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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number: 001-32892
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Delaware
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20-3547095
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.01
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New York Stock Exchange
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TABLE OF CONTENTS
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Page
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Item 1.
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Regulatory and
Environmental Matters
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Securities Exchange Act Reports
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Item 1A.
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Item 2.
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Item 3.
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Item 5.
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Item 6.
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Item 7.
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Seasonality
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Item 7A.
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Item 8.
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Item 9A.
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Item 10*
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Item 11*
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Item 12*
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Item 13*
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Item 14*
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Item 15
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*
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All or a portion of the referenced section is incorporated by reference from our definitive proxy statement that will be issued in connection with the upcoming 2017 Annual Meeting of Stockholders.
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Item 1.
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BUSINESS
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•
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Cast Iron Fittings.
Cast iron is an economical threaded-fitting material and is the standard used in the United States for low pressure applications, such as sprinkler systems and other fire protection systems. We believe the substantial majority of Anvil’s cast iron products are used in the fire protection industry, with the remainder used in steam and other HVAC applications.
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•
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Malleable Iron Fittings and Unions
. Malleable iron is cast iron that is heat-treated to make it stronger, allowing a thinner wall and a lighter product. Threaded malleable iron products are used primarily to join pipe in oil & gas and industrial applications.
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•
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Grooved Fittings, Couplings and Valves.
Grooved ductile iron products, which use a threadless pipe-joining method that does not require welding, are used in all of Anvil’s end markets.
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•
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Threaded Steel Pipe Couplings.
Threaded steel pipe couplings are used by plumbing and electrical end users to join pipe and conduit and by pipe mills as threaded-end protectors.
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•
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Nipples.
Pipe nipples are used to expand or compress the flow between pipes of different diameters. Anvil’s steel pipe nipple product line is a complementary product offering that is packaged with cast iron fittings for fire protection products, malleable iron fittings for industrial applications and its forged steel products for oil & gas and chemical applications. Pipe nipples are also general plumbing items.
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Mueller Co.
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Anvil
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Mueller Technologies
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Canada Valve™
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Anvil
®
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Echologics®
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Centurion
®
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Anvil-Strut®
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Echoshore®
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Hydro Gate®
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Beck®
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ePulse
®
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Hydro-Guard®
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Catawissa™
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Hersey™
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Jones®
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Gruvlok®
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LeakFinderRT®
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Milliken™
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J.B. Smith™
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LeakFinderST™
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Mueller®
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Merit™
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LeakListener®
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Pratt®
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SPF®
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LeakTuner®
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U.S. Pipe Valve and Hydrant™
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Mi.Echo®
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Mi.Data®
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Mi.Hydrant™
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Mi.Net®
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Mueller Systems®
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Location
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Expiration of current agreement(s)
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Albertville, AL
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October 2017
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Aurora, IL
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September 2018
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Decatur, IL
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June 2020
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Tinley Park, IL
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April 2018
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Columbia, PA
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May 2017 and August 2017
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Chattanooga, TN
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January 2017 and October 2019
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Henderson, TN
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December 2018
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Simcoe, Canada
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November 2018
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•
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diversion of management time and attention from existing operations;
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•
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difficulties in integrating acquired businesses, technologies and personnel into our business or into our compliance and control programs;
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•
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working with partners or other ownership structures with shared decision-making authority (our interests and other ownership interests may be inconsistent);
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•
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difficulties in obtaining and verifying relevant information regarding a business or technology prior to the consummation of the transaction, including the identification and assessment of liabilities, claims or other circumstances, including those relating to intellectual property claims, that could result in litigation or regulatory exposure;
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•
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assumptions of liabilities that exceed our assessed amounts;
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•
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verifying the financial statements and other business information of an acquired business;
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•
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inability to obtain required regulatory approvals and/or required financing on favorable terms;
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•
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potential loss of key employees, contractual relationships or customers;
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•
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increased operating expenses related to the acquired businesses or technologies;
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•
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the failure of new technologies, products or services to gain market acceptance with acceptable profit margins;
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•
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entering new markets in which we have little or no experience or in which competitors may have stronger market positions;
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•
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dilution of interests of holders of our common shares through the issuance of equity securities or equity-linked securities; and
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•
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inability to achieve expected synergies.
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•
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catastrophic events, such as fires, floods, explosions, natural disasters, severe weather or other similar occurrences;
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•
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interruptions in the delivery of raw materials or other manufacturing inputs;
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•
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adverse government regulations;
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•
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equipment breakdowns or failures;
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•
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information systems failures;
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•
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violations of our permit requirements or revocation of permits;
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•
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releases of pollutants and hazardous substances to air, soil, surface water or ground water;
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•
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shortages of equipment or spare parts; and
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•
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labor disputes.
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Item 2.
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PROPERTIES
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Location
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Activity
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Size
(sq. ft.)
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Owned or
leased
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Mueller Co.:
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Albertville, AL
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Manufacturing
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422,000
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Leased
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Aurora, IL
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Manufacturing and distribution
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231,000
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Owned
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Decatur, IL
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Manufacturing
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467,000
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Owned
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Hammond, IN
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Manufacturing
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51,000
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|
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Owned
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Chattanooga, TN
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Manufacturing
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525,000
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Owned
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Chattanooga, TN
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Research and development
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22,000
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Leased
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Cleveland, TN
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Manufacturing
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109,500
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Owned
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Brownsville, TX
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Manufacturing
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50,000
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Leased
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Barrie, Ontario
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Distribution
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50,000
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Leased
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Jingmen, China
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Manufacturing
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154,000
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Owned
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Anvil:
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Ontario, CA
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Distribution
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73,000
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Leased
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Columbia, PA
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Manufacturing and distribution
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663,000
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Owned
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Greencastle, PA
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Manufacturing
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135,000
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Owned
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Waynesboro, PA
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Manufacturing
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73,000
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Owned
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North Kingstown, RI
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Manufacturing and research and development
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164,000
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Leased
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Henderson, TN
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Manufacturing
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180,000
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Owned
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Houston, TX
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Manufacturing and distribution
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105,000
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Owned
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Irving, TX
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Distribution
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218,000
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Leased
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Longview, TX
(1)
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Manufacturing
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114,000
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Owned
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Simcoe, Ontario
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Distribution
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107,000
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Owned
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Tinley Park, IL
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Distribution
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130,000
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Leased
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Mueller Technologies:
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Cleveland, NC
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Manufacturing
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190,000
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Owned
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Toronto, Ontario
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Research and development
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10,000
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Leased
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Corporate:
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Atlanta, GA
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Corporate headquarters
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25,000
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Leased
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Item 3.
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LEGAL PROCEEDINGS
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Item 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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High
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Low
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Dividends per share
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||||||
2016
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|
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||||||
4th quarter
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$
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13.50
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$
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11.18
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$
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0.0300
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3rd quarter
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11.75
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9.55
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0.0300
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2nd quarter
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9.94
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7.52
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0.0200
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1st quarter
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9.47
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7.45
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0.0200
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2015
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||||||
4th quarter
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9.29
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7.04
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0.0200
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3rd quarter
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10.49
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8.95
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0.0200
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2nd quarter
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10.54
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8.34
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0.0175
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1st quarter
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10.48
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7.92
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0.0175
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Item 6.
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SELECTED FINANCIAL DATA
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2016
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2015
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2014
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2013
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2012
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||||||||||
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(in millions, except per share data)
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||||||||||||||||||
Statement of operations data:
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Net sales
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$
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1,138.9
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$
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1,164.5
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$
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1,184.7
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$
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1,120.8
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$
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1,023.9
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Cost of sales
|
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774.6
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|
|
817.2
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|
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836.8
|
|
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807.6
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|
|
752.8
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|
|||||
Gross profit
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364.3
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|
|
347.3
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|
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347.9
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|
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313.2
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271.1
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|||||
Selling, general and administrative expenses
|
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218.8
|
|
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216.4
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|
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220.7
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|
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214.4
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|
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204.2
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|||||
Pension settlement
|
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16.6
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|
0.5
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—
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|
|
—
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|
|
—
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|
|||||
Loss on Walter receivable
|
|
—
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|
|
11.6
|
|
|
—
|
|
|
—
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|
|
—
|
|
|||||
Other charges
|
|
8.3
|
|
|
9.2
|
|
|
3.1
|
|
|
1.5
|
|
|
2.8
|
|
|||||
Interest expense, net
|
|
23.6
|
|
|
27.6
|
|
|
49.6
|
|
|
51.7
|
|
|
59.9
|
|
|||||
Loss on early extinguishment of debt
|
|
—
|
|
|
31.3
|
|
|
1.0
|
|
|
1.4
|
|
|
1.5
|
|
|||||
Income before income taxes
|
|
97.0
|
|
|
50.7
|
|
|
73.5
|
|
|
44.2
|
|
|
2.7
|
|
|||||
Income tax expense
|
|
33.1
|
|
|
19.8
|
|
|
18.0
|
|
|
8.8
|
|
|
7.9
|
|
|||||
Income (loss) from continuing operations
|
|
63.9
|
|
|
30.9
|
|
|
55.5
|
|
|
35.4
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(5.2
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)
|
|||||
Discontinued operations
(1)
|
|
—
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|
|
—
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|
|
—
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|
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5.4
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|
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(103.2
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)
|
|||||
Net income (loss)
|
|
$
|
63.9
|
|
|
$
|
30.9
|
|
|
$
|
55.5
|
|
|
$
|
40.8
|
|
|
$
|
(108.4
|
)
|
Net income (loss) per basic share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
0.40
|
|
|
$
|
0.19
|
|
|
$
|
0.35
|
|
|
$
|
0.23
|
|
|
$
|
(0.03
|
)
|
Discontinued operations
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
|
(0.66
|
)
|
|||||
Net income (loss)
|
|
$
|
0.40
|
|
|
$
|
0.19
|
|
|
$
|
0.35
|
|
|
$
|
0.26
|
|
|
$
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(0.69
|
)
|
Net income (loss) per diluted share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
0.39
|
|
|
$
|
0.19
|
|
|
$
|
0.34
|
|
|
$
|
0.22
|
|
|
$
|
(0.03
|
)
|
Discontinued operations
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
|
(0.66
|
)
|
|||||
Net income (loss)
|
|
$
|
0.39
|
|
|
$
|
0.19
|
|
|
$
|
0.34
|
|
|
$
|
0.25
|
|
|
$
|
(0.69
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
161.3
|
|
|
160.5
|
|
|
159.2
|
|
|
157.7
|
|
|
156.5
|
|
|||||
Diluted
|
|
163.4
|
|
|
163.2
|
|
|
162.2
|
|
|
160.3
|
|
|
156.5
|
|
|||||
Balance sheet data (at September 30):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
195.0
|
|
|
$
|
113.1
|
|
|
$
|
161.1
|
|
|
$
|
123.6
|
|
|
$
|
83.0
|
|
Working capital
|
|
426.5
|
|
|
381.5
|
|
|
363.0
|
|
|
386.3
|
|
|
321.5
|
|
|||||
Property, plant and equipment, net
|
|
155.1
|
|
|
148.9
|
|
|
146.3
|
|
|
141.9
|
|
|
137.9
|
|
|||||
Total assets
|
|
1,280.6
|
|
|
1,229.8
|
|
|
1,312.5
|
|
|
1,275.9
|
|
|
1,233.2
|
|
|||||
Total debt
|
|
485.1
|
|
|
489.0
|
|
|
541.0
|
|
|
594.8
|
|
|
615.1
|
|
|||||
Long-term liabilities
|
|
675.3
|
|
|
694.0
|
|
|
716.5
|
|
|
764.6
|
|
|
833.6
|
|
|||||
Total liabilities
|
|
861.1
|
|
|
862.0
|
|
|
960.9
|
|
|
947.7
|
|
|
1,002.0
|
|
|||||
Total equity
|
|
419.5
|
|
|
367.8
|
|
|
351.6
|
|
|
328.2
|
|
|
231.2
|
|
|||||
Other data (year ended September 30):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
|
52.6
|
|
|
58.1
|
|
|
56.7
|
|
|
59.2
|
|
|
60.6
|
|
|||||
Capital expenditures
(2)
|
|
39.4
|
|
|
37.5
|
|
|
36.9
|
|
|
36.5
|
|
|
31.4
|
|
|||||
Cash dividends declared per share
|
|
0.100
|
|
|
0.075
|
|
|
0.070
|
|
|
0.070
|
|
|
0.070
|
|
(1)
|
In 2012, we sold U.S. Pipe. U.S. Pipe’s results of operations are classified as discontinued operations for 2013 and 2012
|
(2)
|
Excludes discontinued operations in 2013 and 2012.
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year ended September 30, 2016
|
||||||||||||||||||
|
Mueller Co.
|
|
Anvil
|
|
Mueller Technologies
|
|
Corporate
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net sales
|
$
|
715.7
|
|
|
$
|
338.3
|
|
|
$
|
84.9
|
|
|
$
|
—
|
|
|
$
|
1,138.9
|
|
Gross profit
|
$
|
250.7
|
|
|
$
|
96.4
|
|
|
$
|
17.2
|
|
|
$
|
—
|
|
|
$
|
364.3
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
88.4
|
|
|
67.3
|
|
|
27.4
|
|
|
35.7
|
|
|
218.8
|
|
|||||
Pension settlement
|
2.2
|
|
|
0.5
|
|
|
—
|
|
|
13.9
|
|
|
16.6
|
|
|||||
Other charges
|
0.8
|
|
|
1.8
|
|
|
0.9
|
|
|
4.8
|
|
|
8.3
|
|
|||||
|
91.4
|
|
|
69.6
|
|
|
28.3
|
|
|
54.4
|
|
|
243.7
|
|
|||||
Operating income (loss)
|
$
|
159.3
|
|
|
$
|
26.8
|
|
|
$
|
(11.1
|
)
|
|
$
|
(54.4
|
)
|
|
120.6
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
23.6
|
|
|||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
97.0
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
33.1
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
$
|
63.9
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year ended September 30, 2015
|
||||||||||||||||||
|
Mueller Co.
|
|
Anvil
|
|
Mueller Technologies
|
|
Corporate
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net sales
|
$
|
702.2
|
|
|
$
|
371.1
|
|
|
$
|
91.2
|
|
|
$
|
—
|
|
|
$
|
1,164.5
|
|
Gross profit
|
$
|
229.1
|
|
|
$
|
101.1
|
|
|
$
|
17.1
|
|
|
$
|
—
|
|
|
$
|
347.3
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
83.8
|
|
|
70.4
|
|
|
29.9
|
|
|
32.3
|
|
|
216.4
|
|
|||||
Loss on Walter receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
11.6
|
|
|
11.6
|
|
|||||
Pension settlement
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||
Other charges
|
8.2
|
|
|
0.4
|
|
|
0.1
|
|
|
0.5
|
|
|
9.2
|
|
|||||
|
92.2
|
|
|
71.1
|
|
|
30.0
|
|
|
44.4
|
|
|
237.7
|
|
|||||
Operating income (loss)
|
$
|
136.9
|
|
|
$
|
30.0
|
|
|
$
|
(12.9
|
)
|
|
$
|
(44.4
|
)
|
|
109.6
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
27.6
|
|
|||||||||
Loss on early extinguishment of debt
|
|
|
|
|
|
|
|
|
31.3
|
|
|||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
50.7
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
19.8
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
$
|
30.9
|
|
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Term Loan
|
$
|
20.5
|
|
|
$
|
17.5
|
|
7.375% Senior Subordinated Notes
|
—
|
|
|
4.0
|
|
||
8.75% Senior Unsecured Notes
|
—
|
|
|
2.4
|
|
||
Deferred financing costs amortization
|
1.9
|
|
|
2.0
|
|
||
ABL Agreement
|
1.1
|
|
|
1.7
|
|
||
Other interest expense
|
0.5
|
|
|
0.3
|
|
||
|
24.0
|
|
|
27.9
|
|
||
Interest income
|
(0.4
|
)
|
|
(0.3
|
)
|
||
|
$
|
23.6
|
|
|
$
|
27.6
|
|
|
Year ended September 30, 2015
|
||||||||||||||||||
|
Mueller Co.
|
|
Anvil
|
|
Mueller Technologies
|
|
Corporate
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net sales
|
$
|
702.2
|
|
|
$
|
371.1
|
|
|
$
|
91.2
|
|
|
$
|
—
|
|
|
$
|
1,164.5
|
|
Gross profit
|
$
|
229.1
|
|
|
$
|
101.1
|
|
|
$
|
17.1
|
|
|
$
|
—
|
|
|
$
|
347.3
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
83.8
|
|
|
70.4
|
|
|
29.9
|
|
|
32.3
|
|
|
216.4
|
|
|||||
Loss on Walter receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
11.6
|
|
|
11.6
|
|
|||||
Pension settlement
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||
Other charges
|
8.2
|
|
|
0.4
|
|
|
0.1
|
|
|
0.5
|
|
|
9.2
|
|
|||||
|
92.2
|
|
|
71.1
|
|
|
30.0
|
|
|
44.4
|
|
|
237.7
|
|
|||||
Operating income (loss)
|
$
|
136.9
|
|
|
$
|
30.0
|
|
|
$
|
(12.9
|
)
|
|
$
|
(44.4
|
)
|
|
109.6
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
27.6
|
|
|||||||||
Loss on early extinguishment of debt
|
|
|
|
|
|
|
|
|
31.3
|
|
|||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
50.7
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
19.8
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
$
|
30.9
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year ended September 30, 2014
|
||||||||||||||||||
|
Mueller Co.
|
|
Anvil
|
|
Mueller Technologies
|
|
Corporate
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net sales
|
$
|
679.1
|
|
|
$
|
401.4
|
|
|
$
|
104.2
|
|
|
$
|
—
|
|
|
$
|
1,184.7
|
|
Gross profit
|
$
|
212.1
|
|
|
$
|
112.9
|
|
|
$
|
22.9
|
|
|
$
|
—
|
|
|
$
|
347.9
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
83.3
|
|
|
70.7
|
|
|
27.2
|
|
|
39.5
|
|
|
220.7
|
|
|||||
Other charges
|
2.1
|
|
|
0.9
|
|
|
0.1
|
|
|
—
|
|
|
3.1
|
|
|||||
|
85.4
|
|
|
71.6
|
|
|
27.3
|
|
|
39.5
|
|
|
223.8
|
|
|||||
Operating income (loss)
|
$
|
126.7
|
|
|
$
|
41.3
|
|
|
$
|
(4.4
|
)
|
|
$
|
(39.5
|
)
|
|
124.1
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
49.6
|
|
|||||||||
Loss on early extinguishment of debt
|
|
|
|
|
|
|
|
|
1.0
|
|
|||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
73.5
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
18.0
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
$
|
55.5
|
|
|
2015
|
|
2014
|
||||
|
(in millions)
|
||||||
Term Loan
|
$
|
17.5
|
|
|
$
|
—
|
|
7.375% Senior Subordinated Notes
|
4.0
|
|
|
30.6
|
|
||
8.75% Senior Unsecured Notes
|
2.4
|
|
|
16.0
|
|
||
Deferred financing costs amortization
|
2.0
|
|
|
2.0
|
|
||
ABL Agreement
|
1.7
|
|
|
1.2
|
|
||
Other interest expense
|
0.3
|
|
|
0.2
|
|
||
|
27.9
|
|
|
50.0
|
|
||
Interest income
|
(0.3
|
)
|
|
(0.4
|
)
|
||
|
$
|
27.6
|
|
|
$
|
49.6
|
|
|
2015
|
|
2014
|
||||
|
(in millions)
|
||||||
Expense from income before income taxes
|
$
|
19.3
|
|
|
$
|
30.1
|
|
Deferred tax asset valuation allowance adjustment
|
0.5
|
|
|
(9.6
|
)
|
||
State tax rate change
|
—
|
|
|
(2.5
|
)
|
||
|
$
|
19.8
|
|
|
$
|
18.0
|
|
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Collections from customers
|
$
|
1,127.9
|
|
|
$
|
1,168.1
|
|
Disbursements, other than interest and income taxes
|
(924.8
|
)
|
|
(1,030.2
|
)
|
||
Interest payments, net
|
(21.1
|
)
|
|
(36.8
|
)
|
||
Income tax payments, net
|
(36.9
|
)
|
|
(13.3
|
)
|
||
Cash provided by operating activities
|
$
|
145.1
|
|
|
$
|
87.8
|
|
•
|
limitations on other debt, liens, investments and guarantees;
|
•
|
restrictions on dividends and redemptions of our capital stock and prepayments and redemptions of debt; and
|
•
|
restrictions on mergers and acquisition, sales of assets and transactions with affiliates.
