elect to defer a percentage of Salary, Bonus, or both Salary and Bonus, by written notice to the Company in a form prescribed by the Company before March 15, 2005. This election shall be effective only as to Salary and Bonus amounts that are to be paid after March 15, 2005.

4.3. At the same time as the election made pursuant to Subsection 4.1, the Participant shall irrevocably select the deferral period for each separate deferral of Salary, Bonus, or both Salary and Bonus. The deferral period may be for a specified number of years (not to be less than five) or until a specified date (not less than five years from the date of election). However, notwithstanding the deferral period specified, payment shall begin following the earliest to occur of:

	(a)		Death,

	(b)		Total and Permanent Disability,

	(c)		Change in Control, or

	(d)		Separation from Service.

4.4. Manner of Payment Election. At the same time as he makes an election pursuant to Subsection 4.1, the Participant also shall elect the manner in which the deferred amount will be paid. The Participant may choose to have payment either in a lump sum or in two (2) to ten (10) approximately equal annual installments. The Participant may only modify this election upon approval from the Company and in a manner that is consistent with Code Section 409A. The Company shall establish separate subaccounts, as needed, to identify amounts subject to different payment intervals.

Section 5: Deferred Compensation Account

5.1. Participant’s Accounts . The Company shall establish and maintain an individual bookkeeping account for each Participant to record his deferrals. This account shall be credited as of the date the amount deferred otherwise would have become due and payable.

5.2. Growth Increments . The Company shall provide the opportunity for Growth Increments to be earned on the deferred amounts. The Participant’s account shall be credited on the last day of each calendar quarter, with a Growth Increment computed on the balance in the account as of the first day of such quarter. The Growth Increment shall be equal to said account balance multiplied by the interest rate. The interest rate shall be equal to the sum of the five-year U.S. Treasury constant maturities rate of interest plus one and one-half percent (1-1/2%), the sum of which is then divided by four (4). The U.S. Treasury constant maturities rate of interest shall be the average weekly rate as reported by the Board of Governors of the Federal Reserve System in the Federal Reserve Statistical Release for the week ending on the date that is the Wednesday immediately preceding the last day of each calendar quarter.

5.3. Charges Against Accounts . There shall be charged against each Participant’s account any payments made to the Participant or to his beneficiary in accordance with Section 6 hereof.

Section 6: Payment of Deferred Amounts

6.1. Payment of Deferred Amounts . Payment of a Participant’s deferred compensation account balance, including accumulated Growth Increments attributable thereto, shall be paid either in a lump sum or in two (2) to ten (10) approximately equal annual installments, as selected by the Participant under Subsection 4.4 of this Plan, as follows:

(a) Lump Sum Payment . Except as provided in Subsection 6.3, a lump sum payment shall be made in cash within thirty (30) calendar days after the end of the deferral period selected by the Participant under Subsection 4.3 hereof.

(b) Installment Payments . Except as provided in Subsection 6.3, the initial payment of a series of annual installment payments shall be made in cash within thirty (30) calendar days after the end of the deferral period selected by the Participant under Subsection 4.3 hereof. The remaining installment payments shall be made in cash each year thereafter until the Participant’s entire deferred compensation

account has been paid. Growth Increments shall continue to be earned on the deferred amounts in the Participant’s deferred compensation account, as provided in Section 5 of this Plan, until the Participant’s entire deferred compensation account has been paid. The amount of each payment shall be equal to the balance remaining in a Participant’s account immediately prior to each such payment, multiplied by a fraction, the numerator of which is one and the denominator of which is the number of installment payments remaining.

6.2. Acceleration of Payments . Notwithstanding the election made pursuant to Subsection 4.4, and subject to the requirements of Subsection 6.3, payment shall be made in a lump sum within thirty (30) days of the date specified for payment under the following circumstances:

(a) If payment commences because the Participant incurs a Separation from Service, or suffers a Total and Permanent Disability (as described in Subsections 4.3(b) and 4.3(c)),

(b) If payment commences because the Participant dies prior to the payment of all or a portion of his deferred compensation account balance,

(c) If the Participant’s account balance is less than five thousand dollars ($5,000) at the time specified for payment, or

(d) If payment commences because of the occurrence of a Change of Control of the Company. In such event, all amounts deferred by the Participant, plus Growth Increments, immediately shall become payable in full as of the date of such Change of Control, notwithstanding any other provisions to the contrary.

In the event the Participant dies prior to the payment of all or a portion of his deferred compensation account balance, as specified in Subsection 6.2(b), payment of the Participant’s benefits shall be made to the beneficiaries designated pursuant to Section 7 hereof.

6.3. Treatment of “Specified Employees” . Notwithstanding any provision of this Plan to the contrary, if a Participant is a “specified employee” (within the meaning of Code Section 409A), no distribution shall be made to such Participant before the expiration of the 6-month period following the Participant’s Separation from Service. Whether a Participant is a “specified employee” for this purpose shall be determined by the Committee, in accordance with the requirements imposed by Code Section 409A and the Treasury Regulations promulgated thereunder. At the expiration of the 6 month period, in the event the Participant would otherwise have received installment payments during the 6 month delay, such amount shall be paid together with the first installment due after the 6 month waiting period expires.

