Exhibit 10.2

2007 SHARE INCENTIVE PLAN

FOR

KKR FINANCIAL HOLDINGS LLC

(As Amended and Restated Effective May 4, 2007)

1.             Purpose of the Plan

KKR Financial Holdings LLC (the “Company”) hereby establishes the 2007 Share
Incentive Plan for KKR Financial Holdings LLC (the “Plan”) for the purpose of
aiding the Company and its Affiliates in recruiting and retaining employees,
non-employee directors, managers or other Persons and to motivate such
employees, non-employee directors, managers or other Persons who perform
services for the Company or an Affiliate to exert their best efforts on behalf
of the Company and its Affiliates by providing incentives through the granting
of Awards.  The Company expects that it will benefit from the added interest
which such key employees, non-employee directors, managers or other Persons will
have in the welfare of the Company as a result of their proprietary interest in
the Company’s success.  This Plan shall constitute an amendment and restatement
of the 2004 Stock Incentive Plan for KKR Financial Corp., which was assumed by
the Company as a result of the transactions consummated pursuant to the
Agreement and Plan of Merger, dated as of February 9, 2007, among the Company,
KKR Financial Corp. and KKR Financial Merger Corp.

2.             Definitions

The following capitalized terms used in the Plan have the respective meanings
set forth in this Section:

(a)                                  Act:  The Securities Exchange Act of 1934,
as amended, or any successor thereto.

(b)                                 Affiliate:  Any entity directly or
indirectly controlling, controlled by, or under common control with, the Company
or any other entity designated by the Board in which the Company or Member of
the Company has an interest.

(c)                                  Award:  An Option, Share Appreciation Right
or Other Share-Based Award granted pursuant to the Plan.

(d)                                 Beneficial Owner:  A “beneficial owner,” as
such term is defined in Rule 13d-3 and 13d-5 under the Act (or any successor
rule thereto).

(e)                                  Board:  The Board of Directors of the
Company.

(f)                                    Change in Control:  The occurrence of any
of the following events:

(i)                         Member approval of the complete liquidation or
dissolution of the Company;

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(ii)                     the sale or disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company to any
Person or Group; provided, however, that the sale of all the capital stock of
KKR Financial Corp. or the conveyance, transfer or lease by KKR Financial Corp.
of any or all of its properties and assets shall not constitute a Change in
Control;

(iii)                  (A) any Person or Group is or becomes the Beneficial
Owner, directly or indirectly, of more than 50% of the voting shares of the
Company or (B) a merger, consolidation or statutory share exchange, in either
case following which the Company’s Members immediately prior to such event hold
less than 50% of the voting power of the surviving or resulting entity (which
surviving or resulting entity shall be deemed to include, without limitation,
any corporation or other entity which as a result of the applicable transaction
owns the Company either directly or indirectly);

(iv)                 during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board (together with any new
directors whose election by such Board or whose nomination for election by the
Members of the Company was approved by a vote of a majority of the directors of
the Company, then still in office, who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board, then in
office; or

(v)                     the Board adopts a resolution to the effect that, in its
judgment, as a consequence of any transaction or event a Change in Control has
effectively occurred;

except, in the case of clauses (i)-(v), if the Change in Control results from a
transaction between the Company and the Manager or an Affiliate of the Manager
or from a termination of the Management Agreement for “cause” (as such term is
defined in the Management Agreement).

(g)                                 Code:  The Internal Revenue Code of 1986, as
amended from time to time, including regulations thereunder (and successor
provisions and regulations thereto).

(h)                                 Committee:  The Compensation Committee of
the Board or such other committee as may be appointed by the Board in accordance
with Section 4 of the Plan.

(i)                                     Company:  KKR Financial Holdings LLC, a
Delaware limited liability company.

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(j)                                     Effective Date:  May 4, 2007, which was
the date the Company assumed the Plan.