|
|
Moody’s
|
|
Standard & Poor’s
|
||||
|
September 30,
|
|
September 30,
|
||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Corporate credit rating
|
Ba3
|
|
B1
|
|
BB-
|
|
BB-
|
ABL Agreement
|
Not rated
|
|
Not rated
|
|
Not rated
|
|
Not rated
|
Term Loan
|
Ba3
|
|
B2
|
|
BB
|
|
BB
|
Outlook
|
Stable
|
|
Stable
|
|
Stable
|
|
Stable
|
|
2017
|
|
2018-2019
|
|
2020-2021
|
|
After 2021
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Principal payments
(1)
|
$
|
5.9
|
|
|
$
|
11.0
|
|
|
$
|
10.1
|
|
|
$
|
466.2
|
|
|
$
|
493.2
|
|
Interest
(2)
|
22.4
|
|
|
44.2
|
|
|
43.2
|
|
|
3.2
|
|
|
113.0
|
|
|||||
Operating leases
|
7.1
|
|
|
8.1
|
|
|
4.1
|
|
|
5.1
|
|
|
24.4
|
|
|||||
Unconditional purchase obligations
(3)
|
56.3
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
59.8
|
|
|||||
Other current liabilities
(4)
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|||||
|
$
|
93.0
|
|
|
$
|
66.8
|
|
|
$
|
57.4
|
|
|
$
|
474.5
|
|
|
$
|
691.7
|
|
(1)
|
The long-term debt balance at
September 30, 2016
is net of
$1.8 million
of unamortized discount on the term loan.
|
(2)
|
Excludes payment of interest associated with interest rate swap contracts.
|
(3)
|
Includes contractual obligations for purchases of raw materials and capital expenditures.
|
(4)
|
Consists of obligations for required pension contributions. Actual payments may differ. We have not estimated required pension contributions beyond
2017
.
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
|
Age
|
|
Position
|
|
Gregory E. Hyland
|
|
65
|
|
|
Chairman of the board of directors, President and Chief Executive Officer
|
Keith L. Belknap
|
|
58
|
|
|
Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary; President of Mueller Technologies
|
Patrick M. Donovan
|
|
57
|
|
|
President, Anvil
|
Evan L. Hart
|
|
51
|
|
|
Senior Vice President and Chief Financial Officer
|
Robert P. Keefe
|
|
62
|
|
|
Senior Vice President and Chief Technology Officer
|
Kevin G. McHugh
|
|
58
|
|
|
Vice President and Controller
|
Gregory S. Rogowski
|
|
57
|
|
|
President, Mueller Co.
|
Marietta Edmunds Zakas
|
|
57
|
|
|
Senior Vice President, Strategy, Corporate Development and Communications
|
Shirley C. Franklin
|
|
71
|
|
|
Director
|
Thomas J. Hansen
|
|
67
|
|
|
Director
|
Jerry W. Kolb
|
|
80
|
|
|
Director
|
Joseph B. Leonard
|
|
73
|
|
|
Director
|
Mark J. O’Brien
|
|
73
|
|
|
Director
|
Bernard G. Rethore
|
|
75
|
|
|
Director
|
Lydia W. Thomas
|
|
72
|
|
|
Director
|
Michael T. Tokarz
|
|
67
|
|
|
Director
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
Number of securities
to be issued
upon exercise of
outstanding options,
warrants and rights
|
|
Weighted average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available
for future issuance
|
|||||||
Equity compensation plans approved by stockholders:
|
|
|
|
|
|
|
|
|
||||
2006 Plan
|
5,066,821
|
|
(1)
|
|
$
|
5.99
|
|
(2)
|
|
7,319,621
|
|
(3)
|
ESPP
|
39,231
|
|
|
|
—
|
|
|
|
3,051,778
|
|
(4)
|
|
Total
|
5,106,052
|
|
|
|
|
|
|
10,371,399
|
|
|
||
Equity compensation plans not approved by stockholders
|
—
|
|
|
|
$
|
—
|
|
|
|
—
|
|
|
(1)
|
Consists of the maximum number of shares that could to be earned upon exercise or vesting of outstanding stock-based awards granted under the 2006 Plan. This includes
232,758
share-settled performance units that could result in a smaller number of securities being earned depending on Company performance, as described in
Note 10.
of the Notes to the Consolidated Financial Statements.
|
(2)
|
Weighted average exercise price of
3,554,308
outstanding stock options.
|
(3)
|
The number of securities remaining available for future issuance under the 2006 Plan is
20,500,000
shares less the cumulative number of shares granted under the plan, assuming maximum payout of all share-settled performance units for which performance goals have not yet been set, plus the cumulative number of awards canceled under the plan and, after January 25, 2012, shares surrendered upon issuance to cover employees' related tax liability.
|
(4)
|
The number of securities remaining available for future issuance under the ESPP Plan is
5,800,000
shares less the cumulative number of shares that have been issued under the plan.
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Index to financial statements
|
|
Page
number
|
Reports of Independent Registered Public Accounting Firm
|
|
F-1
|
Consolidated Balance Sheets at September 30, 2016 and 2015
|
|
F-3
|
Consolidated Statements of Operations for the years ended September 30, 2016, 2015 and 2014
|
|
F-4
|
Consolidated Statements of Comprehensive Income for the years ended September 30, 2016, 2015 and 2014
|
|
F-5
|
Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2016, 2015 and 2014
|
|
F-6
|
Consolidated Statements of Cash Flows for the years ended September 30, 2016, 2015 and 2014
|
|
F-7
|
Notes to Consolidated Financial Statements
|
|
F-8
|
(b)
|
Financial Statement Schedules
|
(c)
|
Exhibits
|
Exhibit no.
|
|
Document
|
2.1
|
|
Agreement and Plan of Merger dated as of June 17, 2005 among Mueller Water Products, Inc., Walter Industries, Inc., JW MergerCo, Inc. and DLJ Merchant Banking II, Inc., as stockholders’ representative. Incorporated by reference to Exhibit 2.1 to Mueller Water Products, Inc. Form 8-K (File no. 333-116590) filed on June 21, 2005.
|
2.2
|
|
Letter Agreement dated as of February 23, 2006 between Walter Industries, Inc. and Mueller Water Products, Inc. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 8-K (File no. 333-131521) filed February 27, 2006.
|
2.3
|
|
Agreement and Plan of Merger, dated as of January 31, 2006, by and among Mueller Holding Company, Inc., Mueller Water Products, LLC and Mueller Water Products Co-Issuer, Inc. Incorporated by reference to Exhibit 2.1 Mueller Water Products, Inc. Form 8-K (File no. 333-116590) filed on February 3, 2006.
|
2.4
|
|
Certificate of Merger, dated February 2, 2006, of Mueller Water Products, LLC and Mueller Water Products Co-Issuer, Inc. with and into Mueller Holding Company, Inc. Incorporated by reference to Exhibit 3.1.2 to Mueller Water Products, Inc. Form 8-K (File no. 333-116590) filed on February 3, 2006.
|
3.1
|
|
Second Restated Certificate of Incorporation of Mueller Water Products, Inc. Incorporated by reference to Exhibit 3.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on January 25, 2012.
|
3.2
|
|
Amended and Restated Bylaws of Mueller Water Products, Inc. Incorporated by reference to Exhibit 3.2 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on January 25, 2012.
|
4.1
|
|
Indenture dated as of May 24, 2007 among Mueller Water Products, Inc., the guarantors named on the signature pages thereto and The Bank of New York (including form of global notes). Incorporated by reference to Exhibit 4.6 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on May 30, 2007.
|
4.2
|
|
Indenture, dated August 26, 2010, among Mueller Water Products, Inc., the guarantors named on the signature pages thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (including form of global notes). Incorporated by reference to Exhibit 4.6 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on August 27, 2010.
|
10.2
|
|
Income Tax Allocation Agreement by and among Walter Industries, Inc., the Walter Affiliates (as defined therein), Mueller Water Products, Inc. and the Mueller Affiliates (as defined therein). Incorporated by reference to Exhibit 10.2 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on May 30, 2006.
|
10.3*
|
|
Mueller Water Products, Inc. Amended and Restated 2006 Stock Incentive Plan. Incorporated by reference to Exhibit A to Mueller Water Products, Inc. Form DEF 14A (File no. 001-32892) filed on December 14, 2011.
|
10.3.1*
|
|
Mueller Water Products, Inc. Second Amended and Restated 2006 Stock Incentive Plan. Incorporated by reference to Exhibit D to Mueller Water Products, Inc. Form DEF 14A (File no. 001-32892) filed on January 15, 2006.
|
Exhibit no.
|
|
Document
|
10.4*
|
|
Mueller Water Products, Inc. Form of Notice of Stock Option Grant. Incorporated by reference to Exhibit 10.21 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on February 9, 2010.
|
10.4.1*
|
|
Mueller Water Products, Inc. Form of Notice of Stock Option Grant. Incorporated by reference to Exhibit 10.4 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on February 7, 2014.
|
10.4.2*
|
|
Mueller Water Products, Inc. Form of Notice of Stock Option Grant. Incorporated by reference to Exhibit 10.4.2 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 26, 2014.
|
10.5*
|
|
Mueller Water Products, Inc. Form of Restricted Stock Unit Award Agreement. Incorporated by reference to Exhibit 10.5 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 29, 2012.
|
10.5.1*
|
|
Mueller Water Products, Inc. Form of Restricted Stock Unit Award Agreement. Incorporated by reference to Exhibit 10.5 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on February 7, 2014.
|
10.5.2*
|
|
Mueller Water Products, Inc. Form of Restricted Stock Unit Award Agreement. Incorporated by reference to Exhibit 10.5.2 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 26, 2014.
|
10.6*
|
|
Mueller Water Products, Inc. 2006 Employee Stock Purchase Plan, as amended September 27, 2006. Incorporated by reference to Exhibit 10.5 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on December 21, 2006.
|
10.6.1*
|
|
Mueller Water Products, Inc. Amended and Restated 2006 Employee Stock Purchase Plan. Incorporated by reference to Exhibit C to Mueller Water Products, Inc. Form DEF 14A (File no. 001-32892) filed on January 15, 2006.
|
10.7*
|
|
Mueller Water Products, Inc. Directors’ Deferred Fee Plan. Incorporated by reference to Exhibit 10.7 to Mueller Water Products, Inc. 8-K (File no. 001-32892) filed on May 30, 2006.
|
10.8*
|
|
Form of Mueller Water Products, Inc. Director Indemnification Agreement. Incorporated by reference to Exhibit 99.2 to Mueller Water Products, Inc. 8-K (File no. 001-32892) filed on October 31, 2008.
|
10.9*
|
|
Executive Incentive Plan of Mueller Water Products, Inc. Incorporated by reference to Exhibit 10.6 to Mueller Water Products, Inc. 8-K (File no. 001-32892) filed on May 30, 2006.
|
10.10*
|
|
Mueller Water Products, Inc. Executive Deferred Compensation Plan. Incorporated by reference to Exhibit 99.3 to Mueller Water Products, Inc. 8-K (File no. 001-32892) filed on October 31, 2008.
|
10.11*
|
|
Employment Agreement, dated September 15, 2008 between Mueller Water Products, Inc. and Gregory E. Hyland. Incorporated by reference to Exhibit 99.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on October 6, 2008.
|
10.11.1*
|
|
Amendment, dated as of March 2, 2006, to Executive Employment Agreement dated September 9, 2005 between Walter Industries, Inc. and Gregory E. Hyland. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 8-K (File no. 333-131521) filed on March 3, 2006.
|
10.11.2*
|
|
Amended and Restated Mueller Water Products, Inc. Supplemental Defined Contribution Plan, effective as of January 1, 2009. Incorporated by reference to Exhibit 10.13.2 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on February 9, 2009.
|
10.11.3*
|
|
Amendment, dated December 1, 2009, to Executive Employment Agreement, dated September 9, 2005, between Mueller Water Products, Inc. and Gregory E. Hyland. Incorporated by reference to Exhibit 99.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on December 4, 2009.
|
10.11.4*
|
|
Amendment, dated December 1, 2010, to Executive Employment Agreement, dated September 9, 2005, between Mueller Water Products, Inc. and Gregory E. Hyland. Incorporated by reference to Exhibit 99.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on December 6, 2010.
|
10.11.5*
|
|
Amendment, dated March 31, 2012, to Executive Employment Agreement, dated September 9, 2005, between Mueller Water Products, Inc. and Gregory E. Hyland. Incorporated by reference to Exhibit 99.1 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on May 10, 2012.
|
10.12*
|
|
Executive Employment Agreement, dated as of July 16, 2008, between Mueller Water Products, Inc. and Evan L. Hart. Incorporated by reference to Exhibit 10.18 to Mueller Water Products, Inc. Form 10-Q (File 001-32892) filed on August 11, 2008.
|
10.12.1*
|
|
Amendment, dated December 1, 2009, to Executive Employment Agreement, dated September 6, 2006, between Mueller Water Products, Inc. and Evan L. Hart. Incorporated by reference to Exhibit 99.3 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on December 4, 2009.
|
10.12.2*
|
|
Amendment, dated March 31, 2012, to Executive Employment Agreement, dated September 6, 2006, between Mueller Water Products, Inc. and Evan L. Hart. Incorporated by reference to Exhibit 99.3 to Mueller Water Products, Inc. Form 8-K (File no. 001-3892) filed on May 10, 2012.
|
10.13*
|
|
Employment Agreement, dated as of July 31, 2006, between Mueller Water Products, Inc. and Thomas E. Fish. Incorporated by reference to Exhibit 10.2 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on August 3, 2006.
|
Exhibit no.
|
|
Document
|
10.14
|
|
Joint Litigation Agreement dated December 14, 2006 between Walter Industries, Inc. and Mueller Water Products, Inc. Incorporated by reference to Exhibit 10.3 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on December 19, 2006.
|
10.15*
|
|
Form of Executive Change-in-Control Severance Agreement. Incorporated by reference to Exhibit 99.3 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on October 6, 2008.
|
10.16*
|
|
Form of Amendment to Executive Employment Agreement. Incorporated by reference to Exhibit 99.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on February 6, 2009.
|
10.17*
|
|
Mueller Water Products, Inc. 2010 Management Incentive Plan. Incorporated by reference to Exhibit 10.20 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on February 9, 2010.
|
10.17.1*
|
|
Mueller Water Products, Inc. Amended and Restated 2010 Management Incentive Plan. Incorporated by reference to Exhibit B to Mueller Water Products, Inc. Form DEF 14A (File no. 001-32892) filed on January 15, 2006.
|
10.19
|
|
Credit Agreement, dated August 26, 2010, among Mueller Water Products, Inc. and the borrowing subsidiaries named on the signature pages thereto, each as a Borrower, certain financial institutions, as Lenders, JPMorgan Chase Bank, N.A., as Syndication Agent, Wells Fargo Bank, National Association and SunTrust Bank, as Co-Documentation Agents, Bank of America, N.A. as Administrative Agent and Banc of America Securities LLC and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint Bookrunners. Incorporated by reference to Exhibit 10.23 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on August 27, 2010.
|
10.19.1
|
|
First Amendment to Credit Agreement, dated December 18, 2012. Incorporated by reference to Exhibit 10.20.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on December 19, 2012.
|
10.19.2
|
|
Second Amendment to Credit Agreement, dated November 25, 2014. Incorporated by reference to Exhibit 10.19.2 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 26, 2014.
|
10.19.3
|
|
Third Amendment to Credit Agreement, dated July 12, 2016. Incorporated by reference to Exhibit 10.19.3 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on August 8, 2016.
|
10.20*
|
|
Employment Agreement, dated April 10, 2009, between Mueller Water Products, Inc. and Gregory Rogowski. Incorporated by reference to Exhibit 10.26 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 23, 2010.
|
10.20.1*
|
|
Amendment to Employment Agreement, date December 1, 2009, between Mueller Water Products, Inc. and Gregory Rogowski. Incorporated by reference to Exhibit 10.27 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 23, 2010.
|
10.20.2*
|
|
Executive Change-in-Control Severance Agreement, dated May 4, 2009, between Mueller Water Products, Inc. and Gregory Rogowski. Incorporated by reference to Exhibit 10.28 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 23, 2010.
|
10.20.3*
|
|
Amendment, dated March 31, 2012, to Executive Employment Agreement, dated September 9, 2005, between Mueller Water Products, Inc. and Gregory Rogowski. Incorporated by reference to Exhibit 99.1 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on May 10, 2012.
|
10.21
|
|
Purchase Agreement, dated March 7, 2012, among Mueller Water Products, Inc., Mueller Group, LLC and USP Holdings Inc. Incorporated by reference to Exhibit 2.3 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on March 8, 2012.
|
10.22*
|
|
Employment Agreement, dated April 1, 2012, between Mueller Water Products, Inc. and Keith L. Belknap. Incorporated by reference to Exhibit 10.22 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 22, 2013.
|
10.22.1*
|
|
Executive Change-in-Control Severance Agreement, dated April 1, 2012, between Mueller Water Products, Inc. and Keith L. Belknap. Incorporated by reference to Exhibit 10.22.1 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 22, 2013.
|
10.23*
|
|
Mueller Water Products, Inc. Form of Performance Share Award Agreement for October 1, 2012 to September 30, 2015 award cycle. Incorporated by reference to Exhibit 10.25 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 29, 2012.
|
10.23.1*
|
|
Exhibit A (2013-15 Award Cycle). Incorporated by reference to Exhibit 10.23.1 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on February 6, 2015.
|
10.23.2*
|
|
Exhibit A (2014-16 Award Cycle). Incorporated by reference to Exhibit 10.24.1 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on February 6, 2015.
