Exhibit 10.23


 


WALTER INDUSTRIES, INC.


INVOLUNTARY SEVERANCE BENEFIT PLAN


 


EFFECTIVE AS OF JANUARY 1, 2008


 

















 


WALTER
INDUSTRIES, INC.


INVOLUNTARY
SEVERANCE BENEFIT PLAN


EFFECTIVE
AS OF JANUARY 1, 2008


 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  POLICY

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  3.

  	
  ELIGIBILITY AND PARTICIPATION

  	
  5

  
	
   

  	
   

  	
   

  
	
  4.

  	
  SEVERANCE PAY

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.

  	
  DISTRIBUTION OF BENEFITS

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.

  	
  PLAN ADMINISTRATION

  	
  11

  
	
   

  	
   

  	
   

  
	
  7.

  	
  PLAN MODIFICATION OR TERMINATION

  	
  12

  
	
   

  	
   

  	
   

  
	
  8.

  	
  GENERAL PROVISIONS

  	
  12

  



 

















 


WALTER
INDUSTRIES, INC.


INVOLUNTARY
SEVERANCE BENEFIT PLAN


EFFECTIVE
AS OF JANUARY 1, 2008


 


THIS
INVOLUNTARY SEVERANCE BENEFIT PLAN is hereby established effective the 1st day
of January, 2008, by Walter Industries, Inc. (the “Company”).


 


1.                                      POLICY


 


Circumstances may make it
necessary for an employee to be involuntarily separated from employment with
Walter Industries, Inc. This involuntary severance benefit plan has been
established to assist eligible terminating Employees of the Participating
Employer affected by such circumstances to reduce the adverse financial effects
of their termination of employment.  All
other policies, practices, procedures and plans providing for severance
payments, whether known as severance pay, separation pay, termination pay,
notice, layoff allowance, supplemental unemployment benefits, or the like, on
behalf of Participants (except for any Change of Control Severance Agreement or
Employment Agreement between the Participant and the Service Recipient), are
hereby superseded.


 


2.                                      DEFINITIONS


 


2.1                                 “Board”
shall mean the Board of Directors of the Company.


 


2.2                                 “Cause”
shall include, but is not limited to:


 


(a)                                  Acts
or omissions constituting dishonesty, potential breach of fiduciary obligation
or intentional wrongdoing or malfeasance, potential violation or negligent
disregard for workplace rules and procedures, insubordination, theft,
violent acts or threats of violence or possession of alcohol or controlled
substances on the property of a Participating Employer;


 


(b)                                 Conviction
of a criminal violation involving fraud or dishonesty;


 


(c)                                  The
failure to materially satisfy the conditions and requirements of an Employee’s
employment with a Participating Employer, and such failure by its nature is
incapable of being cured, or such failure remains uncured for more than 30 days
following receipt by the Employee of written notice from the Participating
Employer specifying the nature of the failure and demanding the cure
thereof.  For purposes of this Section,
inattention by the Employee to his duties shall be deemed a failure capable of
cure.


 


Cause shall be determined
by the Plan Administrator in its sole discretion.


 


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2.3                                 “Code” means the Internal Revenue Code
of 1986, as amended, and any successor statute.


 


2.4                                 “Company” means Walter Industries, Inc.
and any successor thereto by merger, purchase or otherwise which expressly
adopts the Plan.


 


2.5                                 “Effective Date” of the Plan is January 1,
2008.


 


2.6                                 “Eligible
Employee” means an Employee who is employed at the corporate headquarters
of Walter Industries, Inc. or any other Participating Employer as a
Salaried Employee or Non-Union Hourly Employee. 
No temporary, occasional or seasonal Employee, as defined within the
payroll records of the Participating Employer, is an Eligible Employee under
the Plan.  Further, Employees covered by
a collective bargaining agreement will not be considered Eligible
Employees.  An employee who is on a leave
of absence covered by the Family and Medical Leave Act, or who is otherwise on
a leave of absence with guaranteed reinstatement rights, shall be deemed to
qualify as an Eligible Employee if, immediately prior to taking such leave of
absence, he would have qualified as an Eligible Employee.


