Exhibit 10.33

 

CATALINA LIGHTING, INC.

18191 N.W. 68th Avenue

Miami, Florida 33015

 

January 30, 2004

 

Robert Varakian

17555 Collins Ave, #1703

Sunny Isles Beach, FL 33160

 

Re: Change in Control Severance Agreement

 

Dear Bob:

 

This letter agreement sets forth our understandings and agreements with respect
to the severance payable to you under certain circumstances following a Change
in Control (as defined below).

 

1. If, after the occurrence of a Change in Control but before the expiration of
the Post Change of Control Period (as defined below), either your employment
with Catalina Lighting, Inc. (the “Company”) or any of its subsidiaries is
terminated by the Company without Cause (as defined below), or you terminate
your employment with the Company for Good Reason (as defined below), then the
Company will pay you severance in an amount equal to 100% of your annual base
salary as of the date of such Change in Control and such payment shall be made
in a lump sum no later than the fourteenth day after your last day of
employment.

 

2. For purposes of this Agreement, the following terms shall have the following
meanings:

 

  (a) “Cause” shall mean a determination by the Board of Directors of the
Company that you have engaged in conduct injurious to the Company, its
successor, or any of their respective subsidiaries, including, without
limitation, embezzlement, theft, destruction of property, unethical business
conduct, commission of a felony, or any other crime of moral turpitude,
dishonesty in the course of your employment or service, the disclosure of trade
secrets or confidential information of the Company, its successor, or any of
their respective subsidiaries to persons not entitled to receive such
information, violation of any rule or policy of the Company or its successor
that is not cured within 15 days after you are given notice of such violation,
breach of my nonsolicitation covenant or any other agreement between you and the
Company, its successor, or any of their respective subsidiaries, or any other
conduct that is injurious to the Company, its successor, or any of their
respective subsidiaries.

 

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Robert Varakiam

January 30, 2004 Page 2

 

  (b) “Change in Control” shall mean (i) any consolidation or merger in which
the Company is not the surviving entity or which results in the acquisition of
all or a majority of the Company’s outstanding shares of capital stock by a
single person or entity or by a group of persons or entities acting in concert
or (ii) any sale or transfer of all or substantially all of the Company’s
assets; provided, however, that the term “Change in Control” shall not include
any of the following: (x) a transaction or transactions with affiliates of the
Company (as determined by the Company’s Board of Directors in its sole
discretion) or (y) a transaction or transactions pursuant to which more than
fifty percent (50%) of the shares of voting stock of the surviving or acquiring
entity is owned and/or controlled (by agreement or otherwise), directly or
indirectly, by Sun Catalina Holdings, LLC or any of its affiliates.

 

  (c) “Good Reason” shall exist if, without your consent, the Company (i)
reduces your base salary, (ii) requires that you relocate your principal place
of employment more than 100 miles from your current principal place of
employment (i.e. 18191 N.W. 68th Avenue, Miami, Florida 33015) or (iii) reduces
the number of the Company’s divisions reporting to you as of the date hereof;
provided, however that “Good Reason” shall not exist under this clause (iii) if
the Company’s U.K. and/or Asian divisions are sold to an unrelated third party
and the Company retains ownership of its U.S. division.

 

  (d) “Post Change of Control Period” shall mean that one (1) year period
beginning on the date of a Change in Control and ending on the first anniversary
of such Change in Control.

 

3. By signing below, you acknowledge that nothing set forth in this letter shall
constitute a contract for employment with the Company of its successor, and
nothing herein shall require the Company, its successor, or any of their
respective subsidiaries to continue your employment.

 

4. The Company may withhold from any amounts payable to you under this letter
agreement such federal, state, local and other taxes as may be required to be
withheld pursuant to any applicable law or regulation.

 

5. This letter agreement shall terminate on December 31, 2004 and be of no
further force or effect if no Change in Control has occurred on or before such
date,

 

6. This letter agreement is legally binding on the parties and their respective
successors and assigns. It may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. It represents the parties’ entire understanding regarding the
subject matter of this letter agreement and supersedes any and all prior
agreements regarding the same subject matter. The terms and provisions of this
letter agreement cannot be terminated, modified or amended except in a writing
signed by the party against whom

 

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Robert Varakian

January 30, 2004 Page 3

 

enforcement is sought. This letter agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of Florida, and any
suit, action or proceeding arising out of or relating to this letter agreement
shall be commenced and maintained in any court of competent subject matter
jurisdiction located in Miami-Dade County, Florida. In any suit, action or
proceeding arising out of or in connection with this letter agreement, the
prevailing party shall be entitled to recover from the other party, upon final
judgment on the merits, all attorneys’ fees and disbursements actually billed to
such party, including all such fees and disbursements incurred at trial, during
any appeal or during negotiations.

 

Please acknowledge your agreement to the terms of this letter agreement by
signing below and returning a copy to the undersigned.

 

Sincerely, CATALINA LIGHTING, INC.     /s/    CLARENCE E. TERRY        

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Name:

  Clarence E. Terry

Title:

  Vice President

 

Acknowledged and agreed to

as of this 30 day of January, 2004;

 

/s/    ROBERT VARAKIAN        

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Robert Varakian

 

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