|
10.23.3*
|
|
Exhibit A (2015-17 Award Cycle). Incorporated by reference to Exhibit 10.27.1 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on February 6, 2015.
|
Exhibit no.
|
|
Document
|
10.24*
|
|
Mueller Water Products, Inc. Form of Performance Share Award Agreement (Stub Period). Incorporated by reference to Exhibit 10.26 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 29, 2012.
|
10.25*
|
|
Mueller Water Products, Inc. Form of Performance Share Award Agreement for October 1, 2013 to September 30, 2016 award cycle. Incorporated by reference to Exhibit 10.23 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on February 7, 2014.
|
10.26*
|
|
Mueller Water Products, Inc. Form of Performance Share Award Agreement for October 1, 2014 to September 30, 2017 award cycle. Incorporated by reference to Exhibit 10.27 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on February 6, 2015.
|
10.27*
|
|
Term Loan Credit Agreement, dated November 25, 2014, among Mueller Water Products, Inc., as borrower, the several lenders from time to time parties thereto, SunTrust Robinson Humphrey, Inc., TD Securities (USA) LLC and Goldman Sachs Lending Partners LLC, as co-documentation agents, and Bank of America, N.A., as administrative agent. Incorporated by reference to Exhibit 10.26.2 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 26, 2014.
|
10.28*
|
|
Employment Agreement, dated May 2, 2016, between Mueller Water Products Inc. and Patrick M. Donovan. Incorporated by reference to Exhibit 10.28 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on August 8, 2016.
|
10.28.1*
|
|
Executive Change-in-Control Severance Agreement, dated May 2, 2016, between Mueller Water Products and Patrick M. Donovan. Incorporated by reference to Exhibit 10.28.1 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on August 8, 2016.
|
10.29* **
|
|
Employment Agreement, dated September 15, 2008, as amended, between Mueller Water Products Inc. and Marietta Edmunds Zakas.
|
10.29.1* **
|
|
Executive Change-in-Control Severance Agreement, dated September 15, 2008, between Mueller Water Products and Marietta Edmunds Zakas.
|
12.1**
|
|
Computation of Ratio of Earnings to Fixed Charges
|
14.1*
|
|
Code of Business Conduct and Ethics for Mueller Water Products, Inc. Incorporated by reference to Exhibit 14.1 to Mueller Water Products, Inc. Form 10-Q (File no. 00132892) filed on February 7, 2014.
|
21.1**
|
|
Subsidiaries of Mueller Water Products, Inc.
|
23.1**
|
|
Consent of Independent Registered Accounting Firm
|
31.1**
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2**
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1**
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2**
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101**
|
|
The following financial information from the Annual Report on Form 10-K for the year ended September 30, 2015, formatted in XBRL (Extensible Business Reporting Language), (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Other Comprehensive Income, (iii) the Consolidated Statements of Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements.
|
*
|
Management compensatory plan, contract or arrangement
|
**
|
Filed with this annual report
|
|
MUELLER WATER PRODUCTS, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ Gregory E. Hyland
|
|
|
Name: Gregory E. Hyland
|
|
|
|
Title:
Chairman, President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Gregory E. Hyland
|
|
Chairman of the Board of Directors, President and Chief Executive Officer (principal executive officer)
|
|
November 22, 2016
|
Gregory E. Hyland
|
|
|
|
|
|
|
|
|
|
/s/ Evan L. Hart
|
|
Senior Vice President and Chief Financial Officer (principal financial officer)
|
|
November 22, 2016
|
Evan L. Hart
|
|
|
|
|
|
|
|
|
|
/s/ Kevin G. McHugh
|
|
Vice President and Controller (principal accounting officer)
|
|
November 22, 2016
|
Kevin G. McHugh
|
|
|
|
|
|
|
|
|
|
/s/ Shirley C. Franklin
|
|
Director
|
|
November 22, 2016
|
Shirley C. Franklin
|
|
|
|
|
|
|
|
|
|
/s/ Thomas J. Hansen
|
|
Director
|
|
November 22, 2016
|
Thomas J. Hansen
|
|
|
|
|
|
|
|
|
|
/s/ Jerry W. Kolb
|
|
Director
|
|
November 22, 2016
|
Jerry W. Kolb
|
|
|
|
|
|
|
|
|
|
/s/ Joseph B. Leonard
|
|
Director
|
|
November 22, 2016
|
Joseph B. Leonard
|
|
|
|
|
|
|
|
|
|
/s/ Mark J. O’Brien
|
|
Director
|
|
November 22, 2016
|
Mark J. O’Brien
|
|
|
|
|
|
|
|
|
|
/s/ Bernard G. Rethore
|
|
Director
|
|
November 22, 2016
|
Bernard G. Rethore
|
|
|
|
|
|
|
|
|
|
/s/ Lydia W. Thomas
|
|
Director
|
|
November 22, 2016
|
Lydia W. Thomas
|
|
|
|
|
|
|
|
|
|
/s/ Michael T. Tokarz
|
|
Director
|
|
November 22, 2016
|
Michael T. Tokarz
|
|
|
|
|
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|||||||
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions, except share amounts)
|
||||||
Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
195.0
|
|
|
$
|
113.1
|
|
Receivables, net
|
186.7
|
|
|
175.3
|
|
||
Inventories
|
213.8
|
|
|
219.1
|
|
||
Deferred income taxes
|
—
|
|
|
28.3
|
|
||
Other current assets
|
16.8
|
|
|
13.7
|
|
||
Total current assets
|
612.3
|
|
|
549.5
|
|
||
Property, plant and equipment, net
|
155.1
|
|
|
148.9
|
|
||
Intangible assets
|
486.0
|
|
|
507.3
|
|
||
Other noncurrent assets
|
27.2
|
|
|
24.1
|
|
||
Total assets
|
$
|
1,280.6
|
|
|
$
|
1,229.8
|
|
|
|
|
|
||||
Liabilities and equity:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
5.9
|
|
|
$
|
6.1
|
|
Accounts payable
|
100.8
|
|
|
98.7
|
|
||
Other current liabilities
|
79.1
|
|
|
63.2
|
|
||
Total current liabilities
|
185.8
|
|
|
168.0
|
|
||
Long-term debt
|
479.2
|
|
|
482.9
|
|
||
Deferred income taxes
|
109.9
|
|
|
145.3
|
|
||
Other noncurrent liabilities
|
86.2
|
|
|
65.8
|
|
||
Total liabilities
|
861.1
|
|
|
862.0
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 16.)
|
|
|
|
||||
|
|
|
|
||||
Common stock: 600,000,000 shares authorized; 161,693,051 and 160,497,841 shares outstanding at September 30, 2016 and 2015, respectively
|
1.6
|
|
|
1.6
|
|
||
Additional paid-in capital
|
1,563.9
|
|
|
1,574.8
|
|
||
Accumulated deficit
|
(1,078.9
|
)
|
|
(1,142.8
|
)
|
||
Accumulated other comprehensive loss
|
(68.3
|
)
|
|
(67.3
|
)
|
||
Total Company stockholders’ equity
|
418.3
|
|
|
366.3
|
|
||
Noncontrolling interest
|
1.2
|
|
|
1.5
|
|
||
Total equity
|
419.5
|
|
|
367.8
|
|
||
Total liabilities and equity
|
$
|
1,280.6
|
|
|
$
|
1,229.8
|
|
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||
|
Year ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions, except per share amounts)
|
||||||||||
Net sales
|
$
|
1,138.9
|
|
|
$
|
1,164.5
|
|
|
$
|
1,184.7
|
|
Cost of sales
|
774.6
|
|
|
817.2
|
|
|
836.8
|
|
|||
Gross profit
|
364.3
|
|
|
347.3
|
|
|
347.9
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
218.8
|
|
|
216.4
|
|
|
220.7
|
|
|||
Pension settlement
|
16.6
|
|
|
0.5
|
|
|
—
|
|
|||
Loss on Walter receivable
|
—
|
|
|
11.6
|
|
|
—
|
|
|||
Other charges
|
8.3
|
|
|
9.2
|
|
|
3.1
|
|
|||
Total operating expenses
|
243.7
|
|
|
237.7
|
|
|
223.8
|
|
|||
Operating income
|
120.6
|
|
|
109.6
|
|
|
124.1
|
|
|||
Interest expense, net
|
23.6
|
|
|
27.6
|
|
|
49.6
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
31.3
|
|
|
1.0
|
|
|||
Income before income taxes
|
97.0
|
|
|
50.7
|
|
|
73.5
|
|
|||
Income tax expense
|
33.1
|
|
|
19.8
|
|
|
18.0
|
|
|||
Net income
|
$
|
63.9
|
|
|
$
|
30.9
|
|
|
$
|
55.5
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.40
|
|
|
$
|
0.19
|
|
|
$
|
0.35
|
|
Diluted
|
$
|
0.39
|
|
|
$
|
0.19
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
161.3
|
|
|
160.5
|
|
|
159.2
|
|
|||
Diluted
|
163.4
|
|
|
163.2
|
|
|
162.2
|
|
|||
|
|
|
|
|
|
||||||
Dividends declared per share
|
$
|
0.100
|
|
|
$
|
0.075
|
|
|
$
|
0.070
|
|
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||||||||
|
Year ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Net income
|
$
|
63.9
|
|
|
$
|
30.9
|
|
|
$
|
55.5
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Minimum pension liability
|
2.8
|
|
|
6.3
|
|
|
(45.1
|
)
|
|||
Income tax effects
|
(1.1
|
)
|
|
(2.6
|
)
|
|
17.4
|
|
|||
Foreign currency translation
|
0.2
|
|
|
(8.7
|
)
|
|
(4.4
|
)
|
|||
Derivative instruments
|
(4.7
|
)
|
|
(2.6
|
)
|
|
—
|
|
|||
Income tax effects
|
1.8
|
|
|
1.0
|
|
|
—
|
|
|||
|
(1.0
|
)
|
|
(6.6
|
)
|
|
(32.1
|
)
|
|||
Comprehensive income
|
$
|
62.9
|
|
|
$
|
24.3
|
|
|
$
|
23.4
|
|
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE YEARS ENDED SEPTEMBER 30,
2016
|
|||||||||||||||||||||||
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Non-controlling interest
|
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Balance at September 30, 2013
|
$
|
1.6
|
|
|
$
|
1,584.4
|
|
|
$
|
(1,229.2
|
)
|
|
$
|
(28.6
|
)
|
|
$
|
—
|
|
|
$
|
328.2
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
55.5
|
|
|
—
|
|
|
(0.1
|
)
|
|
55.4
|
|
||||||
Dividends declared
|
—
|
|
|
(11.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.2
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
8.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.5
|
|
||||||
Shares retained for employee taxes
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
||||||
Stock issued under stock compensation plans
|
—
|
|
|
4.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
||||||
Joint venture capital contributed
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(32.1
|
)
|
|
—
|
|
|
(32.1
|
)
|
||||||
Balance at September 30, 2014
|
1.6
|
|
|
1,582.8
|
|
|
(1,173.7
|
)
|
|
(60.7
|
)
|
|
1.6
|
|
|
351.6
|
|
||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
30.9
|
|
|
—
|
|
|
(0.1
|
)
|
|
30.8
|
|
||||||
Dividends declared
|
—
|
|
|
(12.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.0
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.9
|
|
||||||
Excess tax benefit on stock option exercises
|
—
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
||||||
Shares retained for employee taxes
|
—
|
|
|
(2.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
||||||
Stock issued under stock compensation plans
|
—
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
||||||
Stock repurchased under buyback program
|
—
|
|
|
(5.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.0
|
)
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
||||||
Balance at September 30, 2015
|
1.6
|
|
|
1,574.8
|
|
|
(1,142.8
|
)
|
|
(67.3
|
)
|
|
1.5
|
|
|
367.8
|
|
||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
63.9
|
|
|
—
|
|
|
(0.3
|
)
|
|
63.6
|
|
||||||
Dividends declared
|
—
|
|
|
(16.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.1
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
||||||
Shares retained for employee taxes
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
||||||
Stock issued under stock compensation plans
|
—
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
||||||
Balance at September 30, 2016
|
$
|
1.6
|
|
|
$
|
1,563.9
|
|
|
$
|
(1,078.9
|
)
|
|
$
|
(68.3
|
)
|
|
$
|
1.2
|
|
|
$
|
419.5
|
|
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||||
|
Year ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
63.9
|
|
|
$
|
30.9
|
|
|
$
|
55.5
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
28.3
|
|
|
28.7
|
|
|
27.3
|
|
|||
Amortization
|
24.3
|
|
|
29.4
|
|
|
29.4
|
|
|||
Pension plans
|
21.0
|
|
|
1.1
|
|
|
1.5
|
|
|||
Deferred income taxes
|
(7.5
|
)
|
|
6.9
|
|
|
15.6
|
|
|||
Stock-based compensation
|
5.2
|
|
|
4.8
|
|
|
8.6
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
31.3
|
|
|
1.0
|
|
|||
Loss on Walter receivable
|
—
|
|
|
11.6
|
|
|
—
|
|
|||
Other, net
|
3.9
|
|
|
4.7
|
|
|
0.7
|
|
|||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Receivables
|
(11.1
|
)
|
|
3.5
|
|
|
(16.9
|
)
|
|||
Inventories
|
5.5
|
|
|
(24.6
|
)
|
|
11.0
|
|
|||
Other assets
|
(5.7
|
)
|
|
(0.7
|
)
|
|
3.6
|
|
|||
Liabilities
|
17.3
|
|
|
(39.8
|
)
|
|
10.3
|
|
|||
Net cash provided by operating activities
|
145.1
|
|
|
87.8
|
|
|
147.6
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(39.4
|
)
|
|
(37.5
|
)
|
|
(36.9
|
)
|
|||
Business acquisitions, net of cash acquired
|
—
|
|
|
0.3
|
|
|
(10.0
|
)
|
|||
Proceeds from sales of assets
|
0.3
|
|
|
5.6
|
|
|
4.7
|
|
|||
Net cash used in investing activities
|
(39.1
|
)
|
|
(31.6
|
)
|
|
(42.2
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Dividends paid
|
(16.1
|
)
|
|
(12.0
|
)
|
|
(11.2
|
)
|
|||
Repayment of debt
|
(5.0
|
)
|
|
(589.0
|
)
|
|
(55.7
|
)
|
|||
Shares retained for employee taxes
|
(3.3
|
)
|
|
(2.4
|
)
|
|
(3.1
|
)
|
|||
Common stock issued
|
3.3
|
|
|
3.3
|
|
|
4.2
|
|
|||
Deferred financing costs paid
|
(1.2
|
)
|
|
(8.5
|
)
|
|
—
|
|
|||
Issuance of debt
|
—
|
|
|
512.5
|
|
|
—
|
|
|||
Stock repurchased under buyback program
|
—
|
|
|
(5.0
|
)
|
|
—
|
|
|||
Excess tax benefit on stock-based compensation
|
—
|
|
|
3.2
|
|
|
—
|
|
|||
Joint venture capital contributed
|
—
|
|
|
—
|
|
|
1.7
|
|
|||
Other
|
(1.4
|
)
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|||
Net cash used in financing activities
|
(23.7
|
)
|
|
(99.0
|
)
|
|
(65.2
|
)
|
|||
Effect of currency exchange rate changes on cash
|
(0.4
|
)
|
|
(5.2
|
)
|
|
(2.7
|
)
|
|||
Net change in cash and cash equivalents
|
81.9
|
|
|
(48.0
|
)
|
|
37.5
|
|
|||
Cash and cash equivalents at beginning of year
|
113.1
|
|
|
161.1
|
|
|
123.6
|
|
|||
Cash and cash equivalents at end of year
|
$
|
195.0
|
|
|
$
|
113.1
|
|
|
$
|
161.1
|
|
Note 1.
|
Organization
|
Note 2.
|
Summary of Significant Accounting Policies
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Balance at beginning of year
|
$
|
5.2
|
|
|
$
|
5.3
|
|
|
$
|
5.3
|
|
Provision charged to expense
|
0.6
|
|
|
0.1
|
|
|
—
|
|
|||
Balances written off, net of recoveries
|
—
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|||
Other
|
(0.1
|
)
|
|
—
|
|
|
0.1
|
|
|||
Balance at end of year
|
$
|
5.7
|
|
|
$
|
5.2
|
|
|
$
|
5.3
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Balance at beginning of year
|
$
|
7.8
|
|
|
$
|
8.5
|
|
|
$
|
10.6
|
|
Provision charged to expense
|
2.1
|
|
|
2.1
|
|
|
2.8
|
|
|||
Inventory disposed
|
(1.5
|
)
|
|
(2.9
|
)
|
|
(4.3
|
)
|
|||
Other
|
0.2
|
|
|
0.1
|
|
|
(0.6
|
)
|
|||
Balance at end of year
|
$
|
8.6
|
|
|
$
|
7.8
|
|
|
$
|
8.5
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Balance at beginning of year
|
$
|
2.9
|
|
|
$
|
2.6
|
|
|
$
|
2.8
|
|
Warranty expense
|
5.3
|
|
|
5.2
|
|
|
4.1
|
|
|||
Warranty payments
|
(6.2
|
)
|
|
(4.9
|
)
|
|
(4.3
|
)
|
|||
Balance at end of year
|
$
|
2.0
|
|
|
$
|
2.9
|
|
|
$
|
2.6
|
|
Note 3.
|
Intangible Assets
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Capitalized external-use software:
|
|
|
|
||||
Cost
|
$
|
20.9
|
|
|
$
|
17.9
|
|
Accumulated amortization
|
(8.9
|
)
|
|
(7.0
|
)
|
||
Net book value
|
12.0
|
|
|
10.9
|
|
||
|
|
|
|
||||
Business combination-related:
|
|
|
|
||||
Cost:
|
|
|
|
||||
Finite-lived intangible assets:
|
|
|
|
||||
Technology
|
80.3
|
|
|
80.3
|
|
||
Customer relationships and other
|
400.2
|
|
|
400.2
|
|
||
Indefinite-lived intangible assets:
|
|
|
|
||||
Trade names and trademarks
|
299.6
|
|
|
299.6
|
|
||
Goodwill
|
5.4
|
|
|
5.4
|
|
||
|
785.5
|
|
|
785.5
|
|
||
Accumulated amortization:
|
|
|
|
||||
Technology
|
(75.0
|
)
|
|
(74.2
|
)
|
||
Customer relationships and other
|
(236.5
|
)
|
|
(214.9
|
)
|
||
|
(311.5
|
)
|
|
(289.1
|
)
|
||
Net book value
|
474.0
|
|
|
496.4
|
|
||
Total intangible assets net book value
|
$
|
486.0
|
|
|
$
|
507.3
|
|
Note 4.
|
Other Charges
|
Note 5.
|
Income Taxes
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
U.S.
|
$
|
96.8
|
|
|
$
|
55.4
|
|
|
$
|
71.6
|
|
Non-U.S.
|
0.2
|
|
|
(4.7
|
)
|
|
1.9
|
|
|||
Income before income taxes
|
$
|
97.0
|
|
|
$
|
50.7
|
|
|
$
|
73.5
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
U.S. federal
|
$
|
37.4
|
|
|
$
|
12.4
|
|
|
$
|
0.1
|
|
U.S. state and local
|
3.1
|
|
|
0.7
|
|
|
1.6
|
|
|||
Non-U.S.
|
0.1
|
|
|
(0.2
|
)
|
|
0.7
|
|
|||
|
40.6
|
|
|
12.9
|
|
|
2.4
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
U.S. federal
|
(10.5
|
)
|
|
4.5
|
|
|
28.7
|
|
|||
U.S. state and local
|
3.2
|
|
|
2.9
|
|
|
(12.8
|
)
|
|||
Non-U.S.