(k)                                  Fair Market Value:  On a given date, (i) if
there should be a public market for the Shares on such date, the closing price
of the Shares as reported on such date on the Composite Tape of the principal
national securities exchange on which such Shares are listed or admitted to
trading, or, if no sale of Shares shall have been reported on the Composite Tape
of any national securities exchange on such date, then the immediately preceding
date on which sales of the Shares have been so reported shall be used, and
(ii) if there should not be a public market for the Shares on such date, the
Fair Market Value shall be the value established by the Committee in good faith,
but shall in any event be determined in a manner consistent with the
requirements of Section 409A of the Code and the regulations thereunder.

(l)                                     Group:  A “group” as such term is used
in Sections 13(d) and 14(d) of the Act, acting in concert.

(m)                               LSAR:  A limited share appreciation right
granted pursuant to Section 7(d) of the Plan.

(n)                                 Management Agreement:  The Amended and
Restated Management Agreement between the Company and the Manager, dated as of
August 12, 2004, and amended May 4, 2007, as the same may be amended from time
to time.

(o)                                 Manager:  KKR Financial Advisors LLC or any
successor or assign.

(p)                                 Member: “Member” means, as of any date, any
holder of Shares, as of such date.

(q)                                 Option:  An option to purchase Shares
granted pursuant to Section 6 of the Plan.

(r)                                    Option Price:  The purchase price per
Share under the terms of an Option, as determined pursuant to Section 6(a) of
the Plan.

(s)                                  Original Effective Date: May 26, 2005,
which was the date the stockholders of KKR Financial Corp. approved the 2004
Stock Incentive Plan for KKR Financial Corp.

(t)                                    Other Share-Based Awards:  Awards granted
pursuant to Section 8 of the Plan.

(u)                                 Participant:  An employee of, or any Person
who performs services for, the Company or an Affiliate (whether as a consultant,
advisor or otherwise) who is selected by the Committee to participate in the
Plan.

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(v)                                 Person:  A “person,” as such term is used
for purposes of Section 13(d) or 14(d) of the Act (or any successor section
thereto).

(w)                               Plan:  The 2007 Share Incentive Plan for KKR
Financial Holdings LLC.

(x)                                   RSU:  A restricted share unit, granted
pursuant to Section 8 of the Plan, which represents the right to receive a
Share.

(y)                                 Shares:  Common Shares of the Company,
subject to coordination with Section 9 of the Plan.

(z)                                   Share Appreciation Right:  A share
appreciation right granted in connection with or independent of the grant of an
Option, pursuant to Section 7 of the Plan.

3.             Shares Subject to the Plan

The total number of Shares that may be used to satisfy Awards under the Plan
shall be equal to 8,089,625 as of the Effective Date, which is equal to the
number of shares available under the 2004 Stock Incentive Plan for KKR Financial
Corp. immediately prior to the Effective Date.  In addition, the number of
Shares that may be used to satisfy Awards under the Plan shall be increased by
125,000 Shares on each January 1 following the Effective Date for so long as the
Plan is in effect, which additional Shares may only be used to satisfy Awards of
restricted Shares to non-employee directors.  The Shares that may be used
hereunder may consist, in whole or in part, of unissued Shares or previously
issued Shares.  A maximum of 5,000,000 of Shares may be granted during any given
calendar year to any Participant.  The issuance of Shares upon the exercise or
payment of an Award shall reduce the total number of Shares available under the
Plan, as applicable.  Shares which are subject to Awards that terminate, lapse
or are cancelled may again be used to satisfy Awards under the Plan.  If the
Option Price of any Option granted under the Plan is satisfied by delivering
Shares to the Company in accordance with the terms of Section 6(b) of the Plan,
only the number of Shares issued net of the Shares delivered shall be deemed
delivered for purposes of determining the maximum number of Shares available
under the Plan.  To the extent any Shares subject to an Award are not delivered
to a Participant because such Shares are used to satisfy an applicable minimum
income tax withholding obligation, such Shares shall not be deemed to have been
delivered for purposes of determining the maximum number of Shares available
under the Plan.