6.4. Unforeseeable Emergency . The Committee shall alter the timing or manner of payment of deferred amounts in the event that the Participant establishes, to the satisfaction of the Committee, severe financial hardship. In such event, the Committee shall:

(a) Provide that all, or a portion of, the amount previously deferred by the Participant immediately shall be paid in a lump sum cash payment,

(b) Provide that all, or a portion of, the installments payable over a period of time immediately shall be paid in a lump sum, or

as long as the amount distributed will not be in excess of that amount which is necessary for the Participant to meet the financial hardship.

Severe financial hardship shall be deemed to have occurred in the event of (i) an illness or accident affecting the Participant, the Participant’s spouse, or the Participant’s dependent (as defined in Code Section 152 (without regard to Code Sections 152(b)(1), 152(b)(2), and 152(d)(1)(B)), (ii) loss of the Participant’s property due to casualty, or (iii) any other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The Committee’s decision in passing on the severe financial hardship of the Participant and the manner in which, if at all, the payment of deferred amounts shall be altered or modified, shall be final, conclusive, and not subject to appeal.

Section 7: Beneficiary Designation

7.1. Designation of Beneficiary . A Participant shall designate a beneficiary or beneficiaries who, upon the Participant’s death, are to receive the amounts that otherwise would have been paid to the Participant. All designations shall be signed by the Participant and be in such form as prescribed by the Company. A designation shall be effective as of the date incorporated in it and only if it is delivered to the Company during the lifetime of the Participant. The Participant also may change his designation of beneficiary on such form as prescribed by the Company. The payment of amounts shall be in accordance with the last unrevoked written designation of beneficiary that has been signed and delivered to the Company.

7.2. Death of Beneficiary . In the event that all of the beneficiaries named in line with Subsection 7.1 predecease the Participant, the amounts that would have been paid to the Participant shall be paid to the Participant’s estate, and in such event, the term “beneficiary” shall include his estate.

7.3. Ineffective Designation . In the event the Participant does not designate a beneficiary or for any reason such designation is ineffective, in whole or in part, the amounts that otherwise would have been paid to the Participant shall be paid to the Participant’s estate and in such event the term “beneficiary” shall include his estate.

Section 8: Rights of Participant

8.1. Contractual Obligation . It is intended that the Company shall be under a contractual obligation to make payments from the Participant’s account when due. Payment of account balances shall be made out of the general funds of the Company as determined by the Board.

8.2. Unsecured Interest . No Participant or beneficiary shall have any interest whatsoever in any specific asset of the Company. To the extent that any person acquires a right to receive payments under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.

8.3. Employment . Nothing in the Plan shall interfere with nor limit in any way the right of the Company to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company.

8.4. Participation . No employee shall have the right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. No employee shall have the right to continue as a Participant beyond the date specified by the Committee.

Section 9: Nontransferability

9.1 Nontransferability . In no event shall the Company make any payment under this Plan to any assignee or creditor of a Participant or a beneficiary. Prior to the time of the payment hereunder, a Participant or a beneficiary shall have no rights by way of anticipation or otherwise to assign or otherwise dispose of any interest under this Plan, nor shall such rights be assigned or transferred by operation of law.

Section 10: Administration

10.1. Administration . This Plan shall be administered by the Corporate Governance Committee of the Board, or any successor thereto. The Committee may from time to time establish rules for the administration of this Plan that are not inconsistent with the provisions of this Plan.

10.2. Finality of Determination . The determination of the Committee as to any disputed questions arising under this Plan, including questions of construction and interpretation, shall be final, binding, and conclusive upon all persons.

10.3. Expenses . The cost of payment from this Plan and the cost of administering the Plan shall be borne by the Company.

Section 11: Withholding of Taxes

11.1. Tax Withholding . The Company shall have the right to deduct from all payments made from the Plan, or from any other amount owed to the Participant (or to a beneficiary), any Federal, state, or local income or payroll taxes (including all taxes required under the Federal Insurance Contributions Act) that the Company determines required by law to be withheld with respect to such payments. If the amount so withheld by the Company is insufficient for such purpose, then the Company may require the Participant (or the beneficiary) to pay to the Company, upon its demand, or otherwise make arrangements satisfactory to the Company for payment of, such amount as may be requested by the Company in order to satisfy the Company’s obligation to withhold any such taxes.

Section 12: Amendment and Termination

12.1. Amendment and Termination . The Company expects the Plan to be permanent but, since future conditions affecting the Company cannot be anticipated or foreseen, the Company necessarily must and does hereby reserve the right to amend, modify, or terminate the Plan at any time by action of its Board. Except with consent of the affected Participant, no amendment, nor the termination of this Plan, shall deprive the Participant of the right to amounts deferred prior to the amendment or termination or to the right to have Growth Increments continue to be credited in accordance with Subsection 4.2 to his account until payment is made. Likewise, no amendment nor termination of the Plan may further defer the timing of payment beyond the date previously established without the Participant’s consent and in accordance with terms of Code Section 409A. Nor may the Company, without the consent of the affected Participant or beneficiary, terminate the Plan or amend it in any manner that would cause the imposition of additional tax on the Participant or beneficiary under Code Section 409A.

Section 13: Applicable Law

13.1. Applicable Law . This Plan shall be governed and construed in accordance with the laws of the State of Wisconsin, except to the extent such laws are preempted by the Employee Retirement Income Security Act of 1974.