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.3
|
)
|
|||
|
(7.5
|
)
|
|
6.9
|
|
|
15.6
|
|
|||
Income tax expense
|
$
|
33.1
|
|
|
$
|
19.8
|
|
|
$
|
18.0
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Expense at U.S. federal statutory income tax rate of 35%
|
$
|
34.0
|
|
|
$
|
17.7
|
|
|
$
|
25.7
|
|
Adjustments to reconcile to income tax expense:
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
State income taxes, net of federal benefit
|
3.8
|
|
|
2.4
|
|
|
3.6
|
|
|||
Domestic production activities deduction
|
(3.9
|
)
|
|
(1.5
|
)
|
|
—
|
|
|||
Tax credits
|
(2.2
|
)
|
|
(1.3
|
)
|
|
(0.1
|
)
|
|||
Nondeductible expenses, other than compensation
|
0.9
|
|
|
0.7
|
|
|
0.9
|
|
|||
Federal valuation allowance
|
(0.2
|
)
|
|
0.6
|
|
|
(1.2
|
)
|
|||
Foreign income taxes
|
0.1
|
|
|
0.4
|
|
|
(0.2
|
)
|
|||
Nondeductible compensation
|
0.4
|
|
|
0.3
|
|
|
0.8
|
|
|||
State valuation allowance, net of federal benefit
|
—
|
|
|
(0.1
|
)
|
|
(8.4
|
)
|
|||
State tax rate change
|
0.4
|
|
|
—
|
|
|
(2.5
|
)
|
|||
Other
|
(0.2
|
)
|
|
0.6
|
|
|
(0.6
|
)
|
|||
Income tax expense
|
$
|
33.1
|
|
|
$
|
19.8
|
|
|
$
|
18.0
|
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Deferred income tax assets:
|
|
|
|
||||
Inventory reserves
|
$
|
14.8
|
|
|
$
|
15.5
|
|
Accrued expenses
|
15.0
|
|
|
13.6
|
|
||
Pension and other postretirement benefits
|
25.0
|
|
|
17.8
|
|
||
Stock-based compensation
|
7.7
|
|
|
8.9
|
|
||
State net operating losses
|
5.0
|
|
|
8.1
|
|
||
Federal credit carryovers
|
0.6
|
|
|
0.5
|
|
||
Other
|
4.8
|
|
|
3.0
|
|
||
|
72.9
|
|
|
67.4
|
|
||
Valuation allowance
|
(0.9
|
)
|
|
(1.3
|
)
|
||
Total deferred income tax assets, net of valuation allowance
|
72.0
|
|
|
66.1
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Intangible assets
|
177.0
|
|
|
182.3
|
|
||
Other
|
3.8
|
|
|
0.8
|
|
||
Total deferred income tax liabilities
|
180.8
|
|
|
183.1
|
|
||
Net deferred income tax liabilities
|
$
|
108.8
|
|
|
$
|
117.0
|
|
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Balance at beginning of year
|
$
|
2.6
|
|
|
$
|
2.7
|
|
Increases related to prior year positions
|
0.3
|
|
|
0.3
|
|
||
Increases related to current year positions
|
0.2
|
|
|
—
|
|
||
Decreases due to lapse in statute of limitations
|
(0.3
|
)
|
|
(0.4
|
)
|
||
Balance at end of year
|
$
|
2.8
|
|
|
$
|
2.6
|
|
Note 6.
|
Borrowing Arrangements
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
ABL Agreement
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan
|
489.4
|
|
|
494.0
|
|
||
Other
|
2.0
|
|
|
2.4
|
|
||
|
491.4
|
|
|
496.4
|
|
||
Deferred financing costs
|
(6.3
|
)
|
|
(7.4
|
)
|
||
Less current portion
|
(5.9
|
)
|
|
(6.1
|
)
|
||
Long-term debt
|
$
|
479.2
|
|
|
$
|
482.9
|
|
Note 7.
|
Derivative Financial Instruments
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Other current liabilities
|
$
|
2.0
|
|
|
$
|
—
|
|
Other noncurrent liabilities
|
5.3
|
|
|
2.6
|
|
||
|
$
|
7.3
|
|
|
$
|
2.6
|
|
Note. 8
|
Retirement Plans
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Service cost
|
$
|
1.7
|
|
|
$
|
1.9
|
|
|
$
|
1.7
|
|
Interest cost
|
18.9
|
|
|
20.1
|
|
|
19.9
|
|
|||
Expected return on plan assets
|
(19.7
|
)
|
|
(24.6
|
)
|
|
(23.8
|
)
|
|||
Amortization of net loss
|
3.4
|
|
|
3.2
|
|
|
3.5
|
|
|||
Curtailment / special settlement loss
|
16.6
|
|
|
0.5
|
|
|
0.2
|
|
|||
Other
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
Net periodic benefit cost
|
$
|
21.0
|
|
|
$
|
1.1
|
|
|
$
|
1.5
|
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Projected benefit obligations
|
$
|
402.0
|
|
|
$
|
427.0
|
|
Accumulated benefit obligations
|
402.0
|
|
|
427.0
|
|
||
Fair value of plan assets
|
337.9
|
|
|
381.3
|
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Projected benefit obligations
|
$
|
1.1
|
|
|
$
|
1.2
|
|
Accumulated benefit obligations
|
1.1
|
|
|
1.2
|
|
||
Fair value of plan assets
|
2.1
|
|
|
2.1
|
|
Balance at beginning of year
|
$
|
113.5
|
|
Actuarial loss
|
17.3
|
|
|
Prior year actuarial loss amortization to net periodic cost, including effect of pension settlement
|
(20.0
|
)
|
|
Balance at end of year
|
$
|
110.8
|
|
Amortization of unrecognized prior year service cost
|
$
|
—
|
|
Amortization of unrecognized loss
|
4.0
|
|
|
|
$
|
4.0
|
|
|
Pension Plans
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Projected benefit obligations:
|
|
|
|
||||
Beginning of year
|
$
|
428.2
|
|
|
$
|
461.5
|
|
Service cost
|
1.7
|
|
|
1.9
|
|
||
Interest cost
|
18.9
|
|
|
20.1
|
|
||
Actuarial loss (gain)
|
37.7
|
|
|
(25.9
|
)
|
||
Benefits paid
|
(25.1
|
)
|
|
(26.0
|
)
|
||
Currency translation
|
0.2
|
|
|
(1.6
|
)
|
||
Decrease in obligation due to curtailment / settlement
|
(58.5
|
)
|
|
(1.8
|
)
|
||
End of year
|
$
|
403.1
|
|
|
$
|
428.2
|
|
Accumulated benefit obligations at end of year
|
$
|
403.1
|
|
|
$
|
428.2
|
|
Plan assets:
|
|
|
|
||||
Beginning of year
|
$
|
383.4
|
|
|
$
|
410.5
|
|
Actual return on plan assets
|
40.1
|
|
|
1.3
|
|
||
Employer contributions
|
—
|
|
|
1.2
|
|
||
Settlement
|
(58.5
|
)
|
|
(1.9
|
)
|
||
Currency translation
|
0.1
|
|
|
(1.7
|
)
|
||
Benefits paid
|
(25.1
|
)
|
|
(26.0
|
)
|
||
End of year
|
$
|
340.0
|
|
|
$
|
383.4
|
|
Accrued benefit cost at end of year:
|
|
|
|
||||
Unfunded status
|
$
|
(63.1
|
)
|
|
$
|
(44.8
|
)
|
Recognized on balance sheet:
|
|
|
|
||||
Other noncurrent assets
|
$
|
1.0
|
|
|
$
|
0.9
|
|
Other current liabilities
|
(1.2
|
)
|
|
—
|
|
||
Other noncurrent liabilities
|
(62.9
|
)
|
|
(45.7
|
)
|
||
|
$
|
(63.1
|
)
|
|
$
|
(44.8
|
)
|
Recognized in accumulated other comprehensive loss, before tax:
|
|
|
|
||||
Prior year service cost
|
$
|
—
|
|
|
$
|
—
|
|
Net actuarial loss
|
110.8
|
|
|
113.5
|
|
||
|
$
|
110.8
|
|
|
$
|
113.5
|
|
|
Pension Plans
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Weighted average used to determine benefit obligations:
|
|
|
|
|
|
|||
Discount rate
|
3.68
|
%
|
|
4.84
|
%
|
|
4.49
|
%
|
Weighted average used to determine net periodic cost:
|
|
|
|
|
|
|||
Discount rate
|
3.92
|
%
|
|
4.49
|
%
|
|
5.16
|
%
|
Expected return on plan assets
|
5.50
|
|
|
6.21
|
|
|
6.24
|
|
|
Strategic asset allocation
|
|
|
|
|
|
|
Actual asset allocations at
|
|||||||||
|
|
|
|
|
|
|
September 30,
|
||||||||||
|
Tactical range
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Equity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Large capitalization stocks
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||
Small capitalization stocks
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
International stocks
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
30
|
|
|
30
|
-
|
50
|
%
|
|
|
29
|
%
|
|
39
|
%
|
|
40
|
%
|
Fixed income investments
|
70
|
|
|
50
|
-
|
70
|
|
|
|
69
|
|
|
60
|
|
|
59
|
|
Cash
|
—
|
|
|
0
|
-
|
5
|
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
100
|
%
|
|
|
|
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
•
|
Equity investments are valued at the closing price reported on the active market when reliable market quotations are readily available. When market quotations are not readily available, assets of the Pension Plans are valued by a method the trustees of the Pension Plans believe accurately reflects fair value;
|
•
|
Fixed income fund investments are valued using the closing price reported in the active market in which the investment is traded or based on yields currently available on comparable securities of issuers with similar credit ratings; and
|
•
|
Other investments are valued as determined by the trustees of the Pension Plans based on their net asset values and supported by the value of the underlying securities and by the unit prices of actual purchase and sale transactions occurring at or close to the financial statement date.
|
|
September 30, 2016
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
|
(in millions)
|
||||||||||
Equity:
|
|
|
|
|
|
||||||
Large cap stocks:
|
|
|
|
|
|
||||||
Large cap growth funds
|
$
|
—
|
|
|
$
|
7.3
|
|
|
$
|
7.3
|
|
Large cap index funds
|
—
|
|
|
38.2
|
|
|
38.2
|
|
|||
Large cap value funds
|
—
|
|
|
7.2
|
|
|
7.2
|
|
|||
Small cap stocks:
|
|
|
|
|
|
||||||
Small cap growth funds
|
—
|
|
|
15.1
|
|
|
15.1
|
|
|||
International stocks:
|
|
|
|
|
|
||||||
Mutual funds
|
13.5
|
|
|
—
|
|
|
13.5
|
|
|||
International funds
|
—
|
|
|
18.1
|
|
|
18.1
|
|
|||
Total equity
|
13.5
|
|
|
85.9
|
|
|
99.4
|
|
|||
Fixed income
|
—
|
|
|
233.3
|
|
|
233.3
|
|
|||
Cash and cash equivalents
|
7.3
|
|
|
—
|
|
|
7.3
|
|
|||
|
$
|
20.8
|
|
|
$
|
319.2
|
|
|
$
|
340.0
|
|
|
September 30, 2015
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
|
(in millions)
|
||||||||||
Equity:
|
|
|
|
|
|
||||||
Large cap stocks:
|
|
|
|
|
|
||||||
Large cap growth funds
|
$
|
—
|
|
|
$
|
32.7
|
|
|
$
|
32.7
|
|
Large cap index funds
|
—
|
|
|
27.1
|
|
|
27.1
|
|
|||
Large cap value funds
|
—
|
|
|
15.7
|
|
|
15.7
|
|
|||
Small cap stocks:
|
|
|
|
|
|
||||||
Small cap growth funds
|
—
|
|
|
18.5
|
|
|
18.5
|
|
|||
International stocks:
|
|
|
|
|
|
||||||
Mutual funds
|
42.1
|
|
|
—
|
|
|
42.1
|
|
|||
International funds
|
—
|
|
|
13.9
|
|
|
13.9
|
|
|||
Total equity
|
42.1
|
|
|
107.9
|
|
|
150.0
|
|
|||
Fixed income
|
—
|
|
|
229.4
|
|
|
229.4
|
|
|||
Cash and cash equivalents
|
4.0
|
|
|
—
|
|
|
4.0
|
|
|||
|
$
|
46.1
|
|
|
$
|
337.3
|
|
|
$
|
383.4
|
|
2017
|
$
|
32.6
|
|
2018
|
25.7
|
|
|
2019
|
25.6
|
|
|
2020
|
25.5
|
|
|
2021
|
25.4
|
|
|
2022-2026
|
122.9
|
|
Note 9.
|
Capital Stock
|
Shares outstanding at September 30, 2013
|
158,234,300
|
|
Vesting of restricted stock units, net of shares withheld for taxes
|
734,047
|
|
Exercise of stock options
|
587,964
|
|
Exercise of employee stock purchase plan instruments
|
204,360
|
|
Shares outstanding at September 30, 2014
|
159,760,671
|
|
Vesting of restricted stock units, net of shares withheld for taxes
|
541,839
|
|
Exercise of stock options
|
506,632
|
|
Exercise of employee stock purchase plan instruments
|
212,550
|
|
Stock repurchased under buyback program
|
(523,851
|
)
|
Shares outstanding at September 30, 2015
|
160,497,841
|
|
Vesting of restricted stock units, net of shares withheld for taxes
|
370,138
|
|
Settlement of performance-based restricted stock units, net of shares withheld for taxes
|
335,998
|
|
Exercise of stock options
|
270,599
|
|
Exercise of employee stock purchase plan instruments
|
218,475
|
|
Shares outstanding at September 30, 2016
|
161,693,051
|
|
Note 10.
|
Stock-based Compensation Plans
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions, except per share data)
|
||||||||||
Decrease in operating income
|
$
|
9.1
|
|
|
$
|
7.0
|
|
|
$
|
13.2
|
|
Decrease in net income
|
5.8
|
|
|
4.4
|
|
|
8.1
|
|
|||
Decrease in earnings per basic share
|
0.04
|
|
|
0.03
|
|
|
0.05
|
|
|||
Decrease in earnings per diluted share
|
0.04
|
|
|
0.03
|
|
|
0.05
|
|
|
Restricted stock units
|
|
Weighted
average
grant date fair value per unit
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic
value
(millions)
|
|||||
Outstanding at September 30, 2013
|
1,925,340
|
|
|
$
|
4.30
|
|
|
0.9
|
|
|
||
Granted
|
381,012
|
|
|
8.51
|
|
|
|
|
|
|||
Vested
|
(1,099,591
|
)
|
|
4.94
|
|
|
|
|
$
|
9.4
|
|
|
Cancelled
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at September 30, 2014
|
1,206,761
|
|
|
5.04
|
|
|
0.7
|
|
|
|||
Granted
|
459,659
|
|
|
9.70
|
|
|
|
|
|
|||
Vested
|
(793,630
|
)
|
|
3.99
|
|
|
|
|
7.7
|
|
||
Cancelled
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at September 30, 2015
|
872,790
|
|
|
8.45
|
|
|
0.8
|
|
|
|||
Granted
|
360,255
|
|
|
9.33
|
|
|
|
|
|
|||
Vested
|
(510,535
|
)
|
|
7.94
|
|
|
|
|
4.7
|
|
||
Cancelled
|
(59,062
|
)
|
|
8.23
|
|
|
|
|
|
|||
Outstanding at September 30, 2016
|
663,448
|
|
|
$
|
9.34
|
|
|
1.0
|
|
|
Award date
|
|
Settlement year
|
|
Performance period
|
|
Grant date per unit fair value
|
|
Units
awarded
|
|
Units forfeited
|
|
Net units
|
|
Performance factor
|
|
Shares
earned
|
||||||
November 27, 2012
|
|
2016
|
|
2013
|
|
$
|
5.22
|
|
|
135,553
|
|
|
—
|
|
|
135,553
|
|
|
2.000
|
|
271,106
|
|
|
|
|
|
2014
|
|
$
|
8.52
|
|
|
135,553
|
|
|
—
|
|
|
135,553
|
|
|
2.000
|
|
271,106
|
|
|
|
|
|
2015
|
|
$
|
9.78
|
|
|
135,552
|
|
|
—
|
|
|
135,552
|
|
|
0.000
|
|
—
|
|
December 3, 2013
|
|
2017
|
|
2014
|
|
$
|
8.52
|
|
|
90,841
|
|
|
(5,401
|
)
|
|
85,440
|
|
|
2.000
|
|
170,880
|
|
|
|
|
|
2015
|
|
$
|
9.78
|
|
|
90,841
|
|
|
(5,401
|
)
|
|
85,440
|
|
|
0.000
|
|
—
|
|
|
|
|
|
2016
|
|
$
|
9.38
|
|
|
90,849
|
|
|
(5,402
|
)
|
|
85,447
|
|
|
1.021
|
|
87,241
|
|
December 2, 2014
|
|
2018
|
|
2015
|
|
$
|
9.78
|
|
|
80,233
|
|
|
(7,318
|
)
|
|
72,915
|
|
|
0.000
|
|
—
|
|
|
|
|
|
2016
|
|
$
|
9.38
|
|
|
80,229
|
|
|
(7,318
|
)
|
|
72,911
|
|
|
1.021
|
|
74,442
|
|
|
|
|
|
2017
|
|
|
|
80,229
|
|
|
(7,319
|
)
|
|
72,910
|
|
|
|
|
|
|||
December 1, 2015
|
|
2019
|
|
2016
|
|
$
|
9.38
|
|
|
77,821
|
|
|
(3,997
|
)
|
|
73,824
|
|
|
1.021
|
|
75,374
|
|
|
|
|
|
2017
|
|
|
|
77,821
|
|
|
(3,997
|
)
|
|
73,824
|
|
|
|
|
|
|||
|
|
|
|
2018
|
|
|
|
77,829
|
|
|
(3,999
|
)
|
|
73,830
|
|
|
|
|
|
|
Options
|
|
Weighted
average
exercise
price
per option
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic
value
(millions)
|
|||||
Outstanding at September 30, 2013
|
5,124,706
|
|
|
$
|
6.22
|
|
|
5.9
|
|
$
|
14.6
|
|
Granted
|
86,904
|
|
|
8.58
|
|
|
|
|
|
|||
Exercised
|
(587,964
|
)
|
|
4.61
|
|
|
|
|
—
|
|
||
Cancelled
|
(71,411
|
)
|
|
12.92
|
|
|
|
|
|
|||
Outstanding at September 30, 2014
|
4,552,235
|
|
|
6.37
|
|
|
5.0
|
|
13.6
|
|
||
Granted
|
97,119
|
|
|
9.97
|
|
|
|
|
|
|||
Exercised
|
(506,632
|
)
|
|
3.42
|
|
|
|
|
3.2
|
|
||
Cancelled
|
(150,056
|
)
|
|
13.90
|
|
|
|
|
|
|||
Outstanding at September 30, 2015
|
3,992,666
|
|
|
6.54
|
|
|
4.2
|
|
9.3
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(270,599
|
)
|
|
6.83
|
|
|
|
|
0.8
|
|
||
Cancelled
|
(167,759
|
)
|
|
17.82
|
|
|
|
|
|
|||
Outstanding at September 30, 2016
|
3,554,308
|
|
|
$
|
5.99
|
|
|
3.4
|
|
$
|
23.8
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at September 30, 2016
|
3,471,004
|
|
|
$
|
5.90
|
|
|
3.3
|
|
$
|
23.5
|
|
|
|
|
|
|
|
|
|
|||||
Expected to vest after September 30, 2016
|
83,304
|
|
|
$
|
9.54
|
|
|
8.0
|
|
$
|
0.3
|
|
Exercise price
|
|
Options
|
|
Weighted
average
exercise price
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Exercisable options
|
|
Weighted
average
exercise price
|
||||||||||||||
|
$
|
0.00
|
|
-
|
$
|
4.99
|
|
|
|
1,343,036
|
|
|
$
|
3.34
|
|
|
4.4
|
|
1,343,036
|
|
|
$
|
3.34
|
|
|
$
|
5.00
|
|
-
|
$
|
9.99
|
|
|
|
1,644,230
|
|
|
6.03
|
|
|
3.4
|
|
1,560,926
|
|
|
5.84
|
|
||
|
$
|
10.00
|
|
-
|
$
|
14.99
|
|
|
|
440,984
|
|
|
11.31
|
|
|
1.0
|
|
440,984
|
|
|
11.31
|
|
||
|
$
|
15.00
|
|
-
|
$
|
20.99
|
|
|
|
126,058
|
|
|
15.09
|
|
|
0.2
|
|
126,058
|
|
|
15.09
|
|
||
|
|
|
|
|
|
3,554,308
|
|
|
$
|
5.99
|
|
|
3.4
|
|
3,471,004
|
|
|
$
|
5.90
|
|
|
2015
|
|
2014
|
||||
Grant-date fair value
|
$
|
5.93
|
|
|
$
|
5.13
|
|
Risk-free interest rate
|
1.74
|
%
|
|
2.44
|
%
|
||
Dividend yield
|
0.80
|
%
|
|
1.10
|
%
|
||
Expected life (years)
|
8.0
|
|
|
8.0
|
|
||
Expected annual volatility
|
0.6199
|
|
|
0.6386
|
|
|
Phantom Plan units
|
|
Weighted
average
grant date
fair value
per unit
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic
value
(millions)
|
|||||
Outstanding at September 30, 2013
|
608,982
|
|
|
$
|
4.03
|
|
|
1.0
|
|
|
||
Granted
|
304,815
|
|
|
8.52
|
|
|
|
|
|
|||
Vested
|
(240,739
|
)
|
|
|
|
|
|
$
|
2.1
|
|
||
Cancelled
|
(29,770
|
)
|
|
5.29
|
|
|
|
|
|
|||
Outstanding at September 30, 2014
|
643,288
|
|
|
6.22
|
|
|
0.8
|
|
|
|||
Granted
|
289,524
|
|
|
9.78
|
|
|
|
|
|
|||
Vested
|
(317,409
|
)
|
|
|
|
|
|
3.1
|
|
|||
Cancelled
|
(56,525
|
)
|
|
8.29
|
|
|
|
|
|
|||
Outstanding at September 30, 2015
|
558,878
|
|
|
8.49
|
|
|
0.8
|
|
|
|||
Granted
|
302,875
|
|
|
9.84
|
|
|
|
|
|
|||
Vested
|
(270,822
|
)
|
|
|
|
|
|
2.5
|
|
|||
Cancelled
|
(56,905
|
)
|
|
9.28
|
|
|
|
|
|
|||
Outstanding at September 30, 2016
|
534,026
|
|
|
$
|
9.60
|
|
|
0.9
|
|
|
Note 11.
