Exhibit
10.5


 


WALTER
INDUSTRIES, INC.


SUPPLEMENTAL
PENSION PLAN


 


AMENDED
AND RESTATED


AS OF


JANUARY
1, 2008


 

















 


WALTER
INDUSTRIES, INC.


SUPPLEMENTAL
PENSION PLAN


 


AMENDED
AND RESTATED


AS OF


JANUARY
1, 2008


 


Table of
Contents


 


	
  Article

  	
   

  	
  Title

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
   

  	
  Purpose

  	
   

  	
  I-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
   

  	
  Definitions

  	
   

  	
  II-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
   

  	
  Administration

  	
   

  	
  III-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
   

  	
  Eligibility
  and Participation

  	
   

  	
  IV-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
   

  	
  Plan
  Benefits/Vesting

  	
   

  	
  V-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
   

  	
  Funding

  	
   

  	
  VI-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
   

  	
  Benefit
  Distributions

  	
   

  	
  VII-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
   

  	
  Amendment
  and Termination

  	
   

  	
  VIII-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
   

  	
  Miscellaneous

  	
   

  	
  IX-1

  



 

















 


WALTER
INDUSTRIES, INC.


SUPPLEMENTAL
PENSION PLAN


 


AMENDED
AND RESTATED


AS OF


JANUARY
1, 2008


 


ARTICLE I


 


Purpose


 


Walter Industries, Inc.
(the “Company”) previously established the Walter Industries, Inc.
Supplemental Pension Plan (the “Plan”) to be effective as of July 31,
1989.  The Company has determined it
would be in the best interests of the Participants to amend and restate the
Plan effective as of January 1, 2008 to comply with Section 409A of
the Internal Revenue Code of 1986, as amended from time to time (the “Code”).  The Plan is an unfunded plan established and
maintained to provide supplemental benefits for employees who substantially
contribute to the success of the Company or a Related Employer.  The purpose of the Plan is to supplement the
benefits of those select management or highly compensated employees whose
pension benefits under the Pension Plan for Salaried Employees of Walter
Industries, Inc. Subsidiaries, Divisions and Affiliates (the “Qualified
Plan”) are limited by reason of the restrictions under Sections 401(a)(17) and
415 of the Code.  The Plan is a
nonqualified deferred compensation plan that is intended to comply with Section 409A
of the Code.


 


I-1

















 


ARTICLE II


 


Definitions


 


Whenever used
hereinafter, the following terms shall have the meaning set forth below.


 


(a)           “Accrued Benefit” shall mean the
Supplemental Benefit which the Participant is entitled to as of the date of
determination, calculated under paragraph (a) of Article V and paid
in accordance with Article VII.


 


(b)           “Actuarial Equivalent” shall mean a
benefit of equivalent current value to the benefit that would otherwise have
been provided to the Participant, determined in accordance with the rules established
by the Plan Administrator using the actuarial methods and actuarial assumptions
set forth under the Qualified Plan.


 


(c)           “Actuarial Present Value” shall
mean, with respect to determining the amount of a lump sum payment, an amount
determined by using the actuarial assumptions set forth in the Qualified Plan.


 


(d)           “Affiliate” shall mean, with respect
to the Company, any corporation other than such Company that is a member
of a controlled group of corporations, within the meaning of Section 414(b) of
the Code, of which such Company is a member; all other trades or businesses
(whether or not incorporated) under common control, within the meaning of Section 414(c) of
the Code, with such Company; any service organization other than such Company
that is a member of an affiliated service group, within the meaning of Section 414(m) of
the Code, of which such Company is a member; and any other organization that is
required to be aggregated with such Company under Section 414(o) of
the Code.


 


(e)           “Board of Directors” shall mean the
Board of Directors of the Company.


 


(f)            “Change in Control” of the Company
shall mean the occurrence of any one (1) or more of the following events:


 


(1)           A change in the effective control of the Company, which
occurs only on either of the following dates:


 


(A)          The date any Person or more than one Person acting as a
group (other than the Company or any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, and any trustee or
other fiduciary holding securities under an employee benefit plan of
the Company or such proportionately owned corporation), acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such Person or Persons) ownership of stock of the Company
representing more than thirty percent (30%) of the total voting power of the
stock of the Company; or


 


II-1

















 


(B)           The date a majority of the members of the Board is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the Board before the date of
the appointment or election;


 


provided that, in any event, the transaction must
constitute a “change in the effective control” of the Company within the
meaning of Section 409A(a)(2)(A)(v) of the Code and Treasury
Regulations Section 1.409A-3(i)(5)(vi).


