Document:

Exhibit
10.4

 

 

 

AMENDED AND RESTATED

WALTER INDUSTRIES, INC. DIRECTORS’ DEFERRED FEE PLAN

 

1.             Establishment
of Plan

The Walter Industries, Inc. Directors’ Deferred Fee Plan (The Plan) has
been established by Walter Industries. Inc. (the Company) for eligible members
of the Board of Directors (the Board) of the Company.

2.             Eligibility

Each person who is elected to be a member of the Board and who is not
an employee of the Company or any of its subsidiaries is eligible to elect to
participate in the Plan.

3.              Participation

An eligible Board member may elect to become a Participant and as such
to defer all or a portion of the fees to which he may thereafter be entitled as
a Director (not including travel expenses) by completing and signing an
Election to Participate in the Walter Industries, Inc. Directors’ Deferred Fee
Plan in any calendar quarter subsequent to the quarter in which he is elected
to office as a Director. A Director electing to participate (Participant) shall
designate whether his fees are to be credited to an “Income Account” or to a
“Stock Equivalent Account,” or divided in any manner between such two accounts.
Such election may be revoked or amended, only with regard to fees covering the
Participant’s services as a Director pursuant to a later term of office and
only if the revocation or amendment is conveyed in writing to the Company prior
to the beginning of said later term of office. Absent such revocation or
amendment an election shall be effective for all subsequent terms of office.

4.             Operation of Plan

a)             Income Account

An electing Participant’s fees otherwise payable shall
be credited as a dollar amount to the Participant’s Income Account on the date
the fee would have otherwise been paid. At the end of each calendar quarter
each Participant’s Income Account will be credited with interest at an annual
rate equal to the yield of a 10-year U.S. Treasury Note as of the beginning of
such calendar quarter plus 1.00%. Interest shall be computed on the basis of
the beginning monthly credit balance in the Participant’s Income Account during
such quarter.

 

 

 

b)             Stock Equivalent Account

 

On the first business day
of each calendar quarter, an electing Participant’s fees otherwise payable
during the preceding calendar quarter shall be converted into Stock Equivalent
Shares equal in number to the maximum number of shares of the Company’s common
stock, or fraction thereof, to the nearest one hundredth of one share, which
could be purchased with such dollar amount at the closing market price for such
stock on that date, or if that date is not a trading date, on the next date
that is a trading date.  If the electing
Participant is not serving as a Director on the first business day of any
calendar quarter due to death, resignation or removal (a “Termination Event”),
such electing Participant’s fees otherwise payable prior to the Termination
Event shall, no later than the tenth day after the Termination Event, be
converted into Stock Equivalent Shares equal in number to the maximum number of
shares of the Company’s common stock, or fraction thereof, to the nearest one
hundredth of one share, which could be purchased with such dollar amount at the
closing market price for such stock on that date, or if that date is not a
trading date, on the next date that is a trading date.

 

On each dividend payment date an amount equal to the
cash dividend which would have been payable had the Participant been the actual
owner of the number of shares of the Company’s common stock reflected as Stock
Equivalent Shares in his Stock Equivalent Account shall be credited to such
account, and such amount shall be converted to equivalent shares, as set forth
above, based on the market price of the common stock on such dividend payment
date. Stock Equivalent Shares shall be appropriately adjusted in the event of
any stock dividends, stock splits or any other similar changes in the Company’s
common stock.

5.             Payments

In January of the year
determined by the Participant pursuant to an election filed with the Secretary
of the Company, which may be any calendar year following the year in which the
Participant has his 72nd birthday or which may be the year of the
Participant’s first termination of his services as a Director (Payment Date),
payment of the Income Account and the Stock Equivalent Account shall be made in
cash to the Participant in one, five, ten or fifteen annual installments as
shall be determined by the Participant. 
Each annual installment payment shall be made no later than January 30, beginning
with the first Payment Date.  Until
complete payment of a Participant’s Deferred Fee Accounts, such accounts shall
be appropriately adjusted from time to time in accordance with paragraphs 4(a)
and 4(b) above.  In the event of a
Participant’s death, payment of all or the remaining portion of his Deferred
Fee Accounts will continue to be made to his beneficiary or beneficiaries in
the series of annual installments determined by the Participant.  In the absence of an election filed by the
Participant with the Secretary of the Company, the entire balance of a
Participant’s Income Account and Stock Equivalent Account shall be paid in a
lump sum to the Participant (or in the event of a Participant’s death, to his
beneficiary or beneficiaries) in a lump sum between January 1 and January 30 of
the calendar year following the year of the Participant’s termination of
services as a director.

