BADGER METER INC (Form: 8-K, Received: 12/28/2018 09:02:09)

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

_______________________

FORM 8-K

CURRENT REPORT

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

_______________________

Date of Report
(Date of earliest event reported)		December 28, 2018

Badger Meter, Inc.
(Exact name of registrant as specified in its charter)

Wisconsin

1-6706

39-0143280

(State or other

jurisdiction of

incorporation)

(Commission File

Number)

(IRS Employer

Identification No.)

4545 W. Brown Deer Rd., Milwaukee, Wisconsin 53223
(Address of principal executive offices, including zip code)

(414) 355-0400
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

_______________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Chief Financial Officer Retirement and Appointment

On December 28, 2018, Badger Meter, Inc. (the “ Company ”) issued a press release announcing that Richard E. Johnson, age 64, the Company’s Chief Financial Officer since 2001, will continue to serve as Senior Vice President – Finance, Chief Financial Officer and Treasurer of the Company until December 31, 2018. From January 1, 2019 until Mr. Johnson’s expected retirement on or about April 5, 2019 (the “ Retirement Date ”), after 18 years of service, Mr. Johnson is expected to serve as Senior Vice President – Administration. Robert A. Wrocklage, age 40, currently the Company’s Vice President – Finance, will become the Company’s Vice President – Finance, Chief Financial Officer and Treasurer on January 1, 2019, to serve for an indefinite term.

In connection with Mr. Johnson’s retirement, the Company and Mr. Johnson entered into a Retirement Agreement, dated as of December 28, 2018 (the “ Agreement ”), which describes Mr. Johnson’s responsibilities until the Retirement Date and the benefits he will receive in connection therewith. The Agreement also contains a standard non-compete provision that lasts for one year.

Under the Agreement, Mr. Johnson’s unvested stock options and restricted stock will vest on January 1, 2019, with no further restrictions, and the Company will pay out any accrued value for outstanding, but unvested, cash-based performance units under the Company’s long-term incentive plan (“ LTIP ”) as of December 31, 2018. The estimated value of this accelerated vesting and payout of Mr. Johnson’s outstanding LTIP awards, based on the closing price of the Company’s common stock on December 27, 2018, is $0.4 million. Mr. Johnson will not be eligible to receive an equity grant or a grant of cash-based performance units under the LTIP for 2019. Mr. Johnson will also receive payment of all earned and unused vacation at his equivalent per hour salary rate as of the Retirement Date.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement. The Agreement is filed herewith as Exhibit 10.1 and is incorporated herein by reference.

Mr. Wrocklage joined the Company in August 2018 to serve as the Company’s Vice President – Finance. Prior to joining the Company, Mr. Wrocklage spent ten years with Actuant Corporation, holding various corporate and business unit financial leadership roles, most recently as Vice President - Corporate Controller and Chief Accounting Officer. He began his career within the Milwaukee audit practices of Arthur Andersen and Deloitte & Touche LLP. He is a Certified Public Accountant. Mr. Wrocklage does not have any direct or indirect material interest in any transaction requiring disclosure under Item 404(a) of Regulation S-K nor any family relationships reportable under Item 401(d) of Regulation S-K.

In connection with his appointment, Mr. Wrocklage is entitled to, among other things: (i) an annual base salary of $300,000; (ii) eligibility to participate in the Company’s annual bonus plan program with a target bonus of 55% of base salary; (iii) continued eligibility to participate in the Company’s LTIP comprised of the following: (a) 30% restricted stock awards, with cliff-vesting to occur at the end of a three-year period, (b) 30% stock option awards, with vesting to occur ratably over a five-year period and (c) 40% performance shares, with grants generally occurring on the first Friday of March each year; (iv) continued eligibility to enter into a Key Executive Employment and Severance Agreement with the Company, which provides for two years severance benefits for all executive officers in the event that there is a change-in-control of the Company; and (v) all other usual compensation and benefit programs available to an executive officer of the Company. For more information on the Company’s compensation and benefit programs, see the Company’s Definitive Proxy Statement for the 2018 Annual Meeting of Shareholders, filed with the U.S. Securities and Exchange Commission on March 16, 2018. The description of Mr. Wrocklage’s Key Executive Employment and Severance Agreement is qualified in its entirety by reference to the form of severance agreement filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on March 4, 2009, which form of severance agreement is incorporated herein by reference.