|
Supplemental Balance Sheet Information
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Inventories:
|
|
|
|
||||
Purchased components and raw material
|
$
|
77.8
|
|
|
$
|
77.8
|
|
Work in process
|
39.0
|
|
|
40.7
|
|
||
Finished goods
|
97.0
|
|
|
100.6
|
|
||
|
$
|
213.8
|
|
|
$
|
219.1
|
|
Other current assets:
|
|
|
|
||||
Maintenance and repair tooling
|
$
|
5.1
|
|
|
$
|
5.0
|
|
Income taxes
|
1.5
|
|
|
1.5
|
|
||
Other
|
10.2
|
|
|
7.2
|
|
||
|
$
|
16.8
|
|
|
$
|
13.7
|
|
Property, plant and equipment:
|
|
|
|
||||
Land
|
$
|
9.8
|
|
|
$
|
9.4
|
|
Buildings
|
81.7
|
|
|
79.3
|
|
||
Machinery and equipment
|
375.2
|
|
|
350.7
|
|
||
Construction in progress
|
20.6
|
|
|
20.1
|
|
||
|
$
|
487.3
|
|
|
$
|
459.5
|
|
Accumulated depreciation
|
(332.2
|
)
|
|
(310.6
|
)
|
||
|
$
|
155.1
|
|
|
$
|
148.9
|
|
Other current liabilities:
|
|
|
|
||||
Compensation and benefits
|
$
|
36.1
|
|
|
$
|
30.5
|
|
Customer rebates
|
17.3
|
|
|
15.4
|
|
||
Taxes other than income taxes
|
4.1
|
|
|
4.0
|
|
||
Warranty
|
2.0
|
|
|
2.9
|
|
||
Environmental
|
5.0
|
|
|
1.9
|
|
||
Income taxes
|
4.6
|
|
|
0.8
|
|
||
Interest
|
0.5
|
|
|
0.5
|
|
||
Restructuring
|
0.7
|
|
|
0.1
|
|
||
Other
|
8.8
|
|
|
7.1
|
|
||
|
$
|
79.1
|
|
|
$
|
63.2
|
|
Note 12.
|
Supplemental Statement of Operations Information
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Included in selling, general and administrative expenses:
|
|
|
|
|
|
||||||
Research and development
|
$
|
12.9
|
|
|
$
|
14.9
|
|
|
$
|
14.4
|
|
Advertising
|
$
|
5.0
|
|
|
$
|
5.2
|
|
|
$
|
4.7
|
|
Interest expense, net:
|
|
|
|
|
|
||||||
Term Loan
|
$
|
20.5
|
|
|
$
|
17.5
|
|
|
$
|
—
|
|
Deferred financing costs amortization
|
1.9
|
|
|
2.0
|
|
|
2.0
|
|
|||
ABL Agreement
|
1.1
|
|
|
1.7
|
|
|
1.2
|
|
|||
7.375% Senior Subordinated Notes
|
—
|
|
|
4.0
|
|
|
30.6
|
|
|||
8.75% Senior Unsecured Notes
|
—
|
|
|
2.4
|
|
|
16.0
|
|
|||
Other interest expense
|
0.5
|
|
|
0.3
|
|
|
0.2
|
|
|||
|
24.0
|
|
|
27.9
|
|
|
50.0
|
|
|||
Interest income
|
(0.4
|
)
|
|
(0.3
|
)
|
|
(0.4
|
)
|
|||
|
$
|
23.6
|
|
|
$
|
27.6
|
|
|
$
|
49.6
|
|
Note 13.
|
Accumulated Other Comprehensive Loss
|
|
Foreign currency translation
|
|
Minimum pension liability, net of tax
|
|
Derivative instruments, net of tax
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Balance at September 30, 2015
|
$
|
(6.3
|
)
|
|
$
|
(59.4
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(67.3
|
)
|
Other comprehensive income (loss) before reclassifications
|
0.2
|
|
|
(10.6
|
)
|
|
(2.9
|
)
|
|
|
|||||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
12.3
|
|
|
—
|
|
|
|
|||||
Other comprehensive income (loss)
|
0.2
|
|
|
1.7
|
|
|
(2.9
|
)
|
|
(1.0
|
)
|
||||
Balance at September 30, 2016
|
$
|
(6.1
|
)
|
|
$
|
(57.7
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(68.3
|
)
|
Note 14.
|
Supplemental Cash Flow Information
|
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Cash paid, net:
|
|
|
|
|
|
||||||
Interest
|
$
|
21.1
|
|
|
$
|
36.8
|
|
|
$
|
48.7
|
|
Income taxes
|
$
|
36.9
|
|
|
$
|
13.3
|
|
|
$
|
2.6
|
|
Note 15.
|
Segment Information
|
|
United States
|
|
Canada
|
|
Other
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
2016
|
$
|
1,020.7
|
|
|
$
|
73.8
|
|
|
$
|
44.4
|
|
|
$
|
1,138.9
|
|
2015
|
1,037.7
|
|
|
82.7
|
|
|
44.1
|
|
|
1,164.5
|
|
||||
2014
|
1,040.6
|
|
|
101.1
|
|
|
43.0
|
|
|
1,184.7
|
|
||||
Property, plant and equipment, net:
|
|
|
|
|
|
|
|
||||||||
September 30, 2016
|
$
|
149.3
|
|
|
$
|
2.5
|
|
|
$
|
3.3
|
|
|
$
|
155.1
|
|
September 30, 2015
|
142.9
|
|
|
2.7
|
|
|
3.3
|
|
|
148.9
|
|
|
Mueller Co.
|
|
Anvil
|
|
Mueller Technologies
|
|
Corporate
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net sales, excluding intercompany:
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
$
|
715.7
|
|
|
$
|
338.3
|
|
|
$
|
84.9
|
|
|
$
|
—
|
|
|
$
|
1,138.9
|
|
2015
|
702.2
|
|
|
371.1
|
|
|
91.2
|
|
|
—
|
|
|
1,164.5
|
|
|||||
2014
|
679.1
|
|
|
401.4
|
|
|
104.2
|
|
|
—
|
|
|
1,184.7
|
|
|||||
Intercompany sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
$
|
5.8
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
2015
|
7.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
7.3
|
|
|||||
2014
|
6.7
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
6.8
|
|
|||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
$
|
159.3
|
|
|
$
|
26.8
|
|
|
$
|
(11.1
|
)
|
|
$
|
(54.4
|
)
|
|
$
|
120.6
|
|
2015
|
136.9
|
|
|
30.0
|
|
|
(12.9
|
)
|
|
(44.4
|
)
|
|
109.6
|
|
|||||
2014
|
126.7
|
|
|
41.3
|
|
|
(4.4
|
)
|
|
(39.5
|
)
|
|
124.1
|
|
|||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
$
|
34.2
|
|
|
$
|
13.1
|
|
|
$
|
4.8
|
|
|
$
|
0.5
|
|
|
$
|
52.6
|
|
2015
|
38.8
|
|
|
14.7
|
|
|
4.2
|
|
|
0.4
|
|
|
58.1
|
|
|||||
2014
|
38.0
|
|
|
14.2
|
|
|
4.1
|
|
|
0.4
|
|
|
56.7
|
|
|||||
Total pension settlement, loss on Walter receivable and other charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
$
|
3.0
|
|
|
$
|
2.3
|
|
|
$
|
0.9
|
|
|
$
|
18.7
|
|
|
$
|
24.9
|
|
2015
|
8.4
|
|
|
0.7
|
|
|
0.1
|
|
|
12.1
|
|
|
21.3
|
|
|||||
2014
|
2.1
|
|
|
0.9
|
|
|
0.1
|
|
|
—
|
|
|
3.1
|
|
|||||
Capital expenditures:
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
$
|
24.3
|
|
|
$
|
7.9
|
|
|
$
|
7.0
|
|
|
$
|
0.2
|
|
|
$
|
39.4
|
|
2015
|
20.5
|
|
|
10.3
|
|
|
6.5
|
|
|
0.2
|
|
|
37.5
|
|
|||||
2014
|
18.8
|
|
|
11.6
|
|
|
6.1
|
|
|
0.4
|
|
|
36.9
|
|
|||||
Total assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
September 30, 2016
|
$
|
750.4
|
|
|
$
|
243.5
|
|
|
$
|
86.1
|
|
|
$
|
200.6
|
|
|
$
|
1,280.6
|
|
September 30, 2015
|
757.7
|
|
|
255.3
|
|
|
77.2
|
|
|
139.6
|
|
|
1,229.8
|
|
|||||
Intangible assets, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
September 30, 2016
|
$
|
416.9
|
|
|
$
|
51.4
|
|
|
$
|
17.7
|
|
|
$
|
—
|
|
|
$
|
486.0
|
|
September 30, 2015
|
435.5
|
|
|
54.5
|
|
|
17.3
|
|
|
—
|
|
|
507.3
|
|
Note 17.
|
Subsequent Events
|
Note 18.
|
Quarterly Consolidated Financial Information (Unaudited)
|
|
Quarter
|
||||||||||||||
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
302.5
|
|
|
$
|
310.1
|
|
|
$
|
283.6
|
|
|
$
|
242.7
|
|
Gross profit
|
103.6
|
|
|
107.1
|
|
|
84.9
|
|
|
68.7
|
|
||||
Operating income
|
46.7
|
|
|
29.7
|
|
|
29.3
|
|
|
14.9
|
|
||||
Net income
|
26.5
|
|
|
15.5
|
|
|
15.7
|
|
|
6.2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per share
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.16
|
|
|
0.10
|
|
|
0.10
|
|
|
0.04
|
|
||||
Diluted
|
0.16
|
|
|
0.09
|
|
|
0.10
|
|
|
0.04
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
311.4
|
|
|
$
|
301.0
|
|
|
$
|
290.3
|
|
|
$
|
261.8
|
|
Gross profit
|
97.7
|
|
|
96.2
|
|
|
82.1
|
|
|
71.3
|
|
||||
Operating income
|
44.4
|
|
|
31.5
|
|
|
25.6
|
|
|
8.1
|
|
||||
Net income (loss)
|
22.3
|
|
|
16.5
|
|
|
12.3
|
|
|
(20.2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share
(1):
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.14
|
|
|
0.10
|
|
|
0.08
|
|
|
(0.13
|
)
|
||||
Diluted
|
0.14
|
|
|
0.10
|
|
|
0.08
|
|
|
(0.13
|
)
|
(1)
|
The sum of the quarterly amounts may not equal the full year amount due to rounding.
|
1.
|
Capitalized terms used in this Second Amendment shall have the meanings assigned to such terms in the Agreement.
|
2.
|
Section 5(iii) shall be deleted in its entirety and replaced with the following:
|
iii.
|
The Company will allow Executive to continue medical and dental coverage for Executive and Executive’s eligible dependents (as provided to its active employees) for up to 18 months following the date of termination of employment, but only if the Executive pays the COBRA rate for such coverage (“Extended Coverage”). If Executive declines Extended Coverage or becomes eligible for medical and/or dental coverage through another employer (including an employer of the Executive’s spouse), such Extended Coverage will cease. The COBRA election period and COBRA maximum period of coverage will begin on the date the Extended Coverage ceases, subject to the rules and limitations that apply to COBRA coverage.
|
3.
|
The section heading for Section 5(vi) shall be replaced by a section heading for Section 5(v) to correct an administrative error.
|
4.
|
A new Section 5(vi) shall be added and shall state in its entirety:
|
vi.
|
Notwithstanding contrary provisions in an executive incentive bonus plan or in Section 3.b of this Article I, Executive will be paid an annual bonus for the fiscal year in which the termination of employment occurs determined and paid in the same manner as for all other executive participants
|
vii.
|
The Company will cover reasonable expenses related to outplacement services, the cost and duration of which shall be determined by the Company in its sole discretion; provided, however, the outplacement assistance is intended to be exempt from Code Section 409A under the exemption in Treas. Reg. § 1.409A-1(b)(9)(v)(A) and, thus, (i) the services will be limited as necessary to be “reasonable” under Code Section 409A, (ii) the services shall be provided by no later than the last day of the second calendar year following the year in which the Executive's date of termination of employment occurs, and (iii) no related payments will be paid beyond the third calendar year after the year in which the Executive’s date of termination of employment occurs.
|
6.
|
The Agreement, as expressly amended by this Second Amendment, shall remain in full force and effect in accordance with its terms and continue to bind the parties. This Second Amendment supersedes and amends any other agreements between the Company and/or any subsidiary or division and Employee, and any policy applicable to the Employee. Any disputes under this Second Amendment shall be resolved as provided in the Agreement.
|
7.
|
This Second Amendment shall be effective as of the date first set forth above.
|
8.
|
Capitalized terms used in this Amendment shall have the meanings assigned to such terms in the Agreement.
|
9.
|
Sections 3(a) and 3(b) of the Agreement shall be deleted in their entirety and replaced with the following:
|
a.
|
Executive’s base salary (“Salary”) will be $280,800.00 per year. Executive’s Salary and job performance will be reviewed at least once per year consistent with the practices of the Company.
|
b.
|
Executive is entitled to participate in a Company executive incentive bonus plan, as in effect from time to time and as approved by the Compensation and Human Resources Committee of the Board of Directors. Executive’s initial target annual bonus (“Bonus”) will be fifty percent (50%) of the Executive’s base salary in effect for such year. Actual annual Bonus may range from 0% to 200% of target and will be determined based upon corporate and/or individual performance factors established by the Company. Bonus ranges, target and performance goals may be changed in accordance with the applicable plan and without amendment of this Agreement. Executive must be employed on the date the Board approves the Bonus payable with respect to any fiscal year to be eligible to receive an annual Bonus for such fiscal year.
|
5.
|
Involuntary Termination of Employment by the Company
. If the Company involuntarily terminates the employment of Executive other than as set forth in Section 4 [Death, Disability, Cause or other than for Good Reason], the Executive will be entitled to the benefits set forth below.
|
i.
|
Lump sum payment of unpaid Salary and other benefits, including accrued but unused vacation pay and unreimbursed business expenses, accrued to the date of termination of employment and paid on the same basis as paid upon any voluntary termination of employment.
|
ii.
|
A total amount equal to 225% of Executive’s current rate of Salary (the “Base Amount”). Payment of the Base Amount shall be made in substantially equal monthly installments over 18 months from the date of Executive’s separation from service (within the meaning of Section 409A of the Code). The first such installment shall be paid within sixty (60) days following Executive’s separation from service (the “Commencement Date”) and subsequent installments shall be paid on the last business day of each succeeding month; provided, however, that Executive’s entitlement to each such installment shall be contingent upon execution (and non-revocation) by Executive of the release under article III, Section 2. All payments are subject to applicable taxes.
|
11.
|
All references to the terms “salary” and “base salary” in Sections 4 through 6 shall be replaced with the term “Salary”.
|
12.
|
The term “bonus” in Section 6 shall be replaced with the term “Bonus”.
|
13.
|
The Agreement, as expressly amended by this Amendment, shall remain in full force and effect in accordance with its terms and continue to bind the parties. This Amendment supersedes and amends any other agreements between the Company and/or any subsidiary or division and Employee, and any policy applicable to the Employee. Any disputes under this Amendment shall be resolved as provided in the Agreement.
|
14.
|
This Amendment shall be effective as of the date first set forth above.
|
15.
|
Capitalized terms used in this Amendment shall have the meanings assigned to such terms in the Agreement.
|
16.
|
Employee agrees that “Good Reason,” as defined under the Agreement, shall not mean a temporary reduction of 20% in the Employee’s salary for the period from February 16, 2009 to May 15, 2009.
|
17.
|
The Parties acknowledge and agree that this Amendment has been negotiated at arm’s-length between persons knowledgeable in the matters dealt with herein. Accordingly, any rules of law that would require interpretation of any ambiguities against the party who drafted this Amendment do not apply and are expressly waived.
|
18.
|
The Parties agree to cooperate fully and execute any and all documents and to take all additional actions which may be necessary or appropriate to give full force and effect to the terms and intent of this Amendment.
|
19.
|
The Agreement, as expressly amended by this Amendment, shall remain in full force and effect in accordance with its terms and continue to bind the parties. This Amendment supersedes and amends any other agreements between the Company and/or any subsidiary or division and Employee, and any policy applicable to the Employee. Any disputes under this Amendment shall be resolved as provided in the Agreement.
|
20.
|
This Amendment shall be effective as of the date first set forth above.
|
1.
|
Prior Agreements.