 


Each Eligible Employee
shall be provided with notice indicating that he is eligible for the Plan and
has been categorized into one of four groups (Group A, Group B, Group C or
Group D)  by the Compensation Committee of the
Board.  The Compensation Committee of the
Board of Directors has the sole discretion to determine to which group an
Eligible Employee belongs.


 


2.7                                 “Employee” means any common law
employee employed by a Participating Employer.


 


2.8                                 “Good Reason” means existence of the
following conditions, arising without the Eligible Employee’s consent:  the Participating Employer requiring the
Eligible Employee to be based at a location in excess of fifty (50) miles from
the location of the Eligible Employee’s principal job location, and/or a
material reduction of the Eligible Employee’s base salary from his previous
position.  Notwithstanding anything to
the contrary, the existence of any of the above conditions shall not constitute
Good Reason unless the Eligible Employee provides notice to the Participating
Employer of the existence of the condition within 90 days after the initial
existence of the condition and the Participating Employer does not
remedy the condition within 30 days after it receives such notice.


 


2.9                                 “Individual Employment Agreement”
means any Change of Control Severance Agreement or Employment Agreement between
the Employee and a Participating Employer that provides benefits upon
Separation from Service.


 


2.10                           “Involuntary Separation from Service”
means a Separation form Service without Cause due to:


 


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(a)                                  a
reduction in work force (including layoffs and consolidations of operations);


 


(b)                                 the
transfer of work to another location; or


 


(c)                                  a
determination that an Employee’s ability to satisfy the criteria of his
position has declined through no fault of the Employee as determined in the
sole discretion of the Plan Administrator.


 


For
purposes of the Plan, an Involuntary Separation from Service includes a
Separation from Service for Good Reason, provided that the Separation from
Service occurs within two (2) years following the initial existence of
Good Reason.  The foregoing definition is
intended to meet the definition of an “involuntary separation from service”
within the meaning of Treasury Regulations Section 1.409A-1(n)(1), and the
safe harbor under Treasury Regulations Section 1.409A-1(n)(2)(ii) for
treating a “voluntary separation from service” as an Involuntary Separation
from Service, and both shall be interpreted, construed, administered, and
applied consistently therewith.


 


2.11                           “Non-Union
Hourly Employee” means an Employee identified as a “Non-Union Hourly
Employee” within the payroll records of the Participating Employer.


 


2.12                           “Participant”
means an Eligible Employee who participates in the Plan pursuant to the
provisions of Article 3.


 


2.13                           “Participating
Employer” means the Company and any other Service Recipient that adopts
this Plan as set forth on Appendix A, as amended from time to time.


 


2.14                           “Pay”
means the annual base rate of pay of an Eligible Employee on his Severance Date
at his stated rate as set forth within the payroll records of the Participating
Employer.  “Pay” does not include any
remuneration other than base salary.  “Week’s
Pay” and “Month’s Pay” shall be calculated in accordance with a Participating
Employer’s regular payroll procedures (including the division of annual base
rate of pay by 52 for Week’s Pay, and 12 for Month’s Pay). For part-time
Employees, the base rate of pay will be a pro-rated salary computation based on
the ratio of scheduled part-time hours compared to scheduled full-time hours
during the twelve (12) months immediately preceding his Severance Date.  The annual base rate of pay for Employees
subject to a sales commission plan shall be based on the actual earnings during
the most recent 24-month period.


 


2.15                           “Plan”
means the Walter Industries, Inc. Involuntary Severance Benefit Plan as
set forth herein, as amended from time to time.


 


2.16                           “Plan
Administrator” means the Company.


 


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2.17                           “Plan
Year” means the twelve (12) consecutive month period beginning on January 1
and ending on December 31.


 


2.18                           “Salaried
Employee” means an Employee identified as a “Salaried Employee” within the
payroll records of the Participating Employer.