13.2. Claim Appeal Procedure . In the event a Participant disagrees with the Committee’s determination regarding the Participant’s right to benefits hereunder, the Participant must submit his written request for reconsideration to the Committee setting forth the basis for his disagreement. The Committee shall review the claim and provide a written response within 60 days after receipt of the claim, although the Committee may extend this period to 120 days by notice to the Participant within the initial 60-day period.

If the Participant disagrees with the Committee’s determination on review, the Participant may file a written objection within 60 days from the date of the Committee’s written response requesting review by the Board. The Board’s decision will be transmitted to the Participant within 60 days of receipt of the written objections, although the Board may extend this period to 120 days by written notice to the Participant within the initial 60-day period. The Board’s decision on appeal shall be final and binding on all parties.

Exhibit (10.15)

BADGER METER, INC.
AMENDED AND RESTATED DEFERRED COMPENSATION PLAN FOR CERTAIN DIRECTORS

(approved December 12, 2008 and retroactively effective on January 1, 2008)

Section 1 . Participants.

Any director of Badger Meter, Inc. (the “Company”), other than a director who is also a salaried officer or employee of the Company or any of its subsidiaries, may elect to become a Participant under this Amended and Restated Deferred Compensation Plan for Certain Directors (the “Plan”) by written notice to the Company. This Plan shall apply only to compensation deferrals occurring after 2004. Deferrals occurring before January 1, 2005 are controlled by the terms of the plan as in effect in 2004.

Section 2 . Deferred Compensation.

Deferral Election . Any Participant may elect to defer all or any part of his compensation as a director which is earned during a calendar year beginning after the date of said election as he may specify in said written notice to the Company, and such deferred compensation shall be credited by the Company to a deferred compensation account for such Participant at the time it would otherwise be payable to the director. Any Participant may increase, reduce or suspend the election, but only with respect to payments earned in any calendar year beginning after the filing of the modified election. In addition, with respect to the calendar year in which a director is first eligible to, and elects to participate in the Plan, the director may, within 30 days of becoming a Participant in the Plan, elect to defer all or any part of his compensation as a director which is earned during such calendar year beginning after the date on which he filed the election to defer, provided the Participant was not an employee of the Company during that same calendar year.

Distribution Election . Prior to the calendar year in which the compensation at issue is earned, the Participant may elect to have the amounts credited to his deferred compensation account distributed to him in five or ten equal annual installments. Such distribution shall begin at the time, and in shall be made in such fashion, as described in Section 5. The Company shall establish separate subaccounts as needed to identify amounts subject to different payment intervals. If the Participant does not make a distribution election under this Section 2, the amounts credited to the Participant’s deferred compensation account under the Plan shall be payable in three equal annual installments, as described in Section 5.

Section 3 . Accounts.

The deferred compensation of each Participant will be credited to an account on the Company’s books in the name of such Participant, and each Participant will be furnished annually with a statement of his account. Such accounts shall serve solely as a device for determining the amount of the deferred compensation to be paid to Participants and shall not constitute or be treated as a trust fund of any kind.

a. Cash or Stock Unit Deferrals.

At the same time he elects to defer all or any part of his compensation, the Participant shall also select the manner in which the compensation to which he may become entitled after the date of election shall be deferred. The Participant shall elect to defer that compensation in one of two ways – as cash or as stock of the Company.

Cash Subaccount. If a Participant elects to defer his compensation into a Cash Subaccount, the Cash Subaccount is credited with the dollar amount of such compensation on the date it would otherwise be payable. Amounts credited to the Cash Subaccount are credited with interest as stated in Paragraph 4 of the Plan.

Stock Subaccount. If a Participant elects to defer his compensation into a Stock Subaccount, the Stock Subaccount is credited with a number of units equivalent to the dollar amount of such compensation on the date it would otherwise be payable. Such units will be computed by dividing the deferred compensation by the fair market value of the Company’s Common Stock. Fair market value for this purpose is the closing price of the Common Stock on the American Stock Exchange on the last trading day of the quarter proceeding the date that the compensation would have been paid if no deferral had been made. Amounts credited to the Stock Subaccount are credited with dividends as stated in Paragraph 4a of this document.

Section 4 . Interest and Dividends .

Interest . The Cash Subaccount of each Participant shall be credited with interest annually, on the last day of each calendar year, until the amounts credited to the Participant’s Cash Subaccount have been fully paid to him as described

under paragraph 6 hereof. The rate of interest to be credited shall be equal to the prime rate of interest in effect at the M&I Marshall and Ilsley Bank of Milwaukee, Wisconsin, as of the first business day of the calendar year.

Dividends . The Stock Subaccount of each Participant shall be credited with dividends quarterly, on the last day of each calendar quarter, until the full payment to the participant under paragraph 6 hereof. Such dividends shall be computed by multiplying the number of units in the Participant’s stock subaccount on each dividend record date, by the amount of each dividend, to determine the dividend amount. The dividend amount will then be divided by the closing stock price on the dividend record date to determine the number of stock units to be added to the stock subaccount. For example, if a participant has five hundred (500) units in a stock subaccount on the record date of a twenty cent ($.20) dividend declaration, the dividend amount would be one hundred dollars (100). If the closing price of the stock was $50 on that date, two units would be added to the Participant’s stock subaccount.