Principal Accounting Officer Retirement

The Company also announced that Beverly L.P. Smiley, age 68, the Company’s Vice President – Controller and Principal Accounting Officer since 1997, will also be retiring on or about March 31, 2019 after 46 years of service to the Company. Ms. Smiley’s successor, once identified, will be named at a later date.

Chief Executive Officer Compensation

As previously disclosed, Kenneth C. Bockhorst, currently a member of the Company’s board of directors and the Company’s President, is expected to also become the Company’s Chief Executive Officer on January 1, 2019.

In connection with his appointment, Mr. Bockhorst is entitled to, among other things: (i) an annual base salary of $575,000; (ii) eligibility to participate in the Company’s annual bonus plan program with a target bonus of 100% of base salary; (iii) eligibility to participate in the Company’s LTIP comprised of the following: (a) 30% restricted stock awards, with cliff-vesting to occur at the end of a three-year period, (b) 30% stock option awards, with vesting to occur ratably over a five-year period and (c) 40% performance shares, with grants generally occurring on the first Friday of March each year; (iv) eligibility to enter into a Key Executive Employment and Severance Agreement with the Company, which provides for three years severance benefits, as well as the actuarial equivalent of the additional retirement benefits he would have earned had he remained employed for three more years, in the event that there is a change-in-control of the Company; and (v) all other usual compensation and benefit programs available to an executive officer of the Company. For more information on the Company’s compensation and benefit programs, see the Company’s Definitive Proxy Statement for the 2018 Annual Meeting of Shareholders, filed with the U.S. Securities and Exchange Commission on March 16, 2018. The description of Mr. Bockhorst’s Key Executive Employment and Severance Agreement is qualified in its entirety by reference to the form of severance agreement filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on March 4, 2009, which form of severance agreement is incorporated herein by reference.

Item 7.01

Regulation FD Disclosure.

The Company issued a press release announcing the retirements of Mr. Johnson and Ms. Smiley and the appointment of Mr. Wrocklage. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information contained in Item 7.01 of this Current Report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 8.01

Other Events.

In connection with the retirements of Mr. Johnson and Ms. Smiley, the Company expects to take a one-time charge of approximately $0.5 million in the fourth quarter of 2018.

Item 9.01	Financial Statements and Exhibits.

(a)	Not applicable.

(b)	Not applicable.

(c)	Not applicable.

(d)	Exhibits .

EXHIBIT INDEX

	Exhibit No.		Description
	(10.1)		Retirement Agreement, dated as of December 28, 2018, by and between the Company and Richard E. Johnson.

	(99.1)		Badger Meter, Inc. Press Release, dated December 28, 2018.

SIGNATURES

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

		BADGER METER, INC.



Date:	December 28, 2018	By:	/s/ Kenneth C. Bockhorst

			Kenneth C. Bockhorst
			President

Exhibit 10.1

RETIREMENT AGREEMENT

Mr. Richard E. Johnson
Senior Vice President – Finance, Chief Financial Officer and Treasurer
Badger Meter, Inc.

Re: Retirement Agreement

Dear Rick:

I am pleased to confirm in this letter (the “ Agreement ”) the terms and conditions related to your planned retirement from Badger Meter, Inc. (“ Badger Meter ” or the “ Company ”). This Agreement shall become effective upon being signed by you and the Company. The benefits and support described herein are not being provided in connection with any existing formal or informal benefit plans or benefit arrangements. Rather, the benefits and support described herein are being provided as the result of your specialized role, involvement, and support for recent executive transition activities, including the planned and ongoing transitions of the Chief Executive Officer, Chief Financial Officer, and VP – Controller roles. The expectation is you will continue to support these ongoing transition activities from signing of this Agreement until your eventual retirement from the Company as described below.