 


2.19                           “Separation
Agreement, Waiver and General Release” means the documentation prescribed
by the Plan Administrator pursuant to which a Participant waives and/or
releases any and all claims, demands or causes of action of any kind whatsoever
arising out of the Participant’s employment and/or termination of employment.


 


2.20                           “Separation
from Service”  means the termination of the Employee’s
employment with the Service Recipient, determined as follows:


 


(a)                                  The Employee’s employment will be
considered terminated effective as of the date that both the Employee and the
Participating Employer reasonably anticipate, based on all of the facts and
circumstances, that either (A) no services will be performed by the
Employee for the Service Recipient after such date, whether as an employee or
as an independent contractor, or (B) the level of bona fide services that
the Employee will perform for the Service Recipient after such date, whether as
an employee or as an independent contractor, will be permanently reduced to no
more than twenty percent (20%) of the average level of bona fide services the
Employee performed over the immediately preceding thirty-six (36) month period
(or, if less, the Employee’s full period of service to the Service Recipient).


 


(b)                                 If the Employee is on a “bona fide leave
of absence” (as defined below) from the Service Recipient, the Employee’s
employment will be considered terminated, notwithstanding that the Employee is
reasonably expected to return to perform services for the Service Recipient (at
a level such that the Employee’s employment is not terminated pursuant to
subsection (a) above), on the later of: (A) the first date
immediately following the end of the Six-Month Period (as defined below), or (B) the
date the Employee’s right to reemployment under applicable law or contract, if
any, expires. A “bona fide leave of absence” is a leave of absence, including
military leave or sick leave, in which there is a reasonable expectation that
the Employee will return to perform service for the Service Recipient. The “Six-Month
Period” is the period that begins on the date the leave of absence commences
and ends on the date that is six months thereafter.


 


(c)                                  The foregoing definition is intended to meet
the requirements for a “separation from service” from the Service Recipient
within the meaning of Section 409A(a)(2)(A)(i) of the Code and
Treasury Regulations Section 1.409A-1(h), and shall be interpreted,
construed, administered and applied consistently therewith. Without limiting
the generality of the foregoing, for purposes of this 


 


4

















 


definition,
the definition of the term “Participating Employer” set forth below shall be
modified as provided in Treasury Regulations Section 1.409A-1(h)(3).


 


2.21                           “Service”
means the Employee’s periods of eligible service with the Service Recipient or
any other entity that was a Service Recipient at the time the service was
performed.  For purposes of determining
Service for each Employee who was employed by a Participating Employer on January 1,
2008, all continuous service ending with a Severance Date will be taken into
account.  In addition, non-continuous
periods of service will be taken into account under the following limited
circumstances:  If an Employee has
terminated employment with a Participating Employer after January 1, 2008
and has been rehired within less than six (6) months, prior service as an
Employee of a Participating Employer will be taken into consideration.


 


2.22                           “Service Recipient” means 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.


 


2.23                           “Severance
Date” means the date after the Effective Date on which an Employee
involuntarily has a Separation from Service without Cause.


 


2.24                           “Severance
Pay” or “Severance Payment” or “Severance Payments” means
payments to eligible Employees pursuant to Section 4 hereof.


 


2.25                           “Specified Employee” means 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).


 


2.26                           “Staff
Reduction Policy” means any administrative policy adopted by the Company,
as in effect from time to time, and attached hereto as Appendix B, which sets
forth the policies for the Participating Employer with respect to management
initiated terminations resulting from force/skills and balances, site closings,
and job eliminations.


 


2.27                           “Year
of Service” means each twelve (12) months of Service.  “Years of Service” shall be determined as of
the Employee’s Severance Date.


 


3.                                      ELIGIBILITY AND
PARTICIPATION


 


3.1                                 An
Eligible Employee will become a Participant under the Plan for purposes of
receiving benefits upon his Severance Date.


 


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The Plan Administrator
shall have complete power and discretion to determine if and when an Eligible
Employee shall participate in the Plan; provided, however, that the Plan
Administrator’s decision shall be made in accordance with the terms of the Plan
and the requirements of any Staff Reduction Policy.


