FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FOURTH AMENDMENT (this “Amendment”) is made and entered into as of the 7th day of September, 2017, by and between Mueller Water Products, Inc., a Delaware corporation (the “Company”), and Evan L. Hart (“Executive”).
W I T N E S S E T H:
WHEREAS, the Company and Executive previously entered into an Employment Agreement dated July 16, 2008, as amended effective as of February 6, 2009, December 1, 2009 and March 31, 2012 (collectively, the “Agreement”);
WHEREAS, the Company and Executive desire to amend the Agreement to reflect the termination of Executive’s employment effective December 31, 2017, to provide for a retention bonus if Executive remains employed by the Company through December 31, 2017, and to make other clarifying amendments; and
WHEREAS, capitalized terms used and not defined in this Amendment shall have the meaning set forth in the Agreement.
NOW, THEREFORE, the Company and Executive, in consideration of the agreements, covenants and conditions herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1.
Article I, Section 2(a)
of the Agreement is amended by deleting the last sentence therein and replacing it with the following:
“On and effective as of December 31, 2017, Executive’s employment shall terminate (the “Termination”). Executive and the Company agree that, unless Executive’s employment is otherwise terminated prior to December 31, 2017, the Termination shall constitute and be deemed an involuntary termination by the Company without Cause. Executive and the Company agree that the Termination or any other circumstances relating to the Termination shall not entitle Executive to terminate employment for Good Reason.”
2.
Article I, Section 2
of the Agreement is amended by adding the following new subsection (c) to the end thereof:
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“c.
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Executive understands and agrees that Executive’s employment with the Company pursuant to this Agreement shall constitute employment “at-will.” 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 (subject to the requirements of Article I, Section 4, 5 or 6, as applicable).”
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3.
Article I, Section 3
of the Agreement is amended by adding the following new subsection (i) to the end thereof:
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“i.
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Executive is eligible to earn an award payment of up to ninety thousand ($90,000) dollars (the “Retention Award”), if Executive remains employed with the Company through December 31, 2017, subject to the provisions of this Section 3(i). The Retention Award shall be payable to Executive in a single lump-sum payment on the Company’s first regularly scheduled payroll date that is coincident with or next following the date that is thirty (30) days after December 31, 2017. If, prior to December 31, 2017, Executive’s employment is terminated: (i) by the Company as a result of a termination for Cause, or (b) by Executive for any reason other than Good Reason pursuant to Section 6(b)(ii) or 6(b)(iii), the Retention Award shall be automatically forfeited.
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If Executive’s employment is (a) involuntarily terminated prior to December 31, 2017 by the Company without Cause other than a termination due to Executive’s death or Disability, or (b) terminated prior to December 31, 2017 by Executive for Good Reason pursuant to Section 6(b)(ii) or 6(b)(iii), such termination shall result in an immediate vesting of the Retention Award. Subject to the provisions of this Section 3(i), such Retention Award shall be payable to Executive in a single lump sum payment on the Company’s first regularly scheduled payroll date that is coincident with or next following the date that is thirty (30) days after the date specified in the notice of separation from the Company as the date upon which Executive’s employment with the Company is to terminate.
If Executive’s employment is terminated prior to December 31, 2017 by reason of Executive’s death or Disability, Executive or Executive’s estate shall be entitled to the Retention Award on a pro-rated basis, based on the number of days Executive was actively employed by the Company between October 1, 2017 and December 31, 2017 (the “Pro-Rated Retention Award”). The Pro-Rated Retention Award shall be payable to Executive or Executive’s estate in a single lump-sum payment within thirty (30) days following the date of Executive’s termination of employment by reason of death or Disability.”
4.
Articles II, III and IV
of the Agreement are amended by replacing the references therein to “Employer” with “the Company.”
5.
Article II, Section 1
of the Agreement is amended by adding the following new sentence to the beginning of its first paragraph:
“The parties expressly intend and agree that the non-competition, non-solicitation and non-disclosure covenants contained in this Article II and Article III shall be construed under the Georgia Restrictive Covenants Act, O.C.G.A. § 13-8-50 et seq., and case law developed thereunder.”
6.
