Exhibit 10.17.1


 


CONFIDENTIAL


 


December 22, 2008


 


Mr. George R. Richmond


16243 Highway 216


Brookwood, AL 35444


 


Dear George:


 


The terms of your employment with Jim Walter Resources, Inc. (the “Company”)
are currently governed by a letter employment agreement dated March 13,
2006 (the “Original Agreement”). New tax rules under Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), require
that certain provisions of our Original Agreement be amended. Accordingly, you
and the Company hereby amend the terms of your employment as set forth below.
To the extent the terms of this letter agreement are inconsistent with the
terms of the Original Agreement, the terms of this letter agreement will
control.


 


1.     Section 2(d) of
the Original Agreement is deleted in its entirety and replaced with the
following:


 


“d) You will receive a car allowance of $2,000 per month, subject to
usual withholding and employment taxes, payable in cash during the succeeding
month in accordance with normal payroll practices.”


 


2.     Section 4
of the Original Agreement is deleted in its entirety and replaced with the
following:


 


“4.           Your supplemental
pension plan benefits will be funded through a rabbi trust. Any benefits
payable under the supplemental pension plan will be paid in accordance with the
terms of the supplemental pension plan document.”


 


3.     Section 5
of the Original Agreement is deleted in its entirety and replaced with the
following:


 


“5.           Severance Benefits


 


a)  In the event of your
Involuntary Termination (as defined below), other than for “Cause” (as defined
in Section 10(a)), or your Constructive Termination (as defined below),
you will be eligible for the following severance benefits:


 


(i)            Eighteen (18)
months of base salary continuation at the rate in effect at the date of your
separation from service (the 


 


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“Severance Date”); provided that base salary will be paid
in accordance with the payroll dates in effect on the Severance Date, and such
payment dates will not be affected by any subsequent change in payroll
practices.


 


(ii)           Walter Industries, Inc. shall authorize
a pro-rata bonus under the EIP (or successor annual bonus plan) based on the
portion of the year actually worked and computed based on actual year to date
performance up to the Severance Date. Such pro-rata bonus shall be paid during
the year following the year that includes the Severance Date in accordance with
the terms of the EIP.


 


(iii)          Payment of an
amount equal to your target bonus for the year that includes the Severance Date
under the EIP (or successor annual bonus plan), payable during the year
following the year that includes the Severance Date.


 


(iv)          Except as provided
below, continuation of all fringe benefits at the level in effect on the
Severance Date, in each case beginning immediately upon the Severance Date and
continuing until the earlier of (A) the date that is eighteen (18) months
after the Severance Date, (B) the last date you are eligible to
participate in the benefit under applicable law, or (C) the date you are
eligible to receive comparable benefits from a subsequent employer, as
determined solely by the Company in good faith. Such benefits shall be provided
to you at the same coverage level and cost to you as in effect on the Severance
Date. Notwithstanding the foregoing, your participation in the Employee Stock
Purchase Plan and long-term disability insurance plan, and your ability to make
deferrals under the 401(k) plan, will cease effective on the Severance
Date.


 


To the extent required by law, you shall qualify for COBRA health
benefit continuation coverage beginning upon expiration of the eighteen (18)
month benefit continuation period described above.


 


For purposes of enforcing this subsection (iv), you shall be deemed to
have a duty to keep the Company informed as to the terms and conditions of any
subsequent employment and the corresponding benefits earned from such
employment, and shall provide, or cause to provide, to the Company in writing
correct, complete, and timely information concerning the same.


 


b)             Notwithstanding
anything to the contrary in this agreement, if you are a Specified Employee (as
defined below) on the Severance Date, to the extent that you are entitled to
receive any benefit or payment under this agreement that constitutes deferred
compensation within the meaning of 


 


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Section 409A of the Code before the date that is six (6) months
after the Severance Date, such benefits or payments shall not be provided or
paid to you on the date otherwise required to be provided or paid. Instead, all
such amounts shall be accumulated and paid in a single lump sum to you on the
first business day after the date that is six (6) months after the
Severance Date (or, if earlier, within fifteen (15) days following your date of
death). If you are required to pay for a benefit that is otherwise required to
be provided by the Company under this agreement by reason of this Section 5(b),
you shall be entitled to reimbursement for such payments on the first business
day after the date that is six (6) months after the Severance Date (or, if
earlier, within fifteen (15) days following your date of death). All benefits
or payments otherwise required to be provided or paid on or after the date that
is six (6) months after the Severance Date shall not be affected by this Section 5(b) and
shall be provided or paid in accordance with the payment schedule applicable to
such benefit or payment under this agreement. 
Prior to the imposition of the six month delay as set forth in this Section 5(b),
it is intended that (i) each installment under this agreement be regarded
as a separate “payment” for purposes of Section 409A of the Code, and (ii) all
benefits or payments provided under this agreement satisfy, to the greatest
extent possible, the exemptions from the application of Section 409A of
the Code provided under Treasury Regulations Sections 1.409A-1(b)(4) (short-term
deferral) or 1.409A-1(b)(9) (certain separation pay plans). This Section 5(b) is
intended to comply with the requirements of Section 409A(a)(2)(B)(i) of
the Code.