Section 5 . Distribution.

When a Participant shall Cease to be a Director of the Company the amount accumulated in such Participant’s deferred compensation account shall be distributed as follows:

a. The Company pay to the Participant the amounts credited to the Participant’s deferred compensation account on January 1 of each year following the date on which the Participant Ceases to be a Director, an amount equal to one-third, one-fifth or one-tenth of the amount accumulated in his deferred compensation account at the date he Ceased to be Director (depending on the number of installments elected by the Participant pursuant to Section 2, above), plus any additional amount of deferred compensation or interest thereafter credited to such account under the provisions of paragraph 4.

b. If a Participant shall Cease to be a Director by reason of his death or if he shall die after he shall be entitled to distribution hereunder but prior to receipt of all distributions hereunder, all amounts credited to his account shall be distributed to such beneficiary as such Participant shall have designated by an instrument in writing filed with the Secretary of the Company, or in the absence of such designation, to his personal representative or estate, in the same manner and at the same intervals as they would have been made to such Participant had he continued to live.

c. Stock Subaccount Valuation

Upon distribution of any portion or all of a Participant’s stock subaccount, the value of the account will be computed by multiplying the number of units in the account on the date of distribution by the closing price of the Company’s Common Stock on the last day of the month prior to the distribution.

d. Conversion of Stock Subaccount to Cash Subaccount.

Within 30 days of the date he Ceases to be a Director, the Participant who has a stock subaccount, may elect to convert the stock subaccount balance into a cash subaccount balance. The conversion will be made by multiplying the number of units in the account on the date of conversion by the closing price of the Company’s Common Stock on the last day of the month prior to the conversion. After conversion, the new cash subaccount would function in the same manner as all other cash subaccounts.

e. For purposes of this Plan, a Participant shall “Cease to be a Director” upon the Participant’s termination of director services with the Company, subject to the following conditions:

(i) If the Participant takes a leave of absence from the Company for purposes of military leave, sick leave or other bona fide leave of absence, the Participant’s services will be deemed to continue for the first six (6) months of the leave of absence, or if longer, for so long as the Participant’s right to continue services is provided by either by statute or by contract. If the period of the leave exceeds six (6) months and the Participant’s right to continue services is not provided by either statute or contract, the Participant will be considered to have Ceased to be a Director on the first day of the seventh (7 ^th ) month of the leave of absence.

(ii) The Participant will be deemed to have Ceased to be a Director for purposes of this Plan when the level of bona fide services performed by the Participant for the Company (either as a director or as an employee, if the Participant continues to provide services to the Company in a capacity other than as a director) permanently decreases to a level equal to twenty percent (20%) or less of the average level of services performed by the Participant during the immediately preceding thirty-six (36)-month period (or the Participant’s actual period of service, if less). The Participant will not be deemed to have Ceased to be a Director if the Participant continues to provide bona fide services to the Company in any capacity (whether as a director or an employee if the Participant continues to provide services to the Company in a capacity other than as a director) at a level that is greater than twenty percent (20%) of the average level of services performed by the Participant during the immediately preceding thirty-six (36)-month period (or the Participant’s actual period of service, if less).

Section 6 . Conditions.

Until each Participant shall have received his full distribution hereunder, he shall not (i) divulge at any time any confidential information, technical or otherwise, obtained by him in his capacity as a director, or (ii) take any steps to do anything which would damage or reflect adversely on the reputation of the Company, or (iii) refuse to furnish such advisory or consulting services as the Company may reasonably request and as his health may permit, provided that such services shall be rendered as an independent contractor and not as an employee and that the Company shall pay reasonable compensation for such services, as well as reimbursement for expenses incurred in connection therewith. Any Participant who shall fail to comply with any of the foregoing conditions shall forfeit all right to any distribution of cash or stock which would otherwise be payable to him thereafter under the terms of this Plan. Notwithstanding the foregoing, however, the Company shall not require the Participant to provide services to it pursuant to this Section 6 to such an extent that the Participant, if he had previously Ceased to be a Director within the meaning of Section 5 hereof, would, as a result of performing such services, be deemed not to have Ceased to be a Director.

Section 7 . Assignment.

Neither the Participant, nor his beneficiary, nor his estate shall have any right or power to transfer, assign, pledge, encumber, anticipate or otherwise dispose of any rights or any distributions payable hereunder.

Section 8 . Participants’ Rights Unsecured.

The right of any Participant to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, wholly contingent upon the conditions set forth in paragraph 6.

Section 9 . Tax Withholding.

The Company shall have the right to deduct from all payments made from the Plan, or from any other amount owed to the Participant (or to the Participant’s personal representative or estate, if applicable), any Federal, state, or local income or payroll taxes (including all taxes required under the Federal Insurance Contributions Act) that the Company determines required by law to be withheld with respect to such payments. If the amount so withheld by the Company is insufficient for such purpose, then the Company may require the Participant (or the Participant’s personal representative or estate, if applicable) to pay to the Company, upon its demand, or otherwise make arrangements satisfactory to the Company for payment of, such amount as may be requested by the Company in order to satisfy the Company’s obligation to withhold any such taxes.

Section 10 . Amendments of the Plan.

