WATTS WATER TECHNOLOGIES INC
EX-10.1
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit 10.1</font></b></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">February&nbsp;14, 2008</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Paul A. Lacourciere</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19
Atlantic Avenue, Suite&nbsp;12</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hampton,
NH 03842</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dear Paul:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
connection with your resignation from employment with Watts Water Technologies,&nbsp;Inc.
(the&nbsp;&#147;Company&#148;) as of Friday, February&nbsp;29, 2008, you are eligible to
receive the severance benefits described in the &#147;Description of Severance
Benefits&#148; attached to this letter agreement as Attachment A if you sign and
return this letter agreement to Gregory
Michaud<b>  </b>no earlier than February&nbsp;29,
2008 but<b>  </b>by March&nbsp;7,
2008 and it becomes binding between the Company and you.&#160; By signing and returning this letter
agreement and not revoking your acceptance, you will be agreeing to the terms
and conditions set forth in the numbered paragraphs below, including the release
of claims set forth in paragraph 3.&#160;
Therefore, you are advised to consult with an attorney before signing
this letter agreement and you may take up to twenty-one (21) days to do so.&#160; If you sign this letter agreement, you may
change your mind and revoke your agreement during the seven (7)&nbsp;day period
after you have signed it.&#160; If you do not
so revoke, this letter agreement will become a binding agreement between the
Company and you upon the expiration of the seven (7)&nbsp;day revocation
period.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If you
choose not to sign and return this letter agreement no earlier than February&nbsp;29,
2008 but by March&nbsp;7, 2008 or if you revoke your acceptance of this letter
agreement during the revocation period, you shall not receive any severance
benefits from the Company.&#160; You will,
however, receive payment on your resignation date for any wages and unused
vacation time accrued through the Resignation Date (as defined herein).&#160; Also, regardless of signing this letter
agreement, you may elect to continue receiving group medical insurance pursuant
to the federal &#147;COBRA&#148; law, 29 U.S.C. &#167; 1161 <u>et</u>  <u>seq.</u>&#160; If you choose not to sign, all premium costs
for COBRA shall be paid by you on a monthly basis for as long as, and to the
extent that, you remain eligible for COBRA continuation.&#160; You should consult the COBRA materials to be
provided by the Company for details regarding these benefits.&#160; All other benefits, including life insurance
and long-term disability insurance, will cease upon your Resignation Date.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You
currently have vested stock options for purchase of 24,000 shares under the
Company&#146;s 1996 Stock Option Plan and 20,000 shares under the Company&#146;s 2004
Stock Incentive Plan. Pursuant to the Company&#146;s 1996 Stock Option Plan and your
stock option agreements, you will have up to your Resignation Date of February&nbsp;29,
2008 to exercise the vested stock options you have that were issued under the
1996 Stock Option Plan.&#160; All vested and
unvested stock options under the 1996 Stock Option Plan will be cancelled on
the Resignation Date.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant
to the Company&#146;s 2004 Stock Incentive Plan, you will have six (6)&nbsp;months
from your Resignation Date to exercise the options that were issued under the
2004 Stock Incentive Plan and that are vested as of your Resignation Date. All
unvested stock options will be cancelled and all unvested shares of restricted
stock will be forfeited to the Company on the Resignation Date.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant
to the terms of the Management Stock Purchase Plan, your non-vested restricted
stock units (RSUs) will be cancelled on the Resignation Date and you will
receive a cash payment equal to the number of such non-vested RSUs multiplied
by the lesser of (a)&nbsp;67% of the fair market value of the Company&#146;s Class&nbsp;A
Common Stock on the date the RSUs were purchased plus simple interest per annum