4.             Administration

The Plan shall be administered by the Committee, which may delegate its duties
and powers in whole or in part as it determines, including to a subcommittee
consisting of at least two individuals who are intended to qualify as
“non-employee directors” within the meaning of Rule 16b-3 under the Act (or any
successor rule thereto) and “outside directors” within the meaning of Section
162(m) of the Code.  The Committee may grant Awards under this Plan only to
Participants; provided that Awards may also, in the discretion of the Committee,
be made under the Plan in assumption of, or in substitution for, outstanding
awards previously granted by the Company or its Affiliates or a company that
becomes an Affiliate.  The number of Shares underlying such substitute Awards
shall be counted against the aggregate number of

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Shares available for Awards under the Plan.  The Committee is authorized to
interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan.  The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan in the manner and to the extent the Committee deems necessary or
desirable.  Any decision of the Committee in the interpretation and
administration of the Plan, as described herein, shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned (including, but not limited to, the Company, its Affiliates,
Participants and their beneficiaries or successors).  The Committee shall have
the full power and authority to establish the terms and conditions of any Award
consistent with the provisions of the Plan and to waive any such terms and
conditions at any time, in its sole discretion (including, without limitation,
accelerating or waiving any vesting conditions and/or accelerating any
payment).  The Committee shall require payment of any amount it may determine to
be necessary to withhold for federal, state, local or other taxes of any
relevant jurisdiction as a result of the granting, vesting or exercise of an
Award, or upon the sale of Shares acquired by the granting, vesting or exercise
of an Award.  For avoidance of doubt, if at any time the Committee determines
that it has not received or required sufficient payment in respect of such
withholding, the Committee is authorized to require such additional payments as
it determines are necessary, and may withhold from such sources as it determines
are necessary, including by payroll deductions.

5.             Limitations

No Award may be granted under the Plan after the tenth anniversary of the
Original Effective Date, but Awards theretofore granted may extend beyond that
date and will continue to be governed by the terms of the Plan.

6.             Terms and Conditions of Options

Options granted under the Plan shall be, as determined by the Committee,
non-qualified options (or other types of Options in jurisdictions outside the
United States), as evidenced by the related Award, and shall be subject to the
foregoing, the following terms and conditions, and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine:

(a)                                  Option Price; Exercisability.  Any Option
granted under the Plan shall have an Option Price of not less than the Fair
Market Value of one Share on the date the Option is granted, and shall be vested
and exercisable in installments at such time and upon such terms and conditions,
as may be determined by the Committee.

(b)                                 Exercise of Options.  Except as otherwise
provided in the Plan or in an Award, an Option may be exercised for all, or from
time to time any part, of the Shares for which it is then exercisable.  For
purposes of this Section 6 of the Plan, the exercise date of an Option shall be
the later of the date a notice of exercise is received by the Company and, if
applicable, the date payment is received by the Company pursuant to clauses (i),
(ii), (iii) or (iv) in the following sentence.  Except as otherwise provided in
an Award,

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the purchase price for the Shares as to which an Option is exercised shall be
paid in full at the time of exercise at the election of the Participant: (i) in
cash or its equivalent (e.g., by check); (ii) to the extent permitted by the
Committee, in Shares having a Fair Market Value equal to the aggregate Option
Price for the Shares being purchased and satisfying such other requirements as
may be imposed by the Committee; (iii) by authorizing the Company to withhold
Shares otherwise issued pursuant to the exercise of the Option having a Fair
Market Value equal to the aggregate Option Price for the Shares being purchased
and satisfying such other requirements as may be imposed by the Committee, (iv)
partly in cash and, to the extent permitted by the Committee, partly in such
Shares; or (v) to the extent permitted by applicable law through the delivery of
irrevocable instructions to a broker to sell Shares obtained upon the exercise
of the Option and deliver promptly to the Company an amount out of the proceeds
of such sale equal to the aggregate Option Price for the Shares being
purchased.  The Committee may also authorize the Company to make or facilitate
loans to Participants to enable them to exercise Options to the extent not
prohibited by applicable law.  The Committee may permit Participants to exercise
Options in joint-tenancy with the Participant’s spouse.  No Participant shall
have any rights to dividends or other rights of a Member with respect to Shares
subject to an Option until the Participant has given written notice of exercise
of the Option, the Participant has paid in full for such Shares, the Shares in
question have been recorded in the Company’s register of Members, and, if
applicable, the Participant has satisfied any other conditions imposed by the
Committee pursuant to the Plan.