Article II, Section 1(a)
of the Agreement is amended by deleting the second sentence therein and replacing it with the following:
“For purposes of this restriction, “Competitive Services” means performing services as principal financial officer with responsibility for the overall financial affairs for a company, or participating as a member of the senior leadership team in overall strategic business planning for a company with duties substantially similar to those duties Executive shall perform for the Company under this Agreement or, in the case of managerial or executive duties, managerial or executive duties for a Competing Business.”
7.
Article II, Section 1(b)(iv)
of the Agreement is amended by replacing its reference to “this Non-Competition Agreement” with “this Article II.”
8.
Article II, Section 2
of the Agreement is amended by deleting the phrase
“within the Territory.”
9.
Article II, Section 5
of the Agreement is amended by deleting the section in its entirety and replacing it with the following:
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“5.
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Non-Disparagement
. Following the termination of employment under this Agreement for any reason and continuing for so long as the Company or any affiliate, successor or assigns thereof carries on the name or like business within the United States, neither the Company nor Executive shall, directly or indirectly, for himself, or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:
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Make any public statements or announcements or permit anyone to make any public statements or announcements concerning Executive’s reasons for termination with the Company without Executive’s consent; or
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Make any public statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of the Company or its affiliated entities on the one hand, or the interests of the Executive, on the other hand.”
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10.
Article II, Section 4
of the Agreement is amended by replacing each reference to “you” and “your” with “Executive” and “Executive’s,” respectively.
11.
Article III, Section 1
of the Agreement is amended by deleting subsections (d) and (e) thereof in their entirety and replacing them with the following:
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“d.
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Executive agrees that during employment and thereafter, Executive shall 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.
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e.
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Executive agrees that this non-disclosure obligation shall extend for the full period of time in which such materials or information remain a trade secret or Confidential Information.”
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12.
Article III, Section 1
of the Agreement is amended by adding the following new subsections (g) and (h) to the end thereof:
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“g.
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Nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or prevents Executive from providing truthful testimony in response to a lawfully issued subpoena or court order. Further, this Agreement does not limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company.
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h.
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Executive is hereby notified that under the Defend Trade Secrets Act: (i) no individual shall be held criminally or civilly liable under federal or state trade secret law for disclosure of a trade secret (as defined in the Economic Espionage Act) that is: (A) made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and made solely for the purpose of reporting or investigating a suspected violation of law or (B) made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and (ii) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.”
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13.
Article III, Section 7
of the Agreement is amended by deleting subsection (a) in its entirety and replacing it with the following:
“a. [Intentionally Omitted]”
14.
Except as specifically amended herein, the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment, to be effective as of the date first above written, except as otherwise provided herein.
MUELLER WATER PRODUCTS, INC.
By:
/s/ J. SCOTT HALL
Title:
President and Chief Executive Officer
Date:
September 7, 2017
EXECUTIVE
/s/ EVAN L. HART
Evan L. Hart
Date:
September 7, 2017
FOR IMMEDIATE RELEASE
September 7, 2017
Investor Contact:
Martie Edmunds Zakas
Sr. Vice President – Strategy, Corporate Development & Communications
770-206-4237
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mzakas@muellerwp.com
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Mueller Water Products Announces Strategic Reorganization and Restructuring to Drive Innovation, Accelerate Growth and Reduce Costs
Projected Annual Cost Savings of Approximately $7 million from Restructuring
Changes to Leadership Team Announced
Mueller Water Products, Inc. (NYSE: MWA) today announced its strategic reorganization plan designed to accelerate its product innovation and revenue growth. The plan re-configures the Company’s divisional structure around products, with five business teams that have line and cross-functional responsibility for managing distinct product portfolios. Under the new organizational structure, engineering, operations, sales & marketing and other functions will be centralized to better align with business needs and generate greater efficiencies.
As a result of the restructuring and reorganization, the Company expects cost reductions of approximately $7 million annually, which includes headcount reduction and lower professional fees and other expenses, and takes into account the hiring and alignment of new administrative talent. The Company will begin to implement the restructuring immediately, and the reorganization is expected to be in place by October 1st. The Company will continue to report its financial performance based on two reportable segments – Infrastructure (previously identified as Mueller Co.) and Technologies (previously reported as Mueller Technologies). The components of these two segments have not changed.