 


3.2                                 An
Employee shall not be eligible to receive a benefit from the Plan if his
Separation from Service occurs by reason of death or disability, as determined
in the discretion of the Board (other than any disability described in, and
subject to, Section 4.8) or if the Separation from Service is for Cause or
is voluntary (unless such voluntary Separation from Service is for a Good
Reason).


 


4.                                      SEVERANCE PAY


 


4.1                                 Basic
Severance.  Each Participant who
incurs a Severance Date and is not provided severance benefits under an
Individual Employment Agreement shall be entitled to receive basic Severance
Pay pursuant to this Section 4.1. 
The amount of basic Severance Pay to be paid to a Participant shall be
determined in accordance with the following schedule:


 




	
  Years of Service

  	
   

  	
  Pay

  
	
   

  	
   

  	
   

  
	
  Less than 1 year

  	
   

  	
  1 week

  
	
  1 year or more

  	
   

  	
  1⁄2 month

  






 


4.2                                 Additional
Severance.  Except as otherwise
provided in this Section 4, each Participant who incurs a Severance Date
and is not provided severance benefits under an Individual Employment Agreement
will be entitled to the greater of the Severance Pay provided by Option
A or Option B below:


 


(a)                                  Option A:  Two weeks Severance Pay
per Years of Service, minus the Basic Severance Pay set forth in Section 4.1,
up to a maximum of fifty-two (52) weeks’
Pay and a minimum of four (4) weeks’ Pay for each salaried exempt
Employee, and a maximum of twenty-six (26) weeks’ Pay and a minimum of
four (4) weeks’ Pay for a Non-Union Non-Exempt or Non-Union Hourly
Employee.


 


(b)                                 Option
B:  Basic Severance as noted in Section 4.1,
plus the combination of (1), (2), and (3) below, as applicable:


 


(1)                                  Participants
age 40 through 45 at the time of their Severance Date will receive an
additional half month’s Pay.


 


(2)                                  Participants
age 46 and above at the time of their Severance Date will receive one
additional month’s Pay.


 


(3)                                  Severance
Pay determined in accordance with the following schedule:


 


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  Years of Service

  	
   

  	
  Pay

  
	
   

  	
   

  	
   

  
	
  Less than 1 year

  	
   

  	
  1 week

  
	
  1 to 3 years

  	
   

  	
  1⁄2 month

  
	
  3 to 6 years

  	
   

  	
  1 month

  
	
  6 to 9 years

  	
   

  	
  1 1⁄2 months

  
	
  9 to 12 years

  	
   

  	
  2 1⁄2 months

  
	
  12 to 15 years

  	
   

  	
  3 months

  
	
  15 to 18 years

  	
   

  	
  3 1⁄2 months

  
	
  18 to 21 years

  	
   

  	
  4 1⁄2 months

  
	
  21 to 24 years

  	
   

  	
  5 months

  
	
  24 to 27 years

  	
   

  	
  5 1⁄2 months

  
	
  27 + years

  	
   

  	
  6 months

  






 


(4)  A Non-Union
Non-Exempt or Non-Union Hourly Employee is entitled to a maximum of 32.5 weeks
of Severance Pay when combining the Basic Severance set forth in Section 4.1
and this Severance set forth in Option B.


 


4.3                                 Additional
Group Severance.


 


(a)                                  Group
A employees will receive 26 weeks of Severance Pay in addition to Severance Pay
provided by an Individual Employment Agreement or Severance Pay as defined and
provided in Sections 4.1 and 4.2.


 


(b)                                 Group
B employees will receive 13 weeks of Severance Pay in addition to Severance Pay
provided by an Individual Employment Agreement or Severance Pay as defined and
provided in Sections 4.1 and 4.2.


 


(c)                                  Group
C employees (salaried exempt Employees not in Group A or Group B) will not
receive any additional group severance pursuant to this section.