 


c) For purposes of this agreement, the following terms have the
meanings set forth below:


 


(i) “Involuntary Termination” means your
involuntary separation from service within the meaning of Treasury Regulations Section 1.409A-1(n)(1).


 


(ii) “Constructive Termination” means your
voluntary separation from service for Good Reason. “Good Reason” means
the occurrence of any of the following conditions (in each case arising without
your consent): (A) a material diminution in your base compensation;
or (B) a material diminution in your authority, duties or
responsibilities. Notwithstanding the foregoing, your voluntary separation from
service shall be a Constructive Termination only if (x) you provide
written notice of the facts or circumstances constituting a Good Reason
condition to the Company within 30 days after the initial existence of the Good
Reason condition, (y) the Company does not remedy the Good Reason
condition within 30 days after it receives such notice, and (z) the
voluntary separation from service occurs within 90 days after the initial
existence of the Good Reason condition. The foregoing definition of
Constructive Termination is intended to qualify for the safe harbor under
Treasury


 


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Regulations Section 1.409A-1(n)(2)(ii) for treating a
voluntary separation from service as an involuntary separation from service.


 


(iii) “Separation from service”
means your “separation from service” from your employer within the meaning of Section 409A(a)(2)(A)(i) of
the Code and the default rules of Treasury Regulations Section 1.409A-1(h).
For this purpose, your “employer” is the Company  and
every entity or other person which collectively with the Company  constitutes a single service recipient (as that term is
defined in Treasury Regulations Sections 1.409A-1(g)) as the result of the
application of the rules of Treasury Regulations Sections 1.409A-1(h)(3); provided
that an 80% standard (in lieu of the default 50% standard) shall be used for
purposes of determining the service recipient / employer for this purpose.


 


(iv)”Specified Employee” means a “specified employee” of the
service recipient that includes the Company (as determined under Treasury
Regulations Sections 1.409A-1(g)) within the meaning of Section
409A(a)(2)(B)(i) of the Code and Treasury Regulations Section 1.409A-1(i), as
determined in accordance with the procedures adopted by such service recipient
that are then in effect, or, if no such procedures are then in effect, in
accordance with the default procedures set forth in Treasury Regulations
Section 1.409A-1(i).


 


d)             You shall not be
entitled to severance benefits under this agreement in the event you experience
a separation from service within twenty-four months  after
a Change in Control of Walter Industries, Inc. (as defined in your
Executive Change in Control Severance Agreement with Walter Industries, Inc.).
Severance benefits payable upon a separation from service during such period,
if any, shall be determined and paid under such Executive Change in Control
Severance Agreement.”


 


4.     The
parties agree that “Good Reason” (as defined above) will not exist solely
because of the occurrence of any of the events described in Section 10(b) of
the Original Agreement.


 


5.     The
penultimate sentence of Section 11 of the Original Agreement is deleted in
its entirety and replaced with the following:


 


“This payment shall be paid to you as promptly as possible after you
remit the related taxes and in any event no later than the end of your taxable
year immediately following your taxable year in which you remit the related
taxes.”


 


6.     A
new Section 13 is inserted immediately after Section 12 of the
Original Agreement, as follows:


 


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“13.         To the extent this
agreement provides for reimbursements of expenses incurred by you or in-kind
benefits the provision of which are not exempt from the requirements of Section 409A
of the Code, the following terms apply with respect to such reimbursements or
benefits: (1) the reimbursement of expenses or provision of in-kind
benefits will be made or provided only during the period of time in which you
are employed by the Company or during the other period of time specifically
provided herein; (2) the amount of expenses eligible for reimbursement, or
in-kind benefits provided, during a calendar year will not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
calendar year; (3) all reimbursements will be made upon your request in
accordance with the Company’s normal policies but no later than the last day of
the calendar year immediately following the calendar year in which the expense
was incurred; and (4) the right to the reimbursement or the in-kind
benefit will not be subject to liquidation or exchange for another benefit.”


 


7.     This letter agreement
records the final, complete, and exclusive understanding among the parties
regarding the amendment of the Original Agreement. As amended by this letter
agreement, the Original Agreement is ratified and remains in full force and
effect in accordance with its terms.


 


If you are in agreement with the foregoing terms, please sign and
return one copy of this letter agreement, and retain one for your record.


 


	
  Very truly yours,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Larry E. Williams

  	
   

  
	
  Name:

  	
  Larry E. Williams

  	
   

  
	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed and Accepted:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ George R. RIchmond

  	
   

  
	
  George R. Richmond

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  12/29/08

  	
   

  
				



 


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