Stock-based compensation expense was $15.1 million, $14.1 million and $11.1 million in the years 2025, 2024 and 2023, respectively, and is recorded within Selling, general and administrative costs within our consolidated statements of operations.

As of September 30, 2025, there was approximately $11.0 million of unrecognized compensation expense related to stock-based awards not yet vested. We expect to recognize this expense over a weighted average life of approximately 1.4 years.

The Mueller Water Products, Inc. 2006 Stock Incentive Plan (“2006 Plan”) authorizes an aggregate of 23,800,000 shares of common stock that may be granted through the issuance of stock-based awards. Any awards canceled are available for reissuance. Generally, all of our employees and members of our Board of Directors are eligible to participate in the 2006 Plan. As of September 30, 2025, 6,740,076 shares of common stock were available for future grants of awards under the 2006 Plan. This total assumes that the maximum number of shares will be earned for awards for which the final number of shares to be earned has not yet been determined.

An award granted under the 2006 Plan vests at such times and in such installments as set by the Compensation and Human Resources Committee of our Board of Directors (“Compensation Committee”), but no award will be exercisable after the 10-year anniversary of the date on which it is granted. Management expects some instruments will be forfeited prior to vesting. Grants to members of our Board of Directors are expected to vest fully. Based on historical forfeitures, we expect certain grants to employees to be forfeited at an annual rate of 2%.

Restricted Stock Units. Depending on the specific terms of each award, restricted stock units generally vest ratably over the life of the award, usually three years, on each anniversary date of the original grant. Compensation expense for restricted stock units is recognized between the grant date and the vesting date (or the date on which a participant becomes retirement-eligible, if sooner) on a straight-line basis for each tranche of each award. Fair values of restricted stock units are determined using the closing price of our common stock on the respective grant date.


	Restricted stock units	Weighted average grant date fair value per unit
Outstanding as of September 30, 2022	358,732	$	12.77
Granted	625,518	12.78
Vested	(301,864)	12.83
Cancelled	(109,103)	12.00
Outstanding as of September 30, 2023	573,283	12.88
Granted	301,908	14.91
Vested	(367,315)	12.99
Cancelled	(54,080)	12.85
Outstanding as of September 30, 2024	453,796	14.15
Granted	194,334	26.13
Vested	(283,026)	13.81
Cancelled	(10,770)	18.55
Outstanding as of September 30, 2025	354,334	$	20.85

Performance-Based Awards. Our performance-based awards consist of performance-based restricted stock units (“PRSUs”). 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 award, 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 grant date for each year’s performance period is set when the Compensation Committee establishes performance goals for the period, normally within 90 days of the beginning of each performance period. At the end of the performance period, the Compensation Committee confirms performance against the applicable performance targets. PRSUs do not convey voting rights or earn dividends. PRSUs vest on the last day of an award cycle, unless vested sooner as a result of a “Change of Control” of the Company, or the death, disability or retirement of a participant.

We recognize compensation expense for stock-settled PRSUs starting on the first day of the applicable performance period and ending on the respective vesting dates. We base the recognized compensation expense upon the number of units awarded for each performance period, the closing price of our common stock on the grant date and the estimated performance factor. In 2025 and 2024, no shares vested related to PRSUs. In 2023, 163,999 shares vested related to PRSUs.


Award date	Settlement year	Performance period	Grant date per unit fair value		Units awarded	Units forfeited	Net units	Performance factor	Shares earned






December 3, 2019	2023	2020	$	11.26	69,988	(2,391)	67,597	0.909	61,446
		2021	11.86		69,989	(9,614)	60,375	1.161	70,096
		2022	13.81		69,988	(9,614)	60,374	0.700	42,262
November 29, 2022	2026	2023-2025	11.41		166,284	(92,550)	73,734	2.000	147,468
November 28, 2023	2027	2024-2026	13.22		136,983	(30,804)	106,179	—	—
December 3, 2024	2028	2025-2027	25.58		64,044	(1,308)	62,736	—	—
March 3, 2025	2028	2025-2027	$	25.19	7,692	—	7,692	—	—

Market-Based Awards. Our market-based awards consist of market-based restricted stock units (“MRSUs”). MRSUs represent a target number of units that may be paid out at the end of a three-fiscal year award cycle based on a calculation of our relative total shareholder return (“TSR”) performance as compared with the TSR of a selected peer group. Settlements in our common shares will range from zero to two times the number of MRSUs granted, depending on our TSR performance ranking within the peer group. The fair values of MRSUs are fixed at the date of grant and the related expense is recognized ratably over the vesting period, which is roughly three years from the date of grant.