on such amount at the one-year U.S. Treasury Bill rate (as published in the <u>Wall
Street Journal</u>) in effect on the purchase date and each anniversary
thereof, or (b)&nbsp;the fair market value of the Class&nbsp;A Common Stock on
the Resignation Date. Your vested RSUs will be converted to shares of the
Company&#146;s Class&nbsp;A Common Stock and issued to you. As a result of the
American Jobs Creation Act of 2004, because you are an officer of the Company,
the distribution of this cash payment for any unvested RSUs and the issuance of
the shares underlying your vested RSUs cannot be made until at least six months
after the Resignation Date.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
following numbered paragraphs set forth the terms and conditions that will
apply if you timely sign and return this letter agreement and do not revoke it
within the seven (7)&nbsp;day period:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Resignation Date</u></b> &#150; Your effective date of resignation
from the Company is February&nbsp;29, 2008 (the &#147;Resignation Date&#148;).</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Description of Severance Benefits</u></b> &#150; The severance benefits paid to you
if you timely sign and return this letter agreement, and do not revoke it, are
described in the &#147;Description of Severance Benefits&#148; attached as Attachment A
(the &#147;Severance Benefits&#148;).</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Release</u></b> &#150; In consideration of the payment of the severance benefits,
which you acknowledge you would not otherwise be entitled to receive, you
hereby fully, forever, irrevocably and unconditionally release, remise and
discharge the Company and its officers, directors, stockholders, corporate
affiliates, subsidiaries, parent companies, agents and employees (each in their
individual and corporate capacities), and all employee benefit plans and plan
fiduciaries (hereinafter, the &#147;Released Parties&#148;) from any and all claims,
charges, complaints, demands, actions, causes of action, suits, rights, debts,
sums of money, costs, accounts, reckonings, covenants, contracts, agreements,
promises, doings, omissions, damages, executions, obligations, liabilities and
expenses (including attorneys&#146; fees and costs), of every kind and nature that
you ever had or now have against any or all of the Released Parties, including,
but not limited to, any and all claims arising out of your employment with
and/or separation from the Company, including, but not limited to, all
employment discrimination claims under Title VII of the Civil Rights Act of
1964, 42 U.S.C. &#167;&nbsp;2000e <u>et</u>  <u>seq</u><u>.</u>, the Age
Discrimination in Employment Act, 29 U.S.C. &#167;&nbsp;621 <u>et</u>  <u>seq</u><u>.</u>, the Americans
With Disabilities Act of 1990, 42 U.S.C. &#167;&nbsp;12101 <u>et</u>  <u>seq.</u>,
the Family and Medical Leave Act, 29 U.S.C. &#167;&nbsp;2601 <u>et seq</u>., the Rehabilitation Act of 1973, 29 U.S.C.
&#167;&nbsp;701 <u>et</u>  <u>seq.</u>,
the Massachusetts Fair Employment Practices Act., M.G.L. c. 151B,
&#167;&nbsp;1 <u>et</u>  <u>seq</u><u>.</u>, the Massachusetts
Civil Rights Act, M.G.L. c. 12, &#167;&#167;&nbsp;11H and 11I, the Massachusetts Equal Rights
Act, M.G.L. c. 93, &#167;&nbsp;102 and M.G.L. c. 214, &#167;&nbsp;1C, the Massachusetts
Labor and Industries Act, M.G.L. c. 149, &#167;1&nbsp;<u>et</u>
<u>seq</u><u>.</u>, the Massachusetts Privacy Act,
M.G.L. c. 214, &#167;&nbsp;1B and the Massachusetts Maternity Leave Act, M.G.L.
c.&nbsp;149, &#167;&nbsp;105(d), all as amended; the New Hampshire Law Against Discrimination, N.H. Rev. Stat. Ann., &#167;
354-A:1 <u>et</u>  <u>seq</u>., N.H. </p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>

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<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Rev. Stat. Ann. &#167; 275:36 <u>et</u>  <u>seq</u>. (equal
pay law) and N.H. Rev. Stat. Ann. &#167; 275-E:1 <u>et</u>  <u>&#160;seq</u>. (whistleblower protection act),<b>  </b>all as amended; all claims arising out of
the Fair Credit Reporting Act, 15 U.S.C. &#167;&nbsp;1681 <u>et</u>  <u>seq</u><u>.</u>, the Employee
Retirement Income Security Act of 1974 (&#147;ERISA&#148;), 29 U.S.C. &#167;&nbsp;1001 <u>et</u>  <u>seq</u><u>.</u>,
and the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C.