 


(2)           The date any Person or more than one Person acting as a
group acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such Person or Persons) all or substantially
all of the Company’s assets; provided that the transaction must
constitute a “change in the ownership of a substantial portion of the assets”
of the Company within the meaning of Section 409A(a)(2)(A)(v) of the
Code and Treasury Regulations Section 1.409A-3(i)(5)(vii).


 


Notwithstanding
the foregoing, in no event shall a Change in Control of the Company be deemed
to have occurred 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.


 


(3)           Notwithstanding the foregoing, it shall not be considered
a Change in Control for the chief executive officer of Jim Walter Resources, 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
provided that he retains the position of chief executive officer of Jim Walter
Resources with the same compensation arrangements that existed prior to such
strategic realignment.


 


(g)           “Code” shall mean the Internal
Revenue Code of 1986, as it may be amended from time to time, or any successor
statute.  Reference to a specific section
of the Code shall include a reference to any successor provision.


 


(h)           “Company” shall mean Walter
Industries, Inc. and its successors.


 


(i)            “Effective Date” shall mean, with
respect to this amendment and restatement, January 1, 2008.  The Plan was originally effective July 31,
1989.


 


(j)            “Participant” shall mean any
employee of the Company or Related Employer who is covered by this Plan as
provided in Article IV.


 


(k)           “Person” shall have the meaning
ascribed to such term in the Code and Treasury Regulations.


 


(l)            “Plan” shall mean the Walter
Industries, Inc. Supplemental Pension Plan as it may be amended from time
to time.


 


II-2

















 


(m)          “Plan Administrator” shall mean the
Executive Compensation Committee of the Board of the Company.


 


(n)           “Plan Year” shall mean the 12-month
period ending each December 31.


 


(o)           “Qualified Plan” shall mean the
Pension Plan for Salaried Employees of Walter Industries, Inc.
Subsidiaries, Divisions and Affiliates.


 


(p)           “Related Employer” shall mean any
Affiliate who adopts this Plan with the consent of the Company.


 


(q)           “Separation from Service shall mean
the Participant’s termination of employment with the employer within the
meaning of Section 409A(a)(2)(A)(i) of the Code and the default rules of
Treasury Regulations Section 1.409A-1(h). For this purpose, the “employer”
is the Company  and every entity or other person
which collectively with the Company  constitutes a
single service recipient (as that term is defined in Treasury Regulations
Sections 1.409A-1(g)) as the result of the application of the rules of
Treasury Regulations Sections 1.409A-1(h)(3); provided that an 80%
standard (in lieu of the default 50% standard) shall be used for purposes of
determining the service recipient/employer for this purpose.


 


(r)            “Service Recipient” shall mean the
Company or an Affiliate of the Company for which the Employee performs services
and any Affiliates of the Company or a subsidiary of the Company that are
required to be considered a single employer under Sections 414(b) and 414(c) of
the Code.


 


(s)           “Specified Employee” shall mean a
key employee of the Service Recipient within the meaning of Section 409A(a)(2)(B)(i) of
the Code and Treasury Regulations Section 1.409A-1(i), as determined in
accordance with the procedures adopted by the Company that are then in effect,
or, if no such procedures are then in effect, in accordance with the default
procedures set forth in Treasury Regulations Section 1.409A-1(i).


 


(t)            “Spouse” shall mean a person legally
married to the Participant in accordance with Federal law.


 


(u)           “Supplemental Benefit” shall mean
the benefit provided for a Participant by the Company in accordance with Article V.


 


(v)           “Year of Service” shall mean each
12-month period of employment with the Company or Related Employer or an
Affiliate of the Company or Related Employer commencing on the Participant’s initial
date of hire.  Periods of employment of
less than 12 months will be aggregated.


 


II-3

















 


ARTICLE III


 


Administration


 


(a)           Plan Administrator.


