Document:

Exhibit
10.4

 

WALTER
INDUSTRIES, INC.

DIRECTORS’
DEFERRED FEE PLAN

 

AMENDED
AND RESTATED

AS OF

JANUARY
1, 2008

 

 

WALTER
INDUSTRIES, INC.

DIRECTORS’
DEFERRED FEE 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

  	
   

  	
  Deferral
  Elections and Discretionary Contributions

  	
   

  	
  V-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  Participant
  Accounts and Investment of Deferred Amounts

  	
   

  	
  VI-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
  Plan
  Benefits and Distributions

  	
   

  	
  VII-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
  Amendment
  and Termination

  	
   

  	
  VIII-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
  Miscellaneous

  	
   

  	
  IX-1

  

 

 

WALTER
INDUSTRIES, INC.

DIRECTORS’
DEFERRED FEE PLAN

 

AMENDED
AND RESTATED

AS OF

JANUARY
1, 2008

 

ARTICLE I

 

Purpose

 

Walter Industries, Inc. (the “Company”)
previously established the Walter Industries, Inc. Directors’ Deferred Fee
Plan (the “Plan”) effective as of January 1, 2008, for eligible members of
the Board of Directors of the Company. 
The Company has determined that it would be in the best interest of the
Participants to amend and restate the Plan effective as of January 1, 2008
to comply with Code Section 409A and to make other desired changes.  The Plan is an unfunded plan.  The Plan is intended to comply with Section 409A
of the Internal Revenue Code.

 

I-1

 

ARTICLE II

 

Definitions

 

(a)                                  “Account” or “Accounts” shall mean a Participant’s Income Account or
Stock Equivalent Account.

 

(b)                                 “Beneficiary” shall mean the person
or persons designated by the Participant on a form prescribed by and filed with
the Plan Administrator, and may be changed at any time by filing a new form
with the Plan Administrator.  If the
Participant has designated no Beneficiary, or if no Beneficiary that he has
designated survives him, then such unpaid amounts shall be paid to his
estate.  In the event of any dispute as
to the entitlement of any Beneficiary, the Plan Administrator’s determination
shall be final, and the Plan Administrator may withhold any payment until such
dispute has been resolved.

 

(c)                                  “Board” or “Board of Directors”
shall mean the board of directors of the Company.

 

(d)                                 “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.

 

(e)                                  “Common Stock” shall mean the common
stock of the Company, par value $.01 per share.

 

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

 

(g)                                 “Compensation” shall mean the fees
paid by the Company to a Participant related to services as a member of the
Board of Directors, but does not include travel expenses.

 

(h)                                 “Dividend Equivalent” shall mean,
with respect to any cash dividend declared and paid by the Company, an amount
equal (i) the cash dividend paid by the Company per share of Common Stock,
multiplied by (ii) the number of Stock Equivalent Shares in the
Participant’s Stock Equivalent Account on the record date of such dividend.

 

(i)                                     “Effective Date” shall mean, for
purposes of this amendment and restatement, January 1, 2008.

 

(j)                                     “Fair Market Value” shall mean, with
respect to a share of Common Stock on any given date, (i) if the Common
Stock is readily tradable on an established securities market, the closing
price per share on such date as reported on the principal securities market on
which the Common Stock is so traded (or, if the date is not a trading day, on
the trading day next preceding such date), or (ii) if the Common Stock is
not readily tradable on an established securities market, the fair market value
of the Common Stock as determined by the Plan Administrator in good faith,
taking into account all applicable laws, rules and regulations.

 

II-1

 

(k)                                  “Income Account” shall mean a
bookkeeping account established in accordance with Article VI that
represents a Participant’s hypothetical interest with respect to the amounts
credited to such Account in accordance with paragraph (a) of Article V
and paragraph (c) of Article VI.

 

(l)                                     “Participant” shall mean any member
of the Board of Directors of the Company who is covered by this Plan as
provided in Article IV.