 


(d)                                 Group
D employees (Non-Union Non-Exempt and Non-Union Hourly Employees) will not receive
any additional group severance pursuant to this section.


 


4.4                                 The
additional Severance Pay described in Sections 4.2 and 4.3 shall be contingent
upon the Participant’s timely execution of a Separation Agreement, Waiver and
General Release, which releases and discharges each Participating Employer and
Affiliate (and its officers, employees and agents) from all claims, demands or
causes of action of any kind whatsoever arising out of the Participant’s
employment and termination of employment. 
No Participant shall be eligible to receive additional Severance Pay
unless he executes a Separation Agreement, Waiver and General Release in a
manner as may be prescribed by the Plan Administrator.


 


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4.5                                 To
the extent permitted by law, if the Participating Employer is obligated by law
to pay any severance type remuneration other than unemployment compensation,
including but not limited to payments pursuant to the Worker Adjustment and
Retraining Notification Act (WARN), on account of, or in connection with, a
Participant’s termination of employment on a Severance Date, the Severance
Payments pursuant to this Article, as applicable, shall be reduced, dollar for
dollar, by the amount of any such remuneration, without regard to the minimum
amount of Severance Pay specified in this Article, as applicable.


 


4.6                                 To
the extent permitted by law and unless otherwise provided by an administrative
policy adopted by the Company, the amount of an Employee’s Severance Pay will
be reduced by any amounts the Employee owes a Participating Employer or other
Service Recipient, including but not limited to, salary and expense advances
and employee loans, as of the Severance Date.


 


4.7                                 Notwithstanding
any other provision of the Plan and unless otherwise provided by an
administrative policy adopted by the Company, if a Participant violates the
Company’s business practices and/or policies and/or fails to continue to
fulfill his obligations not to disclose the private, confidential or
proprietary information of the Service Recipient, the Participant shall not be
entitled to receive any payment pursuant to Sections 4.2 or 4.3, or if payments
have been made, he will be required to repay to the Company all Plan payments.


 


4.8                                 If
an Employee incurs an Involuntary Separation from Service without Cause while
receiving disability benefits from the Participating Employer, the Severance
Payments pursuant to this Article, as applicable, shall be reduced, dollar for
dollar, by the amount of any such disability payments to the Employee, without
regard to the minimum amount of Severance Pay specified in this Article.


 


4.9                                 If
a Participant becomes (a) reemployed by (i) the Company, (ii) any
Service Recipient, or (iii) any other company that participates in any
retirement plan sponsored by Walter Industries, Inc. that is tax-qualified
under Internal Revenue Code Section 401(a), or (b) employed within
sixty (60) days of his Severance Date by any purchaser or surviving business of
the Company, then the Participant shall not be entitled to receive any payment
under the terms of this Plan.  If a
former Participant has received a payment and becomes reemployed (or employed,
as described above), he shall be required to repay to the Participating
Employer the difference between the total number of weeks for which payments
were made and the number of weeks from the former Participant’s Severance Date
to the effective date of his reemployment. 
For example, if the Participant receives sixteen (16) weeks’ Pay and is
reemployed after eight (8) weeks, the equivalent of eight (8) weeks’
Pay must be repaid to the Participating Employer.


 


4.10                           Unless
an Individual Employment Agreement provides otherwise, and notwithstanding
anything above in this Article 4, if a Participant is a “disqualified
individual” (as defined in Section 280G(c) of the Code), and the
Severance Payment 


 


8

















 


provided for in this Article 4,
together with any other payments which the Participant has the right to receive
from a Participating Employer (or other Service Recipient), would constitute a “parachute
payment” (as defined in Section 280(G)(b)(2) of the Code), the
Severance Payment shall be reduced.  The
reduction shall be in an amount so that the present value of the total amount
received by the Participant from the Participating Employer (or other Service
Recipient) will be one dollar ($1.00) less than three (3) times the
Employee’s base amount (as defined in Section 280G of the Code) and so
that no portion of the amounts received by the Employee shall be subject to the
excise tax imposed by Section 4999 of the Code (excise tax).  The determination as to whether any reduction
in the Severance Payment is necessary shall be made by the Plan Administrator
in good faith, and the determination shall be conclusive and binding on the
Participant.  If through error or
otherwise the Participant should receive payments under this Plan, together
with other payments the Participant has the right to receive from the
Participating Employer (or other Service Recipient), excluding deferred
compensation plan payments, in excess of one dollar ($1.00) less than three
times his base amount, the Participant shall immediately repay the excess to
his employer upon notification that an overpayment has been made.


