Exhibit
10.16





Walter Industries, Inc.

4211 W. Boy Scout Blvd.

Tampa, FL  33607

(813) 871-4811


 


January 6, 2003


 


 


Mr. Brad Kitterman

340 Old York Road

Duluth, GA  30097


 


Dear Brad:


 


The purpose of this
letter is to confirm the terms of our offer to employ you as President and
Chief Operating Officer of the U. S. Pipe and Foundry Company, a wholly owned
subsidiary of Walter Industries, Inc. (the “Company”). This offer will remain
valid until and through January 13, 2003 and is subject to satisfactory completion
of a drug test.


 


1.                                       As
President and Chief Operating Officer of U. S. Pipe, you shall report to and
serve at the direction of the President and Chief Executive Officer of Walter
Industries, Inc., or to such other person as may be designated from time to
time.  Your initial responsibilities
shall be to manage the P & L for U. S. Pipe and to expand its
sales/marketing potential while making its operations efficient.  Such responsibilities may be changed from
time to time.


 


2.                                       Your
employment will commence on January 13, 2003.


 


3.                                       Your
compensation package will be as follows:


 


(a)                                  Base
Salary


 


$22,916.67 per
month ($275,000 annually), which will be paid in accordance with the payroll
practices of the Company, as they may change from time to time.


 


(b)                                 Bonus


 


Your annual target bonus
will be 60.0% of your base salary.  The
amount of your bonus will fluctuate based upon actual performance under the
Company’s bonus plan as in effect


 

















 


from time to time.
Participation in the bonus pool is dependent upon the achievement of the
Company’s annual financial and other goals, as well as the accomplishment of
individual objectives mutually agreed upon in writing each year.  To receive a bonus, you must be employed at
the time the bonus is paid, except as allowed in Section 8 of this
document.  Please note that
participation in the Employee Stock Purchase Plan is a requirement for
participation in the bonus pool.


 


As discussed, the
Company desires to have you, as a senior executive of the Company, make a
meaningful investment in the Company. 
In this regard, you have committed to invest currently $50,000 in the
Company’s common stock.  This investment
should be made at the time you accept employment, prior to your obtaining any
inside information concerning the Company and its business.


 


(c)                                  Stock
Options


 


You will receive an
initial award of 30,500 shares under the Company’s stock option plan in the
form of a non-qualified stock option vesting one-third per year over three
years, subject to the terms of the Company’s stock option plan.  This option will be awarded and priced on or
about your first day of employment.


 


You will be eligible to
participate in the Company’s stock option plan going forward.  Your position would normally be eligible for
30,500 shares as a target award which may change under the Company’s executive
compensation program from time to time.


 


(d)                                 Auto
Allowance


 


You will receive $1,500
per month auto allowance.


 


(e)                                  Benefits


 


•                  Reimbursement
for all reasonable and customary business-related travel and entertainment
expenses, in accordance with the terms of the Company’s policy, as it may
change from time to time.


 


•                  Participation
in the Company’s life and health insurance benefit programs in accordance with
their terms, as they may change from time to time.  A benefits booklet will be available for your review upon
request.


 


•                  Participation in the Walter Industries, Inc.
Profit-Sharing Plan according to its terms.


 


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•                  Participation in the Relocation Policy for transferred
employees.  Reasonable temporary living
expenses will be covered for a period of six (6) months, including the use of a
furnished apartment.


 


•                  Participation in the Walter
Industries 401(k) Plan, as it may change from time to time and in accordance
with its terms.  A 401(k) booklet will
be available for your review upon request. 
Your eligibility to participate will be consistent with the requirements
of ERISA.


 


•                  Eligibility
for four (4) weeks of annual vacation to be used each year in accordance with
the Company’s policy, as it may change from time to time.


 


4.                                       It
is agreed and understood that your employment with the Company is to be at
will, and either you or the Company may terminate the employment relationship
at any time for any reason, with or without cause, and with or without notice
to the other.  Nothing herein or
elsewhere constitutes or shall be construed as a commitment to employ you or
pay you severance, other than is stipulated in this letter, for any period of
time.  You confirm that you have read
and have fully understood the contents of this employment offer letter.