1. Retirement Date

You agree to continue to serve as Senior Vice President – Finance, Chief Financial Officer and Treasurer of the Company until December 31, 2018. From January 1, 2019 until your retirement on or about April 5, 2019 (“ Retirement Date ”), you will serve as Senior Vice President – Administration.

2. Benefit Plans

Your existing unvested stock options and restricted stock shall vest as of January 1, 2019, with no further restrictions. The original exercise period will remain in place for all outstanding stock options. In addition, the Company shall pay out any accrued value for your outstanding but unvested cash-based performance units under the Company’s long-term incentive plan (“ LTIP ”) as of December 31, 2018. For the avoidance of doubt, the accrued value for outstanding but unvested cash-based performance units under the LTIP will include partial period payouts for the 2017 – 2019 (participating for 8 of 12 quarters) and the 2018 – 2020 (participating for 4 of 12 quarters) performance periods, in each case based on performance through December 31, 2018. Payout of partial prorated amounts will occur no later than February 2019 along with payout of the full amount for the 2016 – 2018 performance period, subject to actual performance. You will not receive an equity grant or a grant of cash-based performance units under the LTIP for 2019.

3. Earned Vacation

Upon your retirement on the Retirement Date, you will be paid all earned and unused vacation at your equivalent per hour salary rate.

4. Company Car

You will continue to have use of your current Company car until your Retirement Date, at which time you will return it to the Company by April 30, 2019.

5. Non-Competition

In exchange for the rights and benefits described in this Agreement, you agree not to accept, during your employment with the Company and for one year after your Retirement Date, a position as an employee, consultant or director with another company, organization or entity that engages in substantial competition with the Company or its subsidiaries unless the Compensation Committee has otherwise consented to your service in such position. It is understood and agreed that money damages may not be a sufficient remedy for any breach of this Agreement by you and that the Company shall be entitled to seek equitable relief, including injunction and specific performance, as a remedy for any such breach. Such remedy shall not be deemed to be the exclusive remedy for the breach of this Agreement by you, but shall be in addition to all other remedies at law or equity to the Company.

6. Death

For the avoidance of doubt (without limitation to any rights you have under any other plan, agreement or arrangement with Badger Meter), upon your death (if you have otherwise complied with the terms of this Agreement prior to your death), your surviving spouse shall be entitled to the benefits described in this Agreement, if any (and you will be deemed to have satisfied all requirements under this Agreement with respect to such benefits).

7. Resignations

You agree to resign as an officer or director of any subsidiaries of the Company effective as of your Retirement Date and represent and warrant that you will, on or before the Retirement Date, provide any resignations from such other positions as the Company deems necessary. You further represent and warrant that you will, on or before such date, unless otherwise provided for herein, deliver to the Company all Company property, including electronic devices such as laptops, tablets and phones, the original and all copies of all documents, records, and property of any nature whatsoever which are your possession or control and which are the property of the Company or which relate to confidential information of the Company, or to the business activities, facilities, or customers of the Company, including any records (electronic or otherwise), documents or property created by you. The Company hereby revokes, effective as of the Retirement Date, any and all powers of attorney the Company may have granted to you during your employment with the Company.

8. Modification and Waiver

This Agreement may be amended or modified only by an agreement in writing. The failure by you or the Company to declare a breach or otherwise to assert its rights under this Agreement shall not be construed as a waiver of any right that you or the Company has under this Agreement. By signing this Agreement, you agree that your retirement on the Retirement Date shall not be considered a “Covered Termination” as defined in the Key Executive Employment and Severance Agreement between you and the Company.