(c)                                  Attestation.  Wherever in this Plan or any
agreement evidencing an Award a Participant is permitted to pay the Option Price
(or taxes relating to the exercise of an Option) by delivering Shares, the
Participant may, subject to procedures satisfactory to the Committee (and to the
extent permitted by applicable law), satisfy such delivery requirement by
presenting proof of record ownership of such Shares, or, to the extent permitted
by the Committee, beneficial ownership of such Shares, in which case the Company
shall treat the Option as exercised without further payment and shall withhold
such number of Shares from the Shares acquired by the exercise of the Option.

7.             Terms and Conditions of Share Appreciation Rights

(a)                                  Grants.  The Committee also may grant (i) a
Share Appreciation Right independent of an Option or (ii) a Share Appreciation
Right in connection with an Option, or a portion thereof.  A Share Appreciation
Right granted pursuant to clause (ii) of the preceding sentence (A) may be
granted at the time the related Option is granted or at any time prior to the
exercise or cancellation of the related Option, (B) shall cover the same number
of Shares covered by an Option (or such lesser number of Shares as the

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Committee may determine) and (C) shall be subject to the same terms and
conditions as such Option except for such additional limitations as are
contemplated by this Section 7 (or such additional limitations as may be
included in a Share Appreciation Right Award).

(b)                                 Terms.  The exercise price per Share of a
Share Appreciation Right shall be an amount determined by the Committee.  Each
Share Appreciation Right granted independent of an Option shall entitle a
Participant upon exercise to a payment from the Company of an amount equal to
(i) the excess of (A) the Fair Market Value on the exercise date of one Share
over (B) the exercise price per Share, times (ii) the number of Shares covered
by the Share Appreciation Right.  Each Share Appreciation Right granted in
conjunction with an Option, or a portion thereof, shall entitle a Participant to
surrender to the Company the unexercised Option, or any portion thereof, and to
receive from the Company in exchange therefor an amount equal to (I) the excess
of (x) the Fair Market Value on the exercise date of one Share over (y) the
Option Price, times (II) the number of Shares covered by the Option, or portion
thereof, which is surrendered.  The date a notice of exercise is received by the
Company shall be the exercise date.  Payment shall be made in Shares or in cash,
or partly in Shares and partly in cash (any such Shares valued at such Fair
Market Value), all as shall be determined by the Committee.  Share Appreciation
Rights may be exercised from time to time upon actual receipt by the Company of
written notice of exercise stating the number of Shares with respect to which
the Share Appreciation Right is being exercised.  No fractional Shares will be
issued in payment for Share Appreciation Rights, but instead cash will be paid
for a fraction or, if the Committee should so determine, the number of Shares
will be rounded downward to the next whole Share.

(c)                                  Limitations.  The Committee may impose, in
its discretion, such conditions upon the exercisability or transferability of
Share Appreciation Rights as it may deem fit.

(d)                                 Limited Share Appreciation Rights.  The
Committee may grant LSARs that are exercisable upon the occurrence of specified
contingent events.  Such LSARs may provide for a different method of determining
appreciation, specify that payment will be made only in cash and provide that
any related Awards are not exercisable while such LSARs are exercisable.  Unless
the context otherwise requires, whenever the term “Share Appreciation Right” is
used in the Plan, such term shall include LSARs.