 

(m)                               “Plan” shall mean the Walter
Industries, Inc. Directors’ Deferred Fee Plan and as it may be amended
from time to time.

 

(n)                                 “Plan Administrator” shall mean the
Company.

 

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

 

(p)                                 “Stock Equivalent Account” shall
mean a bookkeeping account established in accordance with Article VI that
represents a Participant’s hypothetical interest with respect to the Stock
Equivalent Shares credited to such Account in accordance with paragraph (a) of
Article V and paragraph (c) of Article VI.

 

(q)                                 “Stock Equivalent Share” shall mean
a bookkeeping entry that is equivalent in value, at any given time, to one (1) share
of Common Stock.

 

(r)                                    “Termination Event” shall mean any
event that results in the termination of a Participant’s service as a member of
the Board (including, death, resignation or removal).

 

II-2

 

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. 
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 members of the Board, to
participate or 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 any
Participant or Beneficiary is entitled;

 

(E)                                 To
process claims for benefits under the Plan by Participants or Beneficiaries;

 

(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 a committee 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 officers, legal and financial advisers to the Company 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.  The Participant or a Beneficiary (“Claimant”)
may file with the Plan Administrator a written claim for benefits if the
Participant or Beneficiary 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
for benefits. The Plan Administrator must provide adequate notice in 

 

III-1

 

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; and

 

(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

 

(a)                                  Eligibility.  Each person who is elected to be a member of
the Board and who is not an employee of the Company or any of its subsidiaries
is eligible to elect to participate in the Plan.

 

(b)                                 Participation.  An eligible person shall become a Participant
upon receiving notification from the Plan Administrator and the timely filing
of elections pursuant to Article V.

 

IV-1

 

ARTICLE V

 

Deferral Elections and Discretionary Contributions

 

(a)                                  Deferral Elections and Procedures.

 

(1)                                  Any
Participant may elect to defer, for any calendar year, all or a portion of his
Compensation earned during such calendar year as may be permitted by the Plan
Administrator in its discretion.

 

(2)                                  (A)                              Any
deferral election permitted under this paragraph (a) shall be in writing,
signed by the Participant.  Any election
to defer a portion of Compensation must be delivered to the Plan Administrator
prior to the January 1 of the calendar year in which the Compensation to
be deferred is otherwise earned.

 

(B)                                Notwithstanding
the foregoing, an election may be made by a Participant to defer Compensation
earned subsequent to his deferral election within the 30-day period following a
Participant’s initial eligibility to participate in the Plan.

 

(3)                                  Any
deferral election will continue until revoked or modified by a new election in
writing delivered to the Plan Administrator. 
Such new election will be effective as of the next January 1.

 

(4)                                  A
Participant who elects to defer all or a portion of his Compensation shall
designate whether such amount will be contributed to the Income Account or the
Stock Equivalent Account.  Such election
may be revoked or amended, only with regard to fees covering the Participant’s
services as a member of the Board.

 

(b)                                 Election Forms.  Any election to defer or revocation or change
of an existing deferral election or account allocation election by a
Participant under this Article V shall be made on a form or forms
prescribed by the Plan Administrator (the terms of which are incorporated
herein by reference), and shall specify the amount of Compensation to be
deferred.

 

V-1

 

ARTICLE VI

 

Participant Accounts and Investment of Deferred Amounts

 

(a)                                  In General.

 

(1)                                  Any
Compensation deferred pursuant to this Plan shall be recorded by the Plan
Administrator in an Income Account or Stock Equivalent Account, based on the
Participant’s election.  Such Accounts
will be bookkeeping accounts maintained in the name of the Participant.  The Accounts shall be credited at least
quarterly with all amounts that have been deferred by the Participant during
the Plan Year pursuant to Article V, and such Account shall be charged
from time to time with all amounts that are distributed to the
Participant.  Each Account shall be
adjusted periodically to reflect all investment gains and losses accruing to
amounts credited to each Participant’s Account pursuant to the investment
selections made by each Participant in accordance with paragraph (c) of Article VI.