The Board of Directors of the Company may amend the Plan at any time, without the consent of the Participants or their beneficiaries, provided, however, that no amendment shall divest any Participant of the right to receive the amounts then credited to his account hereunder, subject only to the conditions described in paragraph 6. Further, the Company may not, without the consent of the affected Participant (or the Participant’s personal representative or estate, if applicable), amend the Plan in any manner that would cause the imposition of additional tax under Code section 409A on the Participant (or the Participant’s personal representative or estate, if applicable).

Section 11 . Termination of Plan.

The Board of Directors of the Company may terminate the Plan at any time. Upon termination of the Plan, distributions in respect of credits to Participants’ deferred compensation accounts as of the date of termination shall be made in the manner and at the time heretofore prescribed. Notwithstanding the foregoing, however, the Company may not, without the consent of the affected Participant (or the Participant’s personal representative or estate, if applicable), terminate the Plan if such termination would cause the imposition of additional tax under Code section 409A on the Participant (or the Participant’s personal representative or estate, if applicable).

Section 12 . Expenses.

Costs of administration of the Plan will be paid by the Company.

Section 13 . Gender and Number.

Except when otherwise indicated by the context, any masculine terminology used herein shall also include the feminine gender, and the definition of any term herein in the singular shall also include the plural.

Section 14 . Claims Appeal Procedure

a. In the event a Participant disagrees with the determination of the Corporate Governance Committee of the Board of Directors, or any successor committee thereto (the “Committee”), regarding the Participant’s right to benefits hereunder, the Participant must submit his written request for reconsideration to the Committee setting forth the basis for his disagreement. The Committee shall review the claim and provide a written response within 60 days after receipt of the claim, although the Committee may extend this period to 120 days by notice to the Participant within the initial 60-day period.

b. If the Participant disagrees with the Committee’s determination on review, the Participant may file a written objection within 60 days from the date of the Committee’s written response requesting review by the Board of Directors. The Board of Directors’ decision will be transmitted to the Participant within 60 days of receipt of the written objections, although the Board of Directors may extend this period to 120 days by written notice to the Participant within the initial 60-day period. The Board of Directors’ decision on appeal shall be final and binding on all parties.

Exhibit (10.16)

BADGER METER, INC.
AMENDED AND RESTATED EXECUTIVE SUPPLEMENTAL PLAN II
(approved December 12, 2008 and retroactively effective on January 1, 2008)

Section 1. Establishment of Plan and Purpose

1.1 Establishment of Plan . Badger Meter, Inc. has established, effective as of January 1, 2005, and amended and restated effective as of January 1, 2008, the “Badger Meter, Inc. Amended and Restated Executive Supplemental Plan II” (the “Plan”). This Plan applies only to compensation accruals occurring after December 31, 2004. Accruals prior to that date are controlled by the terms of the plan as in effect in 2004.

1.2 Purpose of the Plan . The Plan has been established to supplement the benefits that eligible Participants will receive under the Company’s qualified retirement plans. Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “Code”) limits the amount of compensation which can be considered in determining benefits under a qualified retirement plan. Because of this rule, the Company cannot contribute the same percentage of compensation on behalf of the Participants that it can contribute on behalf of other employees. As a result, the Company makes a limited contribution to its qualified retirement plans on behalf of the Participants. The Company intends to supplement the Participants’ benefits under the Company’s qualified retirement plans by providing a supplemental benefit as determined under the terms of this Plan.

Section 2. Definitions and Construction

2.1 Definitions .

(a) Code . The Internal Revenue Code of 1986, as amended.

(b) Company . Badger Meter, Inc., a Wisconsin corporation, and any successor. The Board of Directors of the Company, or those board members authorized by the entire Board of Directors, shall act on behalf of the Company for purposes of the Plan.

(d) Employment . Employment within the Company.

(e) ERISA . The Employee Retirement Income Security Act of 1974, as amended.

(f) Memorandum Account . The account maintained for the Participant pursuant to Section 4 below.

(g) Normal Retirement . The Participant’s Termination of Employment with the Company on or after the date the Participant attains age 65.

(h) Participant . Each member of the Company’s Executive Committee who is approved for participation in the Plan by the
Corporate Governance Committee of the Company’s Board of Directors.

(i) Plan . The Badger Meter, Inc. Amended and Restated Executive Supplemental Plan II, as stated in this document and as amended from time to time.

(j) Plan Year . Each calendar year.

(k) Termination of Employment . As used herein, the term “Termination of Employment” shall mean a Participant’s termination of employment from the Company within the meaning of Code Section 409A, subject to the following conditions:

the first six (6) months of the leave of absence, or if longer, for so long as the Participant’s right to reemployment is provided by either by statute or by contract. If the period of the leave exceeds six (6) months and the Participant’s right to reemployment is not provided by either statute or contract, the Participant will be considered to have incurred a Termination of Employment on the first day of the seventh (7th) month of the leave of absence.

(ii) The Participant will be deemed to have incurred a Termination of Employment when the level of bona fide services performed by the Participant for the Company (whether as an employee or as an independent contractor) permanently decreases to a level equal to twenty percent (20%) or less of the average level of services performed by the Participant during the immediately preceding thirty-six (36)-month period (or the Participant’s actual period of service, if less). The Participant will not be deemed to have incurred a Termination of Employment if the Participant continues to provide bona fide services to the Company in any capacity (whether as an employee or an independent contractor) at a level that is greater than twenty percent (20%) of the average level of services performed by the Participant during the immediately preceding thirty-six (36)-month period (or the Participant’s actual period of service, if less).