8.             Other Share-Based Awards

(a)                                  Generally.  The Committee, in its sole
discretion, may grant Awards of Shares, Awards of restricted Shares, Awards of
RSUs and other Awards

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that are valued in whole or in part by reference to, or are otherwise based on
the Fair Market Value, of Shares (“Other Share-Based Awards”).  Such Other
Share-Based Awards shall be in such form, and dependent on such conditions, as
the Committee shall determine, including, without limitation, the right to
receive one or more Shares (or the equivalent cash value of such Shares) upon
the completion of a specified period of service, the occurrence of an event
and/or the attainment of performance objectives.  Other Share-Based Awards may
be granted alone or in addition to any other Awards granted under the Plan. 
Subject to the provisions of the Plan, the Committee shall determine: (i) to
whom and when Other Share-Based Awards will be made; (ii) the number of Shares
to be awarded under (or otherwise related to) such Other Share-Based Awards;
(iii) whether such Other Share-Based Awards shall be settled in cash, Shares or
a combination of cash and Shares; and (iv) all other terms and conditions of
such Other Share-Based Awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all Shares so awarded and issued
shall be fully paid and non-assessable).

(b)                                 Performance-Based Awards.  Notwithstanding
anything to the contrary herein, certain Other Share-Based Awards granted under
this Section 8 may be granted in a manner which is intended to be deductible by
the Company under Section 162(m) of the Code (or any successor section thereto)
(“Performance-Based Awards”).  A Participant’s Performance-Based Award shall be
determined based on the attainment of written performance goals approved by the
Committee for a performance period established by the Committee (i) while the
outcome for that performance period is substantially uncertain and (ii) no more
than 90 days after the commencement of the performance period to which the
performance goal relates or, if less, the number of days which is equal to 25
percent of the relevant performance period.  The performance goals, which must
be objective, shall be based upon one or more of the following criteria: (i)
consolidated earnings before or after taxes (including earnings before interest,
taxes, depreciation and amortization); (ii) net income; (iii) operating income;
(iv) earnings per Share; (v) book value per Share; (vi) return on Members’
equity; (vii) expense management; (viii) return on investment; (ix) improvements
in capital structure; (x) profitability of an identifiable business unit or
product; (xi) maintenance or improvement of profit margins; (xii) share price;
(xiii) dividend per Share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow;
and (xvii) return on assets.  The foregoing criteria may relate to the Company,
one or more of its Affiliates or one or more of its or their divisions or units,
or any combination of the foregoing, and may be applied on an absolute basis
and/or be relative to prior years for the Company, one or more peer group
companies or indices, or any combination thereof, all as the Committee shall
determine.  In addition, to the degree consistent with Section 162(m) of the
Code (or any successor section thereto), the performance goals may be calculated
without regard to extraordinary items.  The Committee shall determine

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whether, with respect to a performance period, the applicable performance goals
have been met with respect to a given Participant and, if they have, shall so
certify and ascertain the amount of the applicable Performance-Based Award.  No
Performance-Based Awards will be paid for such performance period until such
certification is made by the Committee.  The amount of the Performance-Based
Award actually paid to a given Participant may be less than the amount
determined by the applicable performance goal formula, at the discretion of the
Committee.  The amount of the Performance-Based Award determined by the
Committee for a performance period shall be paid to the Participant at such time
as determined by the Committee in its sole discretion after the end of such
performance period; provided, however, that a Participant may, if and to the
extent permitted by the Board and consistent with the provisions of
Sections 162(m) and 409A of the Code, elect to defer payment of a
Performance-Based Award.

9.             Adjustments Upon Certain Events

Notwithstanding any other provisions in the Plan to the contrary, the following
provisions shall apply to all Awards granted under the Plan:

(a)                                  Generally.  In the event of any change in
the outstanding Shares after the Effective Date by reason of any Share dividend
or split, reorganization, recapitalization, merger, consolidation, spin-off or
combination transaction or exchange of Shares or other corporate exchange, or
any distribution to holders of Shares other than regular cash dividends or any
transaction similar to the foregoing, the Committee in its sole discretion and
without liability to any person may make such substitution or adjustment, if
any, as it deems to be equitable, as to (i) the number or kind of Shares or
other securities available for issuance, issued or reserved for issuance
pursuant to the Plan and pursuant to outstanding Awards, (ii) the Option Price
or exercise price of any Share Appreciation Right, and/or (iii) any other
affected terms of any Award.