 

(2)                                  All
amounts that are credited to a Participant’s Accounts shall be credited solely
for purposes of accounting and computation. 
A Participant shall not have any interest in or right to such Accounts
at any time.

 

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

 

(c)                                  Credited Earnings.

 

(1)                                  Income
Account.  Amounts credited to the
Income Account shall be credited as a dollar amount on the date the
Compensation would have otherwise been paid. 
At the end of each calendar quarter each Participant’s Income Account
will be credited with interest at an annual rate equal to the yield of a
10-year U.S. Treasury Note as of the beginning of such calendar quarter plus
1.00%.  Interest shall be computed on the
basis of the beginning monthly credit balance in the Participant’s Income
Account during such quarter.

 

(2)                                  Stock
Equivalent Account.  For Compensation
deferred to the Stock Equivalent Account, on the first business day of each calendar
quarter, the amount of such Compensation otherwise payable during the preceding
calendar quarter shall be converted into Stock Equivalent Shares equal in
number to the maximum number of shares of Common Stock, or fraction thereof, to
the nearest one hundredth of one share, which could be purchased with such
dollar amount at the Fair Market Value of the Common Stock on that date, and
such Stock 

 

VI-1

 

Equivalent Shares shall
be credited to the Participant’s Stock Equivalent Account on that date. If the
electing Participant incurs a Termination Event prior to such date, such
electing Participant’s Compensation deferred to the Stock Equivalent Account
that is otherwise payable prior to the date of the Termination Event shall, no
later than the tenth day after the Termination Event, and without duplication
for Compensation already converted into Stock Equivalent Shares, be converted
into Stock Equivalent Shares equal in number to the maximum number of shares of
Common Stock, or fraction thereof, to the nearest one hundredth of one share,
which could be purchased with such dollar amount at the Fair Market Value of
the Common Stock on the date of the Termination Event, and such Stock
Equivalent Shares shall be credited to the Participant’s Stock Equivalent
Account on the date of the Termination Event.

 

If the Company declares
and pays a cash dividend on its Common Stock, an amount equal to the Dividend
Equivalent for such dividend shall be converted into Stock Equivalent Shares
equal in number to the maximum number of shares of Common Stock, or fraction
thereof, to the nearest one hundredth of one share, which could be purchased
with such dollar amount at the Fair Market Value of the Common Stock on the payment
date of the dividend to which the Dividend Equivalent relates, and such Stock
Equivalent Shares shall be credited to the Participant’s Stock Equivalent
Account on that date.

 

Subject to the Section 409A
Requirements, Stock Equivalent Shares shall be appropriately adjusted in the
event of any stock dividends, stock splits or any other similar changes in the
Company’s Common Stock, as determined by the Plan Administrator in a manner it
deems equitable, in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under this Plan.

 

(d)                                 Valuation; Annual Statement.  The value of a Participant’s Accounts shall
be determined by the Plan Administrator and the Plan Administrator may
establish such accounting procedures as are necessary to account for the
Participant’s interest in the Plan.  Each
Participant’s Account shall be valued as of the last day of each Plan Year or
more frequently as determined by the Plan Administrator.  The Plan Administrator shall furnish each
Participant with an annual statement of his Accounts.

 

(e)                                  Establishment of Trust.

 

(1)                                  The
Company may establish one or more trusts substantially 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.  Except as provided in paragraph (b) above
and the terms of the trust agreement, any such trust or trusts shall be
established in such manner as to permit the use of assets transferred to the
trust and the earnings thereon to be used by the trustee solely to satisfy the
liability of the Company in accordance with the Plan.

