Exhibit 10.15.1


 


CONFIDENTIAL


 


December 22, 2008


 


Mr. Victor P. Patrick


4211 West Boy Scout Blvd.


Tampa, FL 33607


 


Dear Vic:


 


The terms of your employment with Walter Industries, Inc. (the “Company”)
are currently governed by a letter employment agreement dated August 1,
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 vehicle 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 3
of the Original Agreement is deleted in its entirety and replaced with the
following:


 


“3.           Severance
Benefits


 


a)  In the event of your
Involuntary Termination (as defined below), other than for “Cause” (as defined
in Section 9), or your Constructive Termination (as defined below), but,
in each case, excluding any separation from service by reason of your death or
disability, 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 “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)           Payment
of an amount equal to one and a half (1.5) times your target bonus for the year
that includes the Severance Date


 


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under the Executive Incentive Plan (or successor annual bonus plan),
payable as follows: (A) one (1) times your target bonus shall be paid
during the year following the year that includes the Severance Date, and (B) one-half
(0.5) times your target bonus shall be paid during the second year following
the year that includes the Severance Date.


 


(iii)          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 (iii), 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 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 3(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


 


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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 3(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 3(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 3(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 change in the principal geographic location at
which you must perform services to a location that is more than more than 50
miles from current headquarters in Tampa, Florida, (B) a material breach
of this agreement by the Company, including Section 14 of this agreement, or
(C) a material diminution in your authority, duties or responsibilities or
the authority, duties, or responsibilities of the supervisor to whom your are
required to report. 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 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


 


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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 the Company (as defined in your
Executive Change in Control Severance Agreement with the Company). 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.”


 


3.     The
definition of “Constructive Termination” in Section 9 of the Original
Agreement (the second paragraph thereof) is deleted in its entirety. Further,
the parties agree that “Good Reason” (as defined above) will not exist solely
because of the occurrence of any of the events described in the current third
paragraph of Section 9 of the Original Agreement.


 


4.     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.”


 


5.     A
new Section 13 and new Section 14 are inserted immediately after Section 12
of the Original Agreement, as follows:


 


“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


 


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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.


 


14.           The
Company shall require any successor (whether direct or indirect, by purchase,
merger, reorganization, consolidation, acquisition of property or stock,
liquidation, or otherwise) of all or a significant portion of the assets of the
Company by agreement, in form and substance satisfactory to you, to expressly
assume and agree to perform this agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.”


 


6.     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/ Victor P. Patrick

  	
   

  
	
  Victor P. Patrick

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  12-31-2008

  	
   

  
			



 


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