Exhibit 10.2

OIL-DRI CORPORATION OF AMERICA
2006 LONG-TERM INCENTIVE PLAN
DIRECTOR’S STOCK OPTION AGREEMENT

          This Director’s Stock Option Agreement (this “Agreement”) is made as
of the 9th day of June, 2006 (the “Grant Date”), between Oil-Dri Corporation of
America (the “Company”), and Michael A. Nemeroff  (the “Participant”).

          WHEREAS, the Company has adopted the Oil-Dri Corporation of America
2006 Long-Term Incentive Plan (the “Plan”), subject to approval and ratification
by the stockholders of the Company, in order to provide an opportunity for
directors of the Company to purchase shares of the Company’s stock; and

          WHEREAS, the Committee responsible for administration of the Plan has
determined to grant an Option to the Participant as provided herein;

          NOW, THEREFORE, the parties hereto agree as follows:

          1.       Grant of Option.

                    1.1  The Company hereby grants to the Participant the right
and option (the “Option”) to purchase all or any part of an aggregate of 10,000
whole shares of Common Stock subject to, and in accordance with, the terms and
conditions set forth in this Agreement.

                    1.2  The Option is not intended to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Internal Revenue Code.

                    1.3  This Agreement shall be construed in accordance and
consistent with, and subject to, the provisions of the Plan (the provisions of
which are incorporated herein by reference); and, except as otherwise expressly
set forth herein, the capitalized terms used in this Agreement shall have the
same definitions as set forth in the Plan.

          2.       Purchase Price.

                    The price at which the Participant shall be entitled to
purchase shares upon the exercise of the Option shall be $18.53 per share.

          3.       Duration of Option.

                    The Option shall be exercisable to the extent and in the
manner provided herein for a period of ten (10) years from the Grant Date (the
“Exercise Term”); provided, however, that the Option may be earlier terminated
as provided in Sections 6 10 hereof.

          4.       Exercisability of Option.

                    Unless otherwise provided in this Agreement, the Option
shall entitle the Participant to purchase, in whole at any time or in part from
time to time, one hundred percent (100%) of the total number of shares covered
by the Option on or after the first anniversary of the Grant Date. 
Notwithstanding the foregoing, in no event will the Option, or any portion
thereof, be exercisable prior to the approval and ratification by the Company’s
stockholders of the adoption of the Plan.

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          5.       Manner of Exercise and Payment.

                    5.1  Subject to the terms and conditions of this Agreement
and the Plan, the Option may be exercised by delivery of written notice of
exercise to the Company, at its principal executive office.  Such notice shall
be signed by the Participant and shall state that the Participant is electing to
exercise the Option and the number of shares in respect of which the Option is
being exercised.

                    5.2  The notice of exercise shall be accompanied by the full
purchase price for the shares in respect of which the Option is being exercised,
in (i) cash or by check or, if indicated in the notice, such payment shall
follow by check from a registered broker acting as agent on behalf of the
Participant or (ii) by transferring to the Company shares of the Company’s stock
held by the Participant for at least six months prior to the exercise of the
Option and having a Fair Market Value on the date of exercise equal to the cash
amount for which such shares are substituted.

                    5.3  Upon receipt of notice of exercise and full payment for
the shares of stock in respect of which the Option is being exercised, the
Company shall take such action as may be necessary to effect the transfer to the
Participant of the number of shares of stock as to which such exercise was
effective.

                    5.4  The Participant shall not be deemed to be the owner of,
or to have any of the rights of an owner with respect to any shares of stock
subject to the Option until (i) the Option shall have been exercised pursuant to
the terms of this Agreement, (ii) the Company shall have issued and delivered
the shares to the Participant, and (iii) the Participant’s name shall have been
entered as a stockholder of record on the books of the Company, whereupon the
Participant shall have full voting and other ownership rights with respect to
such shares.

          6.       Termination of Service.

                    6.1   Retirement, Disability or Death.

                    If the Participant’s service as a director of the Company
terminates as the result of the Participant’s Retirement from service as a
director; or as a result of the Disability of the Participant as defined in the
Plan; or upon the death of the Participant, the Option shall become immediately
and fully exercisable, except as may be otherwise provided in Section 10 of this
Agreement.  The Participant (or a deceased Participant’s legal representative or
beneficiary) may exercise the Option at any time within three years after such
Retirement, Disability, or death.  Retirement means the Participant’s
termination of service as a director that occurs after the completion of three
(3) years of service (whether before or after the Grant Date), provided that any
interval of less than one (1) year extending from the date of one annual meeting
of stockholders of the Company to the date of the next such meeting shall
qualify as one year for this purpose. 