	March 3, 2025		December 3, 2024
Fair value at grant date	$41.24		$38.25
Units granted	7,692		64,044
Variables used in determining grant date fair value:
Dividend yield	1.1	%	1.1	%
Expected volatility	31.0	%	29.8	%
Risk-free rate	3.9	%	4.1	%
Expected term (in years)	2.60		2.80

The expected volatility was based on historical volatility data for the Company and peer group companies considering the expected term. The expected term represents the remaining term from the grant date to the end of the performance period. The risk-free interest rate was based on the U.S. Treasury yield curve considering the expected term. The dividend yield assumption considers the Company’s estimated dividend yield as of the grant date and dividends were treated as re-invested in the Monte Carlo simulation analysis for purposes of measuring TSR performance.

Stock Options. Stock options generally vest on each anniversary date of the original grant ratably over three years. Compensation expense attributed to stock options is based on the fair value of the awards on their respective grant dates, as determined using a Black-Scholes model.

The expected dividend yield is based on our estimated annual dividend and our stock price history at the grant date. The risk-free interest rate is based on the United States Treasury zero-coupon yield in effect at the grant date with a term equal to the expected term. The expected volatility was based on historical volatility data for the Company considering the expected term. The expected term represents the average period of time the options are expected to be outstanding.


	Options	Weighted average exercise price per option		Weighted average remaining contractual term (years)	Aggregate intrinsic value (millions)
Outstanding as of September 30, 2022	1,013,293	$	12.19	7.7	$	0.3
Granted	573,279	11.41
Exercised	(131,989)	9.59			0.4
Cancelled	(327,115)	12.16
Outstanding as of September 30, 2023	1,127,468	12.10		7.8	$	1.0
Granted	457,356	13.22
Exercised	(517,839)	12.05			5.0
Cancelled	(135,215)	12.69
Outstanding as of September 30, 2024	931,770	12.60		7.9	$	8.5
Granted	228,615	25.54
Exercised	(246,577)	12.33			3.3
Cancelled	(5,604)	19.45
Outstanding as of September 30, 2025	908,204	$	15.89	7.8	$	8.8

Exercisable as of September 30, 2025	374,295	$	12.60	6.8	$	4.8


Exercise price						Outstanding Options	Weighted average exercise price		Weighted average remaining contractual term (years)	Exercisable options	Weighted average exercise price


	$	10.00	-	$	14.99	682,415	$	12.70	7.3	374,295	$	12.60
	$	25.00	-	$	29.99	225,789	25.54		9.2	—	—
						908,204	$	15.89		374,295	$	12.60

Employee Stock Purchase Plan. The Mueller Water Products, Inc. 2006 Employee Stock Purchase Plan (“ESPP”) authorizes the sale of up to 7,600,000 shares of our common stock to employees. Generally, all full-time, active employees are eligible to participate in the ESPP, subject to certain restrictions. Employee purchases are funded through payroll deductions, and any excess payroll withholdings are returned to the employee. The price for shares purchased under the ESPP is 85% of the lower of the closing price on the first day or the last day of the offering period. As of September 30, 2025, 3,499,685 shares were available for issuance under the ESPP.

Phantom Plan. Under the Mueller Water Products, Inc. Phantom Plan adopted in 2012 (“Phantom Plan”), we have awarded “phantom units” to certain non-officer employees. A phantom unit settles in cash equal to the price of one share of our common stock on the vesting date. Phantom units generally vest ratably over three years on each anniversary date of the original grant. We recognize compensation expense for phantom units on a straight-line basis for each tranche of each award based on the closing price of our common stock at each balance sheet date. The outstanding phantom units had a fair value of $25.52 per unit as of September 30, 2025 and our accrued liability for such units was $5.7 million.


	Phantom Plan units	Weighted average grant date fair value per unit		Aggregate intrinsic value (millions)
Outstanding as of September 30, 2022	339,131	$	12.74
Granted	294,063	11.53
Vested	(156,012)			$	0.1
Cancelled	(120,515)	12.22
Outstanding as of September 30, 2023	356,667	12.09
Granted	236,250	13.28
Vested	(156,585)			$	1.5
Cancelled	(20,952)	12.53
Outstanding as of September 30, 2024	415,380	12.71
Granted	143,589	25.61
Vested	(195,118)			$	2.5
Cancelled	(39,482)	16.01
Outstanding as of September 30, 2025	324,369	$	18.03