2.2 Construction . The laws of the State of Wisconsin, as amended from time to time, shall govern the construction and application of this Plan, except to the extent that federal law preempts state law. All references to statutory sections shall include the sections as amended from time to time or any other statute of similar meaning.

Section 3. Eligibility

3.1 Commencement of Participation . Each eligible Participant shall begin participating in this Plan on the date specified by the Corporate Governance Committee of the Company’s Board of Directors (hereinafter, the Participant’s “Commencement Date”).

3.2 Termination of Participation . The Participant’s right to participate in this Plan shall cease on the earlier of: (a) the date of his Termination of Employment; (b) the date the Company terminates the Plan; or (c) the date the Company removes the Participant from continued participation in the Plan.

Section 4. Credited Amounts and Memorandum Account

4.1 Credited Contributions . As of the last day of each Plan Year prior to a Participant’s termination of Employment, the Company shall make a contribution to the Plan on behalf of such Participant in an amount equal to 7.5% of the Participant’s Compensation for that Plan Year. Notwithstanding the foregoing, with respect to the first Plan Year in which the Participant participates in the Plan, the Company’s contribution under this Section 4.1 shall be determined based only on the Compensation earned by the Participant after his Commencement Date.

4.2 Credited Earnings

(a) As of the last day of each Plan Year prior to complete distribution of a Participant’s Memorandum Account, the total amount credited to and remaining in the Participant’s Memorandum Account relating to prior years’ contributions and interest shall be credited with interest.

(b) Interest shall be credited at a rate equal to the prime rate of interest in effect at the M&I Marshall & Ilsley Bank of Milwaukee, Wisconsin (or the Company’s prime lender, if not the M&I) as of the first business day of that Plan Year.

4.3 Memorandum Account .

(a) Solely for the purpose of measuring the total amount due to the Participant, the Company shall maintain a Memorandum Account. The Company shall use the Memorandum Account to keep records to determine the credited contribution and credited earnings for each Plan Year. Within 30 days after the last day of each Plan Year, the Company shall provide to the Participant, his beneficiary or estate, a statement indicating the balance credited to the Memorandum Account.

(b) The Memorandum Account shall not represent specific investments or other assets of the Company even if the Company has purchased insurance or accumulates funds for the purpose of paying the Participant under

this Plan. The Memorandum Account shall not constitute or be treated for any reason as a trust for, property of, or a security interest for the benefit of, the Participant, his beneficiary or estate. The Participant’s rights under this Plan are limited to those of a general unsecured creditor of the Company; the Plan constitutes a mere promise by the Company to make benefit payments in the future.

Section 5. Benefit Distributions

5.1 General . As described in Sections 5.2 and 5.3, the amount payable to the Participant at Normal Retirement or other termination of Employment shall be determined by the amount, including earnings, credited to his Memorandum Account.

5.2 Normal Retirement Benefit . Upon Normal Retirement, the Company will pay the Participant’s accrued benefit in either of the following two methods, as elected by the Participant in accordance with Section 5.6.

(a) A single lump sum paid on the first business day of the 7 ^th month following his Normal Retirement date; or

(b) Payments over 10 or fewer years as selected by the Participant, payable in quarterly installment payments beginning on the first business day of the 7 ^th month following the date of the Participant’s Normal Retirement. The Company shall determine the amount of each installment payment using the “declining digits” method. The first year’s payments are based on 1/10 of the then current balance and the second year’s installments are based on 1/9 of the then current balance, and so on. The unpaid balance shall be credited with interest as provided in Section 4.2. The first payment shall include two quarterly payments in recognition of the delay in payment to the 7 ^th month.

5.3 Benefit Upon Other Termination of Employment . Upon the Participant’s Termination of Employment before Normal Retirement (whether such Termination of Employment is the result of the Participant’s death, disability, or some other circumstance), the Company will pay the accrued benefit to the Participant or beneficiary in the form of a lump sum on the first business day of the 7 ^th month following the date of the Participant’s Termination of Employment.

5.4 Unforeseeable Emergency . Notwithstanding the provisions in this Section 5, in the event of an “unforeseeable emergency” occurring in the personal affairs of the Participant or beneficiary prior to or during the payout period, the Plan Administrator shall accelerate the payout. The term “unforeseeable emergency” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or the Participant’s dependent (as defined in Section 152 of the Code without regard to Code Sections 152(b)(1), 152(b)(2), and 152(d)(1)(B)), loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The amount distributed with respect to an emergency may not exceed the amount necessary to satisfy such emergency plus the amount necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

5.5 Designation of Beneficiary . The Participant shall have the right to designate a beneficiary or beneficiaries to receive any portion of his Memorandum Account unpaid at his death. Such designation shall be effected by filing written notification with the Plan Administrator in the form it prescribes and may be changed from time to time by similar action. If the Participant does not make such designation, any such unpaid portion of the Participant’s benefit shall be paid to his estate. Upon the Participant’s death after the date of the Participant’s Normal Retirement, the unpaid portion of the Participant’s Memorandum Account shall be paid to the Participant’s beneficiary (or his estate, if applicable) in the form selected by the Participant pursuant to Section 5.6, provided such form is otherwise permitted by law. If the Participant has not made an election as to the form of payment of his Memorandum Account under Section 5.6 or if his death occurs prior to his Normal Retirement, the unpaid portion of the Participant’s benefit shall be paid to his beneficiary (or his estate, if applicable) in a single lump sum payment not later than thirty (30) days after the date of the Participant’s death.