                    6.2     Other Termination of Service. 

                    Generally, if the Participant’s service as a director of the
Company terminates for any reason other than those set forth in Section 6.1, the
Participant may, at any time within ninety (90) days after such termination,
exercise the Option to the extent, but only to the extent, that the Option or
portion thereof was exercisable on the date of termination.  However, if the
Participant’s service is terminated for Cause, as defined in the Plan, any
unexercised portion of the Option shall be immediately forfeited and may not be
exercised by the Participant.

                    6.3     No Extension of Exercise Term. 

                    Notwithstanding the terms of Section 6.1 or 6.2 above or
Section 7 below, in no event may the Option be exercised by anyone after the
expiration of the Exercise Term.

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          7.       Effect of Change of Control.

                    In the event of a Change of Control of the Company, as
defined in the Plan, the Option shall become immediately and fully exercisable,
except as may be otherwise provided in Section 10 of this Agreement.  If the
Participant’s service as a director of the Company terminates for any reason at
or after a Change of Control, the Participant may exercise the Option at any
time within three years after his or her termination of service.

          8.       Non-transferability.

                    The Option shall not be transferable other than by will or
the laws of descent and distribution or as otherwise permitted by the Plan. 
During the lifetime of the Participant the Option shall be exercisable only by
the Participant, unless it has been transferred as permitted by the Plan. 

          9.       Adjustments.

                    Upon the occurrence of various corporate events as described
in Section 5.4 of the Plan, the Committee may make appropriate adjustments to
the number or class of shares of stock subject to the Option and the purchase
price for such shares.  The Committee’s adjustment shall be final, binding and
conclusive for all purposes of this Agreement.

          10.     Terminating Event/Exercisability

                    Should the Company’s stockholders fail to approve and ratify
the adoption of the Plan prior to March 14, 2007,  the Option will be null and
void and of no force and effect.  In no event will the Option, or any portion
thereof, be exercisable prior to the approval and ratification by the Company’s
stockholders of the adoption of the Plan.

          11.     Payment of Taxes.

                    The Participant shall be solely responsible for the payment
of the federal, state and local income and self-employment taxes and other
amounts as may be required by law. 

          12.     Participant Bound by the Plan.

                    The Participant hereby acknowledges receipt of a copy of the
Plan and agrees to be bound by all the terms and provisions thereof.

          13.     Modification of Agreement.

                    This Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but only by a written
instrument executed by the parties hereto.

          14.     Severability.

                    Should any provision of this Agreement be held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such holding and
shall continue in full force in accordance with their terms.

          15.     Governing Law.

                    The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Delaware without
giving effect to the conflicts of laws principles thereof.

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          16.     Successors in Interest.

                    This Agreement shall inure to the benefit of and be binding
upon any successor to the Company.  This Agreement shall inure to the benefit of
the Participant’s legal representatives or, if applicable, a transferee and the
transferee’s legal representatives.  Except as otherwise provided herein or in
the Plan, all obligations imposed upon the Participant and all rights granted to
the Company under this Agreement shall be final, binding and conclusive upon any
transferee and upon the Participant’s or transferee’s heirs, executors,
administrators and successors.

          17.     Resolution of Disputes.

                    Any dispute or disagreement which may arise under, or as a
result of, or in any way relate to, the interpretation, construction or
application of this Agreement shall be determined by the Committee.  Any
determination made hereunder shall be final, binding and conclusive on the
Participant and Company for all purposes.

 

OIL-DRI CORPORATION OF AMERICA

 

 

 

 

 

 

 

By:

/s/ Richard M. Jaffee

 

 

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Richard M. Jaffee,

 

 

Chairman of the Board

 

 

 

 

 

 

 

 

/s/ Michael A. Nemeroff

 

 

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Michael A. Nemeroff, Participant

 

 

 

 

 

 

 

 

 

 

 

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Name of Transferee (if applicable)

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