(b)                                 Change in Control.  In the event of a Change
in Control after the Effective Date, the Committee may, in its sole discretion,
provide for: (i) the accelerated vesting (including transferability) or
exercisability of any outstanding Awards then held by Participants that are
otherwise unexercisable or unvested, as the case may be, to the extent
determined by the Committee and as of a date selected by the Committee; (ii) the
earning of all or any outstanding performance shares or incentive awards; (iii)
the termination of an Award upon the consummation of the Change in Control, and
the payment of a cash amount in exchange for the cancellation of an Award which,
in the case of Options and Share Appreciation Rights, may equal the excess, if
any, of the Fair Market Value of the Shares in the Change in Control subject to
such Options or Share Appreciation Rights over the aggregate exercise price of
such Options or Share Appreciation

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Rights; and/or (iv) the issuance of substitute Awards that will substantially
preserve the otherwise applicable terms of any affected Awards previously
granted hereunder.

10.           No Right to Employment or Awards

The granting of an Award under the Plan shall impose no obligation on the
Company or any Affiliate to continue the employment or service or consulting
relationship of a Participant and shall not lessen or affect the Company’s or
Affiliate’s right to terminate the employment or service or consulting
relationship of such Participant.  No Participant or other person shall have any
claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards.  The terms and
conditions of Awards and the Committee’s determinations and interpretations with
respect thereto need not be the same with respect to each Participant (whether
or not such Participants are similarly situated).  No Participant is conferred
any of the rights of a Member of the Company unless and until the Participant is
duly issued or transferred Shares in accordance with the terms of an Award.

11.           Successors and Assigns

The Plan shall be binding on all successors and assigns of the Company and a
Participant, including without limitation, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant’s creditors.

12.           Transferability of Awards

Unless otherwise permitted by the Committee on such terms and conditions as it
shall determine, an Award shall not be transferable or assignable by the
Participant other than by will or by the laws of descent and distribution.  An
Award exercisable after the death of a Participant may be exercised by the
legatees, personal representatives or distributees of the Participant.

13.           Amendments or Termination

Subject to Section 9 of the Plan, the Board may amend, alter or discontinue the
Plan, but no amendment, alteration or discontinuation shall be made which would:
(a) increase the maximum number of Shares available for Awards under the Plan
(including the limits applicable to the different types of Awards), other than
amendments having such purpose that are approved by a majority of the Members of
the Company that are present and entitled to vote on such matter at a meeting
duly convened for such purposes (or such other standard of Member vote as may be
required by applicable state or federal law); (b) without the consent of a
Participant, diminish any of the rights of the Participant under any Award
theretofore granted to such Participant under the Plan; or (c) be prohibited by
applicable law or otherwise require Member approval (whether in order to
maintain the full tax deductibility of all Awards under Section 162(m) of the
Code, to comply with stock exchange listing requirements or otherwise);
provided, however, that the Committee may amend the Plan in such manner as it
deems necessary to permit Awards to meet the requirements of the Code or other
applicable laws.  In no

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event may the Board amend the Plan or any Award to provide for the repricing of
any Option price or exercise price of any Share Appreciation Rights without the
approval by the Members of the Company.

14.           International Participants

With respect to Participants, if any, who reside or work outside the United
States of America, the Committee may, in its sole discretion, amend the terms of
the Plan or Awards with respect to such Participants in order to conform such
terms with the provisions of local law, and the Committee may, where
appropriate, establish one or more sub-plans to reflect such amended or varied
provisions.

15.           Choice of Law

The Plan shall be governed by and construed in accordance with the laws of the
State of New York without regard to conflicts of laws.

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