&#167;&nbsp;1514A (Sarbanes-Oxley whistleblower provision), all as amended; all
common law claims including, but not limited to, actions in tort, defamation
and breach of contract; all claims to
any non-vested ownership interest in the Company, contractual or otherwise,
including, but not limited to, claims to stock or stock options; and any
claim or damage arising out of your employment with and/or separation from the
Company (including a claim for retaliation) under any common law theory or any
federal, state or local statute or ordinance not expressly referenced above; <u>provided</u>,
<u>however</u>, that nothing in this letter agreement prevents you from filing,
cooperating with or participating in any proceeding before the EEOC or a state
fair employment practices agency (except that you acknowledge that you may not
be able to recover any monetary benefits in connection with any such claim,
charge or proceeding); and <u>further</u>  <u>provided</u> that nothing in this
letter agreement waives any rights you have to receive your accrued benefits
under the Company&#146;s Pension Plan and Supplemental Employees Retirement Plan, in
accordance with the respective terms of such plans.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Non-</u></b><b><u style="font-weight:bold;">Disclosure</u></b> &#150; You agree that you will keep
confidential all non-public information concerning the Company that you
acquired during the course of your employment with the Company.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Non</u></b><b><u style="font-weight:bold;">-Solicitation of Employees</u>
</b>- For a period of eighteen (18) months after the Resignation Date, you will
not, directly or indirectly, either alone or in association with others, recruit, solicit, or induce for employment or
hire or engage as an independent contractor, any person who was employed by the
Company at any time during the period of your employment with the Company,
except for an individual whose employment with the Company has been terminated
for a period of six months or longer.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Return of Company Property</u></b> &#150; You confirm that you have returned
to the Company in good working order all keys, files, records (and copies
thereof), equipment (including, but not limited to, computer hardware, software
and printers, wireless handheld devices, cellular phones and pagers), Company
identification, Company proprietary and confidential information and any other
Company-owned property in your possession or control and have left intact all
electronic Company documents, including, but not limited to, those that you
developed or helped to develop during your employment.&#160; You further confirm that you have cancelled
all accounts for your benefit, if any, in the Company&#146;s name, including, but
not limited to, credit cards, telephone charge cards, cellular phone and/or
pager accounts and computer accounts.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Business Expenses and Final Compensation</u></b> &#150; You acknowledge that you have been
reimbursed by the Company for all business expenses incurred in conjunction
with the performance of your employment and that no other reimbursements are
owed to you.&#160; You further acknowledge
that you have received payment in full for all services rendered </p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>

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<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">in conjunction with your employment by the Company and
that no other compensation is owed to you.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Cooperation and Consulting</u></b> &#150; You agree to cooperate with the
Company in the investigation, defense or prosecution of any claims or actions
now in existence or which may be brought in the future against or on behalf of
the Company.&#160; Your cooperation in
connection with such claims or actions shall include, but not be limited to,
you being available to meet with the Company&#146;s counsel to prepare for discovery
or any mediation, arbitration, trial, administrative hearing or other
proceeding or to act as a witness when reasonably requested by the Company.&#160;
During the period you are receiving severance pay from the Company, you
agree to be available upon reasonable notice to consult with the Company; <u>provided</u>,
<u>however,</u> that such assistance will not exceed eight (8)&nbsp;hours per
month.&#160; You also agree that you will not
be paid any additional consideration for this assistance.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Non-Disparagement</u></b> &#150; To the extent permitted by law, you
shall not make any false, disparaging or derogatory statements in public or
private to any person, entity or media outlet regarding the Company or any of
its directors, officers, employees, agents or representatives or the Company&#146;s
business affairs and financial condition.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Amendment</u></b> &#150; This letter agreement shall be
binding upon the parties and may not be abandoned, supplemented, changed or
modified in any manner, orally or otherwise, except by an instrument in writing
of concurrent or subsequent date signed by a duly authorized representative of
the parties hereto.&#160; This letter
agreement is binding upon and shall inure to the benefit of the parties and
their respective agents, assigns, heirs, executors, successors and
administrators.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Waiver of Rights</u></b> &#150; No delay or omission by the Company
in exercising any right under this letter agreement shall operate as a waiver
of that or any other right.&#160; A waiver or
consent given by the Company on any one occasion shall be effective only in