 

 

 

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6.             General

a)                                       Each Participant, or former Participant
entitled to payment of deferred fees hereunder, from time to time may name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any such deferred fees are to be paid in case of his death before he
receives any or all of such fees. Each designation will revoke all prior
designations by the same Participant or former Participant, shall be in form
prescribed by the Company, and will be effective only when filed by the
Participant or former Participant in writing with the Company during his
lifetime. In the absence of any such designation, any fees remaining unpaid at a
Participant’s or former Participant’s death shall be paid to his estate.

 

b)                                   Establishment of the Plan and coverage of
any person shall not be construed to confer any right on the part of such
person to be nominated for re­election, or to be re-elected, to the Board of
Directors of the Company.

 

c)                                    Deferred fees hereunder are not in any
way subject to the debts or other obligations of persons entitled thereto, and
may not be voluntarily or involuntarily sold, transferred or assigned. When a
person entitled to a payment under the Plan is under legal disability or, in
the Company’s opinion, is in any way incapacitated so as to be unable to manage
his financial affairs, the Company may direct that payment be made to such
person’s legal representative, if any, and if none the Company may at its
election make payment to such person’s spouse or otherwise apply such payment
for such person’s benefit in any manner it deems proper. Any payment made in
accordance with the preceding sentence shall be in complete discharge of the
obligation of the Company or any of its subsidiaries to make such payment under
the Plan.

 

d)                                   The establishment of Deferred Fee
Accounts for a Participant shall give him no right or security interest in any
asset of the Company or any of its subsidiaries, and no trust relationship with
respect to such accounts is intended. The right of the Participant or his
beneficiary to receive a distribution under this Plan shall be an unsecured
claim against the general assets of the Company, and neither the Participant
nor his beneficiary shall have any. rights in or against any amounts credited
to his Deferred Fee Accounts or any other specific asset of the Company. All
amounts credited to the Deferred Fee Accounts shall constitute general assets
of the Company.

 

e)                                    A stock Equivalent Account for a
Participant shall give him no right to receive either treasury or unissued
shares of common or any other classes of stock of the Company.

 

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7.             Amendment and Discontinuance

The Company hereby reserves the right to amend or
discontinue the Plan at any time; provided, however, that any amendment or
discontinuance of the Plan shall be prospective in operation only and shall not
affect the payment of any deferred fees theretofore earned by any Participant
or former Participant unless the person affected shall expressly consent
thereto.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4Exhibit
10.15

 

 

CONFIDENTIAL

 

 

July 24, 2002

 

 

Mr. Victor Patrick

114 Beechwood Road

Summit, NJ 07901

 

Dear Vic:

 

Confirming our
recent discussions, we would very much like to have you join Walter Industries,
Inc. under the following terms:

 

1.                                       You
will serve as Senior Vice President — General Counsel and Secretary, reporting
to the Chief Executive Officer of Walter Industries, Inc.

 

You will be responsible for the management of the
Company’s legal functions, including providing oversight to the Company’s subsidiaries
on general corporate law and corporate governance.  Responsibilities will include, among other things, responsibility
for all legal affairs of the organization, including
final legal review of all SEC filings and serving as Secretary of the organization
in accordance with its charter, by-laws and any legal requirements.

 

2.                                       Your
employment will commence as early as August 1, 2002, but not later than August
30, 2002.

 

3.                                       Your
compensation package will be as follows:

 

(a)                                  Your
base salary will be $275,000 per year.