9. Dispute Resolution and Governing Law

This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Wisconsin, without reference to the conflict of law principles thereof. Any dispute arising out of this Agreement shall, at your election, be determined by arbitration under the rules of the American Arbitration Association then in effect (in which case both parties shall be bound by the arbitration award) or by litigation. Whether the dispute is to be settled by arbitration or litigation, the venue for the arbitration or litigation shall be Milwaukee, Wisconsin or, at your election, if you are not then residing or working in the Milwaukee, Wisconsin metropolitan area, in the judicial district encompassing the city in which you reside; provided, that , if you are not then residing in the United States, your election with respect to such venue shall be either Milwaukee, Wisconsin or in the judicial district encompassing that city in the United States among the thirty cities having the largest population (as determined by the most recent United States Census data available at December 31, 2018) which is closest to your residence. The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction notwithstanding their residence or situs, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices.

10. Section 409A

You and the Company intend that any amounts payable hereunder that could constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“ Section 409A ”) shall comply with Section 409A, and this Agreement shall be administered, interpreted and construed in a manner that does not result in the imposition of additional taxes, penalties or interest under Section 409A. If any in-kind benefit or expense reimbursement made hereunder shall be determined to be “deferred compensation” within the meaning of Section 409A, then (a) the amount of the in-kind benefit or expense reimbursement during one taxable year shall not affect the amount of the in-kind benefits or expense reimbursement during any other taxable year, (b) the expense reimbursement shall be made on or before the last day of your taxable year following the year in which the expense was incurred and (c) the right to in-kind benefits or expense reimbursement hereunder shall not be subject to liquidation or exchange for another benefit.

*******

Please indicate your acceptance of the terms and conditions of this letter by returning a signed copy of this letter to my attention.

Badger Meter, Inc.

/s/ Richard A. Meeusen
Richard A. Meeusen, Chairman and Chief Executive Officer

Read and Accepted:
/s/ Richard E. Johnson Date: December 28, 2018
Richard E. Johnson

Exhibit 99.1

Badger Meter Announces Retirement of Richard Johnson as CFO; Robert Wrocklage Named Successor

MILWAUKEE--(BUSINESS WIRE)--December 28, 2018--Badger Meter, Inc. (NYSE:BMI) today announced that Richard E. Johnson (age 64) will retire effective early April 2019. Johnson will be succeeded as the company’s Vice President-Finance, Chief Financial Officer (CFO) and Treasurer by Robert A. Wrocklage (age 40) effective January 1, 2019. Johnson will stay on as Senior Vice President-Administration, continuing to assist in the transition before retiring.

Kenneth C. Bockhorst who, as previously announced, will become Chief Executive Officer on January 1, 2019, stated, “Rick’s wealth of experiences across all areas of finance and administration coupled with his dedication to Badger Meter and its employees have significantly contributed to our success. I am grateful for his 18 years of loyal service and his commitment to a smooth transition.”

Wrocklage will report directly to Bockhorst. Wrocklage joined Badger Meter in August 2018 as Vice President-Finance and has been working alongside Johnson and the entire leadership team. Prior to joining Badger Meter, Wrocklage spent 10 years with Actuant Corporation (NYSE:ATU), holding various corporate and business unit financial leadership roles, most recently as Vice President-Corporate Controller and Chief Accounting Officer. He began his career within the Milwaukee audit practices of Arthur Andersen and Deloitte & Touche LLP and is a Certified Public Accountant.

"Bob brings strong business acumen, outstanding analytical skills and a collaborative leadership style to the CFO role,” commented Bockhorst. “During his short tenure he has gained wide-ranging knowledge of Badger Meter’s culture, products, end markets, operations and key stakeholders. The Company has a robust long-term succession planning process, and we expect this CFO transition to be seamless.”

The company also announced that Beverly L.P. Smiley (age 68), Vice President-Controller, will also be retiring effective in late March 2019 after an extraordinary 46 years of dedicated service to Badger Meter, the past 22 of which included controllership and principal accounting officer responsibilities. Smiley’s successor will be named at a later date.

About Badger Meter

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

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