 


4.11                           The
Plan Administrator will provide an Employee with a notification of the Employee’s
right to continue health and dental insurance coverage (hereinafter referred to
as “Health Insurance”) under COBRA (ERISA §§ 601-606; 29 USCS §§ 1161-1166) as
a result of his Severance Date in accordance with the Participating Employer’s
usual procedures. If an Employee does not elect continuation coverage under
COBRA, the Employee’s health and dental insurance coverage will cease in
accordance with the Participating Employer’s usual practice as permitted under
applicable law and the terms of the relevant benefit plan document and/or
underlying insurance policy.


 


5.                                      DISTRIBUTION OF
BENEFITS


 


5.1                                 (a)                                  Except as set forth in Section 5.1(b), basic
Severance Pay to which a Participant may be entitled pursuant to Section 4.1
shall be paid under the regular payroll schedule in effect on the Severance
Date, starting not later than fifteen (15) days following the Participant’s
Severance Date.  Additional Severance Pay
to which a Participant may be entitled pursuant to Sections 4.2 and/or 4.3
shall be paid on regular paydays, starting after the full amount of basic
Severance Pay is paid to a Participant.


 


All applicable
federal, state and local taxes (including Social Security taxes) and all other
welfare benefit plan coverage payments will be deducted and withheld from all
Severance Payments.


 


Subject to the
requirements of Section 409A, the Employee shall be eligible to receive
payment for any earned and unused vacation, in accordance with the
Participating Employer’s policy in existence on the Severance Date.


 


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(b)                                 If
the Participant is a Specified Employee as of his Severance Date, to the extent
the Participant is entitled to receive any benefit or payment under this Plan
that constitutes deferred compensation within the meaning of Section 409A
(and exceeds the limits on any exceptions to deferred compensation permitted
under Section 409A with respect to severance pay and other types of
payments) of the Code (after first
accounting for all other separation pay, as that term is defined under Section 409A
of the Code, to be paid or provided to the Participant, including under any
Individual Employment Agreement) before the date that is six (6) months
after the Severance Date, such benefits or payments shall not be provided or
paid to the Participant on the date otherwise required to be provided or paid.
Instead, all such amounts shall be accumulated and paid in a single lump sum to
the Participant on the first business day after the date that is six (6) months
after the Severance Date. All benefits or payments otherwise required to be
provided or paid on or after the date that is six (6) months after the
Severance Date shall not be affected by this Section 5(b) and shall
be provided or paid in accordance with the payment schedule applicable to such
benefit or payment under this Plan. Prior to the imposition of the six month
delay as set forth in this Section 5.1(b), it is intended that (i) each
installment under this Plan be regarded as a separate “payment” for purposes of
Treasury Regulations Section 1.409A-2(b)(2)(i), and (ii) all benefits
or payments provided under this Plan satisfy, to the greatest extent possible,
the exemptions from the application of Section 409A provided under
Treasury Regulations Sections 1.409A-1(b)(4) (short-term deferral) or
1.409A-1(b)(9) (certain separation pay plans). This Section 5.1(b) is
intended to comply with the requirements of Section 409A(a)(2)(B)(i) of
the Code and shall be interpreted, construed, administered and applied
consistently therewith.


 


5.2                                 Severance
Payments shall be made from the general assets of the Participant’s
Participating Employer.


