Exhibit 10.18
CONFIDENTIAL
March 13, 2006
George Richmond
Northport, AL
Dear George,
In light of your many valuable contributions to
Walter Industries, Inc. over 29 years of service, and in
recognition of your potential future continuing contributions to
the Corporation, we hereby amend the terms of your employment as
follows:
1.
Your title is changed to “Chief Executive Officer — Jim
Walter Resources.” You will continue to report to
Gregory E. Hyland, Chairman, President and Chief Executive Officer
of Walter Industries until the contemplated spin-off of the
Corporation’s Water Products Business. Thereafter, you
will report to Mr. Hyland’s successor as Chairman of the
Board of Directors. As Chief Executive Officer of Jim Walter
Resources, you will be responsible for all aspects of the
operations of the Corporation’s Jim Walter Resources
subsidiary and such other duties as may be assigned to you by the
Chairman.
2.
Your compensation arrangements will be as follows:
a) Your base salary will be $413,437 per year (salary grade 22),
subject to annual review and adjustment by the Compensation
Committee of Walter’s Board of Directors.
b) Your annual target bonus under the Walter Industries Executive
Incentive Plan (EIP) will be 65% of base pay. The amount of your
annual bonus will fluctuate based upon actual performance under
Walter’s EIP as in effect from time to time.
c) You will receive a special one-time grant of 200,000
non-qualified stock options. These options will vest at the
rate of 1/3 per year over a three-year period and will be subject
to the terms of Walter’s Long Term Incentive Plan and your
individual stock option agreement. You will also receive a
2006 award under the LTIP of 9,500 shares of restricted stock,
vesting on February 28, 2009. You will continue to
participate in annual awards under the LTIP.
d) You will receive a car allowance of $2,000 per month, subject to
usual withholding taxes.
3.
You will have the right to allocate up to 100,000 non-qualified
stock options to members of your senior management team.
4.
Your supplemental pension plan balance will be funded in a rabbi
trust, which will pay out to you upon your retirement or upon a
change in control. It shall not be considered a change in
control if the Company undergoes a strategic realignment of its
businesses (such as a split-up or spin-off transaction), with or
without a shareholder vote, and you remain the chief executive
officer of Jim Walter Resources with the same compensation
arrangements that existed prior to such strategic
realignment.
5.
In the event of your involuntary termination, other than for
“cause”, or your resignation following a significant
diminution in pay or responsibilities, you will be eligible for the
following severance benefits:
a) Eighteen months of base salary
continuation at the rate in effect at the date of termination, plus
a pro rata bonus for the portion of the fiscal year actually worked
computed in accordance with plan terms to the date of termination,
plus twelve months of additional bonus computed at the target level
at the date of termination.
b) Continuing fringe benefits for
the duration of your base salary payments (18 months) and
participation in the Company’s group life and health programs
to the extent such plans permit continuing participation. In any
event, health and life insurance will continue for the period of
your contractual salary severance payments, but not beyond the
availability of such insurance from a subsequent employer. The
COBRA election period will not commence until the expiration of
coverage under the Walter Industries plans.
6.
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 Walter Industries, either solely or in
collaboration with others, which relate to the actual or
anticipated business or research of the Company,