 


(1)           The Plan Administrator shall have complete control and discretion
to manage the operation and administration of the Plan, with all powers
necessary to enable it to carry out its duties in that respect.  Not in limitation, but in amplification of
the foregoing, the Plan Administrator shall have the following powers:


 


(A)          To determine all questions relating to the eligibility of
Participants to continue to participate;


 


(B)           To maintain all records and books of account necessary for
the administration of the Plan;


 


(C)           To interpret the provisions of the Plan and to make and to
publish such interpretive or procedural rules as are not inconsistent with
the Plan and applicable law;


 


(D)          To compute, certify and arrange for the payment of benefits
to which the Participant or any Beneficiary is entitled;


 


(E)           To process claims for benefits under the Plan by the
Participant or any Beneficiary;


 


(F)           To engage consultants and professionals to assist the Plan
Administrator in carrying out its duties under this Plan; and


 


(G)           To develop and maintain such instruments as may be deemed
necessary from time to time by the Plan Administrator to facilitate payment of
benefits under the Plan.


 


(2)           The Plan Administrator may designate employees of the
Company to assist the Plan Administrator in the administration of the Plan and
perform the duties required of the Plan Administrator hereunder.


 


(b)           Plan Administrator’s Authority.  The Plan Administrator may consult with
Company’s officers, legal and financial advisers and others, but nevertheless
the Plan Administrator shall have the full authority and discretion to act, and
the Plan Administrator’s actions shall be final and conclusive on all parties.


 


(c)           Claims  and Appeal
Procedure for Denial of Benefits.  A Participant or a beneficiary (the “Claimant”)
may file with the Plan Administrator a written claim for benefits if the
Participant determines the distribution procedures of the Plan have not
provided him his proper interest in the Plan. 
The Plan Administrator must render a decision on the claim within a
reasonable period of time of the Claimant’s written claim 


 


III-1

















 


for benefits.  The Plan Administrator must provide adequate
notice in writing to the Claimant whose claim for benefits under the Plan the
Plan Administrator has denied.  Notice
must be provided to the Claimant within a reasonable period of time, but not
later than 90 days (45 days in the case of a claim for disability benefits)
after the receipt of a claim.  If the
Plan Administrator determines the additional time is needed, written notice
will be forwarded to the Participant prior to the expiration of the 90-day
period (45 days in the case of a claim for disability benefits).  The extension will not exceed 90 days (30
days in the case of a claim for disability benefits) from the end of the
initial period.  The Plan Administrator’s
notice to the Claimant must set forth:


 


(1)           The
specific reason for the denial;


 


(2)           Specific
references to pertinent Plan provisions on which the Plan Administrator based
its denial;


 


(3)           A
description of any additional material and information needed for the Claimant
to perfect his claim and an explanation of why the material or information is
needed;


 


(4)           Appropriate
information as to the steps to be taken if the Claimant wants to submit the claim
for review; and


 


(5)           In
the case of disability benefits, where disability is determined by a physician
appointed by the Plan Administrator, the specific basis for the determination
of the physician.


 


Any appeal the Claimant
wishes to make of an adverse determination must be made in writing to the Plan
Administrator within sixty (60) days (or 180 days in the case of a claim for
disability benefits where the disability is determined by a physician chosen by
the Plan Administrator) after receipt of the Plan Administrator’s notice of
denial of benefits.  The Plan
Administrator’s notice must further advise the Claimant that his failure to
appeal the action to the Plan Administrator in writing will render the Plan
Administrator’s determination final, binding and conclusive.  The Plan Administrator’s notice of denial of
benefits must identify the name and address of the Plan Administrator to whom
the Claimant may forward his appeal.


 


If the Claimant should
appeal to the Plan Administrator, he, or his duly authorized representative,
must submit, in writing, whatever issues and comments he, or his duly
authorized representative, believes are pertinent.  The Claimant, or his duly authorized
representative, may review pertinent Plan documents free of charge.  The Plan Administrator will re-examine all
facts related to the appeal and make a final determination as to whether the
denial of benefits is justified under the circumstances.  The Plan Administrator must advise the Claimant
of its decision within 60 days following (45 days in the case of a claim for
disability benefits) the Claimant’s written request for review.  If the Plan Administrator determines the
additional time is needed, written notice will be forwarded to the Participant
prior to the expiration of the 60-day period. 
The extension will not exceed 60 days (45 days in the case of a claim
for disability benefits) from the end of the initial period.