(b)                                 Your
annual incentive compensation target level will be 60`% of base pay.  The amount of your incentive will fluctuate
based upon actual performance under the Company’s Executive Incentive Plan as
in effect from time to time.  For 2002,
your incentive compensation award will be guaranteed at fifty percent of your
normal target level.  This incentive
award would be paid out at the time other employees receive their 2002
incentive pay during first quarter 2003.

(c)                                  You
will receive a car allowance of $1,500 per month, subject to usual withholding
taxes.

(d)                                 You
will receive an initial award of 50,000 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 terms of the Company’s stock option plan.  This option will be awarded and priced on or
about your first day of employment.

 

 

(e)                                  In
addition, you will receive 24,900 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 terms of the Company’s stock option plan.  This option will be awarded and priced at
the time WII normally distributes its options to employees during the first
quarter of 2003.

 

(f)                                    You
will receive the following additional benefits:

 

•                  Reimbursement
for all reasonable and customary business-related travel and entertainment
expenses in accordance with the terms of the policy generally applicable to the
executives in the location in which you are primarily based, as it may change
from time to time.

•                  Participation
in the group life and health insurance benefit programs, generally applicable
to executives employed in the location in which you are primarily based, in
accordance with their terms, as they may change from time to time.  You will be eligible for immediate
participation in the life and health benefits on the date you join the company,
with no waiting period.

•                  Participation
in the Profit Sharing Plan, generally applicable to salaried employees in the
location in which you are primarily based, as it may change from time to time
and in accordance with its terms.

•                  Participation
in the Employee Stock Purchase Plan, generally applicable to salaried employees
in the location in which you are primarily based, as it may change from time to
time and in accordance with its terms.

•                  Eligibility
for four weeks of annual vacation to be used each year in accordance with
policy generally applicable to executives employed in the location in which you
are primarily based, as it may change from time to time.

•                  You
will be provided with temporary living expenses and reimbursement for
relocation to the Tampa area in accordance with the policy attached.  You will also receive $20,000 to cover
miscellaneous expenses associated with your relocation.

•                  Attached
are materials describing benefits generally available to Company
employees.  This description is subject
to the specific terms and conditions of the actual benefit plan.

 

4.                                       In
the event of your involuntary termination, other than for “cause”, or your
resignation following a significant diminution in pay or responsibilities as
outlined in paragraph 1.0, you will be eligible for the following severance
benefits:

 

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

 

•                  Eighteen
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.

 

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 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, facilities or the Company’s or its customers’
confidential information and which do not relate to the Company’s business,
anticipated research and developments 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 that 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 you will respect and safeguard the Company’s
property, trade secrets and confidential information.  You acknowledge that the Company’s electronic communication
systems (such as email and voicemail) are maintained to assist in the conduct
of the Company’s business and that such systems and data exchanged or stored
thereon are Company property.  In the
event that you leave the employ of the Company, you will not disclose any trade
secrets or confidential information you acquired while an employee of the
Company to any other person or entity, including without limitation, a
subsequent employer, or use such information in any manner.

 

3

 

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 shall not have occurred if the amount of your bonus
fluctuates due to performance considerations under the Company’s bonus plans in
effect from time to time, and a significant diminution in responsibilities
shall not have occurred if you continue to be responsible for all the legal
affairs of the  Company reporting to the
Chief Executive Officer.

 

9.                                       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 at least
$100,000 in the Company’s common stock. 
This investment should be made prior to your employment date in order to
avoid any concerns regarding insider information concerning the Company and its
businesses..

 

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.

 

Vic, we are delighted that you will be joining Walter Industries
and look forward to working with you. 
If the terms of the proposal are acceptable, please sign one of the
enclosed copies and return it to me in the envelope provided.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Don DeFosset

  
	
   

  	
  President and Chief Executive Officer

  

DD:prc

attachment

 

Agreed and Accepted

 

	
   

  	
   

  
	
  Victor Patrick

  
	
   

  	
   

  
	
  Date

  

 

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