that instance and shall not be construed as a bar to or waiver of any right on
any other occasion.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Validity</u></b> &#150; Should any provision of this letter
agreement be declared or be determined by any court of competent jurisdiction
to be illegal or invalid, the validity of the remaining parts, terms or
provisions shall not be affected thereby and said illegal or invalid part, term
or provision shall be deemed not to be a part of this letter agreement.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Confidentiality</u></b> &#150; To the extent permitted by law, you
understand and agree that the terms and contents of this letter agreement, and
the contents of the negotiations and discussions resulting in this letter
agreement, shall be maintained as confidential by you, your agents and your
representatives and none of the above shall be disclosed except to the extent
required by federal or state law or as otherwise agreed to in writing by an
authorized agent of the Company.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
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<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Nature of Agreement</u></b> &#150; You<b>  </b>understand
and agree that this letter agreement is a severance agreement and does not
constitute an admission of liability or wrongdoing on the part of the Company.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Tax Provision</u></b> &#150; In connection with the severance benefits provided to you
pursuant to this letter agreement, the Company shall withhold and remit to the
tax authorities the amounts required under applicable law, and you shall be
responsible for all applicable taxes with respect to such severance benefits
under applicable law.&#160; You acknowledge
that you are not relying upon advice or representation of the Company with
respect to the tax treatment of any of the severance benefits set forth in
Attachment A.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Acknowledgments</u></b> &#150; You acknowledge that you have been
given at least twenty-one (21) days to consider this letter agreement,
including Attachment A, and that the Company advised you in writing to consult
with an attorney of your own choosing prior to signing this letter
agreement.&#160; You understand that you may
revoke this letter agreement for a period of seven (7)&nbsp;days after you sign
it, and that this letter agreement shall not be effective or enforceable until
the expiration of this seven (7)&nbsp;day revocation period.&#160; You
understand and agree that by entering into this letter agreement you are
waiving any and all rights or claims you might have under the Age
Discrimination in Employment Act, as amended by the Older Workers Benefit
Protection Act, and that you have received consideration beyond that to which
you were previously entitled.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">17.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Voluntary Assent</u></b> &#150; You affirm that no other promises
or agreements of any kind have been made to or with you by any person or entity
whatsoever to cause you to sign this letter agreement, and that you fully
understand the meaning and intent of this letter agreement.&#160; You state and represent that you have had an
opportunity to fully discuss and review the terms of this letter agreement,
including Attachment A, with an attorney.&#160;
You further state and represent that you have carefully read this letter
agreement, including Attachment A, understand the contents herein, freely and
voluntarily assent to all of the terms and conditions hereof, and sign your
name of your own free act.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Applicable Law and Consent to Jurisdiction</u></b> &#150; This letter agreement shall be
interpreted and construed by the laws of the Commonwealth of Massachusetts,
without regard to conflict of laws provisions.&#160;
You hereby irrevocably submit to and acknowledge and recognize the
jurisdiction of the courts of the Commonwealth of Massachusetts, or if
appropriate, a federal court located in the Commonwealth of Massachusetts
(which courts, for purposes of this letter agreement, are the only courts of
competent jurisdiction), over any suit, action or other proceeding arising out
of, under or in connection with this letter agreement or the subject matter
hereof.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><u style="font-weight:bold;">Entire Agreement</u></b> &#150; This letter agreement, including
Attachment A, contains and constitutes the entire understanding and agreement
between the parties hereto with respect to your severance benefits and the
settlement of claims against the Company and cancels all previous oral and
written negotiations, agreements and commitments in connection therewith.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
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<div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If you have any questions
about the matters covered in this letter agreement, please call.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="25%" valign="top" style="padding:0in .7pt 0in .7pt;width:25.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="36%" valign="top" style="padding:0in .7pt 0in .7pt;width:36.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="38%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:38.28%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Very truly yours,</font></p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="top" style="padding:0in .7pt 0in .7pt;width:25.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="36%" valign="top" style="padding:0in .7pt 0in .7pt;width:36.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="38%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:38.28%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="top" style="padding:0in .7pt 0in .7pt;width:25.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="36%" valign="top" style="padding:0in .7pt 0in .7pt;width:36.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="38%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:38.28%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">WATTS WATER