 


III-2














 


ARTICLE IV


 


Eligibility and Participation


 


All
employees of the Company or a Related Employer whose pension benefits are
limited under the Qualified Plan by reason of the restrictions under Sections
401(a)(17) and 415 of the Code shall be eligible to participate in the Plan.


 


IV-1

















 


ARTICLE V


 


Plan Benefits/Vesting


 


(a)           Supplemental Benefit.  In the event that a Participant incurs a
Separation from Service, the Participant shall be entitled to a Supplemental
Benefit payable in accordance with Article VII and equal to the excess, if
any, of (1) over (2), where:


 


(1)           is
the Actuarial Equivalent of the accrued benefit that would have been payable to
or on behalf of such Participant under the Qualified Plan determined as of the
date benefits under this Plan become payable, if the provisions of the
Qualified Plan were administered without regard to any limitations imposed by
the Code (including but not limited to the application of Code Sections
401(a)(17) and 415) on the rate or amount of benefit accrual; and


 


(2)           is
the Actuarial Equivalent of the accrued benefit that is payable to or on behalf
of the Participant under the Qualified Plan determined as of the date the
benefit under this Plan becomes payable.


 


(b)           Death Benefit.  In the event of the death of a married
Participant while employed with the Company or Related Employer, his Spouse
shall be entitled to a death benefit payable pursuant to Article VII in an
amount equal to 100% of the Actuarial Present Value of the Participant’s
Accrued Benefit determined in accordance with (a) above, except that the
benefit shall be calculated as if the Participate terminated employment on the
day before his death.  If a Participant
is not married on the date of his death, death benefits are not available under
this Plan.


 


(c)           Change in Control Benefit.  Participants who have an employment agreement
that provides for a Change in Control benefit under this Plan will, upon a
Change in Control, be entitled to a benefit payable pursuant to Article VII
in an amount equal to 100% of the Actuarial Present Value of the Accrued
Benefit determined in accordance with paragraph (a) above, except that the
benefit shall be calculated as of the date of the Change in Control.


 


(d)           Vesting.  A Participant shall become vested in the
Supplemental Benefit provided under the Plan upon the earlier of:


 


(1)           completion of 5 Years of Service;


 


(2)           the date a Change in Control occurs provided that vesting
will occur only if the Participant is entitled to the Change in Control benefit
described in paragraph (c) above; or


 


(3)           the date of the Participant’s death.


 


V-1

















 


ARTICLE VI


 


Funding


 


(a)           Financing.  The benefits under this Plan, and the
expenses of administering the Plan and maintaining any trust created pursuant
to paragraph (d) of this Article VI, shall be paid out of the general
assets of the Company.


 


(b)           No Trust Created. Nothing contained
in this Plan, and no action taken pursuant to the provisions of this Plan,
shall create or be construed to create a funded plan, a trust of any kind or a
fiduciary relationship between the Company and the Participant, his Beneficiary
or any other person.


 


(c)           Unsecured Interest. The Participant
shall not have any interest whatsoever in any specific asset of the Company or
the Related Employer.  To the extent that
any person acquires a right to receive payments under this Plan, such right
shall be no greater than the right of any unsecured general creditor of the
Company or other Related Employer.


 


(d)           Establishment of Rabbi Trust.


 


(1)           The
Company may utilize one or more trusts in conformance with the terms of the
model trust described in Revenue Procedure 92-64 to assist in meeting its
obligations to Participants under this Plan.


 


(2)           Except
as otherwise provided in the trust established with respect to the Plan, the
Company or a Related Employer, in its sole discretion, and from time to time,
may make contributions to the trust. 
Unless otherwise paid by the Company or a Related Employer, all benefits
under the Plan and expenses chargeable to the Plan shall be paid from the
trust.


 


(3)           The
powers, duties and responsibilities of the trustee of the trust shall be as set
forth in the trust agreement and nothing contained in the Plan, either
expressly or by implication, shall impose any additional powers, duties or
responsibilities upon the trustee.


