Stock-based Compensation Plans

9 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Stock-based Compensation Plans

We have granted various forms of stock-based compensation, including stock options, restricted stock units and both cash-settled and stock-settled performance-based restricted stock units ("PRSUs") under our Amended and Restated 2006 Mueller Water Products, Inc. Stock Incentive Plan (the “2006 Stock Plan”).

PRSUs represent a target number of units that may be paid out at the end of a multi-year award cycle consisting of annual performance periods coinciding with our fiscal years. As determined at the date of grant, PRSUs may settle in cash-value equivalent of, or directly in, shares of our common stock. Settlement will range from zero to two times the number of PRSUs granted, depending on our financial performance against predetermined targets.

The cash-settled PRSUs granted in the quarter ended December 31, 2012 settled in the quarter ended December 31, 2014 for $4.0 million.

The stock-settled PRSUs granted in the quarters ended December 31, 2012, 2013 and 2014 will settle in the quarters ending December 31, 2015, 2016, and 2017, respectively. The stock prices used to value the awards were $5.22 for the 2013 performance period, $8.52 for the 2014 performance period and $9.78 for the 2015 performance period.

We have granted Phantom Plan awards under the Mueller Water Products, Inc. Phantom Plan (“Phantom Plan”). At June 30, 2015, the outstanding Phantom Plan awards had a fair value of $9.10 per award and our liability for Phantom Plan awards was $2.7 million.

We granted stock-based compensation awards under the 2006 Stock Plan, the Mueller Water Products, Inc. 2006 Employee Stock Purchase Plan and the Phantom Plan during the nine months ended June 30, 2015 as follows.



	Number granted	Weighted average grant date fair value per instrument		Total grant date fair value (in millions)
Quarter ended December 31, 2014:
Restricted stock units	378,036	$	9.78	$	3.7
Employee stock purchase plan instruments	51,574	1.89		0.1
Phantom Plan awards	289,524	9.78		2.8
PRSUs	240,691	9.78		2.4
Quarter ended March 31, 2015:
Restricted stock units	40,617	9.97		0.4
Non-qualified stock options	97,119	5.93		0.6
Employee stock purchase plan instruments	56,964	1.96		0.1
Quarter ended June 30, 2015:
Employee stock purchase plan instruments	49,010	2.28		0.1
				$	10.2

We recorded stock-based compensation expense of $0.6 million and $2.1 million during the three months ended June 30, 2015 and 2014, respectively, and $5.9 million and $8.2 million during the nine months ended June 30, 2015 and 2014, respectively. At June 30, 2015, there was approximately $5.1 million of unrecognized compensation expense related to stock-based awards.

We excluded 1,021,028 and 1,117,275 of stock-based compensation instruments from the calculations of diluted earnings per share for the quarters ended June 30, 2015 and 2014, respectively, and 993,148 and 1,103,986 for the nine months ended June 30, 2015 and 2014, respectively, since their inclusion would have been antidilutive.