  TECHNOLOGIES, INC.</font></p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="top" style="padding:0in .7pt 0in .7pt;width:25.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="36%" valign="top" style="padding:0in .7pt 0in .7pt;width:36.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="38%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:38.28%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="top" style="padding:0in .7pt 0in .7pt;width:25.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="36%" valign="top" style="padding:0in .7pt 0in .7pt;width:36.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="38%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:38.28%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="top" style="padding:0in .7pt 0in .7pt;width:25.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="36%" valign="top" style="padding:0in .7pt 0in .7pt;width:36.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By: </font></p>
  </td>
  <td width="33%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:33.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Gregory J. Michaud</font></p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="top" style="padding:0in .7pt 0in .7pt;width:25.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="36%" valign="top" style="padding:0in .7pt 0in .7pt;width:36.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name: Gregory J.
  Michaud</font></p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="top" style="padding:0in .7pt 0in .7pt;width:25.16%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="36%" valign="top" style="padding:0in .7pt 0in .7pt;width:36.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title: Executive VP of
  Human Resources</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt 3.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 3.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I
hereby agree to the terms and conditions set forth above and in Attachment
A.&#160; I have been given at least twenty-one
(21) days to consider this letter agreement (including Attachment A) and I have
chosen to execute this on the date below.&#160;
I intend that this letter agreement will become a binding agreement
between the Company and me if I do not revoke my acceptance in seven (7)&nbsp;days.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="43%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:43.98%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Paul A. Lacourciere</font></p>
  </td>
  <td width="22%" valign="top" style="padding:0in .7pt 0in .7pt;width:22.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="33%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:33.96%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2-29-08</font></p>
  </td>
 </tr>
 <tr>
  <td width="66%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:66.04%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Paul A. Lacourciere</font></p>
  </td>
  <td width="33%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:33.96%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date</font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">To be signed and
  returned no earlier than February&nbsp;29, 2008 but by March&nbsp;7, 2008.</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ATTACHMENT
A</font></u></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">DESCRIPTION
OF SEVERANCE BENEFITS</font></u></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
Company will pay you severance
pay in the form of a lump sum totaling $395,825, less all applicable state and
federal taxes. This total is calculated using eighteen (18) months of your
annual base salary of $223,000 plus $61,325, a discretionary bonus for 2008.
This severance pay will be paid no earlier than the eighth (8th) day after
execution of this letter of agreement. You will receive a separate check for
the value of your deferred non-vested RSUs for the years you participated in
the Management Stock Purchase Plan, less all applicable state and federal
taxes, no earlier than six (6)&nbsp;months after the Resignation Date.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Effective
as of the Resignation Date, if you elect to continue receiving group health
coverage pursuant to the federal &#147;COBRA&#148; law, 29 U.S.C. &#167; 1161 <u>et&nbsp;seq</u><u>.,</u> during the Severance Pay
Period (March&nbsp;1, 2008-August&nbsp;30, 2009), the Company shall&#160; pay the full COBRA costs associated with the
medical and dental coverage you have elected.&#160;
The remaining balance of any COBRA premium costs after the Severance Pay
Period, shall be paid by you on a monthly basis for as long as, and to the
extent that, you remain eligible for COBRA continuation. You should consult the
COBRA materials to be provided by the Company for details regarding these
benefits.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
Company will provide you with Career Transition Services for a period of up to
six (6)&nbsp;months through Lee Hecht Harrison (LHH) at a level selected by the
Company should you choose to participate in these outplacement assistance
services.&#160; Such cost will be paid
directly to LHH<b>  </b>in accordance with the terms of the
Company&#146;s agreement with LHH.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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