5.6 Payment Election . A Participant’s election as to the form of payment of his Memorandum Account upon Normal Retirement shall be filed with the Plan Administrator at the time he begins participation in the Plan on a form designated by the Plan Administrator. The election shall specify the form of distribution desired upon the Participant’s Normal Retirement. The Participant’s initial election as to the form of payment of his Memorandum Account under such circumstances must be made within thirty (30) days of the Participant’s Commencement Date. Thereafter, the Participant’s election with respect to payment of his Memorandum Account upon his Normal Retirement may only be changed with respect to amounts earned in calendar years following the date on which the election change is filed with

the Plan Administrator. The Participant may not change his election with respect to amounts previously contributed to the Plan. The Company shall establish separate subaccounts as needed to identify amounts subject to different payment elections. If the Participant fails to make an election as to the form of payment of his Memorandum Account upon Normal Retirement, the Participant’s benefit hereunder will be paid in a single lump sum on the first business day of the 7 ^th month following the date of the Participant’s Normal Retirement.

Section 6. Funding

The Company intends that the arrangement described in this Plan be unfunded for tax purposes and for purposes of Title I of ERISA. All benefits payable pursuant to the Plan shall be paid for, or provided by, the Company from its general assets. If the Company establishes a trust to assist the Company in providing benefits under this Plan, the trust will conform to the terms of the model trust as described in Revenue Procedure 92-64 or, if applicable, subsequent regulatory guidance.

Section 7 . Administrative Provisions

7.1 Administrator . The Company is the administrator of the Plan and determines the amount and character of all Plan benefits. The Company has the authority and discretion to interpret the Plan, to promulgate and revise rules pertaining to the Plan, and to make any other determination which it deems necessary or advisable for the administration of the Plan. The Company’s decisions with respect to the Plan are final.

7.2 Administrative Duties . With the exception of the duties specified in Section 7.3, the Company may delegate its duties to any officer, employee or advisory committee. However, the Participant may not, in any event or circumstance, exercise discretion or control on behalf of the Company with respect to his own Plan benefits. As of the effective date of this Plan, the Company has delegated its administrative duties to the non-Participant members of the Badger Meter, Inc. Corporate Governance Committee. The Company may remove such persons and appoint replacements as it determines appropriate.

7.3 Termination and Amendment . The Company, by written resolution of its Board of Directors, may terminate, suspend, alter or amend this Plan at any time. The Participant shall be vested in his Memorandum Account as of the date that the Plan is terminated, suspended, altered or amended and the amount provided under the Plan shall continue to be paid to the Participant, his beneficiary or estate as provided under this Plan. No amendment may deprive a Participant of a benefit accrued prior to the amendment, including earnings credited to the account balance, without the Participant’s consent. Likewise, the Company may not, without the consent of the affected Participant or his designated beneficiary or beneficiaries, terminate the Plan or amend it in any manner that would cause the imposition of additional tax on the Participant or his designated beneficiary or beneficiaries under Code section 409A.

Section 8. General Provisions

8.1 No Pledge . No person eligible to receive any payment under this Plan shall have the right to pledge, assign, transfer, sell, or otherwise dispose of all or any portion of such payment, either directly or by operation of law, including, but not by way of limitation, execution, levy, garnishment, attachment, pledge or bankruptcy.

8.2 Continued Employment . Nothing in this Plan shall be construed or interpreted as giving the Participant the right to be retained by the Company or impair the Company’s right to terminate his services.

8.3 Forfeiture for Cause . If a Participant’s Employment is terminated for Cause, his benefits under this Plan shall be fully and completely forfeited. “Cause” means, as determined by the Company, the Participant’s intentional dishonest or illegal conduct in connection with his performance of services for the Company.

8.4 Gender and Number . Except when otherwise indicated by the context, any masculine terminology used herein shall also include the feminine gender, and the definition of any term herein in the singular shall also include the plural.

8.5 Successors . This Plan shall inure to the benefit of and shall be enforceable by the Company, its successors and assigns.

8.6 Withholding . The Company shall have the right to deduct from all payments made from the Plan, or from any other amount owed to the Participant or his beneficiary, any Federal, state, or local income or payroll taxes (including all taxes required under the Federal Insurance Contributions Act) that the Company determines required by law to be

withheld with respect to such payments. If the amount so withheld by the Company is insufficient for such purpose, then the Company may require the Participant or his beneficiary to pay to the Company, upon its demand, or otherwise make arrangements satisfactory to the Company for payment of, such amount as may be requested by the Company in order to satisfy the Company’s obligation to withhold any such taxes.

8.7 Notice. All notices, designations or reports provided for in this Plan shall be in writing and delivered personally or by registered or certified mail, return receipt requested. In the case of the Company, correspondence shall be addressed to the Company’s principal business office. In the case of the Participant or his beneficiary, correspondence shall be addressed to his or his beneficiary’s home address as shown on the records of the Company.