Executive acknowledges and represents that any and all prior employment agreements, including, without limitation, the letter agreement dated as of November 13, 2006, are terminated and that the only obligations and duties between the Company and the Executive with respect to any severance are those expressly set forth in this Agreement and those set forth in the Change in Control Severance Agreement between Executive and the Company dated as of the date hereof (the “Change in Control Agreement”). Executive represents and warrants that the Executive is not a party to any other agreement or obligation for personal services and that there exists no impediment or restraint, contractual or otherwise on the Executive’s power, right or ability to accept the Company’s offer of employment and to perform the employment specified in this Agreement.
|
a.
|
Executive will serve as Senior Vice President, Strategic Planning and Investor Relations and will report to the Chief Executive Officer and Executive’s designated work location will be Atlanta, Georgia. Executive will have the responsibilities generally consistent for such position in similarly sized public companies and such other and additional responsibilities as may be assigned to Executive from time to time by the Company’s Chief Executive Officer. Executive acknowledges that this Agreement contemplates any possible future promotion and any assignment of responsibilities with respect to any affiliate or subsidiary of the Company, which may be made without amendment of this Agreement.
|
b.
|
Executive shall devote substantially all of Executive’s working time, attention and energies to the business of the Company and its affiliated entities. With permission of the person to whom the Executive reports, Executive however, may be involved in charitable and professional activities and serve on boards of not-for-profit entities, in each case in accordance with Company policy and in a manner and in organizations that will not adversely effect the Executive’s performance or reflect unfavorably on the Company. Executive may not serve on any for-profit board without the prior permission of the Board of Directors. In no event will Executive be covered by any insurance policies of the Company for service on other boards unless pursuant to a specific written endorsement approved by the Chief Executive Officer of the Company and obtained by the Executive.
|
3.
|
Compensation and Benefits
|
a.
|
Executive’s base salary will be $280,800 per year. Executive’s salary and job performance will be reviewed at least once per year consistent with the practices of the Company.
|
b.
|
Executive is entitled to participate in a Company executive incentive bonus plan, as in effect from time to time and as approved by the Compensation Committee of the Board of Directors. Executive’s initial target annual bonus will be fifty percent (50%) of the Executive’s base salary in effect for such year. Actual annual bonus may range from 0% to 200% of target and will be determined based upon corporate and/or individual performance factors established by the Company. Bonus ranges, target and performance goals may be changed in accordance with the applicable plan and without amendment of this Agreement. Executive must be employed on the date the Board approves the bonus payable with respect to any fiscal year to be eligible to receive an annual bonus for such fiscal year.
|
c.
|
Executive will be eligible for the Company’s long term incentive program consistent with its application to executives generally at the level of responsibility held and with the terms of such program, as in effect from time to time. The target value of Executive’s annual long term incentive program equity opportunity will be $191,659. This award is at the discretion of the Compensation Committee of the Board or the Chief Executive Officer, as applicable.
|
d.
|
Executive shall be eligible to participate in any pension, profit sharing, health or welfare benefit generally made available by the Company to similarly situated executive employees, as in effect from time to time, including, without limitation:
|
i.
|
life and group health (medical, dental, etc.) benefits generally applicable to executives in the location in which Executive is primarily based, as in effect from time to time and in accordance with their terms.
|
ii.
|
Retirement Savings Plan
,
generally applicable to salaried employees in the location in which Executive is primarily based, as in effect from time to time and in accordance with its terms.
|
iii.
|
Employee Stock Purchase Plan
,
generally applicable to salaried employees in the location in which Executive is primarily based, as in effect from time to time and in accordance with its terms.
|
iv.
|
Four weeks of annual vacation to be used in accordance with the Company’s vacation policies generally applicable to executives in the location in which Executive is primarily based, as in effect from time to time.
|
v.
|
Expense reimbursement for properly documented ordinary and necessary business expenses incurred by Executive in the performance of employment hereunder in accordance with the Company’s expense reimbursement policy.
|
e.
|
Executive shall be entitled to a car allowance of $1,200 per month, subject to applicable taxes.
|
f.
|
Executive shall be entitled to reimbursement of financial planning expenses in accordance with the Company’s policy for executive financial planning.
|
g.
|
Executive shall be entitled to reimbursement for expenses of an annual physical in accordance with the Company’s policy for executive physical exams.
|
h.
|
Executive agrees to comply with policies as adopted from time to time by the Board of Directors for executives, which includes stock ownership guidelines.
|
4.
|
Termination of Employment
-
Death; By Company for Cause or Disability; By Executive’s Resignation for Good Reason.
Executive’s employment automatically terminates upon Executive’s death. The Company may terminate Executive’s employment on account of Disability or for Cause. Executive may voluntarily resign or retire from employment for Good Reason upon not less than 15 business days prior written notice to the Company. Upon termination of employment for any of these reasons, Executive shall be entitled to base salary through the date of termination of employment, and other benefits in accordance with the terms of the Company’s retirement, insurance, and other applicable plans and programs then in effect.
|
a.
|
For purposes of this Agreement, “Disability” occurs if Executive has been physically or mentally incapacitated so as to render Executive incapable of performing the essential functions of any substantial gainful activity, or Executive has received income replacement benefits under a Company plan for at least three months, and, in either instance, that incapacity is expected to result in death or to last for a continuous period of at least 12 months. Executive’s receipt of disability benefits under the Company’s long-term
|
b.
|
For purposes of this Agreement, the term “Cause” means any of the following: Executive’s (i) conviction or guilty plea of a felony or conviction or guilty plea of any crime involving fraud or dishonesty, (ii) theft or embezzlement of property from the Company, (iii) willful and continued refusal to perform the duties of Executive’s position in all material respects (other than any such failure resulting
|
c.
|
For purposes of this Agreement, the term “Good Reason” shall have the meaning set forth in Article I, Section 6(b).
|
5.
|
Involuntary Termination of Employment by the Company.
If the Company involuntarily terminates the employment of Executive other than as set forth in Section 4, the Executive will be entitled to the benefits set forth below.
|
i.
|
Lump sum payment of unpaid base salary and other benefits, including accrued but unused vacation pay and unreimbursed business expenses, accrued to the date of termination of employment and paid on the same basis as paid upon any voluntary termination of employment.
|
ii.
|
A total amount equal to 150% of (A) the sum of Executive’s current monthly rate of base salary and one-twelfth of the annual target bonus (B) multiplied by 12 months (Clauses (A) and (B) together are referred to as the “Base Amount”). Payment of the Base Amount shall be made in substantially equal monthly installments over 18 months from the date of Executive’s separation from service (within the meaning of Section 409A of the Code). The first such installment shall be paid within sixty (60) days following Executive’s separation from service (the “Commencement Date”) and subsequent installments shall be paid on the last business day of each succeeding month; provided, however, that Executive’s entitlement to each such installment shall be contingent upon execution (and non-revocation) by Executive of the release under article III, Section 2. All payments are subject to applicable taxes.
|
iii.
|
The Company will charge Executive the active employee rate for healthcare coverage for 18 months after termination of employment. The COBRA election period will not commence until after the expiration of that period. Executive may decline coverage at any time. If Executive declines coverage or becomes eligible for coverage by another employer, such coverage will cease and Executive may not become covered by Company coverage again.
|
iv.
|
Executive will continue group life insurance coverage for a period of 18 months following Executive’s termination of employment date.
|
vi.
|
Notwithstanding anything to the contrary herein, if Executive is a “specified employee” under Section 409A of the Code, then any payment(s) to the Executive described in this Agreement that (A) constitute “deferred compensation” to an Executive under Section 409A; (B) are not exempt from Section 409A; and (C) are otherwise payable within 6 months after Executive’s separation from service (within the meaning of Section 409A of the Code) shall instead be made on the date 6 months and 1 day after such separation from service, and such payment(s) shall be increased by an amount equal to interest on each such payment(s) at a rate of interest equal to the Federal Funds Rate in effect as of the date of termination of employment from the date on which such
|
6.
|
Termination by Executive for Good Reason.
If Executive terminates employment for Good Reason, Executive will be entitled to the same benefits as if employment had been terminated involuntarily under Article I, Section 5. Any benefits provided under this section are conditioned on Executive giving written notice to the Company under subsection (a) below and meeting the requirements for a satisfactory release as set forth in Article III, Section 2.
|
a.
|
Termination for Good Reason means delivery of a Notice of Termination for Good Reason by Executive given to the Company’s Senior Vice President of Human Resources within ninety (90) days of the occurrence of the event giving rise to the Notice, unless such circumstances are substantially corrected prior to the date of termination specified in the Notice of Termination for Good Reason. A “Notice of Termination for Good Reason” shall mean a notice that (i) indicates the specific termination provision or provisions relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination for Good Reason and (iii) indicates a date of termination of employment. The failure by Executive to set forth in the Notice of Termination for Good Reason any facts or circumstances which contribute to the showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing her rights hereunder. The Notice of Termination for Good Reason shall provide for a date of termination of employment not less than fifteen (15) nor more than thirty (30) days after the date such Notice of Termination for Good Reason is given, provided that in the case of the events set forth in Article I, Sections 6(b)(i) or (ii), the date may be not less than twenty (20) days after the giving of such notice.
|
b.
|
For purposes of this Agreement, “Good Reason” means, without Executive’s express written consent, the occurrence of any one or more of the following to the extent that there is, or would be if not corrected, a material negative change in the Executive’s employment relationship with the Company:
|
i.
|
The assignment of the Executive to duties materially inconsistent with the Executive’s authorities, duties, responsibilities, and status as an executive and/or officer of the Company, or a material reduction or alteration in the nature or status of the Executive’s authorities, duties, or responsibilities from those in effect as of ninety (90) calendar days prior to the reassignment, other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Executive.
|
ii.
|
The Company’s requiring the Executive to be based at a new or different location from the location of the Executive’s current principal job location or office which would result in a material negative change in Executive’s employment; provided that for purposes of this subsection, a material negative change to the employment relationship is presumed if the new location is in excess of fifty (50) miles of the old location; or
|
iii.
|
A material reduction by the Company of the Executive’s base salary in effect on the Effective Date hereof, or as the same shall be increased from time to time.
|
iv.
|
A material negative change in responsibility or base salary shall not have occurred under this Section 6(b) if (A) the amount of the Executive’s bonus fluctuates due to performance considerations under the Company’s incentive plan in effect from time to time or (B) the Executive is transferred to a position of comparable responsibility and compensation with the Company.
|
7.
|
Clawback.
Notwithstanding anything herein to the contrary and only to the extent required by law, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, then the Executive agrees to reimburse the Company for (a) any bonus or other incentive-based or equity-based compensation received by such Executive from the Company during the 12-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurs) of the financial document embodying such financial reporting requirement and (b) any profits realized from the sale of securities of the Company during that 12-month period. The Compensation Committee of the Board of Directors shall have the exclusive authority to interpret and enforce this provision.
|
8.
|
Taxes and Tax Equalization.
The Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as legally shall be required.
|
9.
|
Compliance with Code Section 409A
|
a.
|
Each of the payments of severance and continued medical benefits under Article I, Sections 4 and 5 above are designated as separate payments for purposes of the short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F), the exemption for involuntary terminations under separation pay plans under Treasury Regulation Section 1.409A-1(b)(9)(iii), and the exemption for medical expense reimbursements under Treasury Regulation Section 1.409A-1(b)(9)(v)(B).
|
b.
|
It is the intention of the Company and Executive that this Agreement not result in unfavorable tax consequences to Executive under Code Section 409A. Accordingly, Executive consents to any amendment of this Agreement as the Company may reasonably make in furtherance of such intention, and the Company shall promptly provide, or make available to, Executive a copy of such amendment. Any such amendments shall be made in a manner that preserves to the maximum extent possible the intended benefits to Executive. This Section 10(b) does not create an obligation on the part of the Company to modify this Agreement and does not guarantee that the amounts or benefits owed under this Agreement will not be subject to interest and penalties under Code Section 409A.
|
1.
|
Noncompetition.
|
a.
|
Executive will not perform Competitive Services, directly or indirectly, for any person, entity, business, or enterprise in the United States (the “Territory”) engaged in the business of the Company as being carried on as of the date of termination (“Competing Business”) for the period of twelve (12) months following the date of termination of the Executive’s employment with the Company). For the purposes of this restriction, “Competitive Services” means performing services as a principal strategic planning or investor relations officer for a company and participating as a member of the senior leadership team in overall strategic and business planning for a company and duties substantially similar to those duties Executive will perform for the Company under this Agreement or, in the case of managerial or executive duties, managerial or executive duties for a competitor.
|
b.
|
Executive acknowledges and agrees that:
|
i.
|
Executive is familiar with the business of the Company and the commercial and competitive nature of the industry and recognizes that the value of the Company’s business would be injured if Executive performed Competitive Services for a Competing Business;
|
ii.
|
These non-competition provisions are essential to the continued good will and profitability of the Company;
|
iii.
|
In the course of employment with the Company, Executive will become familiar with the trade secrets and other Confidential Information (as defined below) of the Company and its subsidiaries,
|
iv.
|
Executive’s skills and abilities enable Executive to seek and obtain similar employment in a business other than a Competing Business, and Executive possesses other skills that will serve as the basis for employment opportunities that are not prohibited by this Non-Competition Agreement. When Executive’s employment with the Company terminates, Executive expects to be able to earn a livelihood without violating the terms of this Agreement.
|
2.
|
Nonsolicitation of Employees.
During the term of the Executive’s employment with the Company and for a period of twelve (12) months following the termination of the Executive’s employment with the Company for any reason whatsoever, the Executive shall not, either on her own account or for any person, firm, partnership, corporation, limited liability company, or other entity within the Territory; (a) solicit any employee of the Company to leave her employment with the Company; or (b) induce or attempt to induce any such employee to breach her employment agreement with the Company.
|
3.
|
Nonsolicitation of Customers.
During the term of the Executive’s employment with the Company and for a period of two (2) years following the termination of the Executive's employment with the Company for any reason whatsoever, the Executive shall not directly or indirectly solicit or attempt to solicit any current customer of the Company or any of its subsidiaries with which the Executive had material contact during her employment with the Company: (a) to cease doing business in whole or in part with or through the Company or any of its subsidiaries; or (b) to do business with any other person, firm, partnership, corporation, limited liability company, or other entity which performs services competitive to those provided by the Company or any of its subsidiaries. This restriction on post-employment conduct shall apply only to solicitation for the purpose of selling or offering products or services that are similar to or which compete with those products or services offered by the Company during the period of the Executive’s employment. For purposes of this Article II, Section 3, “material contact” shall be defined as any communication intended or expected to develop or further a business relationship and customers about which the Executive learned confidential information as a result of her employment .
|
4.
|
Developments.
Executive agrees that all inventions, improvements, trade secrets, reports, manuals, computer programs, systems, tapes and other ideas and materials developed or invented by Executive during the period of Executive’s employment with the Company, either solely or in collaboration with others, which relate to the actual or anticipated business or research of the Company, which result from or are suggested by any work Executive may do for the Company, or which result from use of the Company’s premises or the Company’s or its customers’ property (collectively, the “Developments”) shall be the sole and exclusive property of the Company. Executive hereby assigns to the Company Executive’s entire right and interest in any Developments and will hereafter execute any documents in connection therewith that the Company may reasonably request. This section does not apply to any inventions that Executive made prior to her employment by the Company, or to any inventions that Executive develops entirely on her own time without using any of the Company’s equipment, supplies, facilities or the Company’s or its customers’ confidential information and which do not relate to the Company’s business, anticipated research and developments or the work Executive has performed for the Company.
|
5.
|
Non-Disparagement.
Following the termination of employment under this Agreement for any reason and continuing for so long as the the Company or any affiliate, successor or assigns thereof carries on the name or like business within the Territory, neither the Company nor Employee shall, directly or indirectly, for herself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:
|
•
|
Make any statements or announcements or permit anyone to make any public statements or announcements concerning Employee’s reasons for termination with the Company without Employee’s consent, or
|
•
|
Make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of the the Company or its affiliated entities on the one hand, or Employee, on the other hand.
|
1.
|
Confidentiality and Non-Disclosure
|
a.
|
Executive acknowledges that, in the course of Executive’s employment, Executive will have access to confidential information, trade secrets, knowledge or data relating to the Company and its businesses, including but not limited to information disclosed to Executive, or known by Executive as a consequence of or through employment with the Company, where such information is not generally known in the trade or industry, and where such information refers or relates in any manner whatsoever to the business activities, processes, services, or products of the Company, or any affiliates (“Confidential Information”).
|
b.
|
Confidential Information includes, but is not limited to, business and development plans (whether contemplated, initiated, or completed), mergers and acquisitions, pricing information, business contacts, sources of supply, customer information (including customer lists, customer preferences, and sales history), methods of operation, results of analysis, customer lists (including advertising contacts), business forecasts, financial data, costs, revenues, and similar information.
|
c.
|
Confidential Information is to be protected regardless of its format (tangible or intangible); thus, it includes information maintained in electronic form (such as e-mails, computer files, or information on a cell phone, Blackberry, or other personal data device). Information that is in the public domain, other than as a result of a breach of this Agreement, shall not constitute Confidential Information.
|
d.
|
Executive agrees that during employment and during the two (2) year period thereafter, Executive will not use or disclose, on Executive’s own behalf or on behalf of any other person or entity, any Confidential Information to employees of the Company who do not have a need-to-know or to third parties; provided, however, that Executive may disclose Confidential Information during employment in the normal course of business.
|
e.
|
Executive agrees that this non-disclosure obligation shall extend longer than two (2) years after termination of employment as to any materials or information that constitutes a trade secret of the Company under applicable law, for the full period of time in which such materials or information remain a trade secret, if longer than two (2) years.
|
f.
|
Executive agrees to take all reasonable precautions to safeguard and prevent disclosure of Confidential Information to unauthorized persons or entities.
|
2.
|
Release.