 


5.3                                 (a)                                  In
the event of a claim by an Employee as to entitlement or the amount of any
distribution or its method of payment, such Employee shall present the reason
for his claim in writing to the Plan Administrator.  The Plan Administrator shall, within ninety
(90) days after receipt of such written claim, send a written notification to
the Employee as to its disposition, unless the Plan Administrator determines
that special circumstances require an extension of time for processing the
claim.  If the Plan Administrator
determines that an extension of time for processing is required, written notice
of the extension will be furnished to the Employee prior to the termination of
the initial 90-day period.  In no event
will such extension exceed a period of 90 days from the end of such initial
period.  The extension notice will
indicate the special circumstances requiring an extension of time and the date
by which the plan expects to render the benefit determination.


 


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(b)                                 In
the event the claim is wholly or partially denied, such written notification
shall (i) state specifically the reason or reasons for the denial, (ii) reference
to the specific Plan provisions on which the determination is based, (iii) provide
a description of any additional material or information necessary for the
Employee to perfect the claim and an explanation of why such material or
information is necessary, and (iv) set forth the procedure by which the
Employee may appeal the denial of the claim.


 


(c)                                  In
the event an Employee wishes to appeal the denial of his claim, he may request
a review of such denial by making application in writing to the Plan
Administrator within sixty (60) days after the receipt of the denial.  Such Employee (or his duly authorized legal
representative) may, upon written request to the Plan Administrator, review any
documents pertinent to his claim, and submit in writing issues and comments in
support of his position.  Within sixty
(60) days after receipt of the written appeal (unless special circumstances,
such as the need to hold a hearing, require an extension of time, but in no
event more than one hundred twenty (120) days after such receipt), the Plan
Administrator shall notify the Employee of the final decision. The final
decision shall be in writing and shall include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, and
specify references to the pertinent Plan provisions on which the decision is
based.


 


6.                                      PLAN ADMINISTRATION


 


6.1                                 The Plan shall be interpreted, administered
and operated by the Plan Administrator who shall have complete authority and
discretion, subject to the express provisions of the Plan and any Staff
Reduction Policy, to determine who shall be eligible to participate in the Plan
and receive Severance Pay, to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, and to make all other
determinations necessary or advisable for the administration of the Plan.


 


6.2                                 All questions of any character whatsoever
arising in connection with the interpretation of the Plan or its administration
or operation shall be submitted to and settled and determined by the Plan
Administrator in accordance with the procedure for claims and appeals described
in Section 5.3.  Any such settlement
and determination shall be final and conclusive, and shall bind and may be
relied upon by each Participating Employer, each of the Employees and all other
parties in interest.


 


6.3                                 The Plan Administrator may delegate any of
the duties hereunder to such person or persons from time to time as it may
designate.  Except to the extent
prohibited by law, any person acting hereunder pursuant to the delegation of
the Plan Administrator shall be indemnified for actions taken pursuant to such
delegation, by the Company.


 


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7.                                      PLAN
MODIFICATION OR TERMINATION


 


7.1                                 Subject to Code Section 409A, the Plan
may be modified or amended at any time by the Company, with or without
notice.  Without limiting the foregoing,
subject to Code Section 409A, the Plan may be modified or amended to
increase, decrease or eliminate the Severance Payments to any Employee who
incurs a Severance Date after such modification or amendment.


 


7.2                                 It is the intention of the Company to
continue the Plan and make Severance Payments to all eligible terminating
Employees.  However, the Company may, for
any reason subject to Code Section 409A, terminate the Plan or amend the
Plan to withhold its application as to all or some Employees in a location or
other portion of the Company, a Participating Employer or other Service
Recipient, and the Plan Administrator may, accordingly, make no Severance
Payment to anyone who has not incurred a Severance Date at the time of such
termination or amendment.  The Company
may also extend the applicability of the Plan to all or some Employees in a
location or other portion of the Company, a Participating Employer or other
Service Recipient.