 


5.                                       You
agree that all inventions, improvements, trade secrets, reports, manuals,
computer programs, systems, tapes and other ideas and materials developed or
invented by you during the period of your employment with the Company, either
solely or in collaboration with others, which relate to the actual or
anticipated business or research of the Company, which result from or are
suggested by any work you may do for the Company, or which result from use of
the Company’s premises or the Company’s or its customers’ property
(collectively, the “Developments”) shall be the sole and exclusive property of
the Company.  You hereby assign to the
Company your entire right and interest in any such Developments, and will
hereafter execute any documents in connection therewith that the Company may
reasonably request.  This section does
not apply to any inventions that you made prior to your employment by the
Company, or to any inventions that you develop entirely on your own time
without using any of the Company’s equipment, supplies or facilities, or the
Company’s or its customers’ confidential information which do not relate to the
Company’s business, anticipated research and development, or the work you have
performed for the Company.


 


6.                                       As
an inducement to the Company to make this offer to you, you represent and
warrant that you are not a party to any agreement or obligation for personal
services, and there exists no impediment or restraint, contractual or otherwise
on your power, right or ability to accept this offer and to perform the duties
and obligations specified herein.


 


7.                                       You
acknowledge and agree that so long as you are an employee of the Company, you
will respect and safeguard Company’s trade secrets and confidential
information. In the event of your involuntary termination, other than for
“cause”, or “Termination for Good Reason” as defined in paragraph 8. (c) below,
you will be eligible for the following severance benefits:


 


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•                  Twelve
months of salary continuance, including base and target bonus, at the
applicable rate in effect at the time of termination.


 


•                  Twelve
months of continuing fringe benefits to the extent plans permit continued
participation. In any event, health and life insurance will continue for the
period of your contractual severance and the COBRA election period will not
commence until the expiration of that period.


 


8.               Definitions:


 


(a)                                  “Cause”
shall mean your (i) conviction or guilty plea of a felony involving fraud or
dishonesty, (ii) theft or embezzlement of property from the company, (iii)
willful and continued refusal to perform the duties of your position (other
than any such failure resulting from your incapacity due to physical or mental
illness) or (iv) fraudulent preparation of financial information of the
Company.


 


(b)                                 For
purposes of this agreement, a significant diminution in pay or responsibility
shall not have occurred if (i) the amount of your bonus fluctuates due
to performance considerations under the Company’s incentive plan from time to
time or (ii) you are transferred to a position of comparable responsibility and
compensation with the Company carrying the title of President or higher, even
though that position may report to an officer who in turn reports to the Chief
Executive Officer.


 


(c)                                  For
purposes of this agreement, “Termination for Good Reason” shall mean any of the
following: (i) relocation of the headquarters of the U. S. Pipe and Foundry
Company more than fifty (50) miles from the current location, without your
concurrence, (ii) any material breach by the Company of this agreement, (iii) a
material change in the primary line of business of U. S. Pipe and Foundry Company,
excluding its subsidiaries or (iv) any significant diminution in pay or
responsibility as defined in (b) above.


 


9.                                       You
acknowledge and agree that you have read this letter agreement carefully, have
been advised by the Company to consult with an attorney regarding its contents,
and that you fully understand the same.


 


10.                                 It
is agreed and understood that this offer letter, if and when accepted, shall
constitute our entire agreement with respect to the subject matter hereof and
shall supersede all prior agreements, discussions, understandings and proposals
(written or oral) relating to your employment with the Company.  This letter agreement will be interpreted
under and in accordance with the laws of the State of Florida without regard to
conflicts of laws.


 


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We are delighted that you
have agreed to join Walter Industries, Inc. and look forward to working with
you.  If the terms contained within this
letter are acceptable, please sign one of the enclosed copies and return it to
me.


 


 


Sincerely,


 


 


	
   

  	
   

  
	
  Don DeFosset

  
	
  Chairman, President
  & CEO

  
	
  Walter Industries, Inc.

  



 


 


ACCEPTANCE


 


I have read the
foregoing, have been advised to consult with counsel of my choice concerning
the same, and I fully understand the same. 
I approve and accept the terms set forth above as governing my
employment relationship with the Company.


 


	
  Signature

  	
   

  	
   

  	
  Date

  	
   

  



 


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