As a condition of receiving any severance payments under this Agreement, Executive must sign and not revoke, within the deadlines provided by the Company and in compliance with applicable federal and/or state laws, a written release of all employment claims against the Company and its related entities, including, without limitation, employment discrimination of any kind, wage payment, breach of contract, claims for workers compensation, unemployment, disability and severance claims that Executive has or may have at the termination of employment. In addition, Executive will agree not to sue the Company or any other entities or persons released.
|
3.
|
Intellectual Property.
Executive agrees that Executive has no right to use, for the benefit of Executive or anyone other than the Company, any of the copyrights, trademarks, service marks, patents, and inventions of the Company.
|
4.
|
Return of Property.
Executive agrees that upon termination of employment or, prior to such termination at the request of the Company, Executive shall return to the Company all documents, copies, recordings of any kind, papers, computer records, and other material in Executive’s possession or under Executive’s control which may contain or be derived from Confidential Information, together with all other documents, notes, other work product, and other material and property belonging or relating to the Company, and any tangible Company property, including any computer equipment, cell phone, pager, Blackberry or other electronic messaging device, and keys.
|
5.
|
Injunctive Relief.
Executive and the Company recognize that the services to be rendered by Executive are of a special, unique, unusual, and extraordinary character having a peculiar value, the loss of which will cause the Company immediate and irreparable harm which cannot be adequately compensated in damages. Executive and the Company further recognize that disclosure of any Confidential Information or breach of the provisions of this Agreement will give rise to immediate and irreparable injury to the Company that is inadequately compensable in damages. In the event of a breach or threatened breach of this Agreement, Executive agrees and consents that the
|
6.
|
Successors
|
a.
|
The Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) of all or a significant portion of the assets of the Company by agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Regardless of whether such agreement is executed, this Agreement shall be binding upon any successor in accordance with the operation of law and such successor shall be deemed the “Company” for purposes of this Agreement.
|
b.
|
This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amount would still be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.
|
7.
|
Miscellaneous
|
a.
|
Employment Status
. This Agreement is not, and nothing herein shall be deemed to create, an employment contract between the Executive and the Company or any of its subsidiaries. Executive understands and agrees that the Executive’s employment with the Company is at-will, which means that either Executive or Company may, subject to the terms of this Agreement terminate this Agreement at any time with or without cause and with or without notice. The Executive acknowledges that the rights of the Company remain wholly intact to change or reduce at any time and from time to time her compensation, title, responsibilities, location, and all other aspects of the employment relationship, or to discharge him (subject to such discharge possibly qualifying Executive for severance under Article I, Section 4 or 5).
|
b.
|
Agreement
. This Agreement and the Change in Control Severance Agreement together contain the entire understanding of the Company and the Executive with respect to the subject matter hereof and supersede all prior agreements, understandings
.
, negotiations, representations and statements, whether oral, written, implied or expressed, relating to such subject matter.
|
c.
|
Notices
. All notices, requests, demands, and other communications hereunder shall be sufficient if in writing and shall be deemed to have been duly given if delivered by hand or if sent by registered or certified mail to the Executive at the last address he filed in writing with the Company or, in the case of the Company, at its principal office.
|
d.
|
Execution in Counterparts
. This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed to be original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.
|
e.
|
Severability
. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. Further, the captions of this Agreement are not part of the provisions hereof and shall have no force and effect. Notwithstanding any other provisions of this Agreement to the contrary, the Company shall have no obligation to make any payment to the Executive hereunder to the extent, but only to the extent, that such payment is prohibited by the terms of any final order of a federal or state court or regulatory agency of competent jurisdiction; provided, however, that such an order shall not affect, impair, or invalidate any provision of this Agreement not expressly subject to such order.
|
f.
|
Modification
. No provision of this Agreement may be modified, waived, or discharged unless such modification, waiver, or discharge is agreed to in writing and signed by the Executive and by a member of the Board of Directors, as applicable, or by the respective parties’ legal representatives or successors, except as provided in Article I, Section 10(b).
|
g.
|
Applicable Law
. To the extent not preempted by the laws of the United States, the laws of the state of Delaware shall be the controlling law in all matters relating to this Agreement without giving effect to principles of conflicts of laws.
|
h.
|
Consent to Forum.
Executive expressly consents and submits that the exclusive jurisdiction for any controversy, dispute, or claim between the parties arising out of or relating to this Agreement or Executive’s employment with the Company that are not required to be submitted to arbitration pursuant to Article IV of this Agreement (such as claims for injunctive or equitable relief described in Article III, Section 5 of this Agreement) shall be the courts in the state of Delaware. Executive expressly consents to the exercise of personal jurisdiction over Executive by the courts in the state of Delaware. Executive hereby waives, to the fullest extent permitted by applicable law, any objection or defense that a Delaware court does not have personal jurisdiction over Executive, is an improper venue, or constitutes an inconvenient forum.
|
1.
|
Executive and the Company agree that, except as otherwise provided in this Agreement, final and binding arbitration shall be the exclusive remedy for any controversy, dispute, or claim arising out of or relating to this Agreement or Executive’s employment with the Company, including Executive’s hire, treatment in the workplace, or termination of employment. For example, if Executive’s employment with the Company is terminated and he contends that the termination violates any statute, contract or public policy, then Executive will submit the matter to arbitration for resolution, in lieu of any court or jury trial to which Executive would otherwise might be entitled.
|
2.
|
This Article covers all common‑law and statutory claims, including, but not limited to, any claim for breach of contract (including this Agreement) and for violation of laws forbidding discrimination on the basis of race, sex, color, religion, age, national origin, disability, or any other basis covered by applicable federal, state, or local law, and includes claims against the Company and/or any parents, affiliates, owners, officers, directors, employees, agents, general partners or limited partners of the Company, to the extent such claims involve, in any way, this Agreement or Executive’s employment with the Company. This Article covers all judicial claims that could be brought by either party to this Agreement, but does not cover administrative claims for workers’ compensation or unemployment compensation benefits or the filing of charges with government agencies that prohibit waiver of the right to file a charge, and does not preclude either party to the Agreement from seeking emergency injunctive relief in the courts as provided for in Article III, Sections 5 and 7(h).
|
3.
|
The arbitration shall be governed by JAMS Employment Arbitration Rules and Procedure except as modified herein. If the party chooses to have the arbitration proceeding administered by a third party, then the arbitration shall be administered by JAMS. If the party chooses to have the arbitration administered by JAMS, then the arbitration will “commence” in accordance with the JAMS Employment Arbitration Rules and Procedure. If the party chooses to have this matter arbitrated privately, then the arbitration will be deemed to “commence” on the date that the party, pursuant to Article III, Section 7(c), provides a demand for arbitration and notice of claims and remedies sought outlining the facts relied upon, legal theories, and statement of claimed relief (“Demand”). The responding party shall serve a response to the claims and any counterclaims within fifteen (15) business days from the date of receipt of the Demand.
|
4.
|
Any arbitration shall be held in Washington, D.C. (unless the parties mutually agree in writing to another location within the United States) within 120 days of the commencement of the arbitration.
|
5.
|
The arbitration shall take place before a single arbitrator to be appointed by mutual agreement of counsel for each party or, if counsel cannot agree, then pursuant to the procedures set forth by JAMS. The parties may not have any
ex parte
communications with the arbitrator.
|
7.
|
The parties are limited to two (2) depositions per side, and limited written discovery as may be required by the arbitrator, not to exceed that allowed under the Federal Rules of Civil Procedure.
|
8.
|
Any hearing in this matter shall be completed within 120 days of the date of commencement of the arbitration, as the term “commencement” is defined by JAMS. The arbitrator shall issue its award within thirty (30) days of the last hearing day.
|
9.
|
Unless Executive objects, the Company will pay the arbitrator’s fees. Each party shall pay its own costs and attorneys’ fees, if any, unless the arbitrator rules otherwise. A court may enter judgment upon the arbitrator’s award, either by confirming the award, or vacating, modifying or correcting the award, on any ground referred to in the Federal Arbitration Act, or where the findings of fact are not supported by substantial evidence, or where the conclusions of law are erroneous.
|
10.
|
The provisions of this Article are severable, meaning that if any provision in this Article IV (“Dispute Resolution; Mutual Agreement to Arbitrate”) is determined to be unenforceable and cannot be reformed under applicable law, the remaining provisions shall remain in full effect, provided however, that any amendment of an unenforceable provision shall only be to the extent necessary and shall preserve the intent of the parties hereto. It is agreed and understood that the scope of this Article, including questions of arbitrability of any dispute, shall be determined by the arbitrator.
|
11.
|
Executive acknowledges that prior to accepting the provisions of this Article IV and signing this Agreement, Executive has been given an opportunity to consult with an attorney and to review the JAMS Employment Arbitration Rules and Procedure that would govern the dispute resolution process under this Article. In signing this Agreement, the parties acknowledge that the right to a court trial and trial by jury is of value, and knowingly and voluntarily waive such right for any dispute subject to the terms of this Article.
|
|
MUELLER WATER PRODUCTS, INC.
|
|
By:
/s/ GREGORY E. HYLAND
Chairman of the Board, President and Chief Executive Officer
|
|
/s/ MARIETTA EDMUNDS ZAKAS
Executive
|
(a)
|
“
Agreement
” means this Executive Change-in-Control Severance Agreement.
|
(b)
|
“
Base Salary
” means, at any time, the then regular annual rate of pay which the Executive is receiving as annual salary, excluding amounts: (i) received under short-term or long-term incentive or other bonus plans, regardless of whether or not the amounts are deferred, or (ii) designated by the Company as payment toward reimbursement of expenses.
|
(c)
|
“
Beneficial Owner
” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
|
(d)
|
“
Board
” means the Board of Directors of the Company.
|
(e)
|
“
Cause
”
shall be determined solely by the Committee in the exercise of good faith and reasonable judgment, and shall mean the occurrence of any one or more of the following:
|
(i)
|
The Executive’s conviction or guilty plea of a felony or conviction or guilty plea of any crime involving fraud or dishonesty;
|
(ii)
|
The Executive’s willful and continued refusal to perform the duties of his or her position in all material respects (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness), that continues for more than 15 business days after the Company gives the Executive written notice of the failure, specifying what duties the Executive failed to perform and an opportunity to cure;
|
(iii)
|
fraudulent preparation of financial information of the Company; or
|
(iv)
|
The Executive’s willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, provided that no act or failure to act on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interests of the Company.
|
(f)
|
“
Change in Control
” of the Company shall mean the occurrence of any one (1) or more of the following events:
|
(i)
|
Any Person (other than the Company or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, and any trustee or other fiduciary holding securities under an employee benefit plan of the Company or such proportionately owned corporation) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than thirty percent (30%) of the combined voting power of the Company’s then outstanding securities;
|
(ii)
|
During any period of not more than thirty-six (36) consecutive months, individuals who at the beginning of such period constitute the Board of Directors of the Company, and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority (rounded up to the nearest whole number) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;
|
(iii)
|
The consummation of a merger or consolidation of the Company with any other corporation, other than: (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty-six and two-thirds percent (66-2/3%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar
|
(iv)
|
The Company’s stockholders approve a plan or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction or series of transactions having a similar effect).
|
(g)
|
“
Code
” means the Internal Revenue Code of 1986, as amended.
|
(h)
|
“
Committee
” means the Compensation Committee of the Board of Directors of the Company, or, if no Compensation Committee exists, then the full Board of Directors of the Company, or a committee of Board members, as appointed by the full Board to administer this Agreement.
|
(i)
|
“
Company
” means Mueller Water Products, Inc., a Delaware corporation (including any and all subsidiaries), or any successor thereto as provided in Article 9 herein.
|
(j)
|
“
Disability
” or “
Disabled
” means that Executive has been physically or mentally incapacitated so as to render Executive incapable of performing the essential functions of any substantial gainful activity, or Executive has received income replacement benefits under a Company plan for at least three months, and, in either instance, that incapacity is expected to result in death or to last for a continuous period of at least 12 months. Executive’s receipt of disability benefits under the Company’s long-term disability plan or receipt of Social Security disability benefits shall be deemed conclusive evidence of Disability for purposes of this Agreement.
|
(k)
|
“
Effective Date
” means the date this Agreement is approved by the Board, or such other date as the Board shall designate in its resolution approving this Agreement, and as specified in the opening sentence of this Agreement.
|
(l)
|
“
Effective Date of Termination
” means the date on which a Qualifying Termination occurs, as provided in Section 2.2 herein, which triggers the payment of Severance Benefits hereunder.
|
(m)
|
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended.
|
(n)
|
“
Federal Funds Rate”
shall mean the “Federal Funds Rate” as issued in the Money Rates column of The Wall Street Journal.
|
(o)
|
“
Good Reason
” means, without the Executive’s express written consent, the occurrence after a Change in Control of the Company of any one (1) or more of the following to the extent that there is, or would be if not corrected, a material negative change in the Executive’s employment relationship with the Company:
|
(i)
|
The assignment of the Executive to duties materially inconsistent with the Executive’s authorities, duties, responsibilities, and status as an executive and/or officer of the Company, or a material reduction or alteration in the nature or status of the Executive’s authorities, duties, or responsibilities from those in effect as of ninety (90) calendar days prior to the Change in Control, other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Executive;
|
(ii)
|
The Company’s requiring the Executive to be based at a location in excess of fifty (50) miles from the location of the Executive’s principal job location or office immediately prior to the Change in Control; except for required travel on the Company’s business to
|
(iii)
|
A reduction by the Company of the Executive’s Base Salary in effect on the Effective Date hereof, or as the same shall be increased from time to time;
|
(iv)
|
The failure of the Company to continue in effect any of the Company’s short- and long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices, or other compensation arrangements in which the Executive participates unless such failure to continue the plan, policy, practice, or arrangement pertains to all plan participants generally; or the failure by the Company to continue the Executive’s participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, as existed immediately prior to the Change in Control of the Company;
|
(v)
|
The failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform the Company’s obligations under this Agreement, as contemplated in Article 9 herein; and
|
(vi)
|
A material breach of this Agreement by the Company which is not remedied by the Company within ten (10) business days of receipt of written notice of such breach delivered by the Executive to the Company.
|
(p)
|
“
Notice of Termination
” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.
|
(q)
|
“Notice of Termination for Good Reason”
shall mean a notice that (i) indicates the specific termination provision or provisions relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination for Good Reason and (iii) indicates a date of termination of employment. The failure by Executive to set forth in the Notice of Termination for Good Reason any facts or circumstances which contribute to the showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder. The Notice of Termination for Good Reason shall provide for a date of termination of employment not less than thirty (30) nor more than sixty (60) days after the date such Notice of Termination for Good Reason is given, provided that in the case of the events set forth in Article I, Section (o) 6(b)(i) or (ii), the date may be not less than twenty (20) days after the giving of such notice.
|
(r)
|
“
Person
” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).
|
(s)
|
“
Qualifying Termination
” means the Executive’s “separation from service” (as such term is used in Code Section 409A) upon any of the events described in Section 2.2 herein, the occurrence of which triggers the payment of Severance Benefits hereunder.
|
(t)
|
“
Severance Benefits
” mean the payment of severance compensation as provided in Section 2.3 herein.
|
2.1
|
Right to Severance Benefits
. The Executive shall be entitled to receive from the Company Severance Benefits as described in Section 2.3 herein, if there has been a Change in Control of the Company and if, within twenty-four (24) calendar months thereafter, the Executive’s employment with the Company shall end for any reason specified in Section 2.2 herein as being a Qualifying Termination.
|
2.2
|
Qualifying Termination
. The occurrence of any one of the following events within twenty-four (24) calendar months after a Change in Control of the Company shall trigger the payment of Severance Benefits to the Executive under this Agreement:
|
(a)
|
The Company’s involuntary termination of the Executive’s employment without Cause; and
|
(b)
|
The Executive’s voluntary employment termination for Good Reason.
|
2.3
|
Description of Severance Benefits
. In the event the Executive becomes entitled to receive Severance Benefits, as provided in Sections 2.1 and 2.2 herein, the Company shall pay to the Executive and provide him with the following Severance Benefits:
|
(a)
|
A lump-sum amount equal to the Executive’s unpaid Base Salary, accrued vacation pay, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the Effective Date of Termination.
|
(b)
|
A lump-sum amount equal to the Executive’s annual bonus award earned as of the Effective Date of Termination, based on actual year-to-date performance, as determined at the Committee’s discretion (excluding any special bonus payments). This payment will be in lieu of any other payment to be made to the Executive under the annual bonus plan in which the Executive is then participating for the plan year.
|
(c)
|
An aggregate amount equal to one and one-half (1.5) multiplied by the sum of the following: (i) the higher of: (A) the Executive’s annual rate of Base Salary in effect upon
|
(d)
|
A lump-sum amount equal to one-half (.5) multiplied by the sum of the following: (i) the higher of: (A) the Executive’s annual rate of Base Salary in effect upon the Effective Date of Termination, or (B) the Executive’s annual rate of Base Salary in effect on the date of the Change in Control; and (ii) the average of the actual annual bonus earned (whether or not deferred) by the Executive under the annual bonus plan (excluding any special bonus payments) in which the Executive participated in the three (3) years preceding the year in which the Executive’s Effective Date of Termination occurs. If the Executive has less than three (3) years of annual bonus participation preceding the year in which the Executive’s Effective Date of Termination occurs, then the Executive’s annual target bonus established under the annual bonus plan in which the Executive is then participating for the bonus plan year in which the Executive’s Effective Date of Termination occurs shall be used for each year that the Executive did not participate in the annual bonus plan, up to a maximum of three (3) years, to calculate the three (3) year average bonus payment. Such amount shall be in consideration for the Executive entering into a noncompete agreement as described in Article 4 herein.
|
(e)
|
[Intentionally Omitted]
|
(f)
|
Upon the occurrence of a change in control, an immediate full vesting and lapse of all restrictions on any and all outstanding equity-based long-term incentives, including but not limited to stock options and restricted stock awards held by the Executive. This provision shall override any conflicting language contained in the Executive’s respective Award Agreements.
|
(g)
|
To the extent that Executive’s employer contribution account, other than for matching contributions, in the Mueller Water Products, Inc. Retirement Savings Plan (“RSP”) is forfeited upon termination of employment, a lump sum amount equal to the amounts forfeited under the RSP will be paid, subject to applicable taxes, during the sixty (60) day period following the Effective Date of Termination.
|
(h)
|
Continuation for twenty-four (24) months of the Executive’s medical insurance and life insurance coverage. These benefits shall be provided by the Company to the Executive beginning immediately upon the Effective Date of Termination. Such benefits shall be provided to the Executive at the same coverage level and cost to the Executive as in effect immediately prior to the Executive’s Effective Date of Termination.
|
(i)
|
From Executive’s date of termination of employment until the earlier of (i) 24 months following such date of termination or (ii) the date immediately prior to the date of Executive’s employment with a subsequent employer, the Company will provide Executive with outplacement services from a nationally recognized outplacement firm selected by Executive, subject to the limits described in this subsection. The aggregate amount paid by the Company for outplacement services will not exceed an amount equal to 35% of Executive’s annual rate of base salary as of the date of termination of employment (the “Total Outplacement Value”). Further, the cost for such services paid by the Company during any calendar year will not exceed the number of months in that calendar year during which the Executive is entitled to this benefit multiplied by 1/24 of the Total Outplacement Value.
|
2.4
|
Termination for Total and Permanent Disability
. Following a Change in Control, if the Executive’s employment is terminated with the Company due to Disability, the Executive’s benefits shall be determined in accordance with the Company’s retirement, insurance, and other applicable plans and programs then in effect.
|
2.5
|
Termination for Retirement or Death
. Following a Change in Control, if the Executive’s employment with the Company is terminated by reason of his voluntary normal retirement (as defined under the then established rules of the Company’s tax-qualified retirement plan), or death, the Executive’s benefits shall be determined in accordance with the Company’s retirement, survivor’s benefits, insurance, and other applicable programs then in effect.
|
2.6
|
Termination for Cause or by the Executive Other Than for Good Reason
. Following a Change in Control, if the Executive’s employment is terminated either: (i) by the Company for Cause; or (ii) voluntarily by the Executive for reasons other than as specified in Section 2.2(b) herein, the Company shall pay the Executive his full Base Salary at the rate then in effect, accrued vacation, and other items earned by and owed to the Executive through the Effective Date of Termination, plus all other amounts to which the Executive is entitled under any compensation plans of the Company at the time such payments are due, and the Company shall have no further obligations to the Executive under this Agreement.
|
2.7
|
Notice of Termination. Any termination of the Executive’s employment by the Company for Cause shall be communicated by Notice of Termination to the other party.