 


7.3                                 Any modification, amendment, termination,
withholding, extension or other action shall be in writing and apply only to
Employees with Severance Dates occurring after such action.  Any such modification, amendment,
termination, withholding, extension or other action shall be authorized or
ratified by the Company’s Board.  No such
action shall reduce or eliminate the Severance Pay of any Employee whose
Severance Date occurs before such action is taken.


 


8.                                      GENERAL
PROVISIONS


 


8.1                                 This
Plan is intended to be an unfunded employee welfare benefit plan for the
purposes of providing severance benefits to a Participating Employer’s eligible
terminating Employees.  The Plan is
subject to Department of Labor Regulation 2510.3-1 and, notwithstanding any
other provision of this Plan, will not provide a benefit to exceed twice the
equivalent of an Employee’s annual compensation during the year preceding
termination of employment.  In addition,
all Severance Payments hereunder will be completed within twenty-four (24)
months of an Employee’s Severance Date.


 


8.2                                 Nothing
in the Plan shall be deemed to give any Employee the right to be retained in
the employ of a Participating Employer, or to interfere with the right of the
Participating Employer to discharge him at any time and for any lawful reason,
without notice.


 


8.3                                 Except
as otherwise provided herein or by law, no right or interest of any Employee
under the Plan shall be assignable or transferable, in whole or in part, either
directly or by operation of law or otherwise, including, without limitation, by
execution, levy or garnishment, attachment, or pledge.  No attempted assignment or transfer thereof
shall be effective, and no right or interest of any Employee under the Plan
shall 


 


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be liable for, or subject
to, any obligation or liability of such Employee.  As to an Employee who is unable to care for
his affairs, payment pursuant to this Plan may be made directly to his legal
guardian or personal representative, in which case all liabilities of the Plan
to any such Employee shall be fully discharged.


 


8.4                                 If
an Employee dies after a Severance Date, but before receiving all Severance
Payments due pursuant to this Plan, remaining payments will be made in one lump
sum to his beneficiary(ies) entitled to receive any available death benefits
under the Walter Industries, Inc. Profit Sharing Plan, or any successor to
that plan, or if the Participant does not participate in that plan, then the
beneficiary designated under the Walter Industries, Inc. 401(k) Plan,
or any successor to that plan, or if no beneficiary is so designated, to his
estate within 90 days of death.


 


8.5                                 The
Plan shall be governed by, and construed in accordance with, the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and all
applicable rules and regulations thereunder, and, to the extent not
preempted by ERISA, with the laws of the State of Florida.


 


8.6                                 Descriptive
headings within this Plan are for convenience and reference only.  The words of the headings will in no way be
held or deemed to define, describe, explain, modify or limit the meaning of any
provision, or the scope or the intent of this Plan document.


 


8.7                                 Whenever
the Company or another Participating Employer under the terms of this Plan is
permitted or required to do or perform any act, it shall be done and performed
by the board of directors of the Company or such other Participating Employer
or any properly authorized designee of the board of directors.


 


8.8                                 Throughout
this Plan, and whenever appropriate, the masculine gender shall be deemed to
include the feminine and neuter; the singular, the plural; and vice versa.


 


8.9                                 Section 409A; Taxes.  This Plan is intended to conform
in all respects to the requirements under Section 409A of the Code. Accordingly,
the Plan should be interpreted, construed, administered and applied in a manner
as shall meet and comply with the requirements of Section 409A of the
Code, and the Board may amend this Plan in its discretion so as to comply with
any such requirement. 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.
Notwithstanding any other provision of this Plan, neither the Company nor any
individual acting as a director, officer, employee, agent or other
representative of the Company shall be liable to the Employee or any other
Person for any claim, loss, liability or expense arising out of any interest,
penalties 


 


13

















 


or
additional taxes due by the Employee or any other Person as a result of this
Plan or the Company’s administration of the terms of this Plan not satisfying
any of the requirements of Section 409A of the Code.


 


IN WITNESS WHEREOF, this
Plan has been executed this 17th day of October, 2008.


 


 


	
   

  	
  WALTER INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Larry E. Williams

  
	
   

  	
   

  	
  Senior Vice President

  



 


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