 


(e)           Subject to Claims. The Plan constitutes
an unsecured promise by the Company to pay benefits in the future and the Participants
employed by the Company or the Related Employer shall have the status of
general unsecured creditors of the Company or Related Employer.  The Plan is unfunded for Federal income tax
purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974. All amounts credited to the Participants’ accounts will remain the
general assets of the Company or a Related Employer and shall remain subject to
the claims of the Company’s or the Related Employer’s creditors until such amounts
are distributed to the Participants.


 


VI-1

















 


ARTICLE VII


 


Benefit Distributions


 


(a)           Time of Distribution of Benefits.  Benefits shall commence on the first day of
the second month following the first to occur of the following:


 


(1)           the Participant’s Separation from Service for any reason,
including retirement; provided, any distribution to be made to a Specified
Employee as a result of a Separation from Service (for any reason other than
death) shall occur on the first day of the seventh month following the date of
the Participant’s Separation from Service;


 


(2)           the Participant’s death; or


 


(3)           a Change in Control.


 


(b)           Form of Payment.  All benefits under the Plan shall be paid as
a single lump sum.


 


(c)           Forfeitures.  Upon a Participant’s Separation from Service
with the Company or a Related Employer (including an Affiliate of the Company),
the nonvested interest in his Supplemental Benefit, if any, shall be
forfeited.  Such forfeited amount may be used,
in the discretion of the Plan Administrator, to offset administrative expenses
of the Plan or any trust established pursuant to the Plan or to reduce any
future contributions of the Company or a Related Employer.


 


(d)           Tax Withholding.  The
Company may withhold, or require the withholding from any benefit payment which
it is required to make, any federal, state or local taxes required by law to be
withheld with respect to a benefit payment and such sum as the Company may
reasonably estimate as necessary to cover any taxes for which the Company may
be liable and which may be assessed with regard to such payment.  Upon discharge or settlement of such tax
liability, the Company shall distribute the balance of such sum, if any, to the
Participant, or if the Participant is then deceased, to the Beneficiary of the
Participant.  Prior to making any payment
hereunder, the Company may require such documents from any taxing authority, or
may require such indemnities or surety bond, as the Company shall reasonably
deem necessary for its protection.


 


VII-1

















 


ARTICLE VIII


 


Amendment and Termination


 


(a)           Amendment and Termination.  The Plan may be amended at any time, or from
time to time, by the Company, and the Plan may be terminated at any time by the
Company.  Any such amendment or
termination shall be ratified and approved by the Company’s Board of
Directors.  Notice of any such amendment
or termination shall be given in writing to each Participant having an interest
in the Plan.  The ability of the Company
to terminate the Plan shall comply with Section 409A of the Code and the
regulations thereunder.


 


(b)           Effect of Amendment or Termination.


 


(1)           No
amendment or termination of the Plan shall affect the rights of any Participant
with respect to any Accrued Benefits determined as of the date of such
amendment or termination.


 


(2)           In
the event that the Plan is terminated, the Participant’s Accrued Benefit shall
be distributed to the extent permitted under Section 409A of the
Code.  The timing and manner of the
distribution of benefits in connection with any termination of the Plan shall
comply with Section 409A of the Code and the regulations thereunder.  No payment of any Participant’s benefit under
the Plan may be accelerated as a result of the termination of the Plan unless:


 


(A)          the Plan is terminated within the period of 30 days
preceding or the 12 months following a “Change in Control” event (as the term
is defined in Treasury Regulations Section 1.409A-2(g)(4));


 


(B)           the Plan is terminated within 12 months of a corporate
dissolution or is terminated with the approval of a bankruptcy court overseeing
a bankruptcy of the Company;


 


(C)           The Company terminates this Plan and all other similar
deferred compensation arrangements that would be aggregated with the Plan under
Treasury Regulation Section 1.409A-1(c), provided that (i) any
benefits payable as a result of the termination (other than benefits that would
have been payable under the terms of the Plan without regard to the
termination) are not paid until at least 12 months after the date of
termination of the Plan, (ii) all benefit payments under the Plan are
completed within 24 months after the date of termination of the Plan, and (iii) the
Company does not adopt a new or replacement deferred compensation plan within 5
years after the date of termination of the Plan.