Termination by the
|
3.1
|
Form and Timing of Severance Benefits
. The Severance Benefits described in Sections 2.3(a), 2.3(b), and 2.3(d) herein shall be paid in cash to the Executive in a single lump sum as soon as practicable following the Effective Date of Termination, but in no event beyond ten (10) calendar days from such date. Notwithstanding anything to the contrary herein, if Executive is a “specified employee” under Section 409A of the Code, then any payment(s) to the Executive described under Section 2.3 herein upon his or her termination of employment that (A) constitute “deferred compensation to an Executive under Section 409A; (B) are not exempt from Section 409A on account of separation of service (within the meaning of Section 409A) and (C) are otherwise payable within 6 months after Executive’s termination of employment shall instead be made on the date 6 months and 1 day after such termination of employment, and such payment(s) shall be increased by an amount equal to interest on such payment(s) at a rate of interest equal to the Federal Funds Rate in effect as of the date of termination of employment from the date on which such payment(s) would have been made in the absence of this provision and the payment date described in this sentence.
|
3.2
|
Withholding of Taxes
. The Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as legally shall be required.
|
(a)
|
Noncompetition
. During the term of employment and for a period of twelve (12) months after the Effective Date of Termination, the Executive shall not: (i) directly or indirectly act in concert or conspire with any person employed by the Company in order to engage in or prepare to engage in or to have a financial or other interest in any business or any activity which he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on; or (ii) serve as an employee, agent, partner, shareholder, director or consultant for, or in any other capacity participate, engage, or have a financial or other interest in any business or any activity which he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on (provided, however, that notwithstanding anything to the contrary contained in this Agreement, the Executive may own up to two percent (2%) of the outstanding shares of the capital stock of a company whose securities are registered under Section 12 of the Securities Exchange Act of 1934).
|
(b)
|
Confidentiality
. The Company has advised the Executive and the Executive acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information (as defined below), and that Protected Information has been and will be developed at substantial cost and effort to the Company. All Protected Information shall remain confidential permanently and no Executive shall at any time, directly or indirectly, divulge, furnish, or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Executive’s employment with the Company), nor use in any manner, either during the term of employment or after termination, at any time, for any reason, any Protected Information, or cause any such information of the Company to enter the public domain.
|
(c)
|
Nonsolicitation
. During the term of employment and for a period of twelve (12) months after the Effective Date of Termination, the Executive shall not employ or retain or solicit for employment or arrange to have any other person, firm, or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee or consultant of the Company.
|
(d)
|
Cooperation
. Executive agrees to cooperate with the Company and its attorneys in connection with any and all lawsuits, claims, investigations, or similar proceedings that have been or could be asserted at any time arising out of or related in any way to Executive’s employment by the Company or any of its subsidiaries.
|
(e)
|
Nondisparagement
. At all times, the Executive agrees not to disparage the Company or otherwise make comments harmful to the Company’s reputation.
|
5.1
|
Excise Tax Equalization Payment
. If any portion of the Severance Benefits or any other payment under this Agreement, or under any other agreement with, or plan of the Company (in the aggregate, “Total Payments”) would constitute an “excess parachute payment,” such that a golden parachute excise tax is due under Internal Revenue code Sections 280G and 4999, the Company shall provide to the Executive, in cash, an additional payment in an amount sufficient to cover the full cost of any excise tax and all of the Executive’s additional federal, state, and local income, excise, and employment taxes that arise on this additional payment (cumulatively, the “Full Gross-Up Payment”), such that the Executive is in the same after-tax position as if he had not been subject to the excise tax. For this purpose, the Executive shall be deemed to be in the highest marginal rate of federal, state, and local income taxes in the state and locality of the Executive’s residence on the Effective Date of Termination. This payment shall be made as soon as possible following the date of the Executive’s Qualifying Termination, but in no event later than ten (10) calendar days from such date. Notwithstanding the foregoing, this payment must be paid to Executive by the end of the calendar year next following the calendar year in which the Executive remits the related taxes.
|
5.2
|
Subsequent Recalculation
. In the event the Internal Revenue Service subsequently adjusts the excise tax computation herein described, the Company shall reimburse the Executive for the full amount necessary to make the Executive whole on an after-tax basis (less any amounts received by the Executive that the Executive would not have received had the computations initially been computed as subsequently adjusted), including the value of any underpaid excise tax, and any
|
6.1
|
Payment Obligations Absolute
. The Company’s obligation to make the payments and the arrangements provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the Company may have against the Executive or anyone else. 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 shall not seek to recover all or any part of such payment from the Executive or from whomsoever may be entitled thereto, for any reasons whatsoever.
|
6.2
|
Contractual Rights to Benefits
. This Agreement establishes and vests in the Executive a contractual right to the benefits to which he is entitled hereunder. However, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder.
|
8.1
|
Payment of Legal Fees.
If Executive incurs reasonable legal fees or other expenses (including expert witness and accounting fees) on or after the date of the Company’s announcement of a Change in Control and within a reasonable time after the Change in Control occurs, in an effort to interpret this Agreement or to secure, preserve, establish entitlement to, or obtain benefits under this Agreement (including the fees and other expenses of Executive’s legal counsel), the Company shall, regardless of the outcome of such effort, reimburse Executive on a current basis for such fees and expenses. Reimbursement of legal fees and expenses shall be made monthly within ten (10) days after Executive’s written submission of a request for reimbursement together with evidence that such fees and expenses were incurred. If Executive does not prevail (after exhaustion of all available judicial remedies) in respect of a claim by Executive or by the
|
8.2.
|
Dispute Resolution; Mutual Agreement to Arbitrate.
|
(a)
|
Executive and Employer agree that, except as otherwise provided in this Agreement, final and binding arbitration shall be the exclusive remedy for any controversy, dispute, or claim arising out of or relating to this Agreement or Executive’s employment with Employer, including Executive’s hire, treatment in the workplace, or termination of employment. For example, if Executive’s employment with Employer is terminated and he contends that the termination violates any statute, contract or public policy, then Executive will submit the matter to arbitration for resolution, in lieu of any court or jury trial to which Executive would otherwise might be entitled.
|
(b)
|
This Section covers all common law and statutory claims, including, but not limited to, any claim for breach of contract (including this Agreement) and for violation of laws forbidding discrimination on the basis of race, sex, color, religion, age, national origin, disability, or any other basis covered by applicable federal, state, or local law, and includes claims against Employer and/or any parents, affiliates, owners, officers, directors, employees, agents, general partners or limited partners of Employer, to the extent such claims involve, in any way, this Agreement or Executive’s employment with Employer. This Section covers all judicial claims that could be brought by either party to this Agreement, but does not cover administrative claims for workers’ compensation or unemployment compensation benefits or the filing of charges with government agencies that prohibit waiver of the right to file a charge.
|
(c)
|
The arbitration shall be governed by JAMS Employment Arbitration Rules and Procedure except as modified herein. If the party chooses to have the arbitration proceeding administered by a third party, then the arbitration shall be administered by JAMS. If the party chooses to have the arbitration administered by JAMS, then the arbitration will “commence” in accordance with the JAMS Employment Arbitration Rules and Procedure. If the party chooses to have this matter arbitrated privately, then the arbitration will be deemed to “commence” on the date that the party provides a demand for arbitration and notice of claims and remedies sought outlining the facts relied upon, legal theories, and statement of claimed relief (“Demand”). The responding party shall serve a response to the claims and any counterclaims within fifteen (15) business days from the date of receipt of the Demand.
|
(d)
|
Any arbitration shall be held in Washington, D.C. (unless the parties mutually agree in writing to another location within the United States) within 120 days of the commencement of the arbitration.
|
(e)
|
The arbitration shall take place before a single arbitrator to be appointed by mutual agreement of counsel for each party or, if counsel cannot agree, then pursuant to the procedures set forth by JAMS. The parties may not have any
ex parte
communications with the arbitrator.
|
(f)
|
The arbitrator may award any relief otherwise available to the parties by law or equity.
|
(g)
|
The parties are limited to two (2) depositions per side, and limited written discovery as may be required by the arbitrator, not to exceed that allowed under the Federal Rules of Civil Procedure.
|
(h)
|
Any hearing in this matter shall be completed within 120 days of the date of commencement of the arbitration, as the term “commencement” is defined by JAMS. The arbitrator shall issue its award within thirty (30) days of the last hearing day.
|
(i)
|
Unless Executive objects, Employer will pay the arbitrator’s fees. Each party shall pay its own costs and attorneys’ fees, if any, unless the arbitrator rules otherwise. A court may enter judgment upon the arbitrator’s award, either by confirming the award, or vacating, modifying or correcting the award, on any ground referred to in the Federal Arbitration Act, or where the findings of fact are not supported by substantial evidence, or where the conclusions of law are erroneous.
|
(j)
|
The provisions of this Section are severable, meaning that if any provision in this Section 8.2 (“Dispute Resolution: Mutual Agreement to Arbitrate”) is determined to be unenforceable and cannot be reformed under applicable law, the remaining provisions shall remain in full effect, provided however, that any amendment of an unenforceable provision shall only be to the extent necessary and shall preserve the intent of the parties hereto. It is agreed and understood that the scope of this Section, including questions of arbitrability of any dispute, shall be determined by the arbitrator.
|
(k)
|
Executive acknowledges that prior to accepting the provisions of this Section 8.2 and signing this Agreement, Executive has been given an opportunity to consult with an attorney and to review the JAMS Employment Arbitration Rules and Procedure that would govern the dispute resolution process under this Section. In signing this Agreement, the parties acknowledge that the right to a court trial and trial by jury is of value, and knowingly and voluntarily waive such right for any dispute subject to the terms of this Section.
|
9.1
|
Successors to the Company
. The Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) of all or a significant portion of the assets of the Company by agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Regardless of whether such agreement is executed, this Agreement shall be binding upon any successor in accordance with the operation of law and such successor shall be deemed the “Company” for purposes of this Agreement.
|
9.2
|
Assignment by the Executive
. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amount would still be payable to him hereunder had he continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.
|
10.1
|
Release
. As a condition of receiving any severance payments under this Agreement, Executive must sign and not revoke, within the deadlines provided by the Company and in compliance with applicable federal and/or state laws, a written release of all employment claims against the Company and its related entities, including, without limitation, employment discrimination of any kind, wage payment, breach of contract, claims for workers compensation, unemployment, disability and severance claims that Executive has or may have at the termination of employment. In addition, Executive will agree not to sue the Company or any other entities or persons released.
|
10.2
|
Employment Status
. This Agreement is not, and nothing herein shall be deemed to create, an employment contract between the Executive and the Company or any of its subsidiaries. The Executive acknowledges that the rights of the Company remain wholly intact to change or reduce at any time and from time to time his compensation, title, responsibilities, location, and all other aspects of the employment relationship, or to discharge him prior to a Change in Control (subject to such discharge possibly being considered a Qualifying Termination pursuant to Section 2.2).
|
10.3
|
Entire Agreement
. This Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, representations and statements, whether oral, written, implied or expressed, relating to such subject matter. In addition, the payments provided for under this Agreement in the event of the Executive’s termination of employment shall be in lieu of any severance benefits payable under any severance plan, program, or policy of the Company to which he might otherwise be entitled.
|
10.4
|
Notices
. All notices, requests, demands, and other communications hereunder shall be sufficient if in writing and shall be deemed to have been duly given if delivered by hand or if sent by registered or certified mail to the Executive at the last address he has filed in writing with the Company or, in the case of the Company, at its principal offices.
|
10.5
|
Execution in Counterparts
. This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed to be original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.
|
10.6
|
Conflicting Agreements
. The Executive hereby represents and warrants to the Company that his entering into this Agreement, and the obligations and duties undertaken by him hereunder, will not conflict with, constitute a breach of, or otherwise violate the terms of, any other employment or other agreement to which he is a party, except to the extent any such conflict, breach, or violation under any such agreement has been disclosed to the Board in writing in advance of the signing of this Agreement.
|
10.7
|
Severability
. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. Further, the captions of this Agreement are not part of the provisions hereof and shall have no force and effect.
|
10.8
|
Modification
. No provision of this Agreement may be modified, waived, or discharged unless such modification, waiver, or discharge is agreed to in writing and signed by the Executive and by a member of the Board, as applicable, or by the respective parties’ legal representatives or successors.
|
10.9
|
Applicable Law
. To the extent not preempted by the laws of the United States, the laws of Delaware shall be the controlling law in all matters relating to this Agreement without giving effect to principles of conflicts of laws.
|
|
|
Year ended September 30,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Income (loss) before income taxes
|
|
$
|
97.0
|
|
|
$
|
73.5
|
|
|
$
|
44.2
|
|
|
$
|
2.7
|
|
|
$
|
(12.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total interest including amortization of debt discount and issue costs
|
|
$
|
30.1
|
|
|
$
|
50.0
|
|
|
$
|
52.0
|
|
|
$
|
60.2
|
|
|
$
|
65.9
|
|
Estimated interest within rent expense
|
|
3.4
|
|
|
3.1
|
|
|
2.8
|
|
|
2.8
|
|
|
2.8
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges charges
|
|
$
|
33.5
|
|
|
$
|
53.1
|
|
|
$
|
54.8
|
|
|
$
|
63.0
|
|
|
$
|
68.7
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings
(1)
|
|
$
|
130.5
|
|
|
$
|
126.6
|
|
|
$
|
99.0
|
|
|
$
|
65.7
|
|
|
$
|
55.8
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
(2)
|
|
3.9
|
|
|
2.4
|
|
1.8
|
|
|
1.0
|
|
|
—
|
|
(1)
|
For these ratios, “earnings” represents income (loss) before income taxes plus fixed charges.
|
(2)
|
Due to losses during
2012
, the ratio of earnings to fixed charges was less than 1.0. The deficiency of earnings to total fixed charges was
$12.9 million
.
|
Subsidiaries of Mueller Water Products, Inc.
|
||||
Entity
|
|
State of incorporation or
organization
|
|
Doing business as
|
Anvil International Holdings, LLC
|
|
Delaware
|
|
Anvil International Holdings (N.H.)
|
Anvil International, LC
|
|
Delaware
|
|
J.B. Smith Mfg Co. Delaware
|
Echologics B.V.
|
|
Netherlands
|
|
NA
|
Echologics, LLC
|
|
Delaware
|
|
Delaware Echologics, LLC
|
|
|
|
|
Echologics Delaware, LLC
|
|
|
|
|
Echologics of Delaware, LLC
|
Echologics Pte. Ltd.
|
|
Singapore
|
|
NA
|
Henry Pratt Company, LLC
|
|
Delaware
|
|
Hydro Gate
|
|
|
|
|
Lined Valve Company
|
|
|
|
|
Milliken Valve
|
Henry Pratt International, LLC
|
|
Delaware
|
|
NA
|
James Jones Company, LLC
|
|
Delaware
|
|
James Jones Company of Delaware, LLC
|
Jingmen Pratt Valve Co. Ltd.
|
|
China
|
|
NA
|
Mueller Canada Holdings Corp.
|
|
Canada
|
|
NA
|
Mueller Canada Ltd.
|
|
Canada
|
|
Anvil International, Canada
|
|
|
|
|
Echologics
|
|
|
|
|
Mueller Canada
|
|
|
|
|
Mueller Canada Echologics
|
Mueller Co. International Holdings, LLC
|
|
Delaware
|
|
NA
|
Mueller Co. LLC
|
|
Delaware
|
|
Mueller Manufacturing Company, LLC
|
|
|
|
|
Mueller Company, LLC
|
|
|
|
|
Mueller Co. LP
|
Mueller Group Co-Issuer, Inc.
|
|
Delaware
|
|
NA
|
Mueller Group, LLC
|
|
Delaware
|
|
Mueller Flow, LLC
|
|
|
|
|
Mueller Group of Delaware, LLC
|
Mueller International Holdings Limited
|
|
United Kingdom
|
|
NA
|
Mueller International, LLC
|
|
Delaware
|
|
Mueller International (N.H.)
|
Mueller Property Holdings, LLC
|
|
Delaware
|
|
NA
|
Mueller Service California, Inc.
|
|
Delaware
|
|
NA
|
Mueller Service Co., LLC
|
|
Delaware
|
|
Mueller Service Co. of Delaware
|
|
|
|
|
Mueller Service Co. of Delaware, LLC
|
Mueller Systems, LLC
|
|
Delaware
|
|
NA
|
OSP, LLC
|
|
Delaware
|
|
OSP Properties, LLC
|
|
|
|
|
OPS of Delaware, Limited Liability Company
|
PCA-Echologics Pty Ltd.
|
|
Australia
|
|
NA
|
U.S. Pipe Valve & Hydrant, LLC
|
|
Delaware
|
|
NA
|
1.
|
I have reviewed this annual report on Form 10-K of Mueller Water Products, 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(s) 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(s) 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 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 control 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.
|
/s/ Gregory E. Hyland
|
|
Gregory E. Hyland
|
President
and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Mueller Water Products, 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(s) 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(s) 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 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 control 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.
|
/s/ Evan L. Hart
|
|
Evan L. Hart,
|
Senior Vice President
and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Gregory E. Hyland
|
|
Gregory E. Hyland
|
President
and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Evan L. Hart
|
|
Evan L. Hart,
|
Senior Vice President
and Chief Financial Officer
|