 

VI-2

 

(2)                                  Except
as otherwise provided in the trust established with respect to the Plan, the
Company, in its sole discretion, and from time to time, may make contributions
to the trust.  Unless otherwise paid by
the Company, 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 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.

 

VI-3

 

ARTICLE VII

 

Plan Benefits and Distributions

 

(a)                                  Plan Benefits.  In the event of a Termination Event, a
Participant will be entitled to a benefit equal to the balance in his
Accounts.  The balance of a Participant’s
Income Account as of any given date shall be determined as of such date by
crediting earnings in accordance with paragraph (c) of Article VI up
to and including such date. The balance of a Participant’s Stock Equivalent
Account as of any given date shall be equal to (1) the Fair Market Value
of a share of Common Stock on such date, multiplied by (2) the
number of Stock Equivalent Shares in the Participant’s Stock Equivalent Account
on such date.

 

(b)                                 Death Benefit.  In the event of the death of a Participant, the
Participant’s Beneficiary shall be entitled to a death benefit equal to all or
any remaining portion of the amounts credited to his Accounts determined as of
the date of his death, payable in accordance with paragraph (c) or (d) of
Article VII below.

 

(c)                                  Timing of Payment.

 

(1)                                  Payment
of the amount credited to the Participant’s Accounts shall commence on the
earlier of:

 

(A)                              the
first day of the seventh month following the Participant’s death; or

 

(B)                                unless
otherwise elected under (c)(2) below, the first day of the seventh month
following the date of the Participant’s Termination Event.

 

(2)                                  The
Participant may elect to receive payment in any year following his 72nd birthday or the year following his termination
of services as a member of the Board. Such payment shall be made on the later
of (A) the January 15th of the calendar year elected by the
Participant or (B) the first day of the seventh month following the
Participant’s Termination Event.  Such
election must be made prior to December 31, 2008 or, if later, the date
the Participant commences participation in the Plan.

 

(3)                                  Effective
as of January 1, 2009, an election made pursuant to (c)(2) is generally irrevocable unless
the Participant requests a change and (i) the change does
not take effect until at least 12 months after the date on which the election
is made, (ii) the change is made at least 12 months prior to the date the
payment is scheduled to commence, and (iii) payment is deferred for a
period of not less than 5 years from the date payment would otherwise have been
made (unless payment is being made for disability or death) and such request is
permitted under Section 409A of the Code.

 

VII-1

 

(d)                                 Form of Benefit Payment.

 

(1)                                  Benefits paid under
the Plan shall be paid in a lump sum on the date specified above unless the
Participant elects to receive benefits in the form of installments over 5, 10
or 15 years.  Amounts credited to the
Income Account shall be distributed in cash. 
Amounts credited to the Stock Equivalent Account shall be distributed in
shares of Common Stock, provided, however, that any fractional shares shall be
distributed in cash.  All fractional
shares shall be cashed in at the Fair Market Value on the day before the benefits
under the Plan are distributed.  Such
election must be made on or before December 31, 2008 or, if later, the
date the Participant commences participation in the Plan. If installments are
elected, the first installment will be paid on the date specified in paragraph
(c)(1)(A) of this Article VII and each additional installment will be
paid on each anniversary of such date.

 

(2)                                  Notwithstanding the
foregoing, in the event of the death of the Participant, any death benefit paid
to the Participant’s Beneficiary pursuant to paragraph (c) of Article IV
shall be paid in the form of a lump sum on the date specified in paragraph
(c)(1)(A) of this Article VII.

 

(3)                                  Pursuant
to subparagraphs (b)(2) and (b)(3) of this Article VI, a
Participant may elect an optional form of benefit.  Effective as of January 1, 2009, an election made
pursuant to (b)(2) above is generally irrevocable unless the Participant
requests a change and (i) the change does not take effect
until at least 12 months after the date on which the election is made, (ii) the
change is made at least 12 months prior to the date the payment is scheduled to
commence, and (iii) payment is deferred for a period of not less than 5
years from the date payment would otherwise have been made (unless payment is
being made for death) and such request is permitted under Section 409A of
the Code.