“By restructuring the organization around value streams, we intend to increase our customer focus, accelerate product innovation and become more efficient,” said Scott Hall, President and Chief Executive Officer of Mueller Water Products. “We strongly believe that de-layering the organization with a new emphasis on product lifecycle management and profitability will streamline decision-making and promote collaboration throughout the organization. With an even greater focus on our customers, we will be well positioned to improve execution, obtain greater efficiencies and achieve our planned business results.”
Key steps planned by the Company include:
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Reducing the Company’s salaried and management workforce through an expected permanent elimination of approximately 35 full-time positions between now and the end of December. The Company expects to incur about $11 million in restructuring charges
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associated with the reorganization, which will include a charge in the current quarter. The Company will provide additional information regarding the current quarter charge once it becomes available.
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Appointing four new general managers as part of the formation of five value stream teams focused on driving profitability and growth in the Company’s businesses. Dave Woollums will lead the team responsible for Hydrants and Iron Gate Valves; Nick Peyton will lead the team responsible for Specialty Valves; Chad Mize will lead the Brass, Gas and Repair products team; and John DeYarman will lead the team responsible for the Metrology business. Marc Bracken will continue as General Manager of Echologics. The value stream general managers will report into Keith Belknap, who will lead Business Development.
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Centralizing key functions in Atlanta to better align with business needs and generate greater efficiencies. Traditional corporate functions such as HR, Legal, Compliance, Finance and Accounting will be located in Atlanta as well as leadership for Engineering, IT, Operations and EHS. As part of the new structure, Greg Rogowski will lead Sales & Marketing for all of Mueller Water Products.
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Additionally, Evan Hart, Senior Vice President and Chief Financial Officer, will retire as of December 31, 2017. Commenting on Mr. Hart’s retirement, Mr. Hall said, "No one has been more involved in shaping the strong financial position of Mueller Water Products than Evan Hart. We are extremely grateful to Evan for his significant contributions over the last decade." Marietta Edmunds Zakas, who currently serves as Senior Vice President, Strategy, Corporate Development, HR and Communications, will take over as the Company's CFO immediately following Mr. Hart’s retirement.
Scott Hall added, “I am excited about the new organizational changes and importantly the team that will be in place. They all possess a broad knowledge of our business, industry and customers and are committed to delivering superior customer service. Their leadership, capabilities and enthusiasm for our business will all help to drive our future success.”
About Mueller Water Products
Mueller Water Products, Inc. is a pure play water products company and a leading manufacturer and marketer of products and services used in the transmission, distribution and measurement of water in North America. Our broad product and service portfolio includes engineered valves, fire hydrants, metering products and systems, leak detection and pipe condition assessment. We help municipalities increase operational efficiencies, improve customer service and prioritize capital spending, demonstrating why Mueller Water Products is Where Intelligence Meets Infrastructure
®
. For more information about Mueller Water Products, visit
www.muellerwaterproducts.com
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Forward-Looking Statements
This press release contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that address activities that may occur in the future are forward-looking statements. The words “projected,” “designed,” “will,” “expects,” “intend,” and other similar expressions
identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to, statements we make regarding the expected benefits of the restructuring, the timing and elements of the restructuring, the expected annual cost reduction, the anticipated reduction in the number of full-time employees, the hiring and alignment of new administrative talent, our ability to achieve greater efficiencies as a result of the restructuring and our expected restructuring charge in the current quarter. Forward-looking statements are based on certain assumptions and assessments made by us in light of our experience, historical trends, current conditions and expected future developments. Actual results and the timing of events may differ materially from those contemplated by the forward-looking statements due to a number of factors, including the failure to realize the cost savings and efficiencies from the restructuring within the time period currently expected (or at all), the failure to streamline decision-making and promote collaboration throughout our organization as anticipated, negative impacts on our organization and/or relationships with customers resulting from the restructuring (including the reduction in the number of full-time employees), our inability to hire and retain new talent as necessary, unexpected restructuring charges, diversion of management’s attention from our ongoing business operations and opportunities and other factors that are described in the section entitled “RISK FACTORS” in Item 1A of our most recently filed Annual Report on Form 10-K. Undue reliance should not be placed on any forward-looking statements. We do not have any intention or obligation to update forward-looking statements, except as required by law.
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