8.8 Indemnification . The Company shall indemnify each individual who is responsible for administering the Plan against all claims, losses, damages, and expenses, including counsel fees, incurred by such individual and any liability, including any amounts paid in settlement with the Company’s approval arising from the individual’s actions or failure to act, except when the act or omission is judicially determined to be misconduct or willful misconduct of the individual.

Section 9. Claims Appeal Procedure

9.1 Initial Appeal . In the event a Participant disagrees with the determination of the Corporate Governance Committee of the Board of Directors, or any successor committee thereto (the “Committee”), regarding the Participant’s right to benefits hereunder, the Participant must submit his written request for reconsideration to the Committee setting forth the basis for his disagreement. The Committee shall review the claim and provide a written response within 60 days after receipt of the claim, although the Committee may extend this period to 120 days by notice to the Participant within the initial 60-day period.

9.2 Review of Denial . If the Participant disagrees with the Committee’s determination on review, the Participant may file a written objection within 60 days from the date of the Committee’s written response requesting review by the Board of Directors. The Board of Directors’ decision will be transmitted to the Participant within 60 days of receipt of the written objections, although the Board of Directors may extend this period to 120 days by written notice to the Participant within the initial 60-day period. The Board of Directors’ decision on appeal shall be final and binding on all parties.

Exhibit (21.0)

BADGER METER, INC.

SUBSIDIARIES OF THE REGISTRANT

The Company’s subsidiaries are listed below. All of the subsidiaries of the Company listed below are included in the Company’s consolidated financial statements.


	Percentage			State or country
Name	of ownership			in which organized
Badger Meter de las Americas, SA de CV		100	%	Mexico

Badger Meter Canada, Inc.		100	%	Canada

Badger Meter Czech Republic (a subsidiary of Badger Meter International, Inc.)		100	%	Czech Republic

Badger Meter Europe, GmbH		100	%	Federal Republic of Germany

Badger Meter International, Inc. (an international holding company)		100	%	Wisconsin (U.S.)

Badger Meter de Mexico, SA de CV		100	%	Mexico

Badger Meter Slovakia (a subsidiary of Badger Meter Europe)		100	%	Slovakia

The following subsidiaries of the Company were discontinued at December 31, 2006 and subsequently liquidated at December 31, 2007.

Badger Meter France SAS (a French holding company) (Badger Meter France SAS is a subsidiary of Badger Meter International, Inc.)		100	%	France

MecaPlus Equipements SAS (a subsidiary of Badger Meter France)		100	%	France

Exhibit (23.0)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(1)		Registration Statement (Form S-8 No. 33-65618) pertaining to the Badger Meter, Inc. 1993 Stock option plan;

(2)		Registration Statement (Form S-8 No. 33-62239) pertaining to the Badger Meter, Inc. 1995 Stock Option Plan;

(3)		Registration Statement (Form S-8 No. 33-62241) pertaining to the Badger Meter, Inc. Employee Savings and Stock Plan;

(4)		Registration Statement (Form S-8 No. 333-28617) pertaining to the Badger Meter, Inc. 1997 Stock Option Plan;

(5)		Registration Statement (Form S-8 No. 333-73228) pertaining to the Badger Meter, Inc. 1999 Stock Option Plan;

(6)		Registration Statement (Form S-8 No. 333-107850) pertaining to the Badger Meter, Inc. 2003 Stock Option Plan;

(7)		Registration Statement (Form S-8 No. 333-150567) pertaining to the Badger Meter, Inc. 2008 Restricted Stock Plan; and

(8)		Registration Statement (Form S-3 No. 333-155669) of the Badger Meter, Inc. and in the related Prospectus,

of our reports dated February 27, 2009, with respect to the consolidated financial statements and of Badger Meter, Inc. and subsidiaries and the effectiveness of internal control over financial reporting of Badger Meter, Inc., included in this Annual Report (Form 10-K) of Badger Meter, Inc. for the year ended December 31, 2008.

/s/ Ernst & Young LLP

Milwaukee, Wisconsin
February 27, 2009

Exhibit (31.1)

Certification of Chairman, President and Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934

I, Richard A. Meeusen, certify that:


	1.	I have reviewed this Annual Report on Form 10-K of Badger Meter, Inc.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:


	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


	5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


	a.	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 27, 2009


By	/s/ Richard A. Meeusen

Richard A. Meeusen

Chairman, President and Chief Executive Officer

Exhibit (31.2)

Certification of Senior Vice President — Finance, Chief Financial Officer and Treasurer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934

I, Richard E. Johnson, certify that:


	1.	I have reviewed this Annual Report on Form 10-K of Badger Meter, Inc.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:


	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


	5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


	a.	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 27, 2009


By	/s/ Richard E. Johnson

Richard E. Johnson

Senior Vice President — Finance,
Chief Financial Officer and Treasurer

Exhibit (32.0)

Written Statement of the Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. §1350

Solely for the purpose of complying with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Badger Meter, Inc., a Wisconsin corporation (the “Company”), hereby certify, based on our knowledge, that the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2008 (the “Report”) fully complies with the requirements of Section 13 (a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 27, 2009

Date


By	/s/ Richard A. Meeusen

Richard A. Meeusen

Chairman, President and Chief Executive Officer


By	/s/ Richard E. Johnson

Richard E. Johnson

Senior Vice President — Finance, Chief Financial

Officer and Treasurer