 


VIII-1

















 


ARTICLE IX


 


Miscellaneous


 


(a)           Payments to Minors and Incompetents.  If the Plan Administrator receives
satisfactory evidence that a person who is entitled to receive any benefit
under the Plan, at the time such benefit becomes available, is a minor or is
physically unable or mentally incompetent to receive such benefit and to give a
valid release therefor, and that another person or an institution is then
maintaining or has custody of such person, and that no guardian, or other
representative of the estate of such person shall have been duly appointed, the
Plan Administrator may authorize payment of such benefit otherwise payable to
such person to such other person or institution; and the release of such other
person or institution shall be a valid and complete discharge for the payment
of such benefit.


 


(b)           Plan Not a Contract of Employment.  The Plan shall not be deemed to constitute a
contract between the Company and the Participant, nor to be consideration for
the employment of the Participant. 
Nothing in the Plan shall give the Participant the right to be retained
in the employ of the Company; the Participant shall remain subject to discharge
or discipline as an employee to the same extent as if the Plan had not been
adopted.


 


(c)           No Interest in Assets.  Nothing contained in the Plan shall be deemed
to give any Participant any equity or other interest in the assets, business or
affairs of the Company or a Related Employer. No Participant in the Plan shall
have a security interest in assets of the Company or a Related Employer used to
make contributions or pay benefits.


 


(d)           Recordkeeping.  Appropriate records shall be maintained for
the purpose of the Plan by the officers and employees of the Company at the
Company’s expense and subject to the supervision and control of the Plan
Administrator.


 


(e)           Non-Alienation of Benefits.


 


(1)           No benefit under the Plan shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to do so shall be void. 
No benefit under the Plan shall in any manner be liable for or subject
to the debts, contracts, liabilities, engagements or torts of any person.  If any person entitled to benefits under the
Plan shall become bankrupt or shall attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any benefit under the Plan, or if
any attempt shall be made to subject any such benefit to the debts, contracts,
liabilities, engagements or torts of the person entitled to any such benefit,
except as specifically provided in the Plan, then such benefits shall cease and
terminate at the discretion of the Plan Administrator.  The Plan Administrator may then hold or apply
the same or any part thereof to or for the benefit of such person or any 


 


IX-1

















 


dependent or
Beneficiary of such person in such manner and proportions as it shall deem
proper.


 


(2)           Notwithstanding the provisions of paragraph (e)(1) or
any other provision of the Plan, payment of benefits to a divorced Spouse
pursuant to a domestic relations order as defined under Section 414(p) of
the Code, as determined by the Plan Administrator, shall be permitted at any
time provided that the Participant is vested. 
Distributions required by a domestic relations order shall be payable
only in the form of a lump sum payment.


 


(f)            Section 409A Compliance.  The Company intends for this Plan to conform
in all respects to the requirements under Section 409A of the Code, the
failure of which would result in the imposition or accrual of penalties,
interest or additional taxes under Section 409A of the Code (the “Section 409A
Requirements”). Accordingly, the Company intends for this Plan to be
interpreted, construed, administered and applied in a manner as shall meet and
comply with the Section 409A Requirements, and in the event of any
inconsistency between this Plan and the Section 409A Requirements, this
Plan shall be reformed so as to meet the Section 409A Requirements. Any
reference in this Plan to Section 409A of the Code, or any subsection
thereof, shall be deemed to mean and include, to the extent then applicable and
then in force and effect (but not to the extent overruled, limited or
superseded), published rulings, notices and similar announcements issued by the
Internal Revenue Service under or interpreting Section 409A of the Code
and regulations (proposed, temporary or final) issued by the Secretary of the
Treasury under or interpreting Section 409A of the Code


 


(g)           Severability.  The invalidity of any portion of this Plan
shall not invalidate the remainder and the remainder shall continue in full
force and effect.


 


(h)           State Law. This instrument shall be
construed in accordance with and governed by the laws of the State of Florida,
to the extent not superseded by the laws of the United States.


 


IN
WITNESS WHEREOF,
this Plan is effective as of the date first written above and has been executed
on the dates written below.


 


	
   

  	
   

  	
  WALTER INDUSTRIES, INC.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  December 17, 2008

  	
   

  	
  By:

  	
  Larry E. Williams

  
	
  Date

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
					



 


IX-2