 

(e)                                  Accounting Procedures.  The Plan Administrator shall establish such
accounting procedures as are necessary to implement the provisions of this
Article.

 

VII-2

 

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.  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.  No amendment or termination of the Plan shall
affect the rights of any Participant with respect to any amounts credited to
the Account as of the date of such amendment or termination.  Upon termination, the Participants shall
become fully vested.  The timing and
manner of distribution 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 benefits under the Plan may be accelerated as a result of the
termination of the Plan unless:

 

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

 

(2)                                  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;

 

(3)                                  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 (A) 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, (B) all benefit payments under the
Plan are completed within 24 months after the date of termination of the Plan,
and (C) 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 therefore, and that another person or an institution is then
maintaining or has custody of such person, and that no guardian committee, 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 any Participant, nor to be consideration for
the employment of any Participant. 
Nothing in the Plan shall give a Participant the right to be retained in
the employ of the Company; all Participants shall remain subject to discharge
or discipline as employees to the same extent as if the Plan had not been
adopted.

 

(c)                                  Non-Alienation of Benefits.  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 dependent or Beneficiary of such person in such
manner and proportions as it shall deem proper.

 

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

 

(e)                                  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 

 

IX-1

 

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.

 

(f)                                    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.

 

(g)                                 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.  No Participant
in the Plan shall have a security interest in assets of the Company used to
make contributions or pay benefits.

 

(h)                                 Recordkeeping.  Appropriate records shall be maintained for
the Plan, subject to the supervision and control of the Plan Administrator.

 

(i)                                     Gender.  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.

 

(j)                                     Corporate Successors.  The Plan shall not be automatically
terminated by a transfer or sale of assets of the Company or by the merger or
consolidated of the Company into or with any other corporation or other entity,
but the Plan shall be continued after such sale, merger or consolidation only
if and to the extent that the transferee, purchaser or successor entity agrees
to continue the Plan.

 

(k)                                  Liability Limited.  In administering the Plan, neither the Plan
Administrator nor any officer, director or employee thereof, shall be liable
for any act or omission performed or omitted, as the case may be, by such
person with respect to the Plan; provided, that the foregoing shall not relieve
any person of liability for gross negligence, fraud or bad faith.  The Plan Administrator, its officers,
directors and employees shall be entitled to rely conclusively on all tables,
valuations, certificates, opinions and reports that shall be furnished by any
actuary, accountant, trustee, insurance company, consultant, counsel or other
expert who shall be employed or engaged by the Plan Administrator in good
faith.

 

(l)                                     Protective Provisions.  Each Participant shall cooperate with the
Plan Administrator by furnishing any and all information requested by the Plan
Administrator in order to facilitate the payment of benefits hereunder, taking
such physical examinations as the Plan Administrator may deem necessary and
taking such other relevant action as may be requested by the Plan
Administrator.  If a Participant refuses
so to cooperate or makes any material misstatement of information or
nondisclosure of medical history, then no benefits will be payable hereunder to
such Participant or his 

 

IX-2

 

Beneficiary,
provided that, in the Plan Administrator’s sole discretion, benefits may be
payable in an amount reduced to compensate the Company for any loss, cost,
damage or expense suffered or incurred by the Company as a result in any way of
such action, misstatement or nondisclosure.

 

IN WITNESS WHEREOF,
the Company has caused this Plan to be executed by its duly authorized officer
on this 17th day of December, 2008.

 

 

	
   

  	
  WALTER INDUSTRIES, INC.

  	 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Larry E. Williams

  
	
   

  	
   

  	 

	
   

  	
  Title: 

  	
  Senior Vice President

  	 

	
   

  	
   

  	 

	
   

  	
  “COMPANY”

  	 

					

 